Debt: Lindner wants investment flexibili • Table.Briefings

Dear reader,

Finance Minister Christian Lindner wants to push for new flexibility clauses for investments in the reform of European debt rules; however, the Maastricht criteria are to be kept in place. This is the conclusion of a position paper by the German government analyzed by Markus Grabitz.

Austria is currently working on the basis for an electricity price cap to counteract the sharp price increase – a step that is under consideration in Germany for gas prices. Austria could thus follow the example of Spain and Portugal. Hans-Peter Siebenhaar has the details.

While the European Council has adopted the regulation to reduce gas demand by 15 percent next winter, in Germany, according to calculations, it is necessary to reduce consumption by 25 percent. This is the conclusion reached by a study, as you can read in the News.

From co-founder of the German Greenpeace chapter to state and federal politician to spokeswoman for the E-Fuel Alliance: Monika Griefahn looks back on a long career in service to environmental protection. In today’s profile, we introduce the 67-year-old.

Have a great start to the week.

Your
Lisa-Martina Klein

Debt rules: Lindner in favor of more leeway for investments

By

Markus Grabitz

The German government wants to include new flexibility clauses for public investment in the reform of European debt rules. In order to improve the quality of public finances, it is prepared to “turn the screws on the flexibility clauses for investments” in the reform of the euro stability pact, according to the German government’s position on the reform of the debt rules, which was sent to the Bundestag on Thursday. The EU Commission plans to present a proposal for reforming the Stability Pact in the fall. However, the debate among member states has already begun.

The German government had recently agreed on a common position. Federal Finance Minister Christian Lindner (FDP) announced the first points in an interview with Handelsblatt. According to the report, the coalition is sticking to the central ceilings for deficits and debt – the so-called Maastricht criteria – and wants to make the “preventive arm” of the pact more effective and the medium-term budget targets more binding. And in return, he was willing to waive the so-called one-twentieth rule. The one-twentieth rule obliges member states whose budgets are above the Maastricht criteria to reduce the excessive debt mountain by one-twentieth each year.

Maastricht criteria still apply

The Maastricht criteria stipulate that in normal times, countries should not have public budget deficits exceeding three percent of economic output (gross domestic product, GDP) and that their respective debt levels should not exceed 60 percent of their GDP. Several EU member states are currently well above the 60 percent mark. Greece and Italy have values above 150 percent. Germany has a value of just under 70 percent.

Initially, nothing had become known about turning the screws for more flexibility in debt rules in the German government’s position. Lindner’s public statements had focused on caps on deficits and debt. The adjusting screws for the flexibility clauses, which appear in the paper under the heading “Principles of the German government for the reform discussion on fiscal rules,” provide in detail:

First, investment flexibility clauses could apply for a “limited” time, not just “in the event of an economic crisis”. The current rules provide that the flexibility clauses only apply during sharp recessions.
Second, the “overall limit on the use” of the clauses could be increased on a “narrowly limited one-time basis until the medium-term budget target is reached“.
Third, the “extension of the investment clause to other EU programs than currently taken into account” would be possible, assuming positive effects on growth and debt sustainability.

Lindner wants to define escape clause

In addition, the German government is working hard to establish clear criteria for the so-called “escape clause”. The escape clause allows a temporary deviation from the consolidation path in the event of a severe economic slump. The German government praises: In the crisis, the clause helped member states to take the necessary fiscal measures. “However, the clause is only vaguely laid out in the legal texts.”

The German government, therefore, urges: concrete criteria for the use of the clause as well as “procedures for (de)activation” increased the transparency and predictability of the measures for the member states as well as market participants. It says further: “It should be borne in mind that the general escape clause does not mean a suspension of the Growth and Stability Pact.”

The German government is also making a push to give the European Fiscal Board (EFB) independence from the Commission. The EFB watches over the sustainability of public finances in the EU. The EFB’s organizational-institutional independence “could be helpful for a more consistent implementation of the rules”, the German government writes in its position statement.

Austria plans low-cost electricity share

By

Hans-Peter Siebenhaar

In Germany, political attention is currently still focused primarily on galloping gas prices. But Austria is already a step ahead because electricity prices have risen sharply. The government in Vienna is planning concrete steps to get retail electricity prices under control. “Our model is to support basic household consumption with a capped electricity price. In this way, the aid is supposed to reach people directly. For further consumption, however, the market prices apply,” said Energy Minister Leonore Gewessler in an interview with Europe.Table. “We want to use this to maintain the price signal against waste: Energy must be used very carefully.”

In doing so, the government in Vienna is implementing a plan by Gabriel Felbermayr, head of the Wifo economic research institute. Together with the Ministry of Finance under conservative Finance Minister Magnus Brunner (ÖVP), the Green Energy Ministry is working out the basics for capping electricity prices. “This is complex in terms of implementation. But I am confident that we will be able to present a proposal to parliament quickly,” says Gewessler. The plans should be available by the end of August.

Specifically, the plan is to subsidize a fixed amount of electricity for each household. Apparently, the government wants to base this on the average consumption per household in Austria. For the rest of the consumption, the sharply increased electricity price will have to be paid. The social democratic opposition is putting pressure on the government to act quickly. The SPÖ’s energy policy spokesman, Alois Schroll, criticizes the months-long review.

