So much for the cheerful spending policy on credit: At the end of the year, the Covid-related exemption rule for debt will expire, as officially announced by Economic Affairs Commissioner Paolo Gentiloni and EU Vice President Valdis Dombrovskis. However, they both believe that no state should cut back on investments. Christof Roche reports on how they envisage this.
Another work in progress: the Due Diligence Act. If the Council had its way, the financial sector would be almost entirely exempt from the rules. Charlotte Wirth uses the example of a Mexican company linked to a Luxembourg financial holding company to analyze why this exemption can be problematic.
It was bound to happen: Yesterday, the European Court of Auditors criticized a lack of controls over spending under the Reconstruction and Resilience Facility. In an investigation, it had “identified a gap in terms of assurance and accountability in protecting the EU’s financial interests”. Read more in our News.
By the way: Our Charlotte Wirth is currently making a name for herself in another respect. She received a “special mention” in the Luxembourg Amnesty Media Award 2023 in the article category. Namely with her research on Rwandan war criminals who are staying in Belgium, infiltrating politics and associations there and whose traces also lead to Luxembourg. Congratulations!
The European Commission is allowing the suspension of debt rules to expire at the end of the year. EU Economic Affairs Commissioner Paolo Gentiloni said in Brussels that it had been right to trigger the so-called Escape Clause enshrined in the Stability and Growth Pact in spring 2020. This had enabled the member states to “cushion the economic shocks caused by Covid and the Russian war of aggression against Ukraine”. In the meantime, the economic situation in Europe has stabilized again, despite continuing high uncertainty, so that the deactivation of the Escape Clause is in order.
In this context, EU Vice President Valdis Dombrovskis emphasized that the Commission would not launch any deficit procedures against member states with excessive new debt in the current year. However, the procedures would be restarted, where necessary, in spring 2024. The two commissioners made their remarks on the occasion of guidelines presented by the Brussels-based authority on the implementation and coordination of member states’ fiscal policies next year. The guidelines come at a time when a new direction for the Stability and Growth Pact is being negotiated. Until the new set of fiscal rules comes into force, the current debt rules will still apply.
Gentiloni stressed, however, that elements of the reform should be incorporated into national stability and convergence programs already in the current fiscal surveillance cycle “to allow for an effective bridge to future fiscal rules and to take into account the current challenges”. The Italian stressed that the Commission will integrate “quantitative targets as well as qualitative guidelines for investment and energy measures, in line with the Commission’s reform orientations” in its country-specific budget recommendations for 2024, due in May.
In this context, the recommendations are to be formulated on the basis of net primary expenditures and differentiated according to the challenges of the member states in terms of their debt sustainability. It was said in Commission circles that the recommendations are to cover a medium-term period of four years. The so-called 1/20 rule for debt reduction anchored in the current fiscal regime will not be applied.
The sources also said that if deficit proceedings were to be opened against member states next year on the grounds of excessive new borrowing, the reduction target would probably be based on the current size of the deficit in the Stability Pact. While there is no fixed target for deficit reduction yet, as the reform is still pending, the reduction is likely to be comparable to the reduction of the structural deficit in the order of at least 0.5 percent in the current EDP. The counties also made clear that there would be no opening of excessive deficit procedures based on a country’s debt ratio in the coming year under any circumstances.
Gentiloni once again stressed that member states should achieve their budgetary adjustments “not by cutting investment, but by limiting current spending“. There was room for maneuver, he said, especially in the measures they had introduced to cushion the social and economic impact of the energy crisis. Now that energy price pressures are easing, he said, member states should phase out these support measures, starting “with those that are poorly targeted or distort the price signal”. The commissioner made clear that last year, support measures had reached 1.2% of EU gross domestic product (GDP).
