Table.Briefing: Europe (English)

Dispute over suspension of CO2 fleet limits + Broader anti-subsidy proceedings against China + Continuation of Russia sanctions

Dear reader,

Although the internal government squabbles in Ljubljana over the Slovenian candidate for the EU Commission have by no means been resolved, Ursula von der Leyen intends to stick to her plan to present the new personnel tableau on Tuesday. Commission spokesman Eric Mamer said on Friday in Brussels that the Commission President still intends to present her list of Commissioners to the leaders of the European Parliament in Strasbourg on Tuesday.

However, it is possible that von der Leyen will initially present an incomplete list of her new team and leave out the controversial personnel for now. In addition to the Slovenian nominee Marta Kos, who continues to be blocked by the opposition in Ljubljana, this also includes Italy’s candidate Raffaele Fitto. Social Democrats, Liberals and Greens in the European Parliament want to prevent the Fratelli man from becoming Vice-President.

Commission spokesperson Mamer left open what kind of list von der Leyen would present and said meaningfully that there was still “a long time” until Tuesday. By Sunday evening, however, there was still no new status. It is therefore quite possible that von der Leyen’s list on Tuesday will not yet contain the final composition of the Commissioners’ portfolios.

Get the week off to a good start!

Your
Lukas Knigge
Image of Lukas  Knigge

Feature

CO2 fleet limits: industry wants suspension by state of emergency

European car manufacturers want to call on the EU Commission to either postpone the CO2 fleet regulation targets for passenger cars for 2025 by two years or make serious adjustments. Renault CEO Luca de Meo, currently ACEA President, wants the EU umbrella organization ACEA to have the Commission’s initiative approved by the Executive Committee on Wednesday. The Commission will be asked to postpone the 2025 targets by two years under Article 122 of the European Treaties. Article 122 is regarded as an emergency clause in the EU constitution. The CEOs of the manufacturers are represented on the ACEA Executive Committee.

If Article 122 were amended, the Council could, on the initiative of the Commission and without the involvement of Parliament, “adopt measures appropriate to the economic situation, in particular if serious difficulties arise in the supply of certain goods, especially in the energy sector,” as stated in paragraph 1. The paragraph has been used repeatedly, for example during the pandemic and the energy crisis. According to ACEA circles, a law firm has examined the route via Article 122 and found it to be promising. On Wednesday, de Meo had already presented the proposal to the other CEOs and received broad support.

Billions in fines in favor of the EU budget

In 2025, the CO2 fleet limits that manufacturers must comply with in relation to their new car fleet will be reduced by 15 percent. If manufacturers fail to meet their specific targets, fines will be imposed. As the sales of battery electric vehicles (BEV) of all European manufacturers do not meet the requirements of the legislator, according to internal estimates, they will have to expect fines of around €15 billion for 2025.

If the limit values are not met, the manufacturer in question must pay a fine of €95 – per new vehicle and for every gram by which its fleet exceeded the set targets on average. The billions paid by the industry would flow into the general EU budget.

In 2025, the fleet limit for new passenger cars will fall from an average of 95 grams of CO2 per kilometer driven to 93.6 grams. Each manufacturer is given specific CO2 fleet targets, depending on the average weight of their vehicle range. So far, the major manufacturers have always managed to meet their targets. This is unlikely to happen in 2025. Only BMW and Stellantis are considered to have a chance of meeting the legal requirements. VW, Mercedes, Renault and Ford are expecting fines in the billions. The manufacturer-specific targets for 2025 have not yet been determined in detail.

VW is struggling the most

The VW Group, which also includes Porsche, Skoda, Cupra and Audi, expects a specific target of less than 100 grams per kilometer driven. The VW target for 2023 and 2024 is 122 grams. At 118.4 grams in 2023, it was undercut by 3.6 grams. VW delivered 472,400 BEVs in the EU in 2023, which corresponds to a share of 12.5 percent. In the first half of 2024, VW delivered 184,100 BEVs in the EU, which corresponds to a BEV share of 9.5 percent. According to external estimates, VW would have to expect fines of over €4 billion from the EU in 2025. According to estimates, VW would have to increase BEV sales in Europe by 300,000 vehicles in 2025 compared to 2023 or increase the BEV share to 24 percent in order to avoid fines.

Mercedes had a specific fleet target of 128 grams per kilometer driven in 2023. According to preliminary data, the fleet averaged 108 grams in 2023, which is 20 grams below the EU target. Mercedes delivered around 110,000 BEVs in the EU in 2023. In the first half of 2024, BEV sales fell slightly to 52,000 vehicles.

BMW had a specific fleet target of 128.5 grams per kilometer driven in 2023. According to BMW’s internal calculations, the manufacturer achieved a value of 102.1 grams in 2023, falling short of the EU target by an average of 26.4 grams. BMW does not provide figures for BEV sales in the EU. According to reports, BMW CEO Oliver Zipse supports the industry’s push for a change to the 2025 targets, although BMW may not face any fines.

Possibility of big discount battle in 2025

If the EU sticks to the fleet limits for 2025, European manufacturers would probably try to increase BEV sales with further extraordinary discounts in order to reduce fleet consumption and avoid fines. They would be faced with the economic alternative of giving discounts worth billions (with drastic consequences for the residual values of young used cars) or having to pay heavy fines to the EU. In both cases, manufacturers’ profits would collapse and their financial opportunities to invest in the transformation of the industry would be restricted.

VDA President Hildegard Müller makes a different proposal to adjust the 2025 targets. The review of the CO2 fleet legislation planned in the law for 2026 should be rescheduled to 2025. According to the calculation, it will have to be determined that the 2025 targets are not sustainable due to the weak sales of BEVs and will have to be revised. As part of this, the penalties for 2025 could be adjusted or suspended.

The amendment of the CO2 fleet legislation would take place in the course of a regular legislative procedure, i.e. with the involvement of the EU Parliament. The process could take one to two years and would require parliamentary approval. Müller is also calling for the review of the CO2 fleet regulation for heavy commercial vehicles to be rescheduled from 2027 to 2026.

Transport and Environment, the umbrella organization of EU environmental associations, is calling on the European Parliament to prevent the weakening of the 2025 targets. The industry’s demands are “absurd,” the association said.

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  • Flottengrenzwerte
Translation missing.

Interview

WV Stahl calls for broader anti-subsidy proceedings against Chinese steel

Martin Theuringer is Managing Director of the German Steel Federation.

Martin Theuringer, how do you assess the economic situation in the European steel industry?

The economic situation is very serious both in Germany and in Europe. This is particularly true for the steel industry in Germany. In some cases, its very existence is at stake.

How does the situation differ between Germany and the rest of Europe?

To provide a figure: Demand for steel in Germany is currently 30 percent below the level we had in 2018. In Europe, we are at a level of around minus 20 percent. There is less production, less investment and less construction in Germany.

Why is that?

Three points are particularly troublesome. Firstly, electricity prices in Germany are not only too high compared to competitors in the USA and China, but also in comparison to the rest of Europe. Secondly, the steel processing industries, i.e. our customers in Germany, are under particular pressure to adapt as a result of the Russian war of aggression and a changed geopolitical situation. Thirdly, we have a high level of political uncertainty in Germany. The whole question of financing the transformation has not yet been resolved. And without certainty in planning, investments will be held back or relocated abroad.

What is the role of foreign trade in the current situation?

We are noticing the significant increase in import pressure as a result of the enormous global overcapacities that are now pushing into the EU market and also crowding out EU suppliers on third markets. This is exacerbating the crisis quite acutely at the moment. And it has become even more dramatic in recent weeks due to the weak demand in China, which is leading to an enormous increase in Chinese exports, both on the European market and on third markets. Chinese imports will reach a level of over 100 million tons again this year. We last saw this in 2016.

What do you expect from the European Commission?

The focus must be on protecting the European market from unfair competition. It is crucial that the existing possibilities are exhausted and that the instruments provided for this purpose are used. This is the anti-dumping law, but also the possibility of taking action against Chinese import pressure with broad-based anti-subsidy proceedings.

Isn’t the Commission already doing this?

The problem in existing practice is always that the anti-dumping proceedings have a very selective effect. They are directed against a specific product and against very specific suppliers. This is often not effective because there are numerous ways of circumventing this. That is why we are calling for a truly broad-based procedure, because we know that the entire Chinese steel industry is heavily subsidized.

Could the introduction of the carbon border adjustment mechanism (CBAM) in 2026 help?

Of course, we need a functioning border adjustment when the free allocation gradually expires and the risk of carbon leakage increases significantly. There is still an incredible amount of work to be done, as there are still serious functional problems.

For example?

In theory, the border adjustment creates equal opportunities on the European market. But of course we also export to third countries and that is then no longer possible because we also bear high CO2 costs for our exports, which our competitors do not have. A second major problem is that European industry is charged for its entire production, while manufacturers outside the EU are only charged for the part that is exported to Europe. It will be easy for Chinese manufacturers to “green” targeted production and then bring this production to Europe, while the rest of Chinese production remains “gray.” Thirdly, we have a problem for the downstream sectors, which are also steel-intensive. Think of screws or metal manufacturers, for example. They will experience a cost shock as a result of rising CO2 prices and will then have to compete internationally with suppliers who do not have this burden.

While the European steel industry is suffering, a lot of Russian steel continues to be imported. Russia is one of the top 5 countries of origin for European crude steel imports an import ban is not planned until 2028. Does this exacerbate the problems for your industry?

That is something we are very concerned about. We were initially very pleased that the EU reacted quickly after the start of the Russian invasion and promptly imposed sanctions on Russian finished steel products. But a very significant proportion of Russian steel imports into the European Union are intermediate products from steel production. These are then further rolled out here in Europe. And that is a major problem because, of course, there is also underutilized capacity within Europe. This means that there are also displacement effects. We don’t understand it politically either, because with these exceptions we are of course also supporting the Russian war economy. Our demand is that these harmful regulations are corrected in the next sanctions package and that we then see import bans on all Russian steel products.

Last year, negotiations for a sustainable arrangement on steel tariffs with the USA failed. What happens next?

An agreement between the EU and the USA would have been highly desirable in order to take joint action against overcapacity. The deadline for the agreement has now been extended to March 2025 for the time being. Depending on the outcome of the election – especially if Trump wins – it is to be expected that the USA will once again take unilateral action. This in turn would entail enormous risks, as the punitive tariffs under Section 232 would then be reactivated against the EU.

Should the EU have made more concessions to the USA? After all, the Americans wanted to take much stronger action against Chinese overproduction.

We would have liked the Commission to find ways to send a resolute signal with the USA to take joint action against emissions-intensive overproduction, which comes primarily from Asia.

Translation missing.

News

Ukraine aid: Commission proposes stabilization of Russia sanctions

In order for the planned $50 billion support from the G7 countries and the EU for Ukraine to be disbursed, the White House needs guarantees that Russian central bank funds will remain frozen. This is because the income from the central bank funds is needed as collateral in order to take out the multi-billion dollar loan for Ukraine. Currently, the sanctions have to be renewed every six months, which gives potential veto players such as Hungary the opportunity to block the sanctions time and again.

Last Friday, von der Leyen’s head of cabinet Björn Seibert presented, according to several sources, the EU ambassadors with three options for stabilizing the sanctions regime for the frozen Russian central bank funds:

  1. Central bank funds are frozen for five years, with a review every twelve months. A qualified majority in the Council would be required to release the central bank funds at the annual review.
  2. The blocking of central bank funds is renewed every 36 months – still by unanimity. The rest of the sanctions will continue to be renewed every six months.
  3. All sanctions are renewed after a period of 36 months instead of six months.

As confirmed by several sources in Brussels, all three options seem acceptable to the USA. As a next step, the Commission will present an amendment to the law in line with one of the options presented. The EU has to agree on a solution by the end of the year at the latest. jaa

  • Europapolitik

Border controls: Criticism from Juncker and warnings of traffic jams

Former EU Commission President Jean-Claude Juncker has expressed his criticism of the extended border controls on entry to Germany that were introduced on Monday. “I am not a friend of border controls because they are associated with massive inconvenience for commuters,” Juncker told the German Press Agency in Luxembourg.

He considers stationary border controls to be particularly problematic. “If there have to be controls, then mobile rather than stationary controls would be less difficult for those affected, not at the border but in the hinterland,” he said, referring to the border with Luxembourg. More than 50,000 German cross-border commuters work in the neighboring country.

Other countries in the Schengen area have also reintroduced temporary border controls. “I view this with concern,” said Juncker. “In living Europe: the fact that the achievement of European integration is now up for discussion without much ado worries me.” It should not be the case that “borders are once again being created in people’s minds and hearts.”

Traffic jams on the German-Danish border?

Meanwhile, the police in Denmark are warning of traffic jams. Due to random checks when entering Germany, there could be delays on the Danish side from Monday onwards, the police announced.

Federal Interior Minister Nancy Faeser (SPD) had previously promised that commuters would not have to expect major traffic disruptions. She also said that Germany was “not going it alone in Europe” with the extended border controls. It was acting in close coordination with neighboring countries.

Scholz: ‘We can’t rely on our neighbors’

According to government sources, Federal Chancellor Olaf Scholz spoke on the phone with EU Commission President Ursula von der Leyen and the heads of government of Austria and Luxembourg, Karl Nehammer and Luc Frieden, on Saturday. Further talks with EU governments are planned. On Friday, Scholz had spoken with Polish Prime Minister Donald Tusk, who had criticized the German government’s plans.

Scholz also justified the border controls with the fact that other EU states are not fulfilling their obligations as part of a common migration policy. “Unfortunately, we cannot completely rely on all of our neighbors to do what they are supposed to do.” That is part of the truth, he said at a citizens’ dialog in Prenzlau on Saturday.

Since Monday night, the federal police can check travelers entering Germany from Luxembourg, Belgium, the Netherlands and Denmark. Previously, they only did this at the borders with Poland, the Czech Republic, Austria, Switzerland and France. dpa/rtr

  • Migrationspolitik

AI Pact: almost 100 organizations involved

The European Commission is seeing growing interest in the AI Pact. The pact is voluntary and provides organizations with the opportunity to implement the requirements of the AI Act at an early stage. Almost 100 companies, including multinational corporations as well as European SMEs from various sectors, have already signed the declarations of commitment, according to the Commission. The authority did not mention any names. The pact is intended to make it easier for companies to comply with the new regulations.

AI Pact: voluntary preparation

The AI Pact consists of two pillars:

  • Pillar I creates a platform for the exchange of knowledge and best practices among the participating organizations. This pillar promotes cooperation and the sharing of experiences through workshops and networks.
  • Pillar II is aimed at companies that already want to take concrete steps to comply with the new regulations. They voluntarily undertake to make their measures public and report regularly on their progress.

Since the AI Act came into force on August 1, 2024, there have been staggered transition periods: the general rules for AI systems apply from one year after coming into force, while the requirements for high-risk systems apply in three years. However, bans on certain applications, such as social scoring by public authorities, will apply after six months, i.e. from February 2, 2025.

September 25: Kick-off of the AI Pact

On 25 September, the EU Commission’s AI Office is organizing a high-level launch event to officially mark the start of the AI Pact. Companies can sign the Pact at any time, as it is an open, ongoing process. The Commission sees great potential and plans to further promote engagement to ensure the responsible and transparent use of AI in Europe.

According to the Commission, Pillar I of the AI Pact is also gaining in popularity. More than 1000 organizations are now said to have expressed interest. vis

  • Künstliche Intelligenz-Verordnung

Dennis Radtke is the new CDA head

Dennis Radtke is a CDU MEP specializing in industry, employment and social affairs.

Dennis Radtke will lead the CDU employee wing in future, succeeding long-time chairman Karl-Josef Laumann. The 45-year-old Radtke was elected as the new chairman at the national conference of the Christian Democratic Workers’ Union (CDA) in Weimar with 83.1 percent of the valid votes.

After 19 years at the helm, Laumann did not stand for re-election. He is now honorary chairman of the CDA. However, the 67-year-old remains an important voice for employee interests in his party as CDU Vice Chairman and Minister of Labor and Social Affairs in North Rhine-Westphalia.

Radtke has been a member of the CDA Federal Executive Board since 2007. He was most recently Deputy Federal Chairman. He is a member of the IG BCE trade union and a CDU MEP specializing in industry, employment and social affairs.

‘Big’ footsteps

After his election, Radtke declared that the CDU must “go into the Bundestag election campaign with an offer for the millions of employees.” Together with Laumann as CDU vice-chairman, he wanted to ensure “that social issues are once again addressed more concisely in the CDU.” The traffic light government has nothing on offer for employees. “The CDU must be recognizable as an advocate for those who work hard every day and still have a hard time,” warned the new CDA chairman.

In his candidacy speech, Radtke said that the footsteps left by Laumann were “big.” He would approach the new office with humility, joy and trust in God. The CDA sees itself as the social conscience of the CDU. Former federal chairmen included the former Minister of Labor Norbert Blüm. The trained machinist Laumann has been at the helm of the CDU association since 2005. dpa

  • Sozialpolitik

Must-Reads

Dessert

Sven Giegold at his old workplace

Sven Giegold
Sven Giegold is State Secretary at the BMWK. He was previously a Green MEP in the EU Parliament.

Anyone who has recently frequented the Member’s Bar of the European Parliament in Strasbourg or the streets of Brussels’ European Quarter is likely to have come across Sven Giegold. The former Green MEP is currently spending a lot of time in his old workplace. Not out of nostalgia, but to promote the German positions (or at least Habeck’s) as Robert Habeck’s State Secretary for Europe.

“Now, at the start of the new parliamentary term, the ideas for the next five years are being developed,” he says. “Now is the right time to be in Brussels and Strasbourg.

In mid-July, Giegold traveled to Strasbourg to give the newly (re-)elected MEPs his own priorities for the new legislative period and, if possible, to dictate a few key points to Ursula von der Leyen’s team in their inaugural speech for the second term of office. Since the summer break, the 54-year-old has already been to Brussels twice, meeting Commission Vice-President Maroš Šefčovič, nine Commission Directors-General, cabinet members and a few more MEPs. Other stakeholders can only dream of such a list.

Giegold and his fellow campaigners had to pass through numerous entry checks – and then rated them with school grades for fun. The “door” at the Berlaymont, the Commission’s headquarters, did not come off well: “Leaving the building requires assistance from three security officers at the various stations,” they noted. This only received a C+, satisfactory. DG COMP is once again taking it too seriously for Giegold’s liking: “Scanner stops you because of metal belt, lack of proportionality as in Art. 107 TFEU,” he notes. This is the article on state aid control. Till Hoppe

Europe.table editorial team

EUROPE.TABLE EDITORIAL OFFICE

Licenses:
    Dear reader,

    Although the internal government squabbles in Ljubljana over the Slovenian candidate for the EU Commission have by no means been resolved, Ursula von der Leyen intends to stick to her plan to present the new personnel tableau on Tuesday. Commission spokesman Eric Mamer said on Friday in Brussels that the Commission President still intends to present her list of Commissioners to the leaders of the European Parliament in Strasbourg on Tuesday.

    However, it is possible that von der Leyen will initially present an incomplete list of her new team and leave out the controversial personnel for now. In addition to the Slovenian nominee Marta Kos, who continues to be blocked by the opposition in Ljubljana, this also includes Italy’s candidate Raffaele Fitto. Social Democrats, Liberals and Greens in the European Parliament want to prevent the Fratelli man from becoming Vice-President.

    Commission spokesperson Mamer left open what kind of list von der Leyen would present and said meaningfully that there was still “a long time” until Tuesday. By Sunday evening, however, there was still no new status. It is therefore quite possible that von der Leyen’s list on Tuesday will not yet contain the final composition of the Commissioners’ portfolios.

    Get the week off to a good start!

    Your
    Lukas Knigge
    Image of Lukas  Knigge

    Feature

    CO2 fleet limits: industry wants suspension by state of emergency

    European car manufacturers want to call on the EU Commission to either postpone the CO2 fleet regulation targets for passenger cars for 2025 by two years or make serious adjustments. Renault CEO Luca de Meo, currently ACEA President, wants the EU umbrella organization ACEA to have the Commission’s initiative approved by the Executive Committee on Wednesday. The Commission will be asked to postpone the 2025 targets by two years under Article 122 of the European Treaties. Article 122 is regarded as an emergency clause in the EU constitution. The CEOs of the manufacturers are represented on the ACEA Executive Committee.

    If Article 122 were amended, the Council could, on the initiative of the Commission and without the involvement of Parliament, “adopt measures appropriate to the economic situation, in particular if serious difficulties arise in the supply of certain goods, especially in the energy sector,” as stated in paragraph 1. The paragraph has been used repeatedly, for example during the pandemic and the energy crisis. According to ACEA circles, a law firm has examined the route via Article 122 and found it to be promising. On Wednesday, de Meo had already presented the proposal to the other CEOs and received broad support.

    Billions in fines in favor of the EU budget

    In 2025, the CO2 fleet limits that manufacturers must comply with in relation to their new car fleet will be reduced by 15 percent. If manufacturers fail to meet their specific targets, fines will be imposed. As the sales of battery electric vehicles (BEV) of all European manufacturers do not meet the requirements of the legislator, according to internal estimates, they will have to expect fines of around €15 billion for 2025.

    If the limit values are not met, the manufacturer in question must pay a fine of €95 – per new vehicle and for every gram by which its fleet exceeded the set targets on average. The billions paid by the industry would flow into the general EU budget.

    In 2025, the fleet limit for new passenger cars will fall from an average of 95 grams of CO2 per kilometer driven to 93.6 grams. Each manufacturer is given specific CO2 fleet targets, depending on the average weight of their vehicle range. So far, the major manufacturers have always managed to meet their targets. This is unlikely to happen in 2025. Only BMW and Stellantis are considered to have a chance of meeting the legal requirements. VW, Mercedes, Renault and Ford are expecting fines in the billions. The manufacturer-specific targets for 2025 have not yet been determined in detail.

    VW is struggling the most

    The VW Group, which also includes Porsche, Skoda, Cupra and Audi, expects a specific target of less than 100 grams per kilometer driven. The VW target for 2023 and 2024 is 122 grams. At 118.4 grams in 2023, it was undercut by 3.6 grams. VW delivered 472,400 BEVs in the EU in 2023, which corresponds to a share of 12.5 percent. In the first half of 2024, VW delivered 184,100 BEVs in the EU, which corresponds to a BEV share of 9.5 percent. According to external estimates, VW would have to expect fines of over €4 billion from the EU in 2025. According to estimates, VW would have to increase BEV sales in Europe by 300,000 vehicles in 2025 compared to 2023 or increase the BEV share to 24 percent in order to avoid fines.

    Mercedes had a specific fleet target of 128 grams per kilometer driven in 2023. According to preliminary data, the fleet averaged 108 grams in 2023, which is 20 grams below the EU target. Mercedes delivered around 110,000 BEVs in the EU in 2023. In the first half of 2024, BEV sales fell slightly to 52,000 vehicles.

    BMW had a specific fleet target of 128.5 grams per kilometer driven in 2023. According to BMW’s internal calculations, the manufacturer achieved a value of 102.1 grams in 2023, falling short of the EU target by an average of 26.4 grams. BMW does not provide figures for BEV sales in the EU. According to reports, BMW CEO Oliver Zipse supports the industry’s push for a change to the 2025 targets, although BMW may not face any fines.

    Possibility of big discount battle in 2025

    If the EU sticks to the fleet limits for 2025, European manufacturers would probably try to increase BEV sales with further extraordinary discounts in order to reduce fleet consumption and avoid fines. They would be faced with the economic alternative of giving discounts worth billions (with drastic consequences for the residual values of young used cars) or having to pay heavy fines to the EU. In both cases, manufacturers’ profits would collapse and their financial opportunities to invest in the transformation of the industry would be restricted.

    VDA President Hildegard Müller makes a different proposal to adjust the 2025 targets. The review of the CO2 fleet legislation planned in the law for 2026 should be rescheduled to 2025. According to the calculation, it will have to be determined that the 2025 targets are not sustainable due to the weak sales of BEVs and will have to be revised. As part of this, the penalties for 2025 could be adjusted or suspended.

    The amendment of the CO2 fleet legislation would take place in the course of a regular legislative procedure, i.e. with the involvement of the EU Parliament. The process could take one to two years and would require parliamentary approval. Müller is also calling for the review of the CO2 fleet regulation for heavy commercial vehicles to be rescheduled from 2027 to 2026.

    Transport and Environment, the umbrella organization of EU environmental associations, is calling on the European Parliament to prevent the weakening of the 2025 targets. The industry’s demands are “absurd,” the association said.

    • EU-Haushalt
    • Flottengrenzwerte
    Translation missing.

    Interview

    WV Stahl calls for broader anti-subsidy proceedings against Chinese steel

    Martin Theuringer is Managing Director of the German Steel Federation.

    Martin Theuringer, how do you assess the economic situation in the European steel industry?

    The economic situation is very serious both in Germany and in Europe. This is particularly true for the steel industry in Germany. In some cases, its very existence is at stake.

    How does the situation differ between Germany and the rest of Europe?

    To provide a figure: Demand for steel in Germany is currently 30 percent below the level we had in 2018. In Europe, we are at a level of around minus 20 percent. There is less production, less investment and less construction in Germany.

    Why is that?

    Three points are particularly troublesome. Firstly, electricity prices in Germany are not only too high compared to competitors in the USA and China, but also in comparison to the rest of Europe. Secondly, the steel processing industries, i.e. our customers in Germany, are under particular pressure to adapt as a result of the Russian war of aggression and a changed geopolitical situation. Thirdly, we have a high level of political uncertainty in Germany. The whole question of financing the transformation has not yet been resolved. And without certainty in planning, investments will be held back or relocated abroad.

    What is the role of foreign trade in the current situation?

    We are noticing the significant increase in import pressure as a result of the enormous global overcapacities that are now pushing into the EU market and also crowding out EU suppliers on third markets. This is exacerbating the crisis quite acutely at the moment. And it has become even more dramatic in recent weeks due to the weak demand in China, which is leading to an enormous increase in Chinese exports, both on the European market and on third markets. Chinese imports will reach a level of over 100 million tons again this year. We last saw this in 2016.

    What do you expect from the European Commission?

    The focus must be on protecting the European market from unfair competition. It is crucial that the existing possibilities are exhausted and that the instruments provided for this purpose are used. This is the anti-dumping law, but also the possibility of taking action against Chinese import pressure with broad-based anti-subsidy proceedings.

    Isn’t the Commission already doing this?

    The problem in existing practice is always that the anti-dumping proceedings have a very selective effect. They are directed against a specific product and against very specific suppliers. This is often not effective because there are numerous ways of circumventing this. That is why we are calling for a truly broad-based procedure, because we know that the entire Chinese steel industry is heavily subsidized.

    Could the introduction of the carbon border adjustment mechanism (CBAM) in 2026 help?

    Of course, we need a functioning border adjustment when the free allocation gradually expires and the risk of carbon leakage increases significantly. There is still an incredible amount of work to be done, as there are still serious functional problems.

    For example?

    In theory, the border adjustment creates equal opportunities on the European market. But of course we also export to third countries and that is then no longer possible because we also bear high CO2 costs for our exports, which our competitors do not have. A second major problem is that European industry is charged for its entire production, while manufacturers outside the EU are only charged for the part that is exported to Europe. It will be easy for Chinese manufacturers to “green” targeted production and then bring this production to Europe, while the rest of Chinese production remains “gray.” Thirdly, we have a problem for the downstream sectors, which are also steel-intensive. Think of screws or metal manufacturers, for example. They will experience a cost shock as a result of rising CO2 prices and will then have to compete internationally with suppliers who do not have this burden.

    While the European steel industry is suffering, a lot of Russian steel continues to be imported. Russia is one of the top 5 countries of origin for European crude steel imports an import ban is not planned until 2028. Does this exacerbate the problems for your industry?

    That is something we are very concerned about. We were initially very pleased that the EU reacted quickly after the start of the Russian invasion and promptly imposed sanctions on Russian finished steel products. But a very significant proportion of Russian steel imports into the European Union are intermediate products from steel production. These are then further rolled out here in Europe. And that is a major problem because, of course, there is also underutilized capacity within Europe. This means that there are also displacement effects. We don’t understand it politically either, because with these exceptions we are of course also supporting the Russian war economy. Our demand is that these harmful regulations are corrected in the next sanctions package and that we then see import bans on all Russian steel products.

    Last year, negotiations for a sustainable arrangement on steel tariffs with the USA failed. What happens next?

    An agreement between the EU and the USA would have been highly desirable in order to take joint action against overcapacity. The deadline for the agreement has now been extended to March 2025 for the time being. Depending on the outcome of the election – especially if Trump wins – it is to be expected that the USA will once again take unilateral action. This in turn would entail enormous risks, as the punitive tariffs under Section 232 would then be reactivated against the EU.

    Should the EU have made more concessions to the USA? After all, the Americans wanted to take much stronger action against Chinese overproduction.

    We would have liked the Commission to find ways to send a resolute signal with the USA to take joint action against emissions-intensive overproduction, which comes primarily from Asia.

    Translation missing.

    News

    Ukraine aid: Commission proposes stabilization of Russia sanctions

    In order for the planned $50 billion support from the G7 countries and the EU for Ukraine to be disbursed, the White House needs guarantees that Russian central bank funds will remain frozen. This is because the income from the central bank funds is needed as collateral in order to take out the multi-billion dollar loan for Ukraine. Currently, the sanctions have to be renewed every six months, which gives potential veto players such as Hungary the opportunity to block the sanctions time and again.

    Last Friday, von der Leyen’s head of cabinet Björn Seibert presented, according to several sources, the EU ambassadors with three options for stabilizing the sanctions regime for the frozen Russian central bank funds:

    1. Central bank funds are frozen for five years, with a review every twelve months. A qualified majority in the Council would be required to release the central bank funds at the annual review.
    2. The blocking of central bank funds is renewed every 36 months – still by unanimity. The rest of the sanctions will continue to be renewed every six months.
    3. All sanctions are renewed after a period of 36 months instead of six months.

    As confirmed by several sources in Brussels, all three options seem acceptable to the USA. As a next step, the Commission will present an amendment to the law in line with one of the options presented. The EU has to agree on a solution by the end of the year at the latest. jaa

    • Europapolitik

    Border controls: Criticism from Juncker and warnings of traffic jams

    Former EU Commission President Jean-Claude Juncker has expressed his criticism of the extended border controls on entry to Germany that were introduced on Monday. “I am not a friend of border controls because they are associated with massive inconvenience for commuters,” Juncker told the German Press Agency in Luxembourg.

    He considers stationary border controls to be particularly problematic. “If there have to be controls, then mobile rather than stationary controls would be less difficult for those affected, not at the border but in the hinterland,” he said, referring to the border with Luxembourg. More than 50,000 German cross-border commuters work in the neighboring country.

    Other countries in the Schengen area have also reintroduced temporary border controls. “I view this with concern,” said Juncker. “In living Europe: the fact that the achievement of European integration is now up for discussion without much ado worries me.” It should not be the case that “borders are once again being created in people’s minds and hearts.”

    Traffic jams on the German-Danish border?

    Meanwhile, the police in Denmark are warning of traffic jams. Due to random checks when entering Germany, there could be delays on the Danish side from Monday onwards, the police announced.

    Federal Interior Minister Nancy Faeser (SPD) had previously promised that commuters would not have to expect major traffic disruptions. She also said that Germany was “not going it alone in Europe” with the extended border controls. It was acting in close coordination with neighboring countries.

    Scholz: ‘We can’t rely on our neighbors’

    According to government sources, Federal Chancellor Olaf Scholz spoke on the phone with EU Commission President Ursula von der Leyen and the heads of government of Austria and Luxembourg, Karl Nehammer and Luc Frieden, on Saturday. Further talks with EU governments are planned. On Friday, Scholz had spoken with Polish Prime Minister Donald Tusk, who had criticized the German government’s plans.

    Scholz also justified the border controls with the fact that other EU states are not fulfilling their obligations as part of a common migration policy. “Unfortunately, we cannot completely rely on all of our neighbors to do what they are supposed to do.” That is part of the truth, he said at a citizens’ dialog in Prenzlau on Saturday.

    Since Monday night, the federal police can check travelers entering Germany from Luxembourg, Belgium, the Netherlands and Denmark. Previously, they only did this at the borders with Poland, the Czech Republic, Austria, Switzerland and France. dpa/rtr

    • Migrationspolitik

    AI Pact: almost 100 organizations involved

    The European Commission is seeing growing interest in the AI Pact. The pact is voluntary and provides organizations with the opportunity to implement the requirements of the AI Act at an early stage. Almost 100 companies, including multinational corporations as well as European SMEs from various sectors, have already signed the declarations of commitment, according to the Commission. The authority did not mention any names. The pact is intended to make it easier for companies to comply with the new regulations.

    AI Pact: voluntary preparation

    The AI Pact consists of two pillars:

    • Pillar I creates a platform for the exchange of knowledge and best practices among the participating organizations. This pillar promotes cooperation and the sharing of experiences through workshops and networks.
    • Pillar II is aimed at companies that already want to take concrete steps to comply with the new regulations. They voluntarily undertake to make their measures public and report regularly on their progress.

    Since the AI Act came into force on August 1, 2024, there have been staggered transition periods: the general rules for AI systems apply from one year after coming into force, while the requirements for high-risk systems apply in three years. However, bans on certain applications, such as social scoring by public authorities, will apply after six months, i.e. from February 2, 2025.

    September 25: Kick-off of the AI Pact

    On 25 September, the EU Commission’s AI Office is organizing a high-level launch event to officially mark the start of the AI Pact. Companies can sign the Pact at any time, as it is an open, ongoing process. The Commission sees great potential and plans to further promote engagement to ensure the responsible and transparent use of AI in Europe.

    According to the Commission, Pillar I of the AI Pact is also gaining in popularity. More than 1000 organizations are now said to have expressed interest. vis

    • Künstliche Intelligenz-Verordnung

    Dennis Radtke is the new CDA head

    Dennis Radtke is a CDU MEP specializing in industry, employment and social affairs.

    Dennis Radtke will lead the CDU employee wing in future, succeeding long-time chairman Karl-Josef Laumann. The 45-year-old Radtke was elected as the new chairman at the national conference of the Christian Democratic Workers’ Union (CDA) in Weimar with 83.1 percent of the valid votes.

    After 19 years at the helm, Laumann did not stand for re-election. He is now honorary chairman of the CDA. However, the 67-year-old remains an important voice for employee interests in his party as CDU Vice Chairman and Minister of Labor and Social Affairs in North Rhine-Westphalia.

    Radtke has been a member of the CDA Federal Executive Board since 2007. He was most recently Deputy Federal Chairman. He is a member of the IG BCE trade union and a CDU MEP specializing in industry, employment and social affairs.

    ‘Big’ footsteps

    After his election, Radtke declared that the CDU must “go into the Bundestag election campaign with an offer for the millions of employees.” Together with Laumann as CDU vice-chairman, he wanted to ensure “that social issues are once again addressed more concisely in the CDU.” The traffic light government has nothing on offer for employees. “The CDU must be recognizable as an advocate for those who work hard every day and still have a hard time,” warned the new CDA chairman.

    In his candidacy speech, Radtke said that the footsteps left by Laumann were “big.” He would approach the new office with humility, joy and trust in God. The CDA sees itself as the social conscience of the CDU. Former federal chairmen included the former Minister of Labor Norbert Blüm. The trained machinist Laumann has been at the helm of the CDU association since 2005. dpa

    • Sozialpolitik

    Must-Reads

    Dessert

    Sven Giegold at his old workplace

    Sven Giegold
    Sven Giegold is State Secretary at the BMWK. He was previously a Green MEP in the EU Parliament.

    Anyone who has recently frequented the Member’s Bar of the European Parliament in Strasbourg or the streets of Brussels’ European Quarter is likely to have come across Sven Giegold. The former Green MEP is currently spending a lot of time in his old workplace. Not out of nostalgia, but to promote the German positions (or at least Habeck’s) as Robert Habeck’s State Secretary for Europe.

    “Now, at the start of the new parliamentary term, the ideas for the next five years are being developed,” he says. “Now is the right time to be in Brussels and Strasbourg.

    In mid-July, Giegold traveled to Strasbourg to give the newly (re-)elected MEPs his own priorities for the new legislative period and, if possible, to dictate a few key points to Ursula von der Leyen’s team in their inaugural speech for the second term of office. Since the summer break, the 54-year-old has already been to Brussels twice, meeting Commission Vice-President Maroš Šefčovič, nine Commission Directors-General, cabinet members and a few more MEPs. Other stakeholders can only dream of such a list.

    Giegold and his fellow campaigners had to pass through numerous entry checks – and then rated them with school grades for fun. The “door” at the Berlaymont, the Commission’s headquarters, did not come off well: “Leaving the building requires assistance from three security officers at the various stations,” they noted. This only received a C+, satisfactory. DG COMP is once again taking it too seriously for Giegold’s liking: “Scanner stops you because of metal belt, lack of proportionality as in Art. 107 TFEU,” he notes. This is the article on state aid control. Till Hoppe

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