EU response to IRA + Pesticide dispute + Mercosur states

Dear reader,

Tomorrow, the Commission will present its response to the US Inflation Reduction Act. The Green Deal Industrial Plan is eagerly awaited. According to a draft of the paper, the Commission wants to allow numerous relief measures for the economy. It wants to target the aid as specifically as possible – on industries that are threatened by relocation. Markus Grabitz and Manuel Berkel have read the text and summarized the most important points.

According to the Commission, 80 percent of all cultivated and wild plants depend on pollination by bees, butterflies and other insects. However, the population of one-third of these species is declining sharply. To stop this dangerous trend, toxic pesticides must be significantly reduced. A law to this effect is being drafted at EU level. However, there is such a fierce dispute about it that it is currently doubtful whether the regulation will even come into being. Timo Landenberger has more information on this.

Relationship status: complicated. Even after two decades, no trade agreement has been reached between the EU and the Mercosur countries. But that would be welcome on the EU side, especially now, when the EU and countries like Germany would like to intensify their trade relations – think of important raw materials like gas and lithium. Isabel Cuesta analyzes how movement could come into play.

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Your
Sarah Schaefer

EU response to IRA: migration risk crucial

Ever since the US government announced new aid for the domestic industry with its Inflation Reduction Act (IRA), the EU states have been facing ever louder demands for new injections of billions of euros for their own economies. With its response – the Green Deal Industrial Plan – the Commission wants to allow numerous reliefs for the economy, but also precisely target the aid as much as possible. This is shown in a draft of the main document, which “Contexte” obtained on Monday.

Commission President Ursula von der Leyen had already presented the main features in Davos. Financial aid is to come from EU funds, but above all, the member states are to be given further freedom to pay out national aid. In particular, the Temporary Crisis Framework (TCF) is to be extended again, as announced by Competition Commissioner Margrethe Vestager in a letter to the member states.

Drawing level with the USA

For strategic green industries, investment aid such as tax breaks for production capacity would be extended to “match aid received by competitors for similar projects outside the EU.” This is the most direct reference to US government support in the draft. However, member states should also be able to consider “global funding gaps.”

However, the investment aid for production capacities is not only to be limited in time but is also to be “targeted at those sectors where a risk of relocation has been identified.” Through this, the Commission is obviously trying to exclude free riders in the industry from the windfall.

Biomass and hydropower also eligible

In addition, the Commission is concerned with not distorting competitive relationships between EU countries: “The tax incentive provisions would allow member states to align their national tax incentives with a common system, providing greater transparency and predictability for businesses across the EU.”

Further relief relates to renewable energies. Investments in all technologies as defined in the Renewable Energies Directive are now eligible for aid. This means that biomass plants and hydroelectric power plants in particular are now eligible. Storage facilities for green hydrogen and biofuels are now also eligible. In addition, the deadlines for commissioning are to be extended.

Industry receives flat-rate share of investment costs

Furthermore, there will be easier subsidies for the decarbonizing industry. Until now, if a company wanted to switch from burning gas or coal to using electricity or hydrogen, it first had to laboriously calculate cost savings over the entire life of the plant in order to determine the eligible costs. In the future, a flat-rate share of the investment costs will be eligible for aid.

As already announced by Vestager, the General Block Exemption Regulation (GBER) is also to be adapted. For sectors such as hydrogen, zero-emission vehicles, buildings and CO2 storage (CCS), the threshold for the notification requirement is to be raised. For charging and refueling infrastructure, the scope is to be extended and training programs are also to benefit.

The de minimis limits for the cumbersome IPCEI subsidies, which have so far been used to support hydrogen projects, among others, are also to be raised, and in the future, perhaps also include heat pumps and the solar industry. In this way, small and medium-sized enterprises are also to be given access to investment support. Under the GBER, the permissible subsidy quotas are also to be raised for this purpose.

Accompaniment with funds from EU funding pots

The Temporary Crisis Framework (TCF), i.e., the temporarily relaxed state aid rules, would primarily benefit companies in rich member states such as Germany, France, the Netherlands and Denmark. Smaller member states do not have the necessary budgetary resources to make use of these exceptions and to stimulate investments in significant categories.

This imbalance in financial resources threatens to create distortions in the internal market. To prevent innovative industries in poorer member states from being left behind, the Commission proposes flanking measures from EU funds.

The Commission also announces that it will provide fresh money in the form of a European Sovereignty Fund. It intends to submit a proposal for this by the summer as part of the revision of the Multiannual Financial Framework (MFF). The short passage does not provide any information on whether this will involve funds raised on the capital markets, as demanded by some member states and rejected by Germany, nor on the financial volume.

The aim is to maintain the EU’s lead in future technologies such as microelectronics, quantum computing and artificial intelligence, and environmental technologies. The aim is to give companies from all member states access to the funds.

RePowerEU to step in

Other EU funding pots are already known: In addition to the €250 billion reserved from the Reconstruction Fund (RRF) to finance the green transition, €20 billion will come from the RePowerEU initiative. RePowe rEU was launched in May 2022 to cushion the costs when the EU becomes independent of Russian energy supplies.

Member states can also reallocate funds from the €5.4 billion Brexit Adjustment Reserve as grants for green transformation. To help member states take advantage of the available funds, the Commission will publish guidelines for the RRF on Wednesday.

Innovation fund fed by ETS proceeds

In addition, the Commission refers to InvestEU. This is the successor program to the so-called Juncker Plan. The European Investment Bank (EIB) and other financial players mobilize loans for future technologies via financial guarantees. In the mandate from 2021 to 2027, investments amounting to €372 billion are to be released. Guarantees of €26.2 billion will be used from the EU budget for this purpose. So far, guarantees of around €21 billion have been exhausted.

The Commission also addresses the Innovation Fund, which is fed by the proceeds of emissions trading (ETS). The Innovation Fund is intended to help finance the market ramp-up of future technologies. For example, there are plans to launch an auction to subsidize the production of green hydrogen. Whoever wins the bid would be guaranteed a certain price per kilogram of green hydrogen produced for a period of ten years. Manuel Berkel and Markus Grabitz

The dispute over pesticides continues

Artenvielfalt Pestizide — According to the commission, 80 percent of all cultivated and wild plants depend on pollination by bees and co.

By

Timo Landenberger

The EU Commission has made it clear once again: “We know that overuse and reliance on pesticides threaten our food security, farm profitability, biodiversity and our environment. We will continue to work hard to reduce pesticide use and minimize the loss of pollinators in the future,” said Stella Kyriakides, Commissioner for Health and Food Safety, at a recent launch of a revised pollinator initiative.

According to the Commission, 80 percent of all cultivated and wild plants depend on pollination by bees, butterflies and the like. However, the population of one-third of the species is declining sharply. The aim of the initiative is therefore to reverse the “alarming decline” by 2030 and to consistently address the causes. This is also demanded by the European Citizens’ Initiative “Save Bees and Farmers,” which received 1.1 million signatures. The most important instrument: the planned Sustainable Use Regulation (SUR).

At the World Conference on Nature (COP15) in Montréal, the parties agreed to reduce the risks from pesticide use by 50 percent – not least under pressure from the EU delegation. But in Brussels, the SUR bill is causing fierce controversy and making no headway.

Council calls for impact assessment

Most recently, the Agriculture and Energy Councils demanded a further impact assessment from the EU Commission, thus putting the plans on the back burner. A number of countries pointed to high food inflation and feared that a further tightening of EU requirements would make imported products from third countries more competitive with domestic products.

The German government spoke out against any further delay. Nevertheless, according to the Federal Ministry of Agriculture, there is a need for improvement. In particular with regard to:

the balance between the targets and the additional workload for agriculture and administration;
a concretization of the measures to support agriculture;
a consideration of already achieved reductions of pesticides;
the definition of “sensitive areas” and the planned restrictions there.

The latter, in particular, is causing dismay among farmers. The Commission’s draft provides for a general ban on plant protection in urban parks, nature reserves, playgrounds and sports fields. In addition to the EU’s Natura 2000 sites, all national landscape and bird protection areas are to be covered by the ban. In Germany, up to a quarter of the agricultural production area could be affected.

Farmers’ association sees food security at risk

“A completely different approach is needed here, otherwise this will push numerous farms out of business,” emphasizes the President of the German Farmers’ Association, Joachim Rukwied. “Food security in Europe would be jeopardized as a result.”

Norbert Lins (EPP), chairman of the EU Parliament’s Agriculture Committee, even considers the Commission’s approach “so questionable that it will be extremely difficult to improve the proposals so that they can work.” Under the plans, moreover, those who have already taken action would be penalized. In some regions, including Baden-Württemberg, pesticide use has already been declining for many years due to innovations, he said. “Nevertheless, everyone ends up with the same reference years 2015 to 2017. No matter what the status was then,” Lins said.

In the opinion of his group, it would be best if the Commission withdrew the proposals altogether. This is now no longer to be expected, which is why at least the additional impact assessment had to be awaited.

Support from science for Wiener

For SUR rapporteur Sarah Wiener (Greens/EFA), this is “pure delaying tactics. We don’t even know what next year’s harvest will be like. How can a paper be presented that takes into account what the import-export situation will be in five years for a certain crop under theoretical conditions?”, says the MEP. The transition will not be easy, she adds, because the entire food system is in a “fatal dependency.” But there is no alternative, she adds. “We need to green agriculture. This is not a question of party line.”

Wiener is getting support from the scientific community: “Given the urgent need to reduce the impact of pesticides, it is worrying to see that a number of member states and members of the European Parliament have called for a delay and watering down of the new pesticide regulation,” reads an open letter signed across disciplines by more than 700 scientists from across Europe.

Rapporteur against total ban

In any case, Sarah Wiener will not be deterred and will submit her draft report today. In it, the MEP falls short of the Commission’s proposal in some respects. For example, the proposed total ban in protected areas is a mistake. “That would be theoretically correct. But I want to find practical ways for a more resilient agricultural system. And that doesn’t include practically abolishing agriculture in sensitive areas.”

The most important thing is mandatory Integrated Pest Management (IPM). In a cascade system, all agroecological measures should be exhausted first and chemically synthetic pesticides should only be used as a last resort. “We don’t want a simple ban, we want to expand the toolbox.”

Wiener wants to focus on highly hazardous pesticides, including so-called neonicotinoids. Most of them are so toxic that they are actually banned in the EU. Nevertheless, exemptions are granted time and again. Here, the rapporteur calls for the reduction target to be raised from 50 to 80 percent.

Failure of the proposal not excluded

In the meantime, it remains questionable whether the ordinance will be passed at all. The majority is very close and insiders expect that opponents of the project will ask for the proposal to be rejected in both the Environment and Agriculture Committees.

The Agriculture Committee has a so-called partial competence in some articles – including the financing of the SUR via the Common Agricultural Policy (CAP) – but does not want to decide on this before the additional impact assessment is available. In addition, AGRI members would have liked to have a stronger say and currently feel left out. Now it is expected that the actual exchange of blows will only take place before the plenum, which could again significantly delay the procedure. If there is no trilogue negotiation before the end of the legislative period next year, the project could be off the table for the time being.

Mercosur countries: Germany and EU back Latin America

By

Isabel Cuesta Camacho

Strengthening the strategic partnership with Latin America is gaining importance for the EU. This includes the EU-Mercosur trade agreement and securing minerals such as lithium, which the EU classifies as critical. German Chancellor Olaf Scholz also set corresponding priorities on his first trip to Latin America.

After meeting with Argentina’s Prime Minister Alberto Fernández in Buenos Aires over the weekend, Scholz stressed in a press conference the opportunity for closer cooperation in the field of raw materials: “We also talked about the conditions for Argentina’s growth for the future in the field of energy, about natural gas, which we have with the deposit in Vaca Muerta, and also about the lithium deposits and the production of green hydrogen and all the renewable energies that interest Europe and Germany.”

Resource-rich Latin America

Argentina has large quantities of unconventional hydrocarbons, but their extraction is fraught with technological challenges. Vaca Muerta in Argentina’s Neuquén province (southwest) is the world’s second-largest unconventional gas deposit and the fourth-largest oil deposit of its kind. To date, only twelve percent of the potential has been tapped.

In addition to large quantities of unconventional hydrocarbons, Argentina also has large reserves of lithium. It is one of the 30 critic al minerals targeted by the European Commission and is an important component in e-car batteries, for example. According to 2022 data from the US Geological Survey, identified lithium resources worldwide have increased and now total about 89 million metric tons. 50 million tons, or more than half, is accounted for by three South American countries: Argentina, Bolivia and Chile. Australia, Chile and China produce 90 percent of the world’s output.

Is Mercosur coming this year?

Argentine President Fernández also highlighted Argentina’s opportunities for the future in the energy sector: “What we are proposing is a strategic partnership where we can all win. Argentina needs to be able to exploit its mineral resources and natural gas. And Germany benefits from the profits from production and value added in the extraction of raw materials.”

In Buenos Aires, Scholz also urged the rapid conclusion of the free trade agreement between the EU and the South American confederation Mercosur. There was great potential for deepening trade relations, and obviously, a trade agreement between the EU and the Mercosur states was particularly important in this regard, Scholz said at the joint press conference with Argentine President Fernández.

Two decades without an agreement

If the agreement between the European Union and Mercosur (Mercado libre del sur) is signed this year – ratification of the agreement has been pending since 2019 – it would create one of the world’s largest free trade areas with 800 million inhabitants. The Mercosur economic agreement, launched in 1991 by Brazil, Argentina, Paraguay and Uruguay, has expanded beyond trade to include agreements on education, labor, human rights and health.

Negotiations on the agreement with the EU have been ongoing for two decades but without success. In 2019, the two blocs reached an agreement in principle, but since then, the final texts have neither been signed nor ratified. Spain in particular, which has direct investments of more than €66 billion in Mercosur, is pushing for this agreement.

