EU debt rules + Data Act + Clean Air Dir • Table.Briefings

Dear reader,

The protracted discussions around the overhaul of EU debt regulations have recently witnessed a shift in momentum, although today’s Brussels summit of EU finance ministers is not expected to yield a definitive resolution. Yet, EU diplomats are now optimistic about reaching a consensus among member states by year’s end.

A concerted effort between Germany and France has picked up pace, with the possibility that a mutual accord could lay the groundwork for an EU-wide agreement. Germany has observed with approval that France, alongside Spain, has begun to endorse its principal stipulation: concrete benchmarks for national debt reduction. The Spanish Council Presidency’s latest proposal tactically incorporates a fiscal buffer to maintain a safe margin from the new debt ceiling of three percent of GDP.

The debate continues over certain specifics, such as the reforms governments need to implement to secure more time for fiscal consolidation. Nonetheless, Belgian Finance Minister Vincent van Peteghem voiced optimism yesterday that a legal consensus could be attained under Belgium’s Council Presidency by early 2024, which would then set the stage for concluding negotiations with the European Parliament.

The urgency of the situation cannot be overstated: On Jan. 1, the previously suspended austerity measures from the Stability and Growth Pact are set to resume, compelled by the pandemic and conflict-related economic strains. This reinstatement would force heavily indebted nations like Italy, Belgium, and France to enact stringent budgetary measures. Moreover, to avoid a legislative logjam ahead of the June European elections, the dialogue with the European Parliament on certain aspects of the reform must be finalized by April.

Your
Till Hoppe

Accession talks: The way will soon be clear for Ukraine and Moldova

As expected, the EU Commission has recommended the opening of accession talks with Ukraine and Moldova. The authority is more cautious in the case of Bosnia and Herzegovina: Accession negotiations should only begin once the conditions for this have been met, said Ursula von der Leyen.

Russia’s war of aggression and the prospect of Ukraine’s accession have also brought the candidates in the Western Balkans back into focus. Austria, Slovenia, Croatia, and Italy in particular have been pushing for a clear positive signal for Bosnia and Herzegovina. However, the Commission lists 14 conditions that Bosnia must first fulfill. The authority intends to report on progress to the Council next March.

Bosnia has to catch up

In particular, von der Leyen highlighted unconstitutional laws passed in the Republika Srpska, the Serbian entity of Bosnia. In fact, the Bosnian state as a whole is largely dysfunctional, particularly due to the obstructionist policies of Milorad Dodik, President of the Republika Srspka and the strongman in Banja Luka for years.

Von der Leyen emphasized progress in the fight against organized crime, money laundering, and terrorism. However, even this is put into perspective in the report itself: Sometimes a strategy was adopted or an action plan, but not for all areas and there can be no question of successful implementation as yet.

Progress in Montenegro

Von der Leyen and Enlargement Commissioner Olivér Várhelyi tried to emphasize the rather modest progress made by the Western Balkan countries on Wednesday.

Of the six countries, Montenegro is in the best position. However, the reform process has recently stalled due to political instability and polarization. With a new government and after the constitution of the parliament, things could move forward quickly. Specifically, Montenegro would have to achieve milestones in the reform of the rule of law. This also involves the appointment of judges in accordance with the requirements of the Venice Commission. More efforts are also needed in the fight against corruption and organized crime, according to the report.
According to the report, Serbia has met the milestones to open the chapters of the third cluster with the topics of competitiveness and growth. On the negative side, it is mentioned that Serbia still refuses to adopt the EU’s sanctions regime against Russia. It is also critically noted that Belgrade recently concluded a free trade agreement with China. Serbia must also play a constructive role in the dialog with Pristina and cooperate in clarifying the recent escalation in northern Kosovo.
Albania, Kosovo, and North Macedonia are also still in the early stages of important reforms. However, it is positively emphasized that all three have adopted the EU’s sanctions policy.

Ursula von der Leyen presented a “growth plan for the Western Balkans” as a new incentive. The six countries are to reduce the barriers to economic exchange with a view to creating a “common regional market”. This should make companies more competitive, attract investors, and stop the brain drain. In return, and linked to progress in the region, the EU wants to gradually open up its internal market to the six countries, including the free movement of goods and services and access to the single euro payments area.

Ukraine: 95 percent of conditions fulfilled

The Commission’s positive vote for Ukraine and Moldova had been looming for a few days. Georgia is to be upgraded and receive candidate status.

Von der Leyen spoke of a “historic day”: Ten years after the Euro-Maidan in Kyiv, which began at the end of 2013, Ukraine is taking a big step forward on its European path. She did not specify a date for accession, as it would depend on reforms.

However, Ukraine has fulfilled more than 95 percent of the conditions, said von der Leyen. The Commission has developed seven touchstones specifically tailored to Ukraine. These include the fight against corruption, the taming of oligarchs, and the protection of minorities. Media freedom and judicial reform are also on the agenda.

‘Work can start right away’

According to the progress reports that have now been presented, Ukraine has achieved limited success. The Ukrainian economy is still “at an early stage” on the path to a market economy, according to the report. There has been significant progress in the fight against corruption. However, this must be underpinned by further investigations, additional prosecutions, and supreme court rulings. The legal and operational precautions in the fight against organized crime remain weak, explains the Commission.

Von der Leyen does not see this as a problem for accession negotiations. Some reforms are “still in the pipeline”, but these could be tackled quickly. “Work can begin immediately”, said the Commission President optimistically. Here too, the authority intends to reassess the progress of reforms in March. The accession conference could then begin, said von der Leyen.

EU member states must agree unanimously

However, all 27 EU member states must first give their approval. This is to take place at the EU summit in December. “It would be an important signal if we decide to open accession negotiations with Kyiv and Chișinău in December”, Anna Lührmann, Minister of State for Europe at the Federal Foreign Office, told Table.Media. Alongside enlargement, the EU should also push ahead with internal reforms. “Our goal is a bigger and stronger Union“, said the Green politician.

It remains to be seen whether Hungary will block a positive vote. An employee of Prime Minister Viktor Orbán explained that the government in Budapest would only support Ukraine’s rapprochement if minority rights were better protected there.

Support from the European Parliament

Unanimous approval comes from the European Parliament. “Ukraine’s development is impressive despite the Russian attack and the burden of war”, said MEP Michael Gahler. The country has made “considerable progress” in the fight against corruption and the rule of law. The Republic of Moldova had also fulfilled the EU’s preconditions. Even the Left Party welcomed the green light from Brussels for Ukraine.

However, the Vice-President of the European Parliament, Katarina Barley (SPD), warned against exaggerated hopes. Everyone involved must be aware that the negotiations will take time. “The criteria necessary for formal accession must be met. No shortcuts can be taken here.” By Stephan Israel, Eric Bonse, and Till Hoppe

Data Act: Parliament votes, companies remain skeptical

By

Corinna Visser

Today, Thursday, the plenary of the European Parliament is expected to approve a legislative proposal that has met with great resistance from German industry from the outset. However, even if the parliamentarians now approve the trilogue result, the criticism will not subside. Companies fear legal uncertainty and chaos in supervision.

“Unfortunately, many questions in the EU Data Protection Act are still open and numerous points are unclear or even contradictory“, criticizes the German Engineering Federation (VDMA). Legal uncertainty arises, for example, from terms such as “appropriate”, which appears more than 60 times in the recitals, as the IT association Bitkom notes. For example, data owners and users are supposed to take “appropriate technical and organizational measures” to protect trade secrets.

Breaking up data monopolies

With the Data Act, the EU wants to create fair rules for the exchange of data generated by networked products. The aim is to create a single European market for data. The aim is to “break the data monopolies of manufacturers” and give “users control over their data”, says Tiemo Wölken, legal policy spokesperson.

Overall, Wölken sees this as a strengthening of consumer protection. The law “boosts competition for the best products and ideas and breaks the power of dominant tech companies“. However, many German companies – especially the big players – fear that they will lose business secrets when sharing data.

Associations demand support from Commission

Companies need support from the Commission in the form of interpretation aids, explains the VDMA. The Commission should also make the announced official “model data sharing agreement for the B2B sector” available as quickly as possible so that companies can comply with the new requirements quickly and with legal certainty.

Jochen Reinschmidt, Head of Digitalization at ZVEI, takes a similar view. The Data Act is likely to have more far-reaching consequences for large parts of the electrical and digital industry than the GDPR. However, many companies are not yet aware of the consequences of the Data Act. “More lead time is urgently needed to prepare for new regulatory requirements“, says Reinschmidt. Many questions regarding the practical implementation of the Data Act remain unanswered. He is therefore also calling on the Commission to issue “practical guidelines for implementation”.

Preparations should start immediately

At the same time, the associations recommend that companies prepare themselves now for the changed regulatory framework. Jan Paul Marschollek from the VDMA advises companies to “analyze their own data streams and flows and individually assess the associated opportunities and risks” in order to take advantage of the opportunities offered by the data economy – also with regard to existing or newly emerging business models.

But it’s not just companies that need to prepare – the German government does too. The Data Act will take effect immediately as a regulation and provides for the member states to take over supervision themselves. “The German government must now make early efforts to appoint and staff the new institutions required by the Data Act”, says Reinschmidt from ZVEI. New bodies to be created, such as the Data Coordinator or the arbitration boards, must be operational before the end of the transition period in order to give companies planning security.

Who should take over the supervision?

Bitkom hopes that there will not be another dispute and wrangling over competencies, as was the case with the Digital Service Coordinator. The association criticizes that no body has yet been appointed for the Data Governance Act either. What makes the Data Act even more difficult is the fact that various bodies could feel called upon here. Firstly, the data protection officers: Even if the Data Act is mainly concerned with non-personal data and expressly leaves the GDPR untouched, personal data can also fall under the Data Act. At the very least, there is a demarcation problem here.

The Federal Network Agency could also be considered a supervisory authority. Sectoral supervisory authorities – such as the Federal Motor Transport Authority or the Federal Institute for Drugs and Medical Devices – will also want to have a say. However, Bitkom emphasizes that it is crucial who coordinates the whole process and that there are clear and efficient procedures.

The Data Act establishes an ownership right to data

“In the trench warfare of the Brussels lobby battle over trade secrets and the GDPR, the real revolution that the Data Act brings has been lost”, says Damian Boeselager (Volt), who helped negotiate the Data Act as shadow rapporteur for the Greens/EFA group. The Data Act gives European industry the opportunity to “make its digital business models world leaders”.

For example, it is crucial that the Data Act establishes the right of ownership in the digital space and thus ends manufacturers’ royalty-free access to data from products that no longer belong to them. Previously, the law of the jungle applied, but now it lies with the users. The Data Act creates more competition. And unlike the DSA or the DMA, for example, it is not ex-post regulation in markets that have already been “toppled”. Rather, the Data Act creates new data markets “by giving users the choice of who they want to share data with”.

Council and Parliament agree on eID

The Council and Parliament reached a provisional agreement on a new legal framework for a European digital identity (eID) in the trilogue on Wednesday. With the regulation, the EU is taking “a fundamental step towards ensuring that citizens have a clear and secure European digital identity”, said Nadia Calviño, Spain’s Minister for the Economy and Digital Affairs.

The revised regulation aims to ensure universal access for people and businesses to secure and trustworthy electronic identification and authentication. To date, many member states – including Germany – have not fully implemented the digital wallet. This is now set to change.

Driver’s licenses, diplomae and more

The digital wallet should not only prove national identity but also include other electronic documents, such as driver’s licenses, diplomae, or bank accounts.

The eID will drive forward the digitalization of the public sector and society as a whole, said the Parliament’s rapporteur, Romana Jerković (S&D). “The law aims to improve the daily lives of EU citizens by facilitating access to public and private services – not only at home but also when traveling and staying in other EU member states.” Citizens retain full control over the use and disclosure of their data.

The result of the trilogue must now be approved by Parliament and Council. The ITRE Industry Committee will vote on it on Nov. 28. vis

Clean Air Directive: Germany abstains

According to information from Table.Media, Germany will abstain in today’s vote by EU ambassadors (Coreper I) on the Clean Air Directive. The Spanish Council Presidency had submitted a compromise proposal. The member states that had claimed a scrutiny reservation had until yesterday evening to make their position clear. Germany is one of the member states that had a need for scrutiny. In EU circles, it is expected that the Spanish compromise proposal will receive a qualified majority today and that the general approach can be adopted on this basis at the Environment Council on Dec. 18.

The Commission had proposed bringing the limit values for air pollutants closer to the WHO recommendations by 2030. According to its plans, limit values for important air pollutants should be more than halved in some cases. The Parliament wants to go even further and is advocating a one-to-one implementation of the WHO recommendations. mgr

Renaturation: tension before final trilogue

The final trilogue on the proposal for a law to restore nature starts today, Thursday, at 2 p.m. – a law that is politically explosive. The Commission will present a compromise proposal.

It remains to be seen whether Parliament will support this compromise. According to a source close to the negotiations, the conservative EPP in particular continues to reject any reintroduction of restoration targets in agricultural ecosystems. Supporters of the text are therefore concerned that the negotiations could lead to an impasse after all – as the draft compromise already contains many concessions to the conservatives, it is said.

The reintroduction of these targets into the text is also an objective of the Spanish Council Presidency, which was represented by the Spanish Minister for Energy, Environment and Climate Change, Teresa Ribera. It is extremely rare for ministers to negotiate themselves. Normally, the EU ambassadors sit at the table for the Council. The Spanish Council Presidency’s choice of personnel can be seen as a sign of the politically heated situation. Ribera’s negotiating style is considered to be open, communicative, and tough on the issues. cst

Economists call for EU securities regulator ESMA to be strengthened

The German Council of Economic Experts is calling for greater harmonization of securities supervision in the EU in order to strengthen the capital markets. In their 2023/2024 annual report, the so-called economic experts write that despite the free movement of capital, the capital markets in the EU are still highly fragmented. In order to reduce this fragmentation, regulatory harmonization should be promoted, for example in the financial reporting of companies or in the tax treatment of cross-border investments.

“Strong European supervision by the European Securities and Markets Authority (ESMA) could drive forward harmonization and integration and would therefore be an important step towards completing the Capital Markets Union”, the report states. The economic experts emphasize that very well “integrated European capital markets can diversify risks and offer companies a wide range of financing options, particularly in the form of equity”.

The experts also call for more speed in completing the banking union in the EU. “Given the size of European banks and their role as capital market players, the completion of the banking union would promote cross-border capital market integration”, write the experts. Even if there are no direct legal obstacles to cross-border banking transactions, institutional framework conditions play an important role. For example, cross-border bank mergers would be hindered by the lack of a common European deposit guarantee and the fact that bank resolution has not yet been fully transferred to the EU level. cr

Employers demand less state involvement in the economy

The employers’ association Business Europe is calling for the Commission to exercise restraint when proposing new legislation for the economy in the next mandate. It should also get serious about cutting red tape. This is set out in the association’s seven-point plan to the parties in the run-up to the 2024 European elections.

“The European Union must stop micromanaging companies down to the smallest detail“, says Business Europe. The 25 percent reduction in reporting obligations for companies announced by Commission President Ursula von der Leyen is “a good first step”, but Europe must go far beyond this.

Business Europe is therefore urging restraint in political intervention. In addition, there should be fewer reforms to regulations in the area of labor and social policy. The EU has introduced more measures in this area in the current legislative period, such as the minimum wage directive and the law on platform work.

The current “regulatory and overly prescriptive approach in European social policy” often disregards the principles of subsidiarity and proportionality, criticizes Business Europe. Instead, the Union should focus on the functioning of the internal market. For example, it should help to remove barriers to freedom of movement and ensure that qualifications are better recognized throughout the EU. In addition, legislative initiatives should always be examined under the premise of competitiveness.

Trade agreements also with ‘non-like-minded people’

Another key issue for employers is Europe’s role in the world. The association warns that Europe could close itself off too much. This would damage the economy. Europe is already perceived as increasingly protectionist by many developing countries. Business Europe, on the other hand, is calling for new trade agreements – with less focus on whether the partners share Europe’s value system.

“Europe will need to find ways to come to terms with all trading partners and not just those we consider like-minded. Given the ever-changing political landscape, a like-minded partner today may no longer be a like-minded partner tomorrow”, the paper states.

Withdrawal of EU funds for budget laissez-faire

When it comes to the budget, there is an insistence on binding guidelines. “The creation of a credible, respected, investment- and growth-friendly framework for economic governance is essential.” A focus on the net primary expenditure of the member states could simplify the rules and help the states develop medium-term adjustment paths in order to return to the stability criteria. In order to enforce this credibly, the association wants to punish deficit sinners by withdrawing EU funds.

The association also presented its fall economic outlook. In it, Business Europe assumes economic growth in the EU of 0.7% for 2023 and 1.4% for 2024. This corresponds to a slight downward adjustment of 0.2 percentage points for the coming year compared to the outlook from the summer. lei

Mercosur: Deforestation-free supply chains

Brazilian officials said on Wednesday that the directive to combat deforestation will complicate negotiations on a trade agreement with the South American Mercosur bloc. EU lawmakers passed the regulations in April. These require producers of soy, beef, coffee, timber, and other goods to prove that their supply chain is deforestation-free. Otherwise, these products may not be imported into the EU.

Although EU importers are responsible for complying with the new rules, Brazilian Foreign Trade Minister Tatiana Prazeres said that the economic impact for exporters in terms of higher costs and more bureaucracy should not be overlooked in trade talks. “You can’t offer with one hand what you take away with the other”, said the Foreign Trade Minister. She hopes that the issue of implementing the directive will be put on the table during the negotiations on the Mercosur free trade agreement.

A European diplomat told Reuters: “We are trying to reassure them that the implementation will take into account some of their concerns.” Foreign Trade Minister Pazeres and Mauricio Lyrio, Minister of Economy and Finance of the Ministry of Foreign Affairs, stated that they expect the Mercosur agreement to be announced on Dec. 7. rtr

DSA: TikTok and YouTube to provide information on the protection of minors

YouTube and TikTok are to provide the EU with information on how they comply with the new EU regulations on online content for the protection of children. A person with direct knowledge of the matter told the Reuters news agency on Wednesday. EU industry chief Thierry Breton will send his request to the companies on Friday, the source added.

The new EU regulations, which came into force with the Digital Services Act (DSA), require Big Tech to do more to combat harmful and illegal online content, especially content targeting minors. The EU has even launched an investigation into X, formerly Twitter, for possible non-compliance with the DSA. rtr

If the European elections were on Sunday: A comeback for the EPP

By Manuel Müller

Manuel Müller has regularly produced seat projections for the European elections since 2014.

Just eight weeks ago, it looked as if the race for first place in the 2024 European elections could be particularly exciting. In the last seat projection in September, the Social Democrats (S&D) had made up considerable ground and the European People’s Party’s (EPP) lead was the smallest it had almost ever been in this election period.

If we now look at the European polls, we see a very different picture: the EPP not only recently achieved successes in the national elections in Luxembourg and Poland, but also made strong gains in Germany and Spain. This would give the group a total of 170 seats in the base scenario of the seat projection – eight more than in September. In the dynamic scenario, which also takes into account the possibility of new member parties joining the Group, the EPP would have 178 seats, even more than in the current Parliament.

S&D atones for the expulsion of Slovakian member parties

The S&D, on the other hand, has suffered heavy losses and now only has 137 seats (-10 compared to September/dynamic scenario: 138). This is partly due to the fact that the Social Democrats have recently performed somewhat weaker in the polls in various larger member states. However, another factor is more important – namely the Group’s decision to exclude its Slovakian member parties Smer and Hlas. In the Slovakian parliamentary elections in September, Smer leader Robert Fico stood out for his anti-LGBT and pro-Russian statements; following his election victory, Smer and Hlas formed a coalition with the far-right SNS party.

The Social Democrats, who had criticized the EPP in the past for its long adherence to the Hungarian Fidesz, saw their own credibility at risk. With the exclusion of Smer and Hlas, they prioritized a coherent line on values over the goal of becoming the largest group in Parliament. Without the two Slovakian parties, which together account for seven seats in the projection, the S&D is likely to have great difficulty catching up with the EPP.

Renew, Greens and Left lose

But it is not only the S&D that is falling behind in the current seat projection. The other parliamentary groups in the center-left camp are not coming out of their polling lows either. Following losses in France, the liberal Renew group stands at 90 seats (-1/dynamic scenario: 96), its worst result in three years. Following the election debacle in Luxembourg and weak poll results in some other member states, the Greens currently only have 43 seats (-3/dynamic scenario: 47). The Left Group is also stagnating at 43 seats (±0/dynamic scenario: 46).

On the other side of the political spectrum, however, the two right-wing groups could consolidate at a high level. The ECR group around Giorgia Meloni’s Fratelli d’Italia and the Polish PiS would now have 78 seats (+1/dynamic scenario: 89), while the ID group with Marine Le Pen’s Rassemblement National and the German AfD would have 76 seats (+2/dynamic scenario: 92). There is little change among the non-attached MEPs, who would now have 38 seats (+1/dynamic scenario: 34).

Historic shift to the right

If this seat projection comes true in the European elections, it would be a shift to the right of historic proportions. With 181 out of 720 seats, the political groups to the right of the EPP would make up more than a quarter of the entire Parliament for the first time. Conversely, the groups to the left of the EPP – Social Democrats, Liberals, Greens, and Left – would be weaker than ever before with a combined total of 327 out of 720 seats, and would no longer have a joint majority. Decisions in the European Parliament would therefore de facto only be possible with the EPP, which in turn would have three different majority options: with S&D and Renew (412 seats), with Renew and ECR (363 seats), or even with ECR and ID (359 seats).

Whether this actually happens, however, is of course up to the European voters. The seat projection is only a snapshot of the current political mood – and the European elections are still over six months away.

As there are no pan-European election polls, the seat projection presented here is based on aggregated national polls and election results from all member states. In the base scenario, all national parties are assigned to their current parliamentary group (or the parliamentary group of their European umbrella party); parties without a clear assignment are shown as “other”. The dynamic scenario assigns all “other” parties to a parliamentary group that they could plausibly join and also includes other possible changes to the parliamentary groups.

Further information on the data basis and methodology of the projection as well as a more detailed breakdown of the results can be found on the blog The (European) Federalist.

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,

The protracted discussions around the overhaul of EU debt regulations have recently witnessed a shift in momentum, although today’s Brussels summit of EU finance ministers is not expected to yield a definitive resolution. Yet, EU diplomats are now optimistic about reaching a consensus among member states by year’s end.

A concerted effort between Germany and France has picked up pace, with the possibility that a mutual accord could lay the groundwork for an EU-wide agreement. Germany has observed with approval that France, alongside Spain, has begun to endorse its principal stipulation: concrete benchmarks for national debt reduction. The Spanish Council Presidency’s latest proposal tactically incorporates a fiscal buffer to maintain a safe margin from the new debt ceiling of three percent of GDP.

The debate continues over certain specifics, such as the reforms governments need to implement to secure more time for fiscal consolidation. Nonetheless, Belgian Finance Minister Vincent van Peteghem voiced optimism yesterday that a legal consensus could be attained under Belgium’s Council Presidency by early 2024, which would then set the stage for concluding negotiations with the European Parliament.

The urgency of the situation cannot be overstated: On Jan. 1, the previously suspended austerity measures from the Stability and Growth Pact are set to resume, compelled by the pandemic and conflict-related economic strains. This reinstatement would force heavily indebted nations like Italy, Belgium, and France to enact stringent budgetary measures. Moreover, to avoid a legislative logjam ahead of the June European elections, the dialogue with the European Parliament on certain aspects of the reform must be finalized by April.

Your
Till Hoppe

Accession talks: The way will soon be clear for Ukraine and Moldova

As expected, the EU Commission has recommended the opening of accession talks with Ukraine and Moldova. The authority is more cautious in the case of Bosnia and Herzegovina: Accession negotiations should only begin once the conditions for this have been met, said Ursula von der Leyen.

Russia’s war of aggression and the prospect of Ukraine’s accession have also brought the candidates in the Western Balkans back into focus. Austria, Slovenia, Croatia, and Italy in particular have been pushing for a clear positive signal for Bosnia and Herzegovina. However, the Commission lists 14 conditions that Bosnia must first fulfill. The authority intends to report on progress to the Council next March.

Bosnia has to catch up

In particular, von der Leyen highlighted unconstitutional laws passed in the Republika Srpska, the Serbian entity of Bosnia. In fact, the Bosnian state as a whole is largely dysfunctional, particularly due to the obstructionist policies of Milorad Dodik, President of the Republika Srspka and the strongman in Banja Luka for years.

Von der Leyen emphasized progress in the fight against organized crime, money laundering, and terrorism. However, even this is put into perspective in the report itself: Sometimes a strategy was adopted or an action plan, but not for all areas and there can be no question of successful implementation as yet.

Progress in Montenegro

Von der Leyen and Enlargement Commissioner Olivér Várhelyi tried to emphasize the rather modest progress made by the Western Balkan countries on Wednesday.

Of the six countries, Montenegro is in the best position. However, the reform process has recently stalled due to political instability and polarization. With a new government and after the constitution of the parliament, things could move forward quickly. Specifically, Montenegro would have to achieve milestones in the reform of the rule of law. This also involves the appointment of judges in accordance with the requirements of the Venice Commission. More efforts are also needed in the fight against corruption and organized crime, according to the report.
According to the report, Serbia has met the milestones to open the chapters of the third cluster with the topics of competitiveness and growth. On the negative side, it is mentioned that Serbia still refuses to adopt the EU’s sanctions regime against Russia. It is also critically noted that Belgrade recently concluded a free trade agreement with China. Serbia must also play a constructive role in the dialog with Pristina and cooperate in clarifying the recent escalation in northern Kosovo.
Albania, Kosovo, and North Macedonia are also still in the early stages of important reforms. However, it is positively emphasized that all three have adopted the EU’s sanctions policy.

Ursula von der Leyen presented a “growth plan for the Western Balkans” as a new incentive. The six countries are to reduce the barriers to economic exchange with a view to creating a “common regional market”. This should make companies more competitive, attract investors, and stop the brain drain. In return, and linked to progress in the region, the EU wants to gradually open up its internal market to the six countries, including the free movement of goods and services and access to the single euro payments area.

Ukraine: 95 percent of conditions fulfilled

The Commission’s positive vote for Ukraine and Moldova had been looming for a few days. Georgia is to be upgraded and receive candidate status.

Von der Leyen spoke of a “historic day”: Ten years after the Euro-Maidan in Kyiv, which began at the end of 2013, Ukraine is taking a big step forward on its European path. She did not specify a date for accession, as it would depend on reforms.

However, Ukraine has fulfilled more than 95 percent of the conditions, said von der Leyen. The Commission has developed seven touchstones specifically tailored to Ukraine. These include the fight against corruption, the taming of oligarchs, and the protection of minorities. Media freedom and judicial reform are also on the agenda.

‘Work can start right away’

According to the progress reports that have now been presented, Ukraine has achieved limited success. The Ukrainian economy is still “at an early stage” on the path to a market economy, according to the report. There has been significant progress in the fight against corruption. However, this must be underpinned by further investigations, additional prosecutions, and supreme court rulings. The legal and operational precautions in the fight against organized crime remain weak, explains the Commission.

Von der Leyen does not see this as a problem for accession negotiations. Some reforms are “still in the pipeline”, but these could be tackled quickly. “Work can begin immediately”, said the Commission President optimistically. Here too, the authority intends to reassess the progress of reforms in March. The accession conference could then begin, said von der Leyen.

EU member states must agree unanimously

However, all 27 EU member states must first give their approval. This is to take place at the EU summit in December. “It would be an important signal if we decide to open accession negotiations with Kyiv and Chișinău in December”, Anna Lührmann, Minister of State for Europe at the Federal Foreign Office, told Table.Media. Alongside enlargement, the EU should also push ahead with internal reforms. “Our goal is a bigger and stronger Union“, said the Green politician.

It remains to be seen whether Hungary will block a positive vote. An employee of Prime Minister Viktor Orbán explained that the government in Budapest would only support Ukraine’s rapprochement if minority rights were better protected there.

Support from the European Parliament

Unanimous approval comes from the European Parliament. “Ukraine’s development is impressive despite the Russian attack and the burden of war”, said MEP Michael Gahler. The country has made “considerable progress” in the fight against corruption and the rule of law. The Republic of Moldova had also fulfilled the EU’s preconditions. Even the Left Party welcomed the green light from Brussels for Ukraine.

However, the Vice-President of the European Parliament, Katarina Barley (SPD), warned against exaggerated hopes. Everyone involved must be aware that the negotiations will take time. “The criteria necessary for formal accession must be met. No shortcuts can be taken here.” By Stephan Israel, Eric Bonse, and Till Hoppe

Data Act: Parliament votes, companies remain skeptical

By

Corinna Visser

Today, Thursday, the plenary of the European Parliament is expected to approve a legislative proposal that has met with great resistance from German industry from the outset. However, even if the parliamentarians now approve the trilogue result, the criticism will not subside. Companies fear legal uncertainty and chaos in supervision.

“Unfortunately, many questions in the EU Data Protection Act are still open and numerous points are unclear or even contradictory“, criticizes the German Engineering Federation (VDMA). Legal uncertainty arises, for example, from terms such as “appropriate”, which appears more than 60 times in the recitals, as the IT association Bitkom notes. For example, data owners and users are supposed to take “appropriate technical and organizational measures” to protect trade secrets.

Breaking up data monopolies

With the Data Act, the EU wants to create fair rules for the exchange of data generated by networked products. The aim is to create a single European market for data. The aim is to “break the data monopolies of manufacturers” and give “users control over their data”, says Tiemo Wölken, legal policy spokesperson.

Overall, Wölken sees this as a strengthening of consumer protection. The law “boosts competition for the best products and ideas and breaks the power of dominant tech companies“. However, many German companies – especially the big players – fear that they will lose business secrets when sharing data.

Associations demand support from Commission

Companies need support from the Commission in the form of interpretation aids, explains the VDMA. The Commission should also make the announced official “model data sharing agreement for the B2B sector” available as quickly as possible so that companies can comply with the new requirements quickly and with legal certainty.

Jochen Reinschmidt, Head of Digitalization at ZVEI, takes a similar view. The Data Act is likely to have more far-reaching consequences for large parts of the electrical and digital industry than the GDPR. However, many companies are not yet aware of the consequences of the Data Act. “More lead time is urgently needed to prepare for new regulatory requirements“, says Reinschmidt. Many questions regarding the practical implementation of the Data Act remain unanswered. He is therefore also calling on the Commission to issue “practical guidelines for implementation”.

Preparations should start immediately

At the same time, the associations recommend that companies prepare themselves now for the changed regulatory framework. Jan Paul Marschollek from the VDMA advises companies to “analyze their own data streams and flows and individually assess the associated opportunities and risks” in order to take advantage of the opportunities offered by the data economy – also with regard to existing or newly emerging business models.

But it’s not just companies that need to prepare – the German government does too. The Data Act will take effect immediately as a regulation and provides for the member states to take over supervision themselves. “The German government must now make early efforts to appoint and staff the new institutions required by the Data Act”, says Reinschmidt from ZVEI. New bodies to be created, such as the Data Coordinator or the arbitration boards, must be operational before the end of the transition period in order to give companies planning security.

Who should take over the supervision?

Bitkom hopes that there will not be another dispute and wrangling over competencies, as was the case with the Digital Service Coordinator. The association criticizes that no body has yet been appointed for the Data Governance Act either. What makes the Data Act even more difficult is the fact that various bodies could feel called upon here. Firstly, the data protection officers: Even if the Data Act is mainly concerned with non-personal data and expressly leaves the GDPR untouched, personal data can also fall under the Data Act. At the very least, there is a demarcation problem here.

The Federal Network Agency could also be considered a supervisory authority. Sectoral supervisory authorities – such as the Federal Motor Transport Authority or the Federal Institute for Drugs and Medical Devices – will also want to have a say. However, Bitkom emphasizes that it is crucial who coordinates the whole process and that there are clear and efficient procedures.

The Data Act establishes an ownership right to data

“In the trench warfare of the Brussels lobby battle over trade secrets and the GDPR, the real revolution that the Data Act brings has been lost”, says Damian Boeselager (Volt), who helped negotiate the Data Act as shadow rapporteur for the Greens/EFA group. The Data Act gives European industry the opportunity to “make its digital business models world leaders”.

For example, it is crucial that the Data Act establishes the right of ownership in the digital space and thus ends manufacturers’ royalty-free access to data from products that no longer belong to them. Previously, the law of the jungle applied, but now it lies with the users. The Data Act creates more competition. And unlike the DSA or the DMA, for example, it is not ex-post regulation in markets that have already been “toppled”. Rather, the Data Act creates new data markets “by giving users the choice of who they want to share data with”.

Council and Parliament agree on eID

The Council and Parliament reached a provisional agreement on a new legal framework for a European digital identity (eID) in the trilogue on Wednesday. With the regulation, the EU is taking “a fundamental step towards ensuring that citizens have a clear and secure European digital identity”, said Nadia Calviño, Spain’s Minister for the Economy and Digital Affairs.

The revised regulation aims to ensure universal access for people and businesses to secure and trustworthy electronic identification and authentication. To date, many member states – including Germany – have not fully implemented the digital wallet. This is now set to change.

Driver’s licenses, diplomae and more

The digital wallet should not only prove national identity but also include other electronic documents, such as driver’s licenses, diplomae, or bank accounts.

The eID will drive forward the digitalization of the public sector and society as a whole, said the Parliament’s rapporteur, Romana Jerković (S&D). “The law aims to improve the daily lives of EU citizens by facilitating access to public and private services – not only at home but also when traveling and staying in other EU member states.” Citizens retain full control over the use and disclosure of their data.

The result of the trilogue must now be approved by Parliament and Council. The ITRE Industry Committee will vote on it on Nov. 28. vis

Clean Air Directive: Germany abstains

According to information from Table.Media, Germany will abstain in today’s vote by EU ambassadors (Coreper I) on the Clean Air Directive. The Spanish Council Presidency had submitted a compromise proposal. The member states that had claimed a scrutiny reservation had until yesterday evening to make their position clear. Germany is one of the member states that had a need for scrutiny. In EU circles, it is expected that the Spanish compromise proposal will receive a qualified majority today and that the general approach can be adopted on this basis at the Environment Council on Dec. 18.

The Commission had proposed bringing the limit values for air pollutants closer to the WHO recommendations by 2030. According to its plans, limit values for important air pollutants should be more than halved in some cases. The Parliament wants to go even further and is advocating a one-to-one implementation of the WHO recommendations. mgr

Renaturation: tension before final trilogue

The final trilogue on the proposal for a law to restore nature starts today, Thursday, at 2 p.m. – a law that is politically explosive. The Commission will present a compromise proposal.

It remains to be seen whether Parliament will support this compromise. According to a source close to the negotiations, the conservative EPP in particular continues to reject any reintroduction of restoration targets in agricultural ecosystems. Supporters of the text are therefore concerned that the negotiations could lead to an impasse after all – as the draft compromise already contains many concessions to the conservatives, it is said.

The reintroduction of these targets into the text is also an objective of the Spanish Council Presidency, which was represented by the Spanish Minister for Energy, Environment and Climate Change, Teresa Ribera. It is extremely rare for ministers to negotiate themselves. Normally, the EU ambassadors sit at the table for the Council. The Spanish Council Presidency’s choice of personnel can be seen as a sign of the politically heated situation. Ribera’s negotiating style is considered to be open, communicative, and tough on the issues. cst

Economists call for EU securities regulator ESMA to be strengthened

The German Council of Economic Experts is calling for greater harmonization of securities supervision in the EU in order to strengthen the capital markets. In their 2023/2024 annual report, the so-called economic experts write that despite the free movement of capital, the capital markets in the EU are still highly fragmented. In order to reduce this fragmentation, regulatory harmonization should be promoted, for example in the financial reporting of companies or in the tax treatment of cross-border investments.

“Strong European supervision by the European Securities and Markets Authority (ESMA) could drive forward harmonization and integration and would therefore be an important step towards completing the Capital Markets Union”, the report states. The economic experts emphasize that very well “integrated European capital markets can diversify risks and offer companies a wide range of financing options, particularly in the form of equity”.

The experts also call for more speed in completing the banking union in the EU. “Given the size of European banks and their role as capital market players, the completion of the banking union would promote cross-border capital market integration”, write the experts. Even if there are no direct legal obstacles to cross-border banking transactions, institutional framework conditions play an important role. For example, cross-border bank mergers would be hindered by the lack of a common European deposit guarantee and the fact that bank resolution has not yet been fully transferred to the EU level. cr

Employers demand less state involvement in the economy

The employers’ association Business Europe is calling for the Commission to exercise restraint when proposing new legislation for the economy in the next mandate. It should also get serious about cutting red tape. This is set out in the association’s seven-point plan to the parties in the run-up to the 2024 European elections.

“The European Union must stop micromanaging companies down to the smallest detail“, says Business Europe. The 25 percent reduction in reporting obligations for companies announced by Commission President Ursula von der Leyen is “a good first step”, but Europe must go far beyond this.

Business Europe is therefore urging restraint in political intervention. In addition, there should be fewer reforms to regulations in the area of labor and social policy. The EU has introduced more measures in this area in the current legislative period, such as the minimum wage directive and the law on platform work.

The current “regulatory and overly prescriptive approach in European social policy” often disregards the principles of subsidiarity and proportionality, criticizes Business Europe. Instead, the Union should focus on the functioning of the internal market. For example, it should help to remove barriers to freedom of movement and ensure that qualifications are better recognized throughout the EU. In addition, legislative initiatives should always be examined under the premise of competitiveness.

Trade agreements also with ‘non-like-minded people’

Another key issue for employers is Europe’s role in the world. The association warns that Europe could close itself off too much. This would damage the economy. Europe is already perceived as increasingly protectionist by many developing countries. Business Europe, on the other hand, is calling for new trade agreements – with less focus on whether the partners share Europe’s value system.

“Europe will need to find ways to come to terms with all trading partners and not just those we consider like-minded. Given the ever-changing political landscape, a like-minded partner today may no longer be a like-minded partner tomorrow”, the paper states.

Withdrawal of EU funds for budget laissez-faire

When it comes to the budget, there is an insistence on binding guidelines. “The creation of a credible, respected, investment- and growth-friendly framework for economic governance is essential.” A focus on the net primary expenditure of the member states could simplify the rules and help the states develop medium-term adjustment paths in order to return to the stability criteria. In order to enforce this credibly, the association wants to punish deficit sinners by withdrawing EU funds.

The association also presented its fall economic outlook. In it, Business Europe assumes economic growth in the EU of 0.7% for 2023 and 1.4% for 2024. This corresponds to a slight downward adjustment of 0.2 percentage points for the coming year compared to the outlook from the summer. lei

Mercosur: Deforestation-free supply chains

Brazilian officials said on Wednesday that the directive to combat deforestation will complicate negotiations on a trade agreement with the South American Mercosur bloc. EU lawmakers passed the regulations in April. These require producers of soy, beef, coffee, timber, and other goods to prove that their supply chain is deforestation-free. Otherwise, these products may not be imported into the EU.

Although EU importers are responsible for complying with the new rules, Brazilian Foreign Trade Minister Tatiana Prazeres said that the economic impact for exporters in terms of higher costs and more bureaucracy should not be overlooked in trade talks. “You can’t offer with one hand what you take away with the other”, said the Foreign Trade Minister. She hopes that the issue of implementing the directive will be put on the table during the negotiations on the Mercosur free trade agreement.

A European diplomat told Reuters: “We are trying to reassure them that the implementation will take into account some of their concerns.” Foreign Trade Minister Pazeres and Mauricio Lyrio, Minister of Economy and Finance of the Ministry of Foreign Affairs, stated that they expect the Mercosur agreement to be announced on Dec. 7. rtr

DSA: TikTok and YouTube to provide information on the protection of minors

YouTube and TikTok are to provide the EU with information on how they comply with the new EU regulations on online content for the protection of children. A person with direct knowledge of the matter told the Reuters news agency on Wednesday. EU industry chief Thierry Breton will send his request to the companies on Friday, the source added.

The new EU regulations, which came into force with the Digital Services Act (DSA), require Big Tech to do more to combat harmful and illegal online content, especially content targeting minors. The EU has even launched an investigation into X, formerly Twitter, for possible non-compliance with the DSA. rtr

If the European elections were on Sunday: A comeback for the EPP

By Manuel Müller

Just eight weeks ago, it looked as if the race for first place in the 2024 European elections could be particularly exciting. In the last seat projection in September, the Social Democrats (S&D) had made up considerable ground and the European People’s Party’s (EPP) lead was the smallest it had almost ever been in this election period.