This would have entailed considerable costs. If aid measures had been concentrated on actual emergencies, the cost would have been only 0.3 percent of EU GDP, according to the EU Commission’s calculations. With regard to the reform of European debt rules, Vice President Dombrovskis announced that the Commission would present the legislative package for the new EU fiscal framework promptly after the next EU summit, which is scheduled for March 23-24. Authority circles said the negotiations would likely drag into next year. However, they should be completed before the upcoming election for the new European Parliament in spring 2024.
The Parliament is still negotiating, but the Council was already able to agree on a common approach to the Due Diligence Act in December. Under pressure from France, it decided on a special role for the financial sector. The text on which the EU27 agreed at the end is as opaque as it always is when a compromise could only be pushed through by the skin of its teeth.
This much, however, is clear:
The far-reaching exceptions for the financial sector are surprising. It is precisely this sector that has a major influence on global value chains. As recently as its feasibility study on the Due Diligence Act, the Commission highlighted the role of the financial sector “in financing and carrying out economic activities in almost every other sector of the economy”. Because of this influence, the financial sector is considered a risk industry in the UN Sustainable Business Guidelines, for example.
But what does it mean in concrete terms if only very weak due diligence requirements apply to the financial sector? A look at the Luxembourg financial center provides a current example.
It takes us to Mexico. There, two human rights activists disappeared a few weeks ago, the human rights lawyer Ricardo Arturo Lagunes Gasca and the representative of the indigenous Aquila community, Antonio Díaz Valencia.
Neither has been seen since they left for home about a month ago from a meeting with mine operator Ternium and the Aquila community. Their car was found abandoned. It was riddled with bullets. Their relatives are sure that Ternium was involved in their disappearance. The company had threatened the activists in the past. Ternium denies the accusations.
Ternium Mexico has been in dispute for years with the indigenous community on whose territory the company operates several mines. Many local residents have been relocated as a result of Ternium’s projects. Only some of them have been compensated by the company. And this was despite the fact that there was a corresponding agreement with the mining company.
The disappeared lawyer Lagunes Gasca previously represented the families in the dispute against the steel company and held Ternium responsible for environmental and human rights violations.
“This is a classic case of ‘divide and conquer,’ as we see time and again. A company instigates strife between affected communities in order to better achieve its goals,” Antoniya Argirova of the Luxembourg-based NGO coalition Initiative pour un devoir de vigilance (Initiative for Due Diligence) tells Table.Media. She is in contact with the lawyer of the families of the disappeared activists.
Ternium Mexico is a subsidiary of Ternium SA, a Luxembourg financial holding company (SOPARFI). This in turn belongs to the Italo-Argentine group Techint, which is also a holding company based in Luxembourg.
In the case of the disappeared activists, however, Luxembourg sees itself as responsible only to a limited extent: Ternium SA was reminded in a letter of its due diligence obligations under the OECD Guidelines for Multinational Enterprises, among other things, yet Luxembourg is not responsible for Ternium under these guidelines, but Mexico is – after all, the case of Ternium concerns the Mexican subsidiary, says the Ministry of Finance.
The Ternium case shows how difficult it is to determine responsibility in corporate networks. After all, everything hinges on the question of who must perform due diligence: the company or its parent group? In the Council mandate, clarification of this question is left to the member states.
For Luxembourg, the interpretation of the Due Diligence Act is particularly critical, because only 0.1 percent of the companies based there would fall under the law based on their number of employees and turnover. At the same time, however, several thousand holding companies and investment funds are based in the Grand Duchy. They manage assets worth more than €5,000 billion. And yet, according to the Council mandate, they are to be exempt from the law.
Cases like Ternium are numerous in Luxembourg. There is the Pegasus scandal involving the Israeli company NSO, which in turn is linked to the Luxembourg holdings Q Cyber Technologies and Osy Technologies. The Luxembourg holding Kernel, which is responsible for land theft in Ukraine, and the meat company JBS, which is accused of corruption and illegal land clearing and manages large parts of the group from Luxembourg. In the case of all those mentioned, the question of who is ultimately responsible is likely to be difficult to clarify.
The problem is that in Luxembourg, large holding companies are taking over the role of the business group, Charles Muller of Finance and Human Rights tells Table.Media. The asset manager and lawyer used to represent the Luxembourg fund industry ALFI, but today he campaigns for the protection of human rights in the Luxembourg financial industry. For him, one thing is clear: In cases like Ternium, responsibility must lie with the financial holding companies. “Their board of directors meets in Luxembourg. It decides what happens in the subsidiaries”.
Muller finds it hard to understand why the EU27 wants to exempt the financial sector. “If you want to change something, you have to aim at where the money comes from, shares are bought, loans are issued. You always end up with the funding industry“.
In addition, financial service providers already perform due diligence, for example to implement EU rules in the area of corruption and money laundering. EU legislation demands that financial service providers must ensure that they do not manage funds that originate from forced labor.
That the financial industry is capable of extending its due diligence to the areas of human rights and the environment is demonstrated by the Sustainable Finance and Human Rights Survey. This is a survey commissioned by the Luxembourg Ministry of Finance in 2020 and 2022. There, 87 percent of major financial players in Germany, France, Luxembourg, the Netherlands, Switzerland and the United Kingdom said they would welcome strengthening their human rights legislation. Most also stressed that they were well prepared for corresponding requirements.
The question arises, however, whether a country like Luxembourg could even monitor thousands of financial companies for their human rights due diligence. For a long time, the OECD contact point for the Guidelines for Multinational Enterprises employed only a part-time position. In the meantime, one employee has been added.
France has lobbied even harder than Luxembourg against the inclusion of the financial sector. So much so that Paris even threatened to block the general approach in the Council. There are several reasons for this.
The government is aware of the problem of locating accountability. In an evaluation of the 2020 law, the French Ministry of Economy writes: “Based on the data from the Commercial Court, it is not possible to determine whether individual companies are part of a larger group.” It adds, “In the case of foreign companies, it is not possible to identify the only French part that could be affected by the law because of their integration for tax purposes into an international group“.
Brexit is also repeatedly cited as a reason for France’s push. Since it happened, Paris has wanted to replace London as one of the world’s most important financial centers and attract international asset managers. Stricter regulation would therefore come at an inopportune time.
If citizens in Europe can have electricity and gas at any time, travel without borders by train or use the Internet at low cost, it is also due to the work of civil servants like Annegret Groebel. For decades, the enterprising economist has been helping to weld together the single market in the EU’s network industries: railroads, postal services, telecommunications and energy.
“Before the pandemic, I was actually either in Brussels or another European city every week,” says the head of the International Affairs Department at the German Federal Network Agency. Groebel travels the continent in several roles at once – for example, as President of the Council of European Energy Regulators (CEER).
“We develop the methods for Europe’s regulators to best achieve the goals of the Brussels regulatory framework”, says the 62-year-old. In the CEER, Europe’s regulators organize themselves and monitor how consumer-friendly the retail markets for gas and electricity are functioning.
The body thus complements ACER, the Agency for the Cooperation of Energy Regulators. The agency in Ljubljana is supposed to oversee wholesale energy trading – and the omnipresent Annegret Groebel is also a member of ACER’s Regulatory Council.
In the energy crisis, with high prices weighing on Europe’s consumers, regulators are providing DGs with information that later becomes the basis for legislative proposals. “When the REPowerEU package came along, the Commission approached CEER very early on and asked for data on supply contracts for electricity and gas“, Groebel recounts.
How many consumers even have contracts with price guarantees? How have member states regulated whether and at what rates customers are still supplied if their supplier goes bankrupt? All of these questions suddenly had the utmost urgency. “In some cases, suppliers flipped because they hadn’t hedged against high prices, and in some member states, customers don’t automatically fall into a replacement supply“, the regulatory expert reports.
For Groebel, solid data is also essential in the discussion about reforming the electricity market design: “Without sufficient information, there is a risk that policymakers will make well-intentioned proposals but reform will fail”. The CEER president warns against one step in particular: “EU legislators should not decouple the price of electricity from the price of gas. The market’s price signals according to the merit order of power plants express shortages and form the foundation for electricity trade between EU states“, Groebel explains.
“If the market design is adjusted too much, there is a risk of distorting and, in the worst case, destroying the European internal market. Regulators would have to change too many methods for cross-border electricity trading. Within a few months, neither the authorities can handle that nor the market players can implement it”. In addition, according to Groebel, investors would be unsettled if prices lost their incentive effect, so that not enough would be invested in renewable energies and flexibility.
As recently as the beginning of February, the European Court of Auditors complained that the member states had not even fully implemented all the regulatory methods under the third energy market package of 2009.
Annegret Groebel’s career began a decade earlier at the birth of European regulated markets in the network industries. After completing her doctorate in Mannheim, the economist joined the Postal Ministry in 1997: “At that time, however, I was already employed by the new regulatory authority for telecommunications and postal services. At that time, we were already doing something in Bonn that didn’t exist in any other European country“.
The tinkerers in the offices had devised a method of unbundling customers’ telephone lines from the “monopolist” Deutsche Telekom and making them completely accessible to new competitors. “In other countries, there was a lot of interest in how this worked. And since I was in the relevant chamber and also spoke English, I was invited to go along”, Annegret Groebel recounts.
In 2001, the president of the agency brought the Hessian into the staff department, where she gradually built up the International Affairs Department, which was then merged with the Postal Department. In Brühl, the economist completed a Master of European Administrative Management at the European University of Applied Sciences. “Fortunately, it was possible to do this on the side, and this degree gave me a basic foundation of European knowledge for my day-to-day work”, says the knowledgeable economist.
Conversely, Annegret Groebel benefits from her broad wealth of experience in Brussels. “In European bodies, you never get everyone committed to exactly the same method. Getting the right amount of consistency and room for maneuver is tricky but doable in the EU“. Manuel Berkel
So much for the cheerful spending policy on credit: At the end of the year, the Covid-related exemption rule for debt will expire, as officially announced by Economic Affairs Commissioner Paolo Gentiloni and EU Vice President Valdis Dombrovskis. However, they both believe that no state should cut back on investments. Christof Roche reports on how they envisage this.
Another work in progress: the Due Diligence Act. If the Council had its way, the financial sector would be almost entirely exempt from the rules. Charlotte Wirth uses the example of a Mexican company linked to a Luxembourg financial holding company to analyze why this exemption can be problematic.
It was bound to happen: Yesterday, the European Court of Auditors criticized a lack of controls over spending under the Reconstruction and Resilience Facility. In an investigation, it had “identified a gap in terms of assurance and accountability in protecting the EU’s financial interests”. Read more in our News.
By the way: Our Charlotte Wirth is currently making a name for herself in another respect. She received a “special mention” in the Luxembourg Amnesty Media Award 2023 in the article category. Namely with her research on Rwandan war criminals who are staying in Belgium, infiltrating politics and associations there and whose traces also lead to Luxembourg. Congratulations!
The European Commission is allowing the suspension of debt rules to expire at the end of the year. EU Economic Affairs Commissioner Paolo Gentiloni said in Brussels that it had been right to trigger the so-called Escape Clause enshrined in the Stability and Growth Pact in spring 2020. This had enabled the member states to “cushion the economic shocks caused by Covid and the Russian war of aggression against Ukraine”. In the meantime, the economic situation in Europe has stabilized again, despite continuing high uncertainty, so that the deactivation of the Escape Clause is in order.
In this context, EU Vice President Valdis Dombrovskis emphasized that the Commission would not launch any deficit procedures against member states with excessive new debt in the current year. However, the procedures would be restarted, where necessary, in spring 2024. The two commissioners made their remarks on the occasion of guidelines presented by the Brussels-based authority on the implementation and coordination of member states’ fiscal policies next year. The guidelines come at a time when a new direction for the Stability and Growth Pact is being negotiated. Until the new set of fiscal rules comes into force, the current debt rules will still apply.