Lula: preempting China

Tensions among Mercosur members have delayed agreement with Europe in recent years. Luis Lacalle Pou, president of Uruguay, launched free trade talks with China in early 2022. Luiz Inácio Lula da Silva, the current president of Brazil, said last week during a visit to Uruguay that it was “urgent to conclude the agreement between Mercosur and Europe before we approach China.”

In early January, the EU Commissioner for International Partnerships, Jutta Urpilainen, wrote an article for the Spanish newspaper El País highlighting the importance of the strategic alliance with Latin America. The EU, Latin America and the Caribbean already cooperate at various levels with programs such as BELLA in the digital field, EUROSOCIAL+ to promote social cohesion and EUROCLIMA in the field of the environment. In the coming months, cooperation and partnership will be strengthened, she said.

This will be the case simply because Spain will take over the EU Council presidency in the second half of this year. Latin America will then be even more in focus. With rtr/lei

Agriculture Council: Ministers call for more influence on environmental legislation

A total of 16 EU agriculture ministers are calling for more involvement in legislative processes again. This emerges from a joint letter that was handed over to the Swedish Presidency at yesterday’s Council meeting. According to the letter, the ministers feel increasingly ignored, especially in negotiations in the areas of environmental and climate protection and energy.

The initiative came from Austria. “When decisions are made at EU level that have a direct impact on agriculture, then ‘agriculture’ must also sit at the negotiating table,” said Austria’s Agriculture Minister Norbert Totschnig (ÖVP) in Brussels. For example, he said, several laws are currently planned that would result in a reduction of agricultural production capacities. This would endanger food security.

Özdemir: Rivalry belongs in the past

In addition to Totsching, the ministers from Finland, Greece, Italy, Croatia, Latvia, Lithuania, Luxembourg, Malta, Poland, Romania, Slovakia, Slovenia, the Czech Republic, Hungary and Cyprus have signed the letter. The European Parliament’s Agriculture Committee had also repeatedly called for greater involvement in relevant legislation, including the Pesticides Regulation or the Renaturation Act.

Federal Minister of Food and Agriculture Cem Özdemir (Greens) is not one of them. He does not have a problem and is in good communication with the Environment Ministry, Özdemir said. The rivalry between environmental and agricultural policy must be a thing of the past, he said. til

Renewables at record high in 2022

The share of wind and solar energy in the EU’s electricity mix was at 22 percent last year, higher than that of fossil gas (20 percent) for the first time. The share of coal-fired electricity was 16 percent in 2022. This is according to a report by the energy think tank Ember.

According to the report, solar power generation in the EU grew the fastest, recording a record increase of 39 terawatt hours (+ 24 percent) in 2022. According to Ember, this alone avoided gas costs of €10 billion. According to the report, the reasons for the renewable growth are said to be effective political measures as well as the solar expansion of private households and municipalities on rooftops.

Timmermans: ’45 percent renewables are feasible’

This shows that the target of 45 percent renewables by 2030 is ambitious but entirely feasible, said Frans Timmermans, executive Vice President of the EU Commission.

In the fourth quarter of 2022, EU-wide electricity consumption also fell by 7.9 percent compared to the same period last year, Ember writes. Important factors for the decline were mild weather conditions, savings due to increased energy prices, and progress in energy efficiency.

For 2023, the think tank expects a record decline in electricity generation from gas and coal. The switch to renewables in the wake of the energy crisis, the stabilization of hydropower and French nuclear energy could reduce the generation of electricity from fossil fuels by up to 20 percent. Gas consumption in particular is expected to drop most significantly. luk

Wind energy and grid expansion: Cabinet approves acceleration rules

The Federal Cabinet has approved new regulations to accelerate the expansion of wind energy. According to the Ministry for Economic Affairs, the ministers of the traffic light coalition approved the implementation of an EU emergency regulation by written circular on Monday. It provides that environmental impact assessments on certain areas for wind turbines and power lines can be omitted. This is to apply to all projects that are started before July 2024.

The regulations are to be attached to the Room Amendment Ordinance Act, which is already in the parliamentary process. The cabinet was actually supposed to give its approval last Wednesday, but according to government sources, Justice Minister Marco Buschmann (FDP) had requested more time for consideration.

Faster approval of solar installations

Minister for Economic Affairs Robert Habeck (Greens) spoke of great relief for the necessary expansion: “Today, the federal government has launched a wind expansion accelerator the likes of which we have never had before,” he said. “With this, we are once again strongly increasing the dynamics of the expansion of renewable energies.” This is absolutely necessary, he added. With regard to bird protection, he added, “But it is also clear that species protection is and will remain important. Species protection will be materially preserved. There will continue to be protection and compensation measures.”

In addition to wind energy, the law also aims to limit approval procedures for solar plants, for example, on landfills, to three months. In this case, there is no need to check whether an environmental impact assessment is required. In addition, the approval process for smaller heat pumps, which must be completed within one month, is to be accelerated. rtr

India considers own CBAM

India is apparently considering introducing its own counterpart in response to the European Carbon Border Adjustment Mechanism (CBAM). This is according to an article in the Indian newspaper “The Hindu Business Line”.

The newspaper cites meeting minutes from India’s Ministry of Commerce in December. It says India is exploring the possibility of its own border adjustment “based on per capita emissions or cumulative (historical) per capita emissions.” India’s Ministry of Finance is now said to be studying its introduction.

India to denounce EU plans at WTO

The Ministry of Commerce also plans to raise the European CBAM in all World Trade Organization (WTO) fora, the minutes say. The country fears that the EU instrument, which aims to prevent carbon leakage in Europe, could bring difficult trade negotiations and protectionism.

15 percent of Indian exports go to the EU, according to “The Hindu Business Line”. Between 2.3 and 2.8 tons of CO2 are emitted per ton of crude steel produced in India. The global average is around 1.7 tons. Indian steel exports would accordingly be subject to a high CO2 fee on import into the EU. luk

Due diligence: NGOs call for regulation of financial service providers

If the Council succeeds in the trilogue negotiations, the Due Diligence Act will be toothless. The NGO European Coalition for Corporate Justice (ECCJ) and the Luxembourg Due Diligence Initiative criticized this at a press conference yesterday. They criticized in particular the generous exemptions for financial service providers, which the Council adopted in December under special pressure from France.

“In the Council mandate, it is up to member states to decide whether or not to regulate financial institutions. This necessarily leads to downward competition,” warned Marion Lupin of the ECCJ. In practice, the Council’s proposal would mean, for example, that financial services providers would have to ensure that their coffee is fair trade, but they would have no responsibility over whether their financial services lead to human rights or environmental abuses. That’s “absurd,” says Lupin.

Exceptions for holdings possible

Particularly in Luxembourg, where more than 10,000 holding companies (SOPARFI) are located, the Supply Chain Law would hardly apply if the Council were to prevail. In that case, only 0.4 percent of companies based in Luxembourg would still be covered by the law, the Due Diligence Initiative calculated. “Time and again, there are human rights violations by branches of Luxembourg holdings,” but if it were up to Luxembourg and the Council, the law would not concern them in the end, Jean-Louis Zeien complained.

A current example is the activities of the Luxembourg-based steel and mining company Ternium in Mexico. The company is regularly accused of human rights violations against indigenous peoples. Now Ternium may be involved in the case of two kidnapped environmental activists, reports the Initiative Sorgfaltspflicht. In another complaint against Ternium, the Luxembourg OECD Contact Point had to mediate.

While the Council already agreed on a general approach in December, the vote in the EU Parliament is scheduled for May. Last week, four Committees already delivered their opinions. Accordingly, the Parliament has so far stuck to the inclusion of financial service providers. The Trade Committee even wants to include them in the list of risk groups. Yesterday, EU Commissioner Didier Reynders spoke out in favor of regulating financial service providers. cw

Commission: One-third of all online stores manipulate customers

According to the EU Commission, many online stores try to manipulate consumers with prohibited means to pressure them into making purchasing decisions. An inspection of the Brussels authority and the responsible authorities of 25 European countries had shown that 148 of 399 examined websites, and thus more than a third of all sites, used at least one manipulative tactic. This was announced by the EU Commission on Monday. Last year, retailers were inspected in the textile or electronics sector, for example.

According to the report, the online stores were primarily examined for three manipulative methods: missing information, urging purchases or subscriptions, and countdown counters that give false deadlines for purchasing certain products.

Manipulated countdown counters, missing info

According to the study, of the 399 sites examined, 42 used false countdown counters, 54 pushed consumers to make certain decisions – from subscriptions to more expensive products or delivery options – through visual design or language. In addition, 70 online stores had hidden important information or made it difficult to find. This included information on delivery costs, product composition or a cheaper alternative.

All of this violates consumer protection rules, said EU Justice Commissioner Didier Reynders, calling on national authorities to take action against the practices. In parallel, he said, the Commission is reviewing all consumer protection rules to ensure they are well-adapted to the digital age. dpa

The comeback of Luc Frieden

Luc Frieden (ganz rechts) darf auch als President der Handelskammer auf Staatsbesuchen nicht fehlen. 2019 etwa wurde er zusammen mit dem Luxemburger Erbgroßerhzogspaar vom marokkanischen Industrieminister Moulay Hafid Elamamy empfangen. Foto: SIP/Christoph Verhaegen — Luc Frieden (right), as President of the Chamber of Commerce, likes to show his face during state visits – here with Luxembourg’s hereditary Grand Duke and Grand Duchess at the Moroccan Minister of Industry Moulay Hafid Elalamy.

Until 2013, all was still well with the world for Luxembourg’s Christian Democrats: Jean-Claude Juncker was prime minister and the parliamentary elections were merely a routine exercise. The Christian Social People’s Party (CSV for short) was the governing party. Period.

But then came the “Bommeleeër affair”: The CSV twisted itself out of a series of attacks in the 1980s. Illegal wiretapping, a justice minister who tried to influence the investigations, and finally: a vote of no confidence and new elections. And suddenly, a party that knew nothing but governing became an opposition party.

The failed renewal

To this day, the CSV tries to resign itself to backbench bickering against the government and watching others write laws. But it just can’t do it properly. It has to deal with internal party feuds, scandals and more scandals, while Juncker, its driving force, has left for Brussels as President of the Commission.

The party regularly announces that it wants to renew itself. And it tries to be close to the people. In the last European elections, it failed to do both, losing one seat. It doesn’t look good for the party in national polls either. Nothing is routine anymore.

But now that Luxembourg is facing a super-election year with municipal and parliamentary elections, the CSV is planning its comeback. Not with its numerous young deputies, party executives or EU parliamentarians. No, its slogan is: “Back to the Future“. Because last week it became known that Luc Frieden, the long time Justice and Finance Minister, one of the pillars of the CSV, is to fix the mess and lead the party back into government.

The man of the Qataris

In fact, Luc Frieden is many things, but not a blank slate. He has been called the “type of politician the left loves to hate,” the man with “the heart of stone,” the “man of austerity,” or even the “man of the Qataris”.

A short biography:

As former Finance Minister, Luc Frieden transformed the state into a service provider for the private sector and made Luxembourg’s financial center great: Tax rulings and special arrangements for banks were his specialties. During the financial crisis, he stood for austerity (for the people) and for magnanimous aid (for the banks).

Banks, he believes, are best saved by selling them to Qatar. Incidentally, he now presides over one of these banks, Banque Internationale à Luxembourg (BIL). Frieden also generously offered shares in the Luxembourg cargo airline Cargolux to the Qataris. Later, however, the state bought back the shares.

When the CSV’s days of glory were over, so was Luc Frieden’s political career in Luxembourg. The opposition was “too negative” for the Harvard- and Cambridge-educated lawyer. Barely six months after Frieden left the government, he found a nice job in the private sector: In London, as a special advisor to Deutsche Bank (major shareholder: Qatar), he was allowed to advise the board of directors on strategic issues concerning international and European affairs. Luxembourg did not know anything as progressive as a code regulating such things as “deontology” and “revolving doors”.

Frieden also presided over the diocesan newspaper and Luxembourg’s largest daily newspaper, the “Luxemburger Wort”. His attempt to turn the “Everyman’s Newspaper,” which had deviated from “law and order,” into a political instrument of his party again failed: In the meantime, the “Wort” now belongs to the Mediahuis Group.

On the right spectrum of the people’s party

Today, by the way, Luc Frieden is still a popular guest on state visits, such as to Morocco in 2019: He is, in fact, (still) president of the Luxembourg and European Chambers of Commerce, advises companies as a lawyer on the tax rules he threaded as a minister and, on the side, presides over BIL, which he sold to the Qatari royal family a few years ago (who, in turn, later sold it to the Chinese).

Luc Frieden, who is on the right of the political spectrum, is soon to bring law and order back to Luxembourg. Tomorrow, his party wants to confirm him as its top candidate. Renewal or not. In times of Qatar-Gate and ethics issues, who is better suited than the front-runner Luc Frieden? True to the motto: To change the system, you first have to have profited from it.

By the way, the Minister of Justice in the “Bommeleeër affair” – naturally, that was also Luc Frieden.

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,

Tomorrow, the Commission will present its response to the US Inflation Reduction Act. The Green Deal Industrial Plan is eagerly awaited. According to a draft of the paper, the Commission wants to allow numerous relief measures for the economy. It wants to target the aid as specifically as possible – on industries that are threatened by relocation. Markus Grabitz and Manuel Berkel have read the text and summarized the most important points.

According to the Commission, 80 percent of all cultivated and wild plants depend on pollination by bees, butterflies and other insects. However, the population of one-third of these species is declining sharply. To stop this dangerous trend, toxic pesticides must be significantly reduced. A law to this effect is being drafted at EU level. However, there is such a fierce dispute about it that it is currently doubtful whether the regulation will even come into being. Timo Landenberger has more information on this.

Relationship status: complicated. Even after two decades, no trade agreement has been reached between the EU and the Mercosur countries. But that would be welcome on the EU side, especially now, when the EU and countries like Germany would like to intensify their trade relations – think of important raw materials like gas and lithium. Isabel Cuesta analyzes how movement could come into play.

If you like Europe.Table, please forward us. If you have been sent this email: Here you can test our briefing for free.

Your
Sarah Schaefer

EU response to IRA: migration risk crucial

Ever since the US government announced new aid for the domestic industry with its Inflation Reduction Act (IRA), the EU states have been facing ever louder demands for new injections of billions of euros for their own economies. With its response – the Green Deal Industrial Plan – the Commission wants to allow numerous reliefs for the economy, but also precisely target the aid as much as possible. This is shown in a draft of the main document, which “Contexte” obtained on Monday.

Commission President Ursula von der Leyen had already presented the main features in Davos. Financial aid is to come from EU funds, but above all, the member states are to be given further freedom to pay out national aid. In particular, the Temporary Crisis Framework (TCF) is to be extended again, as announced by Competition Commissioner Margrethe Vestager in a letter to the member states.

Drawing level with the USA

For strategic green industries, investment aid such as tax breaks for production capacity would be extended to “match aid received by competitors for similar projects outside the EU.” This is the most direct reference to US government support in the draft. However, member states should also be able to consider “global funding gaps.”

However, the investment aid for production capacities is not only to be limited in time but is also to be “targeted at those sectors where a risk of relocation has been identified.” Through this, the Commission is obviously trying to exclude free riders in the industry from the windfall.

Biomass and hydropower also eligible

In addition, the Commission is concerned with not distorting competitive relationships between EU countries: “The tax incentive provisions would allow member states to align their national tax incentives with a common system, providing greater transparency and predictability for businesses across the EU.”

Further relief relates to renewable energies. Investments in all technologies as defined in the Renewable Energies Directive are now eligible for aid. This means that biomass plants and hydroelectric power plants in particular are now eligible. Storage facilities for green hydrogen and biofuels are now also eligible. In addition, the deadlines for commissioning are to be extended.

Industry receives flat-rate share of investment costs

Furthermore, there will be easier subsidies for the decarbonizing industry. Until now, if a company wanted to switch from burning gas or coal to using electricity or hydrogen, it first had to laboriously calculate cost savings over the entire life of the plant in order to determine the eligible costs. In the future, a flat-rate share of the investment costs will be eligible for aid.

As already announced by Vestager, the General Block Exemption Regulation (GBER) is also to be adapted. For sectors such as hydrogen, zero-emission vehicles, buildings and CO2 storage (CCS), the threshold for the notification requirement is to be raised. For charging and refueling infrastructure, the scope is to be extended and training programs are also to benefit.

The de minimis limits for the cumbersome IPCEI subsidies, which have so far been used to support hydrogen projects, among others, are also to be raised, and in the future, perhaps also include heat pumps and the solar industry. In this way, small and medium-sized enterprises are also to be given access to investment support. Under the GBER, the permissible subsidy quotas are also to be raised for this purpose.

Accompaniment with funds from EU funding pots

The Temporary Crisis Framework (TCF), i.e., the temporarily relaxed state aid rules, would primarily benefit companies in rich member states such as Germany, France, the Netherlands and Denmark. Smaller member states do not have the necessary budgetary resources to make use of these exceptions and to stimulate investments in significant categories.

This imbalance in financial resources threatens to create distortions in the internal market. To prevent innovative industries in poorer member states from being left behind, the Commission proposes flanking measures from EU funds.

The Commission also announces that it will provide fresh money in the form of a European Sovereignty Fund. It intends to submit a proposal for this by the summer as part of the revision of the Multiannual Financial Framework (MFF). The short passage does not provide any information on whether this will involve funds raised on the capital markets, as demanded by some member states and rejected by Germany, nor on the financial volume.

The aim is to maintain the EU’s lead in future technologies such as microelectronics, quantum computing and artificial intelligence, and environmental technologies. The aim is to give companies from all member states access to the funds.

RePowerEU to step in

Other EU funding pots are already known: In addition to the €250 billion reserved from the Reconstruction Fund (RRF) to finance the green transition, €20 billion will come from the RePowerEU initiative. RePowe rEU was launched in May 2022 to cushion the costs when the EU becomes independent of Russian energy supplies.

Member states can also reallocate funds from the €5.4 billion Brexit Adjustment Reserve as grants for green transformation. To help member states take advantage of the available funds, the Commission will publish guidelines for the RRF on Wednesday.

Innovation fund fed by ETS proceeds

In addition, the Commission refers to InvestEU. This is the successor program to the so-called Juncker Plan. The European Investment Bank (EIB) and other financial players mobilize loans for future technologies via financial guarantees. In the mandate from 2021 to 2027, investments amounting to €372 billion are to be released. Guarantees of €26.2 billion will be used from the EU budget for this purpose. So far, guarantees of around €21 billion have been exhausted.

The Commission also addresses the Innovation Fund, which is fed by the proceeds of emissions trading (ETS). The Innovation Fund is intended to help finance the market ramp-up of future technologies. For example, there are plans to launch an auction to subsidize the production of green hydrogen. Whoever wins the bid would be guaranteed a certain price per kilogram of green hydrogen produced for a period of ten years. Manuel Berkel and Markus Grabitz

The dispute over pesticides continues

By

Timo Landenberger

The EU Commission has made it clear once again: “We know that overuse and reliance on pesticides threaten our food security, farm profitability, biodiversity and our environment. We will continue to work hard to reduce pesticide use and minimize the loss of pollinators in the future,” said Stella Kyriakides, Commissioner for Health and Food Safety, at a recent launch of a revised pollinator initiative.

According to the Commission, 80 percent of all cultivated and wild plants depend on pollination by bees, butterflies and the like. However, the population of one-third of the species is declining sharply. The aim of the initiative is therefore to reverse the “alarming decline” by 2030 and to consistently address the causes. This is also demanded by the European Citizens’ Initiative “Save Bees and Farmers,” which received 1.1 million signatures. The most important instrument: the planned Sustainable Use Regulation (SUR).

At the World Conference on Nature (COP15) in Montréal, the parties agreed to reduce the risks from pesticide use by 50 percent – not least under pressure from the EU delegation. But in Brussels, the SUR bill is causing fierce controversy and making no headway.

Council calls for impact assessment

Most recently, the Agriculture and Energy Councils demanded a further impact assessment from the EU Commission, thus putting the plans on the back burner. A number of countries pointed to high food inflation and feared that a further tightening of EU requirements would make imported products from third countries more competitive with domestic products.

The German government spoke out against any further delay. Nevertheless, according to the Federal Ministry of Agriculture, there is a need for improvement. In particular with regard to:

the balance between the targets and the additional workload for agriculture and administration;
a concretization of the measures to support agriculture;
a consideration of already achieved reductions of pesticides;
the definition of “sensitive areas” and the planned restrictions there.

The latter, in particular, is causing dismay among farmers. The Commission’s draft provides for a general ban on plant protection in urban parks, nature reserves, playgrounds and sports fields. In addition to the EU’s Natura 2000 sites, all national landscape and bird protection areas are to be covered by the ban. In Germany, up to a quarter of the agricultural production area could be affected.

Farmers’ association sees food security at risk

“A completely different approach is needed here, otherwise this will push numerous farms out of business,” emphasizes the President of the German Farmers’ Association, Joachim Rukwied. “Food security in Europe would be jeopardized as a result.”

Norbert Lins (EPP), chairman of the EU Parliament’s Agriculture Committee, even considers the Commission’s approach “so questionable that it will be extremely difficult to improve the proposals so that they can work.” Under the plans, moreover, those who have already taken action would be penalized. In some regions, including Baden-Württemberg, pesticide use has already been declining for many years due to innovations, he said. “Nevertheless, everyone ends up with the same reference years 2015 to 2017. No matter what the status was then,” Lins said.

In the opinion of his group, it would be best if the Commission withdrew the proposals altogether. This is now no longer to be expected, which is why at least the additional impact assessment had to be awaited.

Support from science for Wiener

For SUR rapporteur Sarah Wiener (Greens/EFA), this is “pure delaying tactics. We don’t even know what next year’s harvest will be like. How can a paper be presented that takes into account what the import-export situation will be in five years for a certain crop under theoretical conditions?”, says the MEP. The transition will not be easy, she adds, because the entire food system is in a “fatal dependency.” But there is no alternative, she adds. “We need to green agriculture. This is not a question of party line.”

Wiener is getting support from the scientific community: “Given the urgent need to reduce the impact of pesticides, it is worrying to see that a number of member states and members of the European Parliament have called for a delay and watering down of the new pesticide regulation,” reads an open letter signed across disciplines by more than 700 scientists from across Europe.

Rapporteur against total ban

In any case, Sarah Wiener will not be deterred and will submit her draft report today. In it, the MEP falls short of the Commission’s proposal in some respects. For example, the proposed total ban in protected areas is a mistake. “That would be theoretically correct. But I want to find practical ways for a more resilient agricultural system. And that doesn’t include practically abolishing agriculture in sensitive areas.”

The most important thing is mandatory Integrated Pest Management (IPM). In a cascade system, all agroecological measures should be exhausted first and chemically synthetic pesticides should only be used as a last resort. “We don’t want a simple ban, we want to expand the toolbox.”

Wiener wants to focus on highly hazardous pesticides, including so-called neonicotinoids. Most of them are so toxic that they are actually banned in the EU. Nevertheless, exemptions are granted time and again. Here, the rapporteur calls for the reduction target to be raised from 50 to 80 percent.

Failure of the proposal not excluded

In the meantime, it remains questionable whether the ordinance will be passed at all. The majority is very close and insiders expect that opponents of the project will ask for the proposal to be rejected in both the Environment and Agriculture Committees.

The Agriculture Committee has a so-called partial competence in some articles – including the financing of the SUR via the Common Agricultural Policy (CAP) – but does not want to decide on this before the additional impact assessment is available. In addition, AGRI members would have liked to have a stronger say and currently feel left out. Now it is expected that the actual exchange of blows will only take place before the plenum, which could again significantly delay the procedure. If there is no trilogue negotiation before the end of the legislative period next year, the project could be off the table for the time being.

Mercosur countries: Germany and EU back Latin America

By

Isabel Cuesta Camacho

Strengthening the strategic partnership with Latin America is gaining importance for the EU. This includes the EU-Mercosur trade agreement and securing minerals such as lithium, which the EU classifies as critical. German Chancellor Olaf Scholz also set corresponding priorities on his first trip to Latin America.

After meeting with Argentina’s Prime Minister Alberto Fernández in Buenos Aires over the weekend, Scholz stressed in a press conference the opportunity for closer cooperation in the field of raw materials: “We also talked about the conditions for Argentina’s growth for the future in the field of energy, about natural gas, which we have with the deposit in Vaca Muerta, and also about the lithium deposits and the production of green hydrogen and all the renewable energies that interest Europe and Germany.”

Resource-rich Latin America

Argentina has large quantities of unconventional hydrocarbons, but their extraction is fraught with technological challenges. Vaca Muerta in Argentina’s Neuquén province (southwest) is the world’s second-largest unconventional gas deposit and the fourth-largest oil deposit of its kind. To date, only twelve percent of the potential has been tapped.

In addition to large quantities of unconventional hydrocarbons, Argentina also has large reserves of lithium. It is one of the 30 critic al minerals targeted by the European Commission and is an important component in e-car batteries, for example. According to 2022 data from the US Geological Survey, identified lithium resources worldwide have increased and now total about 89 million metric tons. 50 million tons, or more than half, is accounted for by three South American countries: Argentina, Bolivia and Chile. Australia, Chile and China produce 90 percent of the world’s output.

Is Mercosur coming this year?

Argentine President Fernández also highlighted Argentina’s opportunities for the future in the energy sector: “What we are proposing is a strategic partnership where we can all win. Argentina needs to be able to exploit its mineral resources and natural gas. And Germany benefits from the profits from production and value added in the extraction of raw materials.”

In Buenos Aires, Scholz also urged the rapid conclusion of the free trade agreement between the EU and the South American confederation Mercosur. There was great potential for deepening trade relations, and obviously, a trade agreement between the EU and the Mercosur states was particularly important in this regard, Scholz said at the joint press conference with Argentine President Fernández.

Two decades without an agreement

If the agreement between the European Union and Mercosur (Mercado libre del sur) is signed this year – ratification of the agreement has been pending since 2019 – it would create one of the world’s largest free trade areas with 800 million inhabitants. The Mercosur economic agreement, launched in 1991 by Brazil, Argentina, Paraguay and Uruguay, has expanded beyond trade to include agreements on education, labor, human rights and health.

Negotiations on the agreement with the EU have been ongoing for two decades but without success. In 2019, the two blocs reached an agreement in principle, but since then, the final texts have neither been signed nor ratified. Spain in particular, which has direct investments of more than €66 billion in Mercosur, is pushing for this agreement.

Lula: preempting China

Tensions among Mercosur members have delayed agreement with Europe in recent years. Luis Lacalle Pou, president of Uruguay, launched free trade talks with China in early 2022. Luiz Inácio Lula da Silva, the current president of Brazil, said last week during a visit to Uruguay that it was “urgent to conclude the agreement between Mercosur and Europe before we approach China.”

In early January, the EU Commissioner for International Partnerships, Jutta Urpilainen, wrote an article for the Spanish newspaper El País highlighting the importance of the strategic alliance with Latin America. The EU, Latin America and the Caribbean already cooperate at various levels with programs such as BELLA in the digital field, EUROSOCIAL+ to promote social cohesion and EUROCLIMA in the field of the environment. In the coming months, cooperation and partnership will be strengthened, she said.

This will be the case simply because Spain will take over the EU Council presidency in the second half of this year. Latin America will then be even more in focus. With rtr/lei

Agriculture Council: Ministers call for more influence on environmental legislation

A total of 16 EU agriculture ministers are calling for more involvement in legislative processes again. This emerges from a joint letter that was handed over to the Swedish Presidency at yesterday’s Council meeting. According to the letter, the ministers feel increasingly ignored, especially in negotiations in the areas of environmental and climate protection and energy.

The initiative came from Austria. “When decisions are made at EU level that have a direct impact on agriculture, then ‘agriculture’ must also sit at the negotiating table,” said Austria’s Agriculture Minister Norbert Totschnig (ÖVP) in Brussels. For example, he said, several laws are currently planned that would result in a reduction of agricultural production capacities. This would endanger food security.

Özdemir: Rivalry belongs in the past

In addition to Totsching, the ministers from Finland, Greece, Italy, Croatia, Latvia, Lithuania, Luxembourg, Malta, Poland, Romania, Slovakia, Slovenia, the Czech Republic, Hungary and Cyprus have signed the letter. The European Parliament’s Agriculture Committee had also repeatedly called for greater involvement in relevant legislation, including the Pesticides Regulation or the Renaturation Act.

Federal Minister of Food and Agriculture Cem Özdemir (Greens) is not one of them. He does not have a problem and is in good communication with the Environment Ministry, Özdemir said. The rivalry between environmental and agricultural policy must be a thing of the past, he said. til

Renewables at record high in 2022

The share of wind and solar energy in the EU’s electricity mix was at 22 percent last year, higher than that of fossil gas (20 percent) for the first time. The share of coal-fired electricity was 16 percent in 2022. This is according to a report by the energy think tank Ember.

According to the report, solar power generation in the EU grew the fastest, recording a record increase of 39 terawatt hours (+ 24 percent) in 2022. According to Ember, this alone avoided gas costs of €10 billion. According to the report, the reasons for the renewable growth are said to be effective political measures as well as the solar expansion of private households and municipalities on rooftops.

Timmermans: ’45 percent renewables are feasible’

This shows that the target of 45 percent renewables by 2030 is ambitious but entirely feasible, said Frans Timmermans, executive Vice President of the EU Commission.

In the fourth quarter of 2022, EU-wide electricity consumption also fell by 7.9 percent compared to the same period last year, Ember writes. Important factors for the decline were mild weather conditions, savings due to increased energy prices, and progress in energy efficiency.

For 2023, the think tank expects a record decline in electricity generation from gas and coal. The switch to renewables in the wake of the energy crisis, the stabilization of hydropower and French nuclear energy could reduce the generation of electricity from fossil fuels by up to 20 percent. Gas consumption in particular is expected to drop most significantly. luk

Wind energy and grid expansion: Cabinet approves acceleration rules

The Federal Cabinet has approved new regulations to accelerate the expansion of wind energy. According to the Ministry for Economic Affairs, the ministers of the traffic light coalition approved the implementation of an EU emergency regulation by written circular on Monday. It provides that environmental impact assessments on certain areas for wind turbines and power lines can be omitted. This is to apply to all projects that are started before July 2024.

The regulations are to be attached to the Room Amendment Ordinance Act, which is already in the parliamentary process. The cabinet was actually supposed to give its approval last Wednesday, but according to government sources, Justice Minister Marco Buschmann (FDP) had requested more time for consideration.

Faster approval of solar installations

Minister for Economic Affairs Robert Habeck (Greens) spoke of great relief for the necessary expansion: “Today, the federal government has launched a wind expansion accelerator the likes of which we have never had before,” he said. “With this, we are once again strongly increasing the dynamics of the expansion of renewable energies.” This is absolutely necessary, he added. With regard to bird protection, he added, “But it is also clear that species protection is and will remain important. Species protection will be materially preserved. There will continue to be protection and compensation measures.”

In addition to wind energy, the law also aims to limit approval procedures for solar plants, for example, on landfills, to three months. In this case, there is no need to check whether an environmental impact assessment is required. In addition, the approval process for smaller heat pumps, which must be completed within one month, is to be accelerated. rtr

India considers own CBAM

India is apparently considering introducing its own counterpart in response to the European Carbon Border Adjustment Mechanism (CBAM). This is according to an article in the Indian newspaper “The Hindu Business Line”.

The newspaper cites meeting minutes from India’s Ministry of Commerce in December. It says India is exploring the possibility of its own border adjustment “based on per capita emissions or cumulative (historical) per capita emissions.” India’s Ministry of Finance is now said to be studying its introduction.

India to denounce EU plans at WTO

The Ministry of Commerce also plans to raise the European CBAM in all World Trade Organization (WTO) fora, the minutes say. The country fears that the EU instrument, which aims to prevent carbon leakage in Europe, could bring difficult trade negotiations and protectionism.

15 percent of Indian exports go to the EU, according to “The Hindu Business Line”. Between 2.3 and 2.8 tons of CO2 are emitted per ton of crude steel produced in India. The global average is around 1.7 tons. Indian steel exports would accordingly be subject to a high CO2 fee on import into the EU. luk

Due diligence: NGOs call for regulation of financial service providers

If the Council succeeds in the trilogue negotiations, the Due Diligence Act will be toothless. The NGO European Coalition for Corporate Justice (ECCJ) and the Luxembourg Due Diligence Initiative criticized this at a press conference yesterday. They criticized in particular the generous exemptions for financial service providers, which the Council adopted in December under special pressure from France.

“In the Council mandate, it is up to member states to decide whether or not to regulate financial institutions. This necessarily leads to downward competition,” warned Marion Lupin of the ECCJ. In practice, the Council’s proposal would mean, for example, that financial services providers would have to ensure that their coffee is fair trade, but they would have no responsibility over whether their financial services lead to human rights or environmental abuses. That’s “absurd,” says Lupin.

Exceptions for holdings possible

Particularly in Luxembourg, where more than 10,000 holding companies (SOPARFI) are located, the Supply Chain Law would hardly apply if the Council were to prevail. In that case, only 0.4 percent of companies based in Luxembourg would still be covered by the law, the Due Diligence Initiative calculated. “Time and again, there are human rights violations by branches of Luxembourg holdings,” but if it were up to Luxembourg and the Council, the law would not concern them in the end, Jean-Louis Zeien complained.

A current example is the activities of the Luxembourg-based steel and mining company Ternium in Mexico. The company is regularly accused of human rights violations against indigenous peoples. Now Ternium may be involved in the case of two kidnapped environmental activists, reports the Initiative Sorgfaltspflicht. In another complaint against Ternium, the Luxembourg OECD Contact Point had to mediate.

While the Council already agreed on a general approach in December, the vote in the EU Parliament is scheduled for May. Last week, four Committees already delivered their opinions. Accordingly, the Parliament has so far stuck to the inclusion of financial service providers. The Trade Committee even wants to include them in the list of risk groups. Yesterday, EU Commissioner Didier Reynders spoke out in favor of regulating financial service providers. cw

Commission: One-third of all online stores manipulate customers

According to the EU Commission, many online stores try to manipulate consumers with prohibited means to pressure them into making purchasing decisions. An inspection of the Brussels authority and the responsible authorities of 25 European countries had shown that 148 of 399 examined websites, and thus more than a third of all sites, used at least one manipulative tactic. This was announced by the EU Commission on Monday. Last year, retailers were inspected in the textile or electronics sector, for example.

According to the report, the online stores were primarily examined for three manipulative methods: missing information, urging purchases or subscriptions, and countdown counters that give false deadlines for purchasing certain products.

Manipulated countdown counters, missing info

According to the study, of the 399 sites examined, 42 used false countdown counters, 54 pushed consumers to make certain decisions – from subscriptions to more expensive products or delivery options – through visual design or language. In addition, 70 online stores had hidden important information or made it difficult to find. This included information on delivery costs, product composition or a cheaper alternative.

All of this violates consumer protection rules, said EU Justice Commissioner Didier Reynders, calling on national authorities to take action against the practices. In parallel, he said, the Commission is reviewing all consumer protection rules to ensure they are well-adapted to the digital age. dpa

The comeback of Luc Frieden

Until 2013, all was still well with the world for Luxembourg’s Christian Democrats: Jean-Claude Juncker was prime minister and the parliamentary elections were merely a routine exercise. The Christian Social People’s Party (CSV for short) was the governing party. Period.

But then came the “Bommeleeër affair”: The CSV twisted itself out of a series of attacks in the 1980s. Illegal wiretapping, a justice minister who tried to influence the investigations, and finally: a vote of no confidence and new elections. And suddenly, a party that knew nothing but governing became an opposition party.

The failed renewal

To this day, the CSV tries to resign itself to backbench bickering against the government and watching others write laws. But it just can’t do it properly. It has to deal with internal party feuds, scandals and more scandals, while Juncker, its driving force, has left for Brussels as President of the Commission.

The party regularly announces that it wants to renew itself. And it tries to be close to the people. In the last European elections, it failed to do both, losing one seat. It doesn’t look good for the party in national polls either. Nothing is routine anymore.

But now that Luxembourg is facing a super-election year with municipal and parliamentary elections, the CSV is planning its comeback. Not with its numerous young deputies, party executives or EU parliamentarians. No, its slogan is: “Back to the Future“. Because last week it became known that Luc Frieden, the long time Justice and Finance Minister, one of the pillars of the CSV, is to fix the mess and lead the party back into government.

The man of the Qataris

In fact, Luc Frieden is many things, but not a blank slate. He has been called the “type of politician the left loves to hate,” the man with “the heart of stone,” the “man of austerity,” or even the “man of the Qataris”.

A short biography:

As former Finance Minister, Luc Frieden transformed the state into a service provider for the private sector and made Luxembourg’s financial center great: Tax rulings and special arrangements for banks were his specialties. During the financial crisis, he stood for austerity (for the people) and for magnanimous aid (for the banks).

Banks, he believes, are best saved by selling them to Qatar. Incidentally, he now presides over one of these banks, Banque Internationale à Luxembourg (BIL). Frieden also generously offered shares in the Luxembourg cargo airline Cargolux to the Qataris. Later, however, the state bought back the shares.

When the CSV’s days of glory were over, so was Luc Frieden’s political career in Luxembourg. The opposition was “too negative” for the Harvard- and Cambridge-educated lawyer. Barely six months after Frieden left the government, he found a nice job in the private sector: In London, as a special advisor to Deutsche Bank (major shareholder: Qatar), he was allowed to advise the board of directors on strategic issues concerning international and European affairs. Luxembourg did not know anything as progressive as a code regulating such things as “deontology” and “revolving doors”.

Frieden also presided over the diocesan newspaper and Luxembourg’s largest daily newspaper, the “Luxemburger Wort”. His attempt to turn the “Everyman’s Newspaper,” which had deviated from “law and order,” into a political instrument of his party again failed: In the meantime, the “Wort” now belongs to the Mediahuis Group.

On the right spectrum of the people’s party

Today, by the way, Luc Frieden is still a popular guest on state visits, such as to Morocco in 2019: He is, in fact, (still) president of the Luxembourg and European Chambers of Commerce, advises companies as a lawyer on the tax rules he threaded as a minister and, on the side, presides over BIL, which he sold to the Qatari royal family a few years ago (who, in turn, later sold it to the Chinese).

Luc Frieden, who is on the right of the political spectrum, is soon to bring law and order back to Luxembourg. Tomorrow, his party wants to confirm him as its top candidate. Renewal or not. In times of Qatar-Gate and ethics issues, who is better suited than the front-runner Luc Frieden? True to the motto: To change the system, you first have to have profited from it.

By the way, the Minister of Justice in the “Bommeleeër affair” – naturally, that was also Luc Frieden.

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

Feature

EU response to IRA: migration risk crucial

Drawing level with the USA

Biomass and hydropower also eligible

Industry receives flat-rate share of investment costs

Accompaniment with funds from EU funding pots

RePowerEU to step in

Innovation fund fed by ETS proceeds

The dispute over pesticides continues

Council calls for impact assessment

Farmers’ association sees food security at risk

Support from science for Wiener

Rapporteur against total ban

Failure of the proposal not excluded

Mercosur countries: Germany and EU back Latin America

Resource-rich Latin America

Is Mercosur coming this year?

Two decades without an agreement

Lula: preempting China

Events

News

Agriculture Council: Ministers call for more influence on environmental legislation

Özdemir: Rivalry belongs in the past

Renewables at record high in 2022

Timmermans: ’45 percent renewables are feasible’

Wind energy and grid expansion: Cabinet approves acceleration rules

Faster approval of solar installations

India considers own CBAM

India to denounce EU plans at WTO

Due diligence: NGOs call for regulation of financial service providers

Exceptions for holdings possible

Commission: One-third of all online stores manipulate customers

Manipulated countdown counters, missing info

Apéro

The comeback of Luc Frieden

The failed renewal

The man of the Qataris

On the right spectrum of the people’s party

Europe.Table Editorial Office

EUROPE.TABLE EDITORS

Feature

EU response to IRA: migration risk crucial

Drawing level with the USA

Biomass and hydropower also eligible

Industry receives flat-rate share of investment costs

Accompaniment with funds from EU funding pots

RePowerEU to step in

Innovation fund fed by ETS proceeds

The dispute over pesticides continues

Council calls for impact assessment

Farmers’ association sees food security at risk

Support from science for Wiener

Rapporteur against total ban

Failure of the proposal not excluded

Mercosur countries: Germany and EU back Latin America

Resource-rich Latin America

Is Mercosur coming this year?

Two decades without an agreement

Lula: preempting China

Events

News

Agriculture Council: Ministers call for more influence on environmental legislation

Özdemir: Rivalry belongs in the past

Renewables at record high in 2022

Timmermans: ’45 percent renewables are feasible’

Wind energy and grid expansion: Cabinet approves acceleration rules

Faster approval of solar installations

India considers own CBAM

India to denounce EU plans at WTO

Due diligence: NGOs call for regulation of financial service providers

Exceptions for holdings possible

Commission: One-third of all online stores manipulate customers

Manipulated countdown counters, missing info

Apéro

The comeback of Luc Frieden

The failed renewal

The man of the Qataris

On the right spectrum of the people’s party

Europe.Table Editorial Office