If we now look at the European polls, we see a very different picture: the EPP not only recently achieved successes in the national elections in Luxembourg and Poland, but also made strong gains in Germany and Spain. This would give the group a total of 170 seats in the base scenario of the seat projection – eight more than in September. In the dynamic scenario, which also takes into account the possibility of new member parties joining the Group, the EPP would have 178 seats, even more than in the current Parliament.

S&D atones for the expulsion of Slovakian member parties

The S&D, on the other hand, has suffered heavy losses and now only has 137 seats (-10 compared to September/dynamic scenario: 138). This is partly due to the fact that the Social Democrats have recently performed somewhat weaker in the polls in various larger member states. However, another factor is more important – namely the Group’s decision to exclude its Slovakian member parties Smer and Hlas. In the Slovakian parliamentary elections in September, Smer leader Robert Fico stood out for his anti-LGBT and pro-Russian statements; following his election victory, Smer and Hlas formed a coalition with the far-right SNS party.

The Social Democrats, who had criticized the EPP in the past for its long adherence to the Hungarian Fidesz, saw their own credibility at risk. With the exclusion of Smer and Hlas, they prioritized a coherent line on values over the goal of becoming the largest group in Parliament. Without the two Slovakian parties, which together account for seven seats in the projection, the S&D is likely to have great difficulty catching up with the EPP.

Renew, Greens and Left lose

But it is not only the S&D that is falling behind in the current seat projection. The other parliamentary groups in the center-left camp are not coming out of their polling lows either. Following losses in France, the liberal Renew group stands at 90 seats (-1/dynamic scenario: 96), its worst result in three years. Following the election debacle in Luxembourg and weak poll results in some other member states, the Greens currently only have 43 seats (-3/dynamic scenario: 47). The Left Group is also stagnating at 43 seats (±0/dynamic scenario: 46).

On the other side of the political spectrum, however, the two right-wing groups could consolidate at a high level. The ECR group around Giorgia Meloni’s Fratelli d’Italia and the Polish PiS would now have 78 seats (+1/dynamic scenario: 89), while the ID group with Marine Le Pen’s Rassemblement National and the German AfD would have 76 seats (+2/dynamic scenario: 92). There is little change among the non-attached MEPs, who would now have 38 seats (+1/dynamic scenario: 34).

Historic shift to the right

If this seat projection comes true in the European elections, it would be a shift to the right of historic proportions. With 181 out of 720 seats, the political groups to the right of the EPP would make up more than a quarter of the entire Parliament for the first time. Conversely, the groups to the left of the EPP – Social Democrats, Liberals, Greens, and Left – would be weaker than ever before with a combined total of 327 out of 720 seats, and would no longer have a joint majority. Decisions in the European Parliament would therefore de facto only be possible with the EPP, which in turn would have three different majority options: with S&D and Renew (412 seats), with Renew and ECR (363 seats), or even with ECR and ID (359 seats).

Whether this actually happens, however, is of course up to the European voters. The seat projection is only a snapshot of the current political mood – and the European elections are still over six months away.

As there are no pan-European election polls, the seat projection presented here is based on aggregated national polls and election results from all member states. In the base scenario, all national parties are assigned to their current parliamentary group (or the parliamentary group of their European umbrella party); parties without a clear assignment are shown as “other”. The dynamic scenario assigns all “other” parties to a parliamentary group that they could plausibly join and also includes other possible changes to the parliamentary groups.

Further information on the data basis and methodology of the projection as well as a more detailed breakdown of the results can be found on the blog The (European) Federalist.

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

EU debt rules + Data Act + Clean Air Directive

Feature

Accession talks: The way will soon be clear for Ukraine and Moldova

Bosnia has to catch up

Progress in Montenegro

Ukraine: 95 percent of conditions fulfilled

‘Work can start right away’

EU member states must agree unanimously

Support from the European Parliament

Data Act: Parliament votes, companies remain skeptical

Breaking up data monopolies

Associations demand support from Commission

Preparations should start immediately

Who should take over the supervision?

The Data Act establishes an ownership right to data

Events

News

Council and Parliament agree on eID

Driver’s licenses, diplomae and more

Clean Air Directive: Germany abstains

Renaturation: tension before final trilogue

Economists call for EU securities regulator ESMA to be strengthened

Employers demand less state involvement in the economy

Less intervention in social policy

Trade agreements also with ‘non-like-minded people’

Withdrawal of EU funds for budget laissez-faire

Mercosur: Deforestation-free supply chains

DSA: TikTok and YouTube to provide information on the protection of minors

Opinion

If the European elections were on Sunday: A comeback for the EPP

S&D atones for the expulsion of Slovakian member parties

Renew, Greens and Left lose

Historic shift to the right

Europe.table editorial team

EUROPE.TABLE EDITORS

Feature

Accession talks: The way will soon be clear for Ukraine and Moldova

Bosnia has to catch up

Progress in Montenegro

Ukraine: 95 percent of conditions fulfilled

‘Work can start right away’

EU member states must agree unanimously

Support from the European Parliament

Data Act: Parliament votes, companies remain skeptical

Breaking up data monopolies

Associations demand support from Commission

Preparations should start immediately

Who should take over the supervision?

The Data Act establishes an ownership right to data

Events

News

Council and Parliament agree on eID

Driver’s licenses, diplomae and more

Clean Air Directive: Germany abstains

Renaturation: tension before final trilogue

Economists call for EU securities regulator ESMA to be strengthened

Employers demand less state involvement in the economy

Less intervention in social policy

Trade agreements also with ‘non-like-minded people’

Withdrawal of EU funds for budget laissez-faire

Mercosur: Deforestation-free supply chains

DSA: TikTok and YouTube to provide information on the protection of minors

Opinion

If the European elections were on Sunday: A comeback for the EPP

S&D atones for the expulsion of Slovakian member parties

Renew, Greens and Left lose

Historic shift to the right

Europe.table editorial team

EUROPE.TABLE EDITORS

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