Gentiloni stressed, however, that elements of the reform should be incorporated into national stability and convergence programs already in the current fiscal surveillance cycle “to allow for an effective bridge to future fiscal rules and to take into account the current challenges”. The Italian stressed that the Commission will integrate “quantitative targets as well as qualitative guidelines for investment and energy measures, in line with the Commission’s reform orientations” in its country-specific budget recommendations for 2024, due in May.
In this context, the recommendations are to be formulated on the basis of net primary expenditures and differentiated according to the challenges of the member states in terms of their debt sustainability. It was said in Commission circles that the recommendations are to cover a medium-term period of four years. The so-called 1/20 rule for debt reduction anchored in the current fiscal regime will not be applied.
The sources also said that if deficit proceedings were to be opened against member states next year on the grounds of excessive new borrowing, the reduction target would probably be based on the current size of the deficit in the Stability Pact. While there is no fixed target for deficit reduction yet, as the reform is still pending, the reduction is likely to be comparable to the reduction of the structural deficit in the order of at least 0.5 percent in the current EDP. The counties also made clear that there would be no opening of excessive deficit procedures based on a country’s debt ratio in the coming year under any circumstances.
Gentiloni once again stressed that member states should achieve their budgetary adjustments “not by cutting investment, but by limiting current spending“. There was room for maneuver, he said, especially in the measures they had introduced to cushion the social and economic impact of the energy crisis. Now that energy price pressures are easing, he said, member states should phase out these support measures, starting “with those that are poorly targeted or distort the price signal”. The commissioner made clear that last year, support measures had reached 1.2% of EU gross domestic product (GDP).
This would have entailed considerable costs. If aid measures had been concentrated on actual emergencies, the cost would have been only 0.3 percent of EU GDP, according to the EU Commission’s calculations. With regard to the reform of European debt rules, Vice President Dombrovskis announced that the Commission would present the legislative package for the new EU fiscal framework promptly after the next EU summit, which is scheduled for March 23-24. Authority circles said the negotiations would likely drag into next year. However, they should be completed before the upcoming election for the new European Parliament in spring 2024.
The Parliament is still negotiating, but the Council was already able to agree on a common approach to the Due Diligence Act in December. Under pressure from France, it decided on a special role for the financial sector. The text on which the EU27 agreed at the end is as opaque as it always is when a compromise could only be pushed through by the skin of its teeth.
This much, however, is clear:
The far-reaching exceptions for the financial sector are surprising. It is precisely this sector that has a major influence on global value chains. As recently as its feasibility study on the Due Diligence Act, the Commission highlighted the role of the financial sector “in financing and carrying out economic activities in almost every other sector of the economy”. Because of this influence, the financial sector is considered a risk industry in the UN Sustainable Business Guidelines, for example.
But what does it mean in concrete terms if only very weak due diligence requirements apply to the financial sector? A look at the Luxembourg financial center provides a current example.
It takes us to Mexico. There, two human rights activists disappeared a few weeks ago, the human rights lawyer Ricardo Arturo Lagunes Gasca and the representative of the indigenous Aquila community, Antonio Díaz Valencia.
Neither has been seen since they left for home about a month ago from a meeting with mine operator Ternium and the Aquila community. Their car was found abandoned. It was riddled with bullets. Their relatives are sure that Ternium was involved in their disappearance. The company had threatened the activists in the past. Ternium denies the accusations.
Ternium Mexico has been in dispute for years with the indigenous community on whose territory the company operates several mines. Many local residents have been relocated as a result of Ternium’s projects. Only some of them have been compensated by the company. And this was despite the fact that there was a corresponding agreement with the mining company.
The disappeared lawyer Lagunes Gasca previously represented the families in the dispute against the steel company and held Ternium responsible for environmental and human rights violations.
“This is a classic case of ‘divide and conquer,’ as we see time and again. A company instigates strife between affected communities in order to better achieve its goals,” Antoniya Argirova of the Luxembourg-based NGO coalition Initiative pour un devoir de vigilance (Initiative for Due Diligence) tells Table.Media. She is in contact with the lawyer of the families of the disappeared activists.
Ternium Mexico is a subsidiary of Ternium SA, a Luxembourg financial holding company (SOPARFI). This in turn belongs to the Italo-Argentine group Techint, which is also a holding company based in Luxembourg.
In the case of the disappeared activists, however, Luxembourg sees itself as responsible only to a limited extent: Ternium SA was reminded in a letter of its due diligence obligations under the OECD Guidelines for Multinational Enterprises, among other things, yet Luxembourg is not responsible for Ternium under these guidelines, but Mexico is – after all, the case of Ternium concerns the Mexican subsidiary, says the Ministry of Finance.
The Ternium case shows how difficult it is to determine responsibility in corporate networks. After all, everything hinges on the question of who must perform due diligence: the company or its parent group? In the Council mandate, clarification of this question is left to the member states.
For Luxembourg, the interpretation of the Due Diligence Act is particularly critical, because only 0.1 percent of the companies based there would fall under the law based on their number of employees and turnover. At the same time, however, several thousand holding companies and investment funds are based in the Grand Duchy. They manage assets worth more than €5,000 billion. And yet, according to the Council mandate, they are to be exempt from the law.
Cases like Ternium are numerous in Luxembourg. There is the Pegasus scandal involving the Israeli company NSO, which in turn is linked to the Luxembourg holdings Q Cyber Technologies and Osy Technologies. The Luxembourg holding Kernel, which is responsible for land theft in Ukraine, and the meat company JBS, which is accused of corruption and illegal land clearing and manages large parts of the group from Luxembourg. In the case of all those mentioned, the question of who is ultimately responsible is likely to be difficult to clarify.
The problem is that in Luxembourg, large holding companies are taking over the role of the business group, Charles Muller of Finance and Human Rights tells Table.Media. The asset manager and lawyer used to represent the Luxembourg fund industry ALFI, but today he campaigns for the protection of human rights in the Luxembourg financial industry. For him, one thing is clear: In cases like Ternium, responsibility must lie with the financial holding companies. “Their board of directors meets in Luxembourg. It decides what happens in the subsidiaries”.
Muller finds it hard to understand why the EU27 wants to exempt the financial sector. “If you want to change something, you have to aim at where the money comes from, shares are bought, loans are issued. You always end up with the funding industry“.
In addition, financial service providers already perform due diligence, for example to implement EU rules in the area of corruption and money laundering. EU legislation demands that financial service providers must ensure that they do not manage funds that originate from forced labor.
That the financial industry is capable of extending its due diligence to the areas of human rights and the environment is demonstrated by the Sustainable Finance and Human Rights Survey. This is a survey commissioned by the Luxembourg Ministry of Finance in 2020 and 2022. There, 87 percent of major financial players in Germany, France, Luxembourg, the Netherlands, Switzerland and the United Kingdom said they would welcome strengthening their human rights legislation. Most also stressed that they were well prepared for corresponding requirements.
The question arises, however, whether a country like Luxembourg could even monitor thousands of financial companies for their human rights due diligence. For a long time, the OECD contact point for the Guidelines for Multinational Enterprises employed only a part-time position. In the meantime, one employee has been added.
France has lobbied even harder than Luxembourg against the inclusion of the financial sector. So much so that Paris even threatened to block the general approach in the Council. There are several reasons for this.
The government is aware of the problem of locating accountability. In an evaluation of the 2020 law, the French Ministry of Economy writes: “Based on the data from the Commercial Court, it is not possible to determine whether individual companies are part of a larger group.” It adds, “In the case of foreign companies, it is not possible to identify the only French part that could be affected by the law because of their integration for tax purposes into an international group“.
Brexit is also repeatedly cited as a reason for France’s push. Since it happened, Paris has wanted to replace London as one of the world’s most important financial centers and attract international asset managers. Stricter regulation would therefore come at an inopportune time.
If citizens in Europe can have electricity and gas at any time, travel without borders by train or use the Internet at low cost, it is also due to the work of civil servants like Annegret Groebel. For decades, the enterprising economist has been helping to weld together the single market in the EU’s network industries: railroads, postal services, telecommunications and energy.
“Before the pandemic, I was actually either in Brussels or another European city every week,” says the head of the International Affairs Department at the German Federal Network Agency. Groebel travels the continent in several roles at once – for example, as President of the Council of European Energy Regulators (CEER).
“We develop the methods for Europe’s regulators to best achieve the goals of the Brussels regulatory framework”, says the 62-year-old. In the CEER, Europe’s regulators organize themselves and monitor how consumer-friendly the retail markets for gas and electricity are functioning.
The body thus complements ACER, the Agency for the Cooperation of Energy Regulators. The agency in Ljubljana is supposed to oversee wholesale energy trading – and the omnipresent Annegret Groebel is also a member of ACER’s Regulatory Council.
In the energy crisis, with high prices weighing on Europe’s consumers, regulators are providing DGs with information that later becomes the basis for legislative proposals. “When the REPowerEU package came along, the Commission approached CEER very early on and asked for data on supply contracts for electricity and gas“, Groebel recounts.
How many consumers even have contracts with price guarantees? How have member states regulated whether and at what rates customers are still supplied if their supplier goes bankrupt? All of these questions suddenly had the utmost urgency. “In some cases, suppliers flipped because they hadn’t hedged against high prices, and in some member states, customers don’t automatically fall into a replacement supply“, the regulatory expert reports.
For Groebel, solid data is also essential in the discussion about reforming the electricity market design: “Without sufficient information, there is a risk that policymakers will make well-intentioned proposals but reform will fail”. The CEER president warns against one step in particular: “EU legislators should not decouple the price of electricity from the price of gas. The market’s price signals according to the merit order of power plants express shortages and form the foundation for electricity trade between EU states“, Groebel explains.
“If the market design is adjusted too much, there is a risk of distorting and, in the worst case, destroying the European internal market. Regulators would have to change too many methods for cross-border electricity trading. Within a few months, neither the authorities can handle that nor the market players can implement it”. In addition, according to Groebel, investors would be unsettled if prices lost their incentive effect, so that not enough would be invested in renewable energies and flexibility.
As recently as the beginning of February, the European Court of Auditors complained that the member states had not even fully implemented all the regulatory methods under the third energy market package of 2009.
Annegret Groebel’s career began a decade earlier at the birth of European regulated markets in the network industries. After completing her doctorate in Mannheim, the economist joined the Postal Ministry in 1997: “At that time, however, I was already employed by the new regulatory authority for telecommunications and postal services. At that time, we were already doing something in Bonn that didn’t exist in any other European country“.
The tinkerers in the offices had devised a method of unbundling customers’ telephone lines from the “monopolist” Deutsche Telekom and making them completely accessible to new competitors. “In other countries, there was a lot of interest in how this worked. And since I was in the relevant chamber and also spoke English, I was invited to go along”, Annegret Groebel recounts.
In 2001, the president of the agency brought the Hessian into the staff department, where she gradually built up the International Affairs Department, which was then merged with the Postal Department. In Brühl, the economist completed a Master of European Administrative Management at the European University of Applied Sciences. “Fortunately, it was possible to do this on the side, and this degree gave me a basic foundation of European knowledge for my day-to-day work”, says the knowledgeable economist.
Conversely, Annegret Groebel benefits from her broad wealth of experience in Brussels. “In European bodies, you never get everyone committed to exactly the same method. Getting the right amount of consistency and room for maneuver is tricky but doable in the EU“. Manuel Berkel