Bonus plus electricity price cap

In Germany, a similar model is currently being discussed for the gas price. Households would be subject to a price cap up to a basic consumption level; anything consumed in excess of this would have to be paid for at the market price. It was proposed by the Macroeconomic Policy Institute (IMK) of the Hans Böckler Foundation, which is close to the trade unions, and the CSU, among others.

The black-green government in Vienna has been trying to cushion the price shock on the energy markets since the outbreak of the Ukraine war. To this end, the coalition has already put together three packages to provide relief for particularly burdened sections of the population. For example, every citizen in Austria will receive €500 as a climate bonus in October. Now the electricity price cap is to be added.

However, the responsible minister, Brunner, has not yet made any concrete statements on financing. The opposition SPÖ calls for energy companies to be financed by means of an excess profits tax, following the example of Spain. “The billions in excess profits of energy companies must be skimmed off to finance anti-inflationary measures such as the energy price cap we are calling for,” said SPÖ finance spokesman Jan Krainer.

But Brunner rejects this popular demand. In addition, Austria’s largest electricity group, Verbund, has already been asked to pay a special dividend, which was decided under pressure from Chancellor Karl Nehammer (ÖVP).

Austria wants to follow Spain’s example

Austria is not the only country in the EU with a planned electricity price cap. Spain had already introduced a government-imposed price reduction in May. According to the government in Madrid, this made 70 percent of electricity consumption significantly cheaper. In Spain, the situation was particularly precarious because the regulated electricity tariff is directly linked to the electricity exchanges. Portugal had also reacted in parallel to its large neighbor.

Following the example of Spain and Portugal, the SPÖ wants to decouple the price of electricity from the gas price and thus reduce the electricity price. Party leader Pamela Rendi-Wagner proposes abolishing the current marginal cost principle. Under this market design, all energy sources, regardless of their electricity generation costs – whether from wind power, hydropower or photovoltaics – receive the electricity price set by expensive gas-fired power plants as compensation.

Support comes from economist Felbermayr. Although he fundamentally adheres to the current market design, he says that Europe-wide consideration must nevertheless be given to how the coupling of the gas and electricity prices can be defused. “The Iberian solution is not entirely wrong,” he says.

Unlike in Spain, public criticism of energy producers is hardly noticeable in Austria. The reason for the restraint is obvious: The listed market leader Verbund is majority state-owned. The post of CEO is held by former Upper Austrian provincial politician Michael Strugl of the Austrian People’s Party (ÖVP).

Meanwhile, the EU Commission is not enthusiastic about Austria’s approach. Johannes Hahn (ÖVP), the Vienna-based budget commissioner, recently criticized on ORF radio that he was not a great friend of price caps. “If low-income households suffer from high energy prices, they should be helped directly and as a matter of priority,” says the commissioner, who has excellent connections in Austria.

Study: Germany can survive winter without Russian gas

If Russia were to cut off its gas supplies entirely in the coming weeks, Germany would have to reduce its gas consumption by around 25 percent by spring. This is the conclusion of a joint study by the University of Bonn and the University of Cologne. Even if the planned liquefied natural gas terminals went into operation as planned in the winter, savings of 210 terawatt hours (TWh) would be necessary by April 2023.

If savings in gas consumption that can be achieved through alternative energy sources in power generation were factored in, a reduction of around 20 percent would still be necessary, according to the researchers. Such a reduction is feasible with collective savings by industry, households, commerce, and the public sector, “if measures are taken quickly to save gas”, the study concludes. Scaremongering is therefore misplaced, it adds. “Germany can make it through next winter without Russian gas at manageable cost,” tweeted Georg Zachmann, Bruegel analyst and one of the study’s authors.

The EU contingency plan envisages average savings of 15 percent for the member states. However, individual states will probably have to save significantly more gas than 15 percent (Europe.Table reported). The International Energy Agency (IEA) calls for an average savings target of 20 percent. Klaus Müller, President of the German Federal Network Agency, also issued a 20 percent gas savings target for the German government.

Economic costs manageable

The economic costs of adjusting to an import stop are “substantial, but manageable with appropriate economic policy measures,” according to the study, which was funded by the German Research Foundation. In the event of a halt to Russian gas imports, there would be “neither mass poverty nor popular uprisings, but rather production losses, which Germany has already coped with in the past when it has had to face crises.”

The authors are critical of the German government’s efforts to date to adjust demand. The focus on increasing storage levels and neglecting adjustment measures has not been conducive to ending Germany’s dependence on Russia and its political blackmail by Moscow. The authors, therefore, call for rapid measures to save gas.

“The sooner we start reducing demand, the cheaper it will be,” Zachmann cautions. Reducing gas demand earlier not only results in more gas being stored but also means that demand elasticity increases with lead time, the energy expert says. luk

Commission to harmonize forest fire risk assessment

In order to better adapt to the increasing risk of forest fires in Europe, the assessment of the danger situation in the different regions is to become more aligned. The European Commission presented a corresponding tool on Friday.

Together with fire experts from 43 countries, the Brussels-based authority has compiled, evaluated and harmonized data from the past 20 years. The goal is to enable a risk comparison and evaluation of the forest fire hazard on a pan-European level.

This is necessary to improve planning and coordination of prevention measures and cross-border firefighting, the report says. The development of a pan-European approach stems from a series of EU regulations that require the commission to have a comprehensive overview of forest fire risk in Europe.

Until now, very different methodologies have been used in different regions and countries, which has been an obstacle in assessing risks, especially for cross-border fires, the Commission said.

The development in Europe is worrying. According to the Commission, in the EU in 2019 burned an area of more than 4000 square kilometers, the following year 3400, and last year 5000. til

Turkey: Four ships leave Ukrainian ports, one docks

Four more grain freighters have departed from Ukrainian ports. The ships, loaded with sunflower oil and corn, among other things, and bound for China, Turkey, and Italy, were on their way to Istanbul to be inspected there, the Turkish Defense Ministry announced on Twitter on Sunday. In total, eight freighters from Ukraine have thus left since the grain agreement was concluded.

The grain freighter “Razoni”, which was the first ship to leave a Ukrainian port after the agreement between Ukraine and Russia, will not arrive in Lebanon this Sunday as expected. This was announced by the Ukrainian embassy there upon request. The “Razoni” had left the Ukrainian Black Sea port of Odesa on Monday and was supposed to moor in Tripoli this Sunday. The freighter was delayed, the Ukrainian embassy said, but did not give any details.

Agricultural exports through Ukraine’s Black Sea ports had previously been blocked for months because of Russia’s war of aggression. Warring parties Ukraine and Russia each signed separate agreements with Turkey on July 22, under UN mediation, to allow grain exports from Ukraine from three ports. A coordination center in Istanbul is staffed by representatives of the four parties. Inspections are to ensure, among other things, that the ships are not carrying weapons.

In addition, a cargo ship has also docked in a Ukrainian port for the first time since the end of the Russian naval blockade. “The bulk carrier Fulmar S has arrived at the port of Chornomorsk and is ready for loading,” the Ukrainian Ministry of Infrastructure announced on its Telegram channel on Sunday. With the arrival of the Fulmar S, the grain corridor now has an “entrance and exit”, Infrastructure Minister Olexander Kubrakov said. This is an important signal for the markets, he added.

Ukraine also wants to obtain the release of the seaport of Mykolaiv for grain transportation in the future. A proposal to this effect has been sent to the UN and Turkey, Kubrakov informed. The goal is to raise grain exports to three million tons per month.

Ukrainian farmers, however, are under severe pressure despite the resumption of grain exports across the Black Sea. Only about 20 million tons of wheat are foreseeable to be harvested this year, about two-thirds of the yield last year before the Russian war of aggression began, Ukrainian Deputy Agriculture Minister Taras Vysozkiy told the Funke Mediengruppe newspapers (Sunday). dpa/rtr

Putin and Erdogan want to expand cooperation

Russia and Turkey want to expand their economic cooperation. On Friday, Presidents Vladimir Putin and Recep Tayyip Erdogan said in a joint statement after their meeting in Sochi, Russia, that cooperation between the two countries is to be deepened in the areas of transport, agriculture, finance, and construction. According to Russian Deputy Prime Minister Alexander Novak, Turkey also agreed to pay for parts of energy supplies from Russia in rubles in the future.

Putin and Erdogan also pledged their support for the grain agreement signed by Russia and Ukraine under the mediation of Turkey and the United Nations. This also includes the unhindered export of Russian grain as well as fertilizer and raw materials, the statement released on Friday said.

The two presidents also assured each other of mutual coordination and solidarity in combating “all terrorist organizations in Syria.” Turkey had occupied areas in northern Syria with military operations against Kurdish militias against Russia’s opposition. rtr

EU agricultural subsidies: climate and species protection exemptions possible

When farmers use EU subsidies, they must continue to comply with “standards for maintaining land in good agricultural and ecological condition” in 2023, according to the German Federal Ministry of Agriculture. These include crop rotation on arable land, i.e., the annual change of the main crop, and conversion of a minimum proportion of four percent of arable land into biodiversity areas.

However, in view of the consequences of the Russian war of aggression in Ukraine, the EU Commission has given member states the option of exceptionally relaxing standards for food production in 2023: for example, mandatory crop rotation can reportedly be suspended, as can the requirement for four percent non-productive land.

If the EU states use these exemptions, they must notify the EU Commission by August 28 at the latest, according to the Ministry of Agriculture. However, there is no obligation for farmers to apply the exemptions, it said. So anyone who wants to do something for climate and species protection within the framework of EU agricultural subsidies can continue to apply the EU regulations that will apply from 2023. dpa

Italy: Azione party withdraws from center-left electoral alliance

A setback for the left-wing camp in Italy a few weeks before the eagerly awaited parliamentary elections: The Azione party wants to leave the center-left electoral alliance formed just a few days ago before the polls at the end of September. “This was the most painful decision of my life,” party leader Carlo Calenda told state television station Rai Tre on Sunday. He justified the move by saying that the alliance included parties that voted against the government of incumbent Prime Minister Mario Draghi. His unity government broke up in July, which is why new elections are now due.

The left-wing camp had formed an alliance with forces of the bourgeois center and thus sees itself strengthened for the new election on September 25. The head of the Social Democratic Party (PD), Enrico Letta, recently said that the alliance with the Azione party would make the parliamentary election an open race. In polls, the conservative-right camp is considered the favorite, and the far-right “Brothers of Italy” could emerge as the strongest party.

The right-wing bloc is predicted to win 45 percent of the vote, and the PD and Azione together just under 30 percent. However, Italian electoral law favors parties that form broad alliances. According to Letta, his new alliance hopes to gain further support from Italy’s fragmented political landscape.

Azione and its ally +Europa have only five to seven percent voter approval in the polls. But two senior members of Silvio Berlusconi’s conservative Forza Italia recently switched to Azione. They justified the move by saying that the political orientation of the conservative bloc had become too extreme. It consists of Forza Italia, the Lega, and the “Brothers of Italy”. rtr

EU launches participatory study on the future of online platforms

The European Commission has launched a call for tender for a two-year participatory study on the future of online platforms. With the Digital Services Act (DSA) and the Digital Markets Act (DMA), the EU has created a new legal framework for online platforms. The study is now intended to analyze long-term trends and prospects for online platforms. In this way, the Commission wants to ensure that the legal framework is implemented in a forward-looking manner. At the same time, the study is to provide data for monitoring and thus support the Commission’s work in this area.

Those wishing to apply to conduct the study must design and develop a comprehensive research process for ten specific topics, which will be determined in collaboration with all Commission services. The deadline for submitting proposals is 4 p.m. on September 22, 2022.

Study should also look at the development of metaverses

One example of an emerging trend that should be examined in depth is the concentration of economic power in the digital sphere. In this context, the changing role of online platforms and the position of EU SMEs in industrial supply chains should be specifically examined.

Other topics include the future of personal data use and online identity in the digital platform economy, including the development of metaverses, augmented reality, and the future of social media. The study will also explore long-term questions about the future of global standardization in the digital domain, the future of government-as-a-platform, and the future of intellectual property law. vis

Monika Griefahn – fighting for e-fuels

Monika Griefahn is working with the E-Fuel Alliance to ensure that internal combustion vehicles can drive in a CO2-neutral manner.

The topic of environmental protection has accompanied Monika Griefahn since her childhood. Born in Mühlheim-Ruhr in 1954, she grew up in the Ruhr region amid its polluted air. “You can’t imagine that today. Everything was yellow from the sulfur clouds. The laundry was always dirty when you hung it outside,” Griefahn recounts.

A few decades later, she looks back on a professional career in politics in which the issue of the environment was almost always at the forefront. Today, the former Lower Saxony environment minister and member of the Bundestag (1998-2009) is involved with the E-Fuel Alliance for sustainable fuels. Fuels that use CO2 from the atmosphere, hydrogen and green electricity to make even the old Opel Corsa climate-friendly to drive.

Co-founder of Greenpeace in Germany

After school, Griefahn goes to Hamburg to study sociology and mathematics. The growing industry there washes chemicals into the Elbe River. In response, Griefahn gets involved in citizens’ initiatives and writes her doctoral thesis on the Cradle to Cradle production system. A way of manufacturing products so that their components can be fully recycled or composted.

In 1980, she and several other activists founded the German branch of the world’s largest environmental organization – Greenpeace. Her efforts there also find favor in politics. When Gerhard Schröder put together his cabinet for the state government in Lower Saxony in 1990, his choice for environment minister fell on the Greenpeace leader. “Schröder must have thought that this woman could really make a difference,” says Griefahn.

Today, Monika Griefahn has taken her leave from politics and instead works directly on solutions for the climate crisis. As a spokesperson for the E-Fuel Alliance, she has been working since 2021 to also make the cars that are already on our roads today climate-friendly: There are currently more than 1.4 billion internal combustion engine vehicles on the planet. “We won’t be able to just scrap them. Even cars that are sorted out in our country today will often continue to drive somewhere else tomorrow,” says Griefahn.

Reducing dependence on individual states

E-fuels are supposed to offer a solution. These are a mixture of CO2 and hydrogen. Depending on their chemical composition, they resemble gasoline, crude oil or diesel. There are still hardly any production plants for them, yet e-fuels would be an answer to a variety of problems, according to Griefahn. “Currently, we import 60 percent fossil energy from countries like Russia and Saudi Arabia. I see no problem in investing in the construction of large plants for the production of climate-friendly e-fuels in many different countries,” says Griefahn.

Countries such as Namibia, Japan, Algeria, Morocco, and Australia are already showing interest in the idea. Cooperation with these countries not only makes Europe’s energy supply more climate-friendly and diverse, but also reduces dependence on individual states, says Griefahn.

The climate crisis requires a variety of solutions. In Monika Griefahn’s opinion, politicians still lack a good eye for this. “Do we know that e-mobility is the only true solution? I don’t. The copper consumption alone speaks against it.” She says we need to find ways to use the resources that are already in circulation and remain open to new ideas: “We must not restrict engineering and inventive talent too much.” Svenja Schlicht

EUROPE.TABLE EDITORS

Till
Hoppe

Charlotte
Wirth

Falk
Steiner

Timo
Landenberger

Corinna
Visser

Lukas
Knigge

Eric
Bonse

Sarah
Schaefer

Manuel
Berkel

Lisa-Martina
Klein

Markus
Grabitz

Stephan
Israel

Claire
Stam

Dear reader,

Finance Minister Christian Lindner wants to push for new flexibility clauses for investments in the reform of European debt rules; however, the Maastricht criteria are to be kept in place. This is the conclusion of a position paper by the German government analyzed by Markus Grabitz.

Austria is currently working on the basis for an electricity price cap to counteract the sharp price increase – a step that is under consideration in Germany for gas prices. Austria could thus follow the example of Spain and Portugal. Hans-Peter Siebenhaar has the details.

While the European Council has adopted the regulation to reduce gas demand by 15 percent next winter, in Germany, according to calculations, it is necessary to reduce consumption by 25 percent. This is the conclusion reached by a study, as you can read in the News.

From co-founder of the German Greenpeace chapter to state and federal politician to spokeswoman for the E-Fuel Alliance: Monika Griefahn looks back on a long career in service to environmental protection. In today’s profile, we introduce the 67-year-old.

Have a great start to the week.

Your
Lisa-Martina Klein

Debt rules: Lindner in favor of more leeway for investments

By

Markus Grabitz

The German government wants to include new flexibility clauses for public investment in the reform of European debt rules. In order to improve the quality of public finances, it is prepared to “turn the screws on the flexibility clauses for investments” in the reform of the euro stability pact, according to the German government’s position on the reform of the debt rules, which was sent to the Bundestag on Thursday. The EU Commission plans to present a proposal for reforming the Stability Pact in the fall. However, the debate among member states has already begun.

The German government had recently agreed on a common position. Federal Finance Minister Christian Lindner (FDP) announced the first points in an interview with Handelsblatt. According to the report, the coalition is sticking to the central ceilings for deficits and debt – the so-called Maastricht criteria – and wants to make the “preventive arm” of the pact more effective and the medium-term budget targets more binding. And in return, he was willing to waive the so-called one-twentieth rule. The one-twentieth rule obliges member states whose budgets are above the Maastricht criteria to reduce the excessive debt mountain by one-twentieth each year.

Maastricht criteria still apply

The Maastricht criteria stipulate that in normal times, countries should not have public budget deficits exceeding three percent of economic output (gross domestic product, GDP) and that their respective debt levels should not exceed 60 percent of their GDP. Several EU member states are currently well above the 60 percent mark. Greece and Italy have values above 150 percent. Germany has a value of just under 70 percent.

Initially, nothing had become known about turning the screws for more flexibility in debt rules in the German government’s position. Lindner’s public statements had focused on caps on deficits and debt. The adjusting screws for the flexibility clauses, which appear in the paper under the heading “Principles of the German government for the reform discussion on fiscal rules,” provide in detail:

First, investment flexibility clauses could apply for a “limited” time, not just “in the event of an economic crisis”. The current rules provide that the flexibility clauses only apply during sharp recessions.
Second, the “overall limit on the use” of the clauses could be increased on a “narrowly limited one-time basis until the medium-term budget target is reached“.
Third, the “extension of the investment clause to other EU programs than currently taken into account” would be possible, assuming positive effects on growth and debt sustainability.

Lindner wants to define escape clause

In addition, the German government is working hard to establish clear criteria for the so-called “escape clause”. The escape clause allows a temporary deviation from the consolidation path in the event of a severe economic slump. The German government praises: In the crisis, the clause helped member states to take the necessary fiscal measures. “However, the clause is only vaguely laid out in the legal texts.”

The German government, therefore, urges: concrete criteria for the use of the clause as well as “procedures for (de)activation” increased the transparency and predictability of the measures for the member states as well as market participants. It says further: “It should be borne in mind that the general escape clause does not mean a suspension of the Growth and Stability Pact.”

The German government is also making a push to give the European Fiscal Board (EFB) independence from the Commission. The EFB watches over the sustainability of public finances in the EU. The EFB’s organizational-institutional independence “could be helpful for a more consistent implementation of the rules”, the German government writes in its position statement.

Austria plans low-cost electricity share

By

Hans-Peter Siebenhaar

In Germany, political attention is currently still focused primarily on galloping gas prices. But Austria is already a step ahead because electricity prices have risen sharply. The government in Vienna is planning concrete steps to get retail electricity prices under control. “Our model is to support basic household consumption with a capped electricity price. In this way, the aid is supposed to reach people directly. For further consumption, however, the market prices apply,” said Energy Minister Leonore Gewessler in an interview with Europe.Table. “We want to use this to maintain the price signal against waste: Energy must be used very carefully.”

In doing so, the government in Vienna is implementing a plan by Gabriel Felbermayr, head of the Wifo economic research institute. Together with the Ministry of Finance under conservative Finance Minister Magnus Brunner (ÖVP), the Green Energy Ministry is working out the basics for capping electricity prices. “This is complex in terms of implementation. But I am confident that we will be able to present a proposal to parliament quickly,” says Gewessler. The plans should be available by the end of August.

Specifically, the plan is to subsidize a fixed amount of electricity for each household. Apparently, the government wants to base this on the average consumption per household in Austria. For the rest of the consumption, the sharply increased electricity price will have to be paid. The social democratic opposition is putting pressure on the government to act quickly. The SPÖ’s energy policy spokesman, Alois Schroll, criticizes the months-long review.

Bonus plus electricity price cap

In Germany, a similar model is currently being discussed for the gas price. Households would be subject to a price cap up to a basic consumption level; anything consumed in excess of this would have to be paid for at the market price. It was proposed by the Macroeconomic Policy Institute (IMK) of the Hans Böckler Foundation, which is close to the trade unions, and the CSU, among others.

The black-green government in Vienna has been trying to cushion the price shock on the energy markets since the outbreak of the Ukraine war. To this end, the coalition has already put together three packages to provide relief for particularly burdened sections of the population. For example, every citizen in Austria will receive €500 as a climate bonus in October. Now the electricity price cap is to be added.

However, the responsible minister, Brunner, has not yet made any concrete statements on financing. The opposition SPÖ calls for energy companies to be financed by means of an excess profits tax, following the example of Spain. “The billions in excess profits of energy companies must be skimmed off to finance anti-inflationary measures such as the energy price cap we are calling for,” said SPÖ finance spokesman Jan Krainer.

But Brunner rejects this popular demand. In addition, Austria’s largest electricity group, Verbund, has already been asked to pay a special dividend, which was decided under pressure from Chancellor Karl Nehammer (ÖVP).

Austria wants to follow Spain’s example

Austria is not the only country in the EU with a planned electricity price cap. Spain had already introduced a government-imposed price reduction in May. According to the government in Madrid, this made 70 percent of electricity consumption significantly cheaper. In Spain, the situation was particularly precarious because the regulated electricity tariff is directly linked to the electricity exchanges. Portugal had also reacted in parallel to its large neighbor.

Following the example of Spain and Portugal, the SPÖ wants to decouple the price of electricity from the gas price and thus reduce the electricity price. Party leader Pamela Rendi-Wagner proposes abolishing the current marginal cost principle. Under this market design, all energy sources, regardless of their electricity generation costs – whether from wind power, hydropower or photovoltaics – receive the electricity price set by expensive gas-fired power plants as compensation.

Support comes from economist Felbermayr. Although he fundamentally adheres to the current market design, he says that Europe-wide consideration must nevertheless be given to how the coupling of the gas and electricity prices can be defused. “The Iberian solution is not entirely wrong,” he says.

Unlike in Spain, public criticism of energy producers is hardly noticeable in Austria. The reason for the restraint is obvious: The listed market leader Verbund is majority state-owned. The post of CEO is held by former Upper Austrian provincial politician Michael Strugl of the Austrian People’s Party (ÖVP).

Meanwhile, the EU Commission is not enthusiastic about Austria’s approach. Johannes Hahn (ÖVP), the Vienna-based budget commissioner, recently criticized on ORF radio that he was not a great friend of price caps. “If low-income households suffer from high energy prices, they should be helped directly and as a matter of priority,” says the commissioner, who has excellent connections in Austria.

Study: Germany can survive winter without Russian gas

If Russia were to cut off its gas supplies entirely in the coming weeks, Germany would have to reduce its gas consumption by around 25 percent by spring. This is the conclusion of a joint study by the University of Bonn and the University of Cologne. Even if the planned liquefied natural gas terminals went into operation as planned in the winter, savings of 210 terawatt hours (TWh) would be necessary by April 2023.

If savings in gas consumption that can be achieved through alternative energy sources in power generation were factored in, a reduction of around 20 percent would still be necessary, according to the researchers. Such a reduction is feasible with collective savings by industry, households, commerce, and the public sector, “if measures are taken quickly to save gas”, the study concludes. Scaremongering is therefore misplaced, it adds. “Germany can make it through next winter without Russian gas at manageable cost,” tweeted Georg Zachmann, Bruegel analyst and one of the study’s authors.

The EU contingency plan envisages average savings of 15 percent for the member states. However, individual states will probably have to save significantly more gas than 15 percent (Europe.Table reported). The International Energy Agency (IEA) calls for an average savings target of 20 percent. Klaus Müller, President of the German Federal Network Agency, also issued a 20 percent gas savings target for the German government.

Economic costs manageable

The economic costs of adjusting to an import stop are “substantial, but manageable with appropriate economic policy measures,” according to the study, which was funded by the German Research Foundation. In the event of a halt to Russian gas imports, there would be “neither mass poverty nor popular uprisings, but rather production losses, which Germany has already coped with in the past when it has had to face crises.”

The authors are critical of the German government’s efforts to date to adjust demand. The focus on increasing storage levels and neglecting adjustment measures has not been conducive to ending Germany’s dependence on Russia and its political blackmail by Moscow. The authors, therefore, call for rapid measures to save gas.

“The sooner we start reducing demand, the cheaper it will be,” Zachmann cautions. Reducing gas demand earlier not only results in more gas being stored but also means that demand elasticity increases with lead time, the energy expert says. luk

Commission to harmonize forest fire risk assessment

In order to better adapt to the increasing risk of forest fires in Europe, the assessment of the danger situation in the different regions is to become more aligned. The European Commission presented a corresponding tool on Friday.

Together with fire experts from 43 countries, the Brussels-based authority has compiled, evaluated and harmonized data from the past 20 years. The goal is to enable a risk comparison and evaluation of the forest fire hazard on a pan-European level.

This is necessary to improve planning and coordination of prevention measures and cross-border firefighting, the report says. The development of a pan-European approach stems from a series of EU regulations that require the commission to have a comprehensive overview of forest fire risk in Europe.

Until now, very different methodologies have been used in different regions and countries, which has been an obstacle in assessing risks, especially for cross-border fires, the Commission said.

The development in Europe is worrying. According to the Commission, in the EU in 2019 burned an area of more than 4000 square kilometers, the following year 3400, and last year 5000. til

Turkey: Four ships leave Ukrainian ports, one docks

Four more grain freighters have departed from Ukrainian ports. The ships, loaded with sunflower oil and corn, among other things, and bound for China, Turkey, and Italy, were on their way to Istanbul to be inspected there, the Turkish Defense Ministry announced on Twitter on Sunday. In total, eight freighters from Ukraine have thus left since the grain agreement was concluded.

The grain freighter “Razoni”, which was the first ship to leave a Ukrainian port after the agreement between Ukraine and Russia, will not arrive in Lebanon this Sunday as expected. This was announced by the Ukrainian embassy there upon request. The “Razoni” had left the Ukrainian Black Sea port of Odesa on Monday and was supposed to moor in Tripoli this Sunday. The freighter was delayed, the Ukrainian embassy said, but did not give any details.

Agricultural exports through Ukraine’s Black Sea ports had previously been blocked for months because of Russia’s war of aggression. Warring parties Ukraine and Russia each signed separate agreements with Turkey on July 22, under UN mediation, to allow grain exports from Ukraine from three ports. A coordination center in Istanbul is staffed by representatives of the four parties. Inspections are to ensure, among other things, that the ships are not carrying weapons.

In addition, a cargo ship has also docked in a Ukrainian port for the first time since the end of the Russian naval blockade. “The bulk carrier Fulmar S has arrived at the port of Chornomorsk and is ready for loading,” the Ukrainian Ministry of Infrastructure announced on its Telegram channel on Sunday. With the arrival of the Fulmar S, the grain corridor now has an “entrance and exit”, Infrastructure Minister Olexander Kubrakov said. This is an important signal for the markets, he added.

Ukraine also wants to obtain the release of the seaport of Mykolaiv for grain transportation in the future. A proposal to this effect has been sent to the UN and Turkey, Kubrakov informed. The goal is to raise grain exports to three million tons per month.

Ukrainian farmers, however, are under severe pressure despite the resumption of grain exports across the Black Sea. Only about 20 million tons of wheat are foreseeable to be harvested this year, about two-thirds of the yield last year before the Russian war of aggression began, Ukrainian Deputy Agriculture Minister Taras Vysozkiy told the Funke Mediengruppe newspapers (Sunday). dpa/rtr

Putin and Erdogan want to expand cooperation

Russia and Turkey want to expand their economic cooperation. On Friday, Presidents Vladimir Putin and Recep Tayyip Erdogan said in a joint statement after their meeting in Sochi, Russia, that cooperation between the two countries is to be deepened in the areas of transport, agriculture, finance, and construction. According to Russian Deputy Prime Minister Alexander Novak, Turkey also agreed to pay for parts of energy supplies from Russia in rubles in the future.

Putin and Erdogan also pledged their support for the grain agreement signed by Russia and Ukraine under the mediation of Turkey and the United Nations. This also includes the unhindered export of Russian grain as well as fertilizer and raw materials, the statement released on Friday said.

The two presidents also assured each other of mutual coordination and solidarity in combating “all terrorist organizations in Syria.” Turkey had occupied areas in northern Syria with military operations against Kurdish militias against Russia’s opposition. rtr

EU agricultural subsidies: climate and species protection exemptions possible

When farmers use EU subsidies, they must continue to comply with “standards for maintaining land in good agricultural and ecological condition” in 2023, according to the German Federal Ministry of Agriculture. These include crop rotation on arable land, i.e., the annual change of the main crop, and conversion of a minimum proportion of four percent of arable land into biodiversity areas.

However, in view of the consequences of the Russian war of aggression in Ukraine, the EU Commission has given member states the option of exceptionally relaxing standards for food production in 2023: for example, mandatory crop rotation can reportedly be suspended, as can the requirement for four percent non-productive land.

If the EU states use these exemptions, they must notify the EU Commission by August 28 at the latest, according to the Ministry of Agriculture. However, there is no obligation for farmers to apply the exemptions, it said. So anyone who wants to do something for climate and species protection within the framework of EU agricultural subsidies can continue to apply the EU regulations that will apply from 2023. dpa

Italy: Azione party withdraws from center-left electoral alliance

A setback for the left-wing camp in Italy a few weeks before the eagerly awaited parliamentary elections: The Azione party wants to leave the center-left electoral alliance formed just a few days ago before the polls at the end of September. “This was the most painful decision of my life,” party leader Carlo Calenda told state television station Rai Tre on Sunday. He justified the move by saying that the alliance included parties that voted against the government of incumbent Prime Minister Mario Draghi. His unity government broke up in July, which is why new elections are now due.

The left-wing camp had formed an alliance with forces of the bourgeois center and thus sees itself strengthened for the new election on September 25. The head of the Social Democratic Party (PD), Enrico Letta, recently said that the alliance with the Azione party would make the parliamentary election an open race. In polls, the conservative-right camp is considered the favorite, and the far-right “Brothers of Italy” could emerge as the strongest party.

The right-wing bloc is predicted to win 45 percent of the vote, and the PD and Azione together just under 30 percent. However, Italian electoral law favors parties that form broad alliances. According to Letta, his new alliance hopes to gain further support from Italy’s fragmented political landscape.

Azione and its ally +Europa have only five to seven percent voter approval in the polls. But two senior members of Silvio Berlusconi’s conservative Forza Italia recently switched to Azione. They justified the move by saying that the political orientation of the conservative bloc had become too extreme. It consists of Forza Italia, the Lega, and the “Brothers of Italy”. rtr

EU launches participatory study on the future of online platforms

The European Commission has launched a call for tender for a two-year participatory study on the future of online platforms. With the Digital Services Act (DSA) and the Digital Markets Act (DMA), the EU has created a new legal framework for online platforms. The study is now intended to analyze long-term trends and prospects for online platforms. In this way, the Commission wants to ensure that the legal framework is implemented in a forward-looking manner. At the same time, the study is to provide data for monitoring and thus support the Commission’s work in this area.

Those wishing to apply to conduct the study must design and develop a comprehensive research process for ten specific topics, which will be determined in collaboration with all Commission services. The deadline for submitting proposals is 4 p.m. on September 22, 2022.

Study should also look at the development of metaverses

One example of an emerging trend that should be examined in depth is the concentration of economic power in the digital sphere. In this context, the changing role of online platforms and the position of EU SMEs in industrial supply chains should be specifically examined.

Other topics include the future of personal data use and online identity in the digital platform economy, including the development of metaverses, augmented reality, and the future of social media. The study will also explore long-term questions about the future of global standardization in the digital domain, the future of government-as-a-platform, and the future of intellectual property law. vis

Monika Griefahn – fighting for e-fuels

The topic of environmental protection has accompanied Monika Griefahn since her childhood. Born in Mühlheim-Ruhr in 1954, she grew up in the Ruhr region amid its polluted air. “You can’t imagine that today. Everything was yellow from the sulfur clouds. The laundry was always dirty when you hung it outside,” Griefahn recounts.

A few decades later, she looks back on a professional career in politics in which the issue of the environment was almost always at the forefront. Today, the former Lower Saxony environment minister and member of the Bundestag (1998-2009) is involved with the E-Fuel Alliance for sustainable fuels. Fuels that use CO2 from the atmosphere, hydrogen and green electricity to make even the old Opel Corsa climate-friendly to drive.

Co-founder of Greenpeace in Germany

After school, Griefahn goes to Hamburg to study sociology and mathematics. The growing industry there washes chemicals into the Elbe River. In response, Griefahn gets involved in citizens’ initiatives and writes her doctoral thesis on the Cradle to Cradle production system. A way of manufacturing products so that their components can be fully recycled or composted.

In 1980, she and several other activists founded the German branch of the world’s largest environmental organization – Greenpeace. Her efforts there also find favor in politics. When Gerhard Schröder put together his cabinet for the state government in Lower Saxony in 1990, his choice for environment minister fell on the Greenpeace leader. “Schröder must have thought that this woman could really make a difference,” says Griefahn.

Today, Monika Griefahn has taken her leave from politics and instead works directly on solutions for the climate crisis. As a spokesperson for the E-Fuel Alliance, she has been working since 2021 to also make the cars that are already on our roads today climate-friendly: There are currently more than 1.4 billion internal combustion engine vehicles on the planet. “We won’t be able to just scrap them. Even cars that are sorted out in our country today will often continue to drive somewhere else tomorrow,” says Griefahn.

Reducing dependence on individual states

E-fuels are supposed to offer a solution. These are a mixture of CO2 and hydrogen. Depending on their chemical composition, they resemble gasoline, crude oil or diesel. There are still hardly any production plants for them, yet e-fuels would be an answer to a variety of problems, according to Griefahn. “Currently, we import 60 percent fossil energy from countries like Russia and Saudi Arabia. I see no problem in investing in the construction of large plants for the production of climate-friendly e-fuels in many different countries,” says Griefahn.

Countries such as Namibia, Japan, Algeria, Morocco, and Australia are already showing interest in the idea. Cooperation with these countries not only makes Europe’s energy supply more climate-friendly and diverse, but also reduces dependence on individual states, says Griefahn.

The climate crisis requires a variety of solutions. In Monika Griefahn’s opinion, politicians still lack a good eye for this. “Do we know that e-mobility is the only true solution? I don’t. The copper consumption alone speaks against it.” She says we need to find ways to use the resources that are already in circulation and remain open to new ideas: “We must not restrict engineering and inventive talent too much.” Svenja Schlicht