Today, the heads of state and government of the EU and the Western Balkan countries are meeting in Brussels to discuss the next round of EU enlargement. On the agenda of the EU summit are, of course, the membership applications of Ukraine, Moldova, and Georgia. Eric Bonse and Till Hoppe give an overview of what to expect from the summit, which seems to lack a clear direction.
China is already putting out feelers to countries like Serbia, and as a result, the EU can under no circumstances afford to hesitate any longer and must finally officially start accession talks with the Western Balkan countries warns Mario Holzner, Director of the Vienna Institute for International Economic Studies in an interview with Europe.Table.
An important agreement has now been reached on sustainability reporting: Unlisted companies and companies based outside the EU are also affected by the reporting obligation. Leonie Düngefeld analyzes what applies to which company sizes and from when.
Timo Landenberger has looked at the Commission’s proposal for the nature conservation legislative package. It contains a lot of good things – fewer pesticides, extensive renaturation – but the agricultural and forestry sectors are still up in arms.
Today’s Opinion by Linn Selle, President of the European Movement Germany, also revolves around the potential new members of the EU, but here she focuses primarily on the German government. The EU’s largest member state must not duck out of the current debate, she writes.
Amid severe crises, the EU is preparing for a new round of enlargement. At the EU summit today, the membership applications of Ukraine, Moldova, and Georgia are on the agenda. In addition, the Union’s 27 heads of state and government want to discuss the proposal for a new “European political community” made by French President Emmanuel Macron. The meeting will be preceded by an informal Western Balkans summit, but no decisions are expected.
On Friday, the meeting continues with a euro summit in an expanded format (i.e., 27). In the presence of ECB President Christine Lagarde, the topics will be inflation, the threat of fragmentation due to rising spreads and high sovereign debt, but also the energy crisis, and EU sanctions against Russia. The Conference on the Future of Europe’s proposals on reforming the EU (including abolishing unanimity in foreign policy) are also on the agenda.
“This will be a geopolitical summit,” said an insider in charge of the preparations. All topics are directly or indirectly related to Russia’s war of aggression in Ukraine and the consequences for Europe. However, a clear geopolitical strategy is not emerging. While Ukraine can look forward to a warm welcome, the Western Balkans must prepare for a cold shower.
In his invitation, EU Council President Charles Michel asked the heads of state and government to grant candidate status to Ukraine and Moldova. He made no recommendation on the Western Balkans. “It is now time to confirm that the future of Ukraine, Moldova, and Georgia lies in the EU,” the letter said. “I will ask you to grant candidate status to Ukraine and Moldova.”
Diplomats from several EU countries said that there was a unanimous “yes” to this recommendation. Against the backdrop of the Russian invasion of Ukraine, there was no alternative to approval. To be sure, the EU has never invited a country at war. However, a refusal would encourage Kremlin leader Vladimir Putin to continue his aggression. Putin should not be given the right to veto EU accession, one diplomat said.
The Europeans in the Western Balkans have been less proactive. Twenty years after the Balkan wars, they do not want to change their hesitant enlargement policy, which is tied to countless conditions. Austria and some other countries have warned against putting Ukraine on the fast track and leaving the Balkans hanging. However, this is unlikely to have any practical consequences.
There is no junket between the Western Balkans and Ukraine, a diplomat said. Croatia, Slovenia, and Austria want to push for granting Bosnia and Herzegovina candidate status or at least lowering the hurdle. The EU Commission is pushing for Bosnia to first work through a list of 14 conditions. The EU would also be obliged to finally lift the visa requirement for Kosovo. France and the Netherlands are blocking this for domestic political reasons. All other Balkan states now enjoy visa-free travel.
The 27 heads of state and government at the Balkan summit were counting on at least one breakthrough: