There is a lot of movement in the political groups this week. The S&D is electing its chair today; the only candidate is the current group leader Iratxe García Pérez. Tomorrow sees the election of the vice-chairs. There are four new candidates for the nine posts. Ana Catarina Mendes from Portugal is a newcomer to parliament. The former minister in the António Costa cabinet is to replace the former hopeful Pedro Marques, who was no longer nominated.
The Italian Camilla Laureti is also experiencing a rapid rise. She succeeded the late parliamentary president David Maria Sassoli in 2022 and could replace Elisabetta Gualmini on the parliamentary group’s executive committee. Gaby Bischoff from the SPD is running again, but may be speculating on a different portfolio. So far, the delegations from Belgium and Hungary have not had their own vice-chairs. This could change with the candidacies of Kathleen van Brempt and Klára Dobrev. The Hungarian stood out in the plenary with clear speeches – on the rule of law and the “whitewashing of anti-European right-wing extremism in the EU”.
Things are more complicated in the Left Group. The extended parliamentary group bureau, which includes the two current co-leaders, the national heads of delegation and the independents, will meet tomorrow. This “Bureau” will discuss and negotiate the future composition of the left-wing group, i.e. possible new members, the basis for parliamentary work over the next five years (the letter of affinity) and the leadership structure. At the end of the week, there should once again be two parliamentary group leaders and their deputies. There are currently no reliable predictions as to whether the French delegation, which has grown to nine members, and the German Left delegation, which has shrunk by two to three seats, will once again provide the co-chairs. Let us be surprised.
The European Court of Auditors has doubts about the outgoing EU Commission’s track record on one key point. During the gas crisis, some political measures did improve security of supply – particularly the reduction in consumption and the obligation to fill gas storage facilities. “However, EU law was perhaps not the decisive factor in achieving these goals“, said Court of Auditors member João Leão on Monday at the presentation of a new audit report.
The impact of other crisis measures is even less clear, Leão continued, citing in particular the gas price brake (market correction mechanism) and joint gas purchasing (AggregateEU). This calls into question the usefulness of various crisis summits in 2022. For Commission President Ursula von der Leyen, the fall in gas prices has been one of the key political successes of her time in office.
Experts, on the other hand, had repeatedly doubted the influence of politics. For economists, the decline in consumption was simply an expected reaction to the high prices. The national governments had a vested interest in filling the gas storage facilities – there was a threat of a collapse of European industry and critical functions such as heat supply. However, sharing the costs of filling the gas storage facilities was controversial. In this respect, the agreement on common goals was certainly a political success.
The auditors also did not examine the chartering of floating LNG terminals and fast-track approvals for permanently installed liquefied natural gas terminals. The EU auditors therefore failed to take into account significant political contributions by the nation-states.
However, they have identified a blind spot in the member states: “This crisis was more about affordability than availability“, criticized Leão. However, less attention has been paid to how supply disruptions affect different customer groups in different countries. Recent outages have once again driven up LNG prices. The auditors cite a strike in Australia and the temporary closure of an export terminal in Norway as price drivers.
What’s more, Russia still covered 15 percent of European gas consumption last year – LNG imports have continued to increase since the pipeline failures. The EU states should therefore, according to the auditors, examine more closely in the future how supply risks would affect the affordability of gas.
The Commission had expected AggregateEU to have more market power and lower purchase prices on the LNG market. However, the Commission has no right to inspect the contracts and is therefore unable to assess whether the demand platform is really lowering prices.
Another piece of news from Monday shows just how dependent the EU still is on LNG. Gasunie and Vopak want to explore the possibility of operating the terminal in Eemshaven, which is also important for Germany, beyond 2027 – the EU actually wants to become independent of Russian gas by then.
The conditions for this are to be created by a new high-level working group, which Germany, among others, had pushed for. At the most recent meeting on Friday, according to a source, several member states were unsure how to deal with the possibility of imposing an embargo on Russian imports. This has been legally permissible since the latest amendment to the gas market package. The EU member states would therefore still like guidelines and legal clarification from the Commission. The exit could be discussed again at the ministerial level at the informal Council on July 15 and 16.
The COVID-19 pandemic and strict lockdowns have disillusioned many Chinese citizens. The struggling economy remains a concern. Many seek a fresh start in another country or at least a safe haven to turn to in emergencies. One option is “golden visas”: residence permits obtained through investments or donations, which can eventually lead to citizenship.
The most common way to obtain a “golden visa” is through real estate purchases, a practice that has led many European countries to distance themselves from it in recent years. Golden visa programs have caused property prices to skyrocket in some areas. The buyers, often from China and Russia, typically do not live in these properties but rent them out as vacation homes. The European Commission already in 2022 warned that such visa grants increase “risks regarding security, money laundering, tax evasion and corruption,” calling for an EU-wide ban. However, the issuance of these visas remains at the discretion of individual countries.
There is also growing concern about the potential infiltration of Chinese spies. In the case of exposed intelligence officer Jian G., a German citizenship helped conceal the true identity of the spy for many years. With visas and citizenships for any investor, the EU currently gives the Chinese state an effective tool to hide intelligence operations.
China has the second-largest millionaire population globally, after the United States. Simultaneously, it has the highest net outflow of wealthy individuals. According to British migration consultancy Henley & Partners, 15,200 individuals with investable assets of one million US dollars or more could leave China this year – 13,800 did so in 2023. Many still head for Europe as they cannot adequately diversify their wealth due to strict capital controls in China. Once they arrive, they are no longer bound to one country thanks to the travel and residence freedom within the Schengen Area. The healthcare system in European countries is also attractive, as are the universities for their offspring, Henley & Partners explains, which also operates an office in Shanghai.
Worldwide, there are now real estate and law firms specializing in immigration and investment consulting for Chinese clients. After Spain announced in April that it would abolish its golden visa programs, demand surged. According to the Spanish daily El País, Chinese buyers purchased several cheaper apartments to reach the 500,000-euro threshold. Wealthier individuals invested in commercial and luxury properties – the article cites a chalet in Madrid purchased by a Chinese buyer for 975,000 euros.
After Cyprus in 2020, the United Kingdom in 2022, and Ireland and Portugal in 2023 terminated their visa programs entirely or partially, the focus has shifted to less affluent European countries. Malta is currently the only state where one can obtain full citizenship within 12 months relatively quickly. The minimum investment sum is 750,000 euros. Another important destination for wealthy migrants remains Greece. In 2023, authorities doubled the minimum investment sum to 500,000 euros. The five-year residence permit can be extended indefinitely – provided the properties are not sold.
Golden visas were particularly welcomed in Greece during the 2013 sovereign debt crisis as an investment source. Since then, the country has issued over 22,300 residence permits – two-thirds of them to Chinese property buyers. However, corruption cases have also arisen, with local developers specifically purchasing properties to resell them at a markup to Chinese investment migrants. Rents and prices for owner-occupied apartments rose so sharply that affordable housing for average earners in central areas became increasingly scarce.
Prices also increased on some Greek islands and other tourist hotspots. The Athenian coastal suburb of Alimos is now referred to by locals as “Chinatown”. To ease the situation, Athens plans to introduce stricter rules for short-term rentals. Further increases in minimum investment sums are also being discussed.
While countries like Greece tighten their rules, Hungary launched a new program last month, which will take effect on July 1. Non-EU and non-EEA citizens can obtain a ten-year residence permit in exchange for acquiring residential property, investing in local real estate funds or donating to a university. The minimum investment amount is 250,000 euros. Chinese nationals were already the strongest foreign property buyers in Hungary in 2023, purchasing 647 properties, followed by Russians with 223.
To reach Europe, one can also invest in non-EU third countries. Chinese citizens can, for example, acquire citizenship of the South Pacific island nation of Vanuatu for 250,000 euros. This citizenship grants visa-free access to Schengen countries – for now. The European Commission proposed suspending the visa waiver agreement for Vanuatu two years ago. The relevant committee will address this once the new Parliament and committees are constituted, according to the EU Parliament.
In Vanuatu, the sale of citizenships contributes more than a tenth to the GDP. The Caribbean island of Dominica also receives more revenue from selling citizenships for approximately 91,600 euros per person than from taxes, as Bloomberg reported. With a Dominican passport, one can currently travel visa-free to the EU for 90 days.
Over the past 15 years, China has pumped more than $231 billion in subsidies into the development of its domestic EV industry. This is the conclusion of a study by the US think tank CSIS. The analysis by the team led by China expert Scott Kennedy breaks down in detail how the government has financially supported the companies. In response, the USA has already imposed countervailing duties. The EU also recently announced additional tariffs on EVs from China.
But Beijing does not want to accept this. The Chinese government wants to persuade the EU Commission to lift the tariffs in negotiations – and very quickly, before the tariffs come into force on July 4. This was reported by the state-controlled Chinese newspaper Global Times on Monday. Initial talks could take place as early as this week.
China will argue that it is too short-sighted to speak of “unfair” practices in the EU. The Europeans are still moderate in their accusations. The USA even describes China’s subsidies as “criminal behavior”. The CSIS study now sheds light on arguments with which the EU and China are likely to enter the negotiations.
Just over half of the total government support for the Chinese EV industry consisted of tax exemptions, which made the vehicles more affordable for buyers. The remainder was made up of additional buyer premiums, government funding for infrastructure such as charging stations, government procurement of electric vehicles and funding programs for research and development.
“Chinese electric vehicles have benefited from massive industrial policy support”, writes Kennedy. The data is still “very conservative” as it does not include programs at the local level. They also do not include the generally low cost of land, electricity and credit that manufacturers have been able to access. The team also did not include aid for Chinese battery manufacturers.
Nevertheless, Beijing will present a reading that focuses on the fact that subsidies have fallen steadily in relation to the industry’s total turnover – from more than 40 percent in the early years to just 11.5 percent in 2023. This shows that support for the young industry has decreased over time. In whole numbers, this means that support per vehicle has shrunk from 13,860 dollars in 2018 to just under 4,600 dollars in 2023. This sum is less than the 7,500 dollars that US buyers receive for certain vehicles under the Inflation Reduction Act. Similar purchase incentives also exist or existed in the EU.
According to Kennedy, proponents of the tariffs could argue that 15 years of massive state aid have already drastically changed the market, making it difficult for manufacturers in other countries to compete. For example, there are still around 200 EV manufacturers in China that produce more than the domestic market needs. Despite or perhaps because of the many government subsidies, only a few suppliers are profitable. In a functioning market economy, companies would have to plan their investments better, said Kennedy. A large gap between supply and demand would normally lead to mergers or closures.
Kennedy assumes that the ongoing subsidies are not part of a plan for global dominance, but rather a result of China’s inefficient economic system. German companies that are against the tariffs also see it this way. “If you look at the cause of this overcapacity, it is essentially because companies have built up more capacity and demand has not been what they expected”, argues the German Chamber of Commerce in China, for example. Ultimately, there will be consolidation , but this is a medium-term effect that will not be resolved “within the next two to three years”.
The authors of the CSIS study consider China’s bet on e-vehicles to be “very risky”. Many of the newly founded companies might not survive the fierce competition at home combined with growing protectionism abroad. But the companies that remain in the end will certainly mature into very important global players.
According to the study, the fact that tariffs are now the response of Europeans and Americans is also the result of Western inconsistency. “In general, Western car manufacturers and governments have been hesitant and not aggressive enough”, criticizes Kennedy. There is still not enough pressure on car manufacturers to electrify their fleets and offer more affordable models. It is clear that the USA and other countries cannot defend their interests without making “more aggressive efforts” to develop their own industries. In other words, the EU could give manufacturers more charging points.
Klaus-Heiner Lehne can look back on three decades of work in EU institutions – in the European Parliament and currently in the European Court of Auditors. His many years of experience are clear to see. He speaks confidently, with a firm voice and answers knowledgeably without having to pause for thought.
The 66-year-old has been a member of the CDU since he was seventeen. He became politically active in the same year. “At the age of 19, I was the youngest local elected representative in North Rhine-Westphalia“, he says casually. To this day, Lehne is honorary chairman of the CDU Düsseldorf.
Born in Düsseldorf, he initially studied physics, but dropped out after a few semesters. He finally decided to “follow the family tradition of law”. The discipline he learned while studying physics helped him to complete his law degree in almost record time.
Lehne’s political career path was repeatedly shaped by party tactics. After several years as a councillor in Düsseldorf, he was elected to the Bundestag in 1992, having already stood twice in vain. However, given poor CDU poll ratings in the run-up to the following Bundestag election, he thought he had a poor chance of “winning the constituency and being secured on the list”.
A candidacy for the European Parliament emerged as a more promising alternative. In 1994, he moved to Brussels with the intention of “counteracting the Bundestag’s limited scope for shaping legislation in its original place, where the legislation is made that later has to be translated into German law”.
There, Lehne soon realized: “You are much freer in the European Parliament. You can have a say in the content of laws and are not bound by coalition majorities like in the Bundestag.” For Lehne, this was the “much more appealing task”. He served four terms as a Member of the European Parliament.
Lehne counts the Takeover Directive, the second Money Laundering Directive and the creation of uniform European patent law among his greatest successes over the past 20 years. From 2004 to 2014, he was Chairman of the EPP Group and from 2009 Chairman of the Legal Affairs Committee.
Finally, internal party dynamics came into play again, which steered Lehne’s path to Luxembourg. An opposing candidate contested his first place on the list. “But I didn’t want to vacate it. So there was a threat of conflict, which was also seen in the federal party”, says Lehne. Finally, he was offered another alternative: the European Court of Auditors.
In his mid-50s, Lehne was able to take on a new perspective in Luxembourg: “From the MEP’s point of view, the job is done once the law has been passed. But here you very often see that even with good laws, there is a lack of administrative implementation and the results are then unsatisfactory”, says Lehne. His lesson, which he has shared with colleagues in the European Parliament: “Focus less on the legislation and more on the implementation. Take a look: What are the national administrations actually doing with it?”
Two and a half years after joining the Court, Lehne was elected President in 2016. During his two terms in office, he has focused on two main developments: “We have significantly increased the number of performance reports. They now make up more than half of the reports.” In contrast to the usual compliance reports, which only check whether legal requirements have been met, “performance reports deal with profitability and efficiency”, he explains. His second achievement: “We have significantly improved our public relations work. After all, our impact only comes about when MEPs are approached about our reports and put pressure on the Commission to avoid mistakes.”
However, his presidency also had its downsides: “The six years were characterized by all kinds of difficulties”, recalls Lehne. These included the affair surrounding former Belgian Council member Pinxten, who was found to have committed large-scale expenses fraud. “After that, we had to clean up the house”, says Lehne emphatically.
And then finally the scandal surrounding him at the end of 2021. Investigations by the French daily newspaper “Libération” accused him of non-transparent financial management, maintaining a bogus apartment in Luxembourg and excessive expense claims, for which he had to answer to the European Parliament’s Budgetary Control Committee.
Lehne, who always firmly rejected the accusations, still remembers well how “absolutely unpleasant” this time was for him. He regrets that the incident “led to a politicization of the institution“. “Suddenly everyone was criticizing the fact that an EPP man was at the helm, even though I had to resign from all my political functions.” After the European Parliament exonerated him, he can now say: “For me, the issue is over.”
The former parliamentarian now sits in the Court’s first chamber, where he is “responsible for climate action, the environment and compliance in the agricultural sector“. He currently has a report on urban pollution on his desk. In addition to going through administrative documents, his day-to-day work as an auditor involves checking EU-funded projects on site: “Do the cows and olive trees that are being funded actually exist? Sometimes we also work with satellite images.” The Court regularly identifies the biggest weaknesses in the second chamber’s area of responsibility, “that’s all the structural and cohesion funds”, as Lehne explains. “One important cause is overly bureaucratic rules.”
His time at the Court of Audit runs until 2026. “I’m very happy to carry out my current duties for the next two years”, says the former parliamentarian. “But after that, I’m looking forward to retirement.” He would like to remain involved in party politics, but no longer take on a mandate. “At some point, enough is enough.” Clara Baldus
There is a lot of movement in the political groups this week. The S&D is electing its chair today; the only candidate is the current group leader Iratxe García Pérez. Tomorrow sees the election of the vice-chairs. There are four new candidates for the nine posts. Ana Catarina Mendes from Portugal is a newcomer to parliament. The former minister in the António Costa cabinet is to replace the former hopeful Pedro Marques, who was no longer nominated.
The Italian Camilla Laureti is also experiencing a rapid rise. She succeeded the late parliamentary president David Maria Sassoli in 2022 and could replace Elisabetta Gualmini on the parliamentary group’s executive committee. Gaby Bischoff from the SPD is running again, but may be speculating on a different portfolio. So far, the delegations from Belgium and Hungary have not had their own vice-chairs. This could change with the candidacies of Kathleen van Brempt and Klára Dobrev. The Hungarian stood out in the plenary with clear speeches – on the rule of law and the “whitewashing of anti-European right-wing extremism in the EU”.
Things are more complicated in the Left Group. The extended parliamentary group bureau, which includes the two current co-leaders, the national heads of delegation and the independents, will meet tomorrow. This “Bureau” will discuss and negotiate the future composition of the left-wing group, i.e. possible new members, the basis for parliamentary work over the next five years (the letter of affinity) and the leadership structure. At the end of the week, there should once again be two parliamentary group leaders and their deputies. There are currently no reliable predictions as to whether the French delegation, which has grown to nine members, and the German Left delegation, which has shrunk by two to three seats, will once again provide the co-chairs. Let us be surprised.
The European Court of Auditors has doubts about the outgoing EU Commission’s track record on one key point. During the gas crisis, some political measures did improve security of supply – particularly the reduction in consumption and the obligation to fill gas storage facilities. “However, EU law was perhaps not the decisive factor in achieving these goals“, said Court of Auditors member João Leão on Monday at the presentation of a new audit report.
The impact of other crisis measures is even less clear, Leão continued, citing in particular the gas price brake (market correction mechanism) and joint gas purchasing (AggregateEU). This calls into question the usefulness of various crisis summits in 2022. For Commission President Ursula von der Leyen, the fall in gas prices has been one of the key political successes of her time in office.
Experts, on the other hand, had repeatedly doubted the influence of politics. For economists, the decline in consumption was simply an expected reaction to the high prices. The national governments had a vested interest in filling the gas storage facilities – there was a threat of a collapse of European industry and critical functions such as heat supply. However, sharing the costs of filling the gas storage facilities was controversial. In this respect, the agreement on common goals was certainly a political success.
The auditors also did not examine the chartering of floating LNG terminals and fast-track approvals for permanently installed liquefied natural gas terminals. The EU auditors therefore failed to take into account significant political contributions by the nation-states.
However, they have identified a blind spot in the member states: “This crisis was more about affordability than availability“, criticized Leão. However, less attention has been paid to how supply disruptions affect different customer groups in different countries. Recent outages have once again driven up LNG prices. The auditors cite a strike in Australia and the temporary closure of an export terminal in Norway as price drivers.
What’s more, Russia still covered 15 percent of European gas consumption last year – LNG imports have continued to increase since the pipeline failures. The EU states should therefore, according to the auditors, examine more closely in the future how supply risks would affect the affordability of gas.
The Commission had expected AggregateEU to have more market power and lower purchase prices on the LNG market. However, the Commission has no right to inspect the contracts and is therefore unable to assess whether the demand platform is really lowering prices.
Another piece of news from Monday shows just how dependent the EU still is on LNG. Gasunie and Vopak want to explore the possibility of operating the terminal in Eemshaven, which is also important for Germany, beyond 2027 – the EU actually wants to become independent of Russian gas by then.
The conditions for this are to be created by a new high-level working group, which Germany, among others, had pushed for. At the most recent meeting on Friday, according to a source, several member states were unsure how to deal with the possibility of imposing an embargo on Russian imports. This has been legally permissible since the latest amendment to the gas market package. The EU member states would therefore still like guidelines and legal clarification from the Commission. The exit could be discussed again at the ministerial level at the informal Council on July 15 and 16.
The COVID-19 pandemic and strict lockdowns have disillusioned many Chinese citizens. The struggling economy remains a concern. Many seek a fresh start in another country or at least a safe haven to turn to in emergencies. One option is “golden visas”: residence permits obtained through investments or donations, which can eventually lead to citizenship.
The most common way to obtain a “golden visa” is through real estate purchases, a practice that has led many European countries to distance themselves from it in recent years. Golden visa programs have caused property prices to skyrocket in some areas. The buyers, often from China and Russia, typically do not live in these properties but rent them out as vacation homes. The European Commission already in 2022 warned that such visa grants increase “risks regarding security, money laundering, tax evasion and corruption,” calling for an EU-wide ban. However, the issuance of these visas remains at the discretion of individual countries.
There is also growing concern about the potential infiltration of Chinese spies. In the case of exposed intelligence officer Jian G., a German citizenship helped conceal the true identity of the spy for many years. With visas and citizenships for any investor, the EU currently gives the Chinese state an effective tool to hide intelligence operations.
China has the second-largest millionaire population globally, after the United States. Simultaneously, it has the highest net outflow of wealthy individuals. According to British migration consultancy Henley & Partners, 15,200 individuals with investable assets of one million US dollars or more could leave China this year – 13,800 did so in 2023. Many still head for Europe as they cannot adequately diversify their wealth due to strict capital controls in China. Once they arrive, they are no longer bound to one country thanks to the travel and residence freedom within the Schengen Area. The healthcare system in European countries is also attractive, as are the universities for their offspring, Henley & Partners explains, which also operates an office in Shanghai.
Worldwide, there are now real estate and law firms specializing in immigration and investment consulting for Chinese clients. After Spain announced in April that it would abolish its golden visa programs, demand surged. According to the Spanish daily El País, Chinese buyers purchased several cheaper apartments to reach the 500,000-euro threshold. Wealthier individuals invested in commercial and luxury properties – the article cites a chalet in Madrid purchased by a Chinese buyer for 975,000 euros.
After Cyprus in 2020, the United Kingdom in 2022, and Ireland and Portugal in 2023 terminated their visa programs entirely or partially, the focus has shifted to less affluent European countries. Malta is currently the only state where one can obtain full citizenship within 12 months relatively quickly. The minimum investment sum is 750,000 euros. Another important destination for wealthy migrants remains Greece. In 2023, authorities doubled the minimum investment sum to 500,000 euros. The five-year residence permit can be extended indefinitely – provided the properties are not sold.
Golden visas were particularly welcomed in Greece during the 2013 sovereign debt crisis as an investment source. Since then, the country has issued over 22,300 residence permits – two-thirds of them to Chinese property buyers. However, corruption cases have also arisen, with local developers specifically purchasing properties to resell them at a markup to Chinese investment migrants. Rents and prices for owner-occupied apartments rose so sharply that affordable housing for average earners in central areas became increasingly scarce.
Prices also increased on some Greek islands and other tourist hotspots. The Athenian coastal suburb of Alimos is now referred to by locals as “Chinatown”. To ease the situation, Athens plans to introduce stricter rules for short-term rentals. Further increases in minimum investment sums are also being discussed.
While countries like Greece tighten their rules, Hungary launched a new program last month, which will take effect on July 1. Non-EU and non-EEA citizens can obtain a ten-year residence permit in exchange for acquiring residential property, investing in local real estate funds or donating to a university. The minimum investment amount is 250,000 euros. Chinese nationals were already the strongest foreign property buyers in Hungary in 2023, purchasing 647 properties, followed by Russians with 223.
To reach Europe, one can also invest in non-EU third countries. Chinese citizens can, for example, acquire citizenship of the South Pacific island nation of Vanuatu for 250,000 euros. This citizenship grants visa-free access to Schengen countries – for now. The European Commission proposed suspending the visa waiver agreement for Vanuatu two years ago. The relevant committee will address this once the new Parliament and committees are constituted, according to the EU Parliament.
In Vanuatu, the sale of citizenships contributes more than a tenth to the GDP. The Caribbean island of Dominica also receives more revenue from selling citizenships for approximately 91,600 euros per person than from taxes, as Bloomberg reported. With a Dominican passport, one can currently travel visa-free to the EU for 90 days.
Over the past 15 years, China has pumped more than $231 billion in subsidies into the development of its domestic EV industry. This is the conclusion of a study by the US think tank CSIS. The analysis by the team led by China expert Scott Kennedy breaks down in detail how the government has financially supported the companies. In response, the USA has already imposed countervailing duties. The EU also recently announced additional tariffs on EVs from China.
But Beijing does not want to accept this. The Chinese government wants to persuade the EU Commission to lift the tariffs in negotiations – and very quickly, before the tariffs come into force on July 4. This was reported by the state-controlled Chinese newspaper Global Times on Monday. Initial talks could take place as early as this week.
China will argue that it is too short-sighted to speak of “unfair” practices in the EU. The Europeans are still moderate in their accusations. The USA even describes China’s subsidies as “criminal behavior”. The CSIS study now sheds light on arguments with which the EU and China are likely to enter the negotiations.
Just over half of the total government support for the Chinese EV industry consisted of tax exemptions, which made the vehicles more affordable for buyers. The remainder was made up of additional buyer premiums, government funding for infrastructure such as charging stations, government procurement of electric vehicles and funding programs for research and development.
“Chinese electric vehicles have benefited from massive industrial policy support”, writes Kennedy. The data is still “very conservative” as it does not include programs at the local level. They also do not include the generally low cost of land, electricity and credit that manufacturers have been able to access. The team also did not include aid for Chinese battery manufacturers.
Nevertheless, Beijing will present a reading that focuses on the fact that subsidies have fallen steadily in relation to the industry’s total turnover – from more than 40 percent in the early years to just 11.5 percent in 2023. This shows that support for the young industry has decreased over time. In whole numbers, this means that support per vehicle has shrunk from 13,860 dollars in 2018 to just under 4,600 dollars in 2023. This sum is less than the 7,500 dollars that US buyers receive for certain vehicles under the Inflation Reduction Act. Similar purchase incentives also exist or existed in the EU.
According to Kennedy, proponents of the tariffs could argue that 15 years of massive state aid have already drastically changed the market, making it difficult for manufacturers in other countries to compete. For example, there are still around 200 EV manufacturers in China that produce more than the domestic market needs. Despite or perhaps because of the many government subsidies, only a few suppliers are profitable. In a functioning market economy, companies would have to plan their investments better, said Kennedy. A large gap between supply and demand would normally lead to mergers or closures.
Kennedy assumes that the ongoing subsidies are not part of a plan for global dominance, but rather a result of China’s inefficient economic system. German companies that are against the tariffs also see it this way. “If you look at the cause of this overcapacity, it is essentially because companies have built up more capacity and demand has not been what they expected”, argues the German Chamber of Commerce in China, for example. Ultimately, there will be consolidation , but this is a medium-term effect that will not be resolved “within the next two to three years”.
The authors of the CSIS study consider China’s bet on e-vehicles to be “very risky”. Many of the newly founded companies might not survive the fierce competition at home combined with growing protectionism abroad. But the companies that remain in the end will certainly mature into very important global players.
According to the study, the fact that tariffs are now the response of Europeans and Americans is also the result of Western inconsistency. “In general, Western car manufacturers and governments have been hesitant and not aggressive enough”, criticizes Kennedy. There is still not enough pressure on car manufacturers to electrify their fleets and offer more affordable models. It is clear that the USA and other countries cannot defend their interests without making “more aggressive efforts” to develop their own industries. In other words, the EU could give manufacturers more charging points.
Klaus-Heiner Lehne can look back on three decades of work in EU institutions – in the European Parliament and currently in the European Court of Auditors. His many years of experience are clear to see. He speaks confidently, with a firm voice and answers knowledgeably without having to pause for thought.
The 66-year-old has been a member of the CDU since he was seventeen. He became politically active in the same year. “At the age of 19, I was the youngest local elected representative in North Rhine-Westphalia“, he says casually. To this day, Lehne is honorary chairman of the CDU Düsseldorf.
Born in Düsseldorf, he initially studied physics, but dropped out after a few semesters. He finally decided to “follow the family tradition of law”. The discipline he learned while studying physics helped him to complete his law degree in almost record time.
Lehne’s political career path was repeatedly shaped by party tactics. After several years as a councillor in Düsseldorf, he was elected to the Bundestag in 1992, having already stood twice in vain. However, given poor CDU poll ratings in the run-up to the following Bundestag election, he thought he had a poor chance of “winning the constituency and being secured on the list”.
A candidacy for the European Parliament emerged as a more promising alternative. In 1994, he moved to Brussels with the intention of “counteracting the Bundestag’s limited scope for shaping legislation in its original place, where the legislation is made that later has to be translated into German law”.
There, Lehne soon realized: “You are much freer in the European Parliament. You can have a say in the content of laws and are not bound by coalition majorities like in the Bundestag.” For Lehne, this was the “much more appealing task”. He served four terms as a Member of the European Parliament.
Lehne counts the Takeover Directive, the second Money Laundering Directive and the creation of uniform European patent law among his greatest successes over the past 20 years. From 2004 to 2014, he was Chairman of the EPP Group and from 2009 Chairman of the Legal Affairs Committee.
Finally, internal party dynamics came into play again, which steered Lehne’s path to Luxembourg. An opposing candidate contested his first place on the list. “But I didn’t want to vacate it. So there was a threat of conflict, which was also seen in the federal party”, says Lehne. Finally, he was offered another alternative: the European Court of Auditors.
In his mid-50s, Lehne was able to take on a new perspective in Luxembourg: “From the MEP’s point of view, the job is done once the law has been passed. But here you very often see that even with good laws, there is a lack of administrative implementation and the results are then unsatisfactory”, says Lehne. His lesson, which he has shared with colleagues in the European Parliament: “Focus less on the legislation and more on the implementation. Take a look: What are the national administrations actually doing with it?”
Two and a half years after joining the Court, Lehne was elected President in 2016. During his two terms in office, he has focused on two main developments: “We have significantly increased the number of performance reports. They now make up more than half of the reports.” In contrast to the usual compliance reports, which only check whether legal requirements have been met, “performance reports deal with profitability and efficiency”, he explains. His second achievement: “We have significantly improved our public relations work. After all, our impact only comes about when MEPs are approached about our reports and put pressure on the Commission to avoid mistakes.”
However, his presidency also had its downsides: “The six years were characterized by all kinds of difficulties”, recalls Lehne. These included the affair surrounding former Belgian Council member Pinxten, who was found to have committed large-scale expenses fraud. “After that, we had to clean up the house”, says Lehne emphatically.
And then finally the scandal surrounding him at the end of 2021. Investigations by the French daily newspaper “Libération” accused him of non-transparent financial management, maintaining a bogus apartment in Luxembourg and excessive expense claims, for which he had to answer to the European Parliament’s Budgetary Control Committee.
Lehne, who always firmly rejected the accusations, still remembers well how “absolutely unpleasant” this time was for him. He regrets that the incident “led to a politicization of the institution“. “Suddenly everyone was criticizing the fact that an EPP man was at the helm, even though I had to resign from all my political functions.” After the European Parliament exonerated him, he can now say: “For me, the issue is over.”
The former parliamentarian now sits in the Court’s first chamber, where he is “responsible for climate action, the environment and compliance in the agricultural sector“. He currently has a report on urban pollution on his desk. In addition to going through administrative documents, his day-to-day work as an auditor involves checking EU-funded projects on site: “Do the cows and olive trees that are being funded actually exist? Sometimes we also work with satellite images.” The Court regularly identifies the biggest weaknesses in the second chamber’s area of responsibility, “that’s all the structural and cohesion funds”, as Lehne explains. “One important cause is overly bureaucratic rules.”
His time at the Court of Audit runs until 2026. “I’m very happy to carry out my current duties for the next two years”, says the former parliamentarian. “But after that, I’m looking forward to retirement.” He would like to remain involved in party politics, but no longer take on a mandate. “At some point, enough is enough.” Clara Baldus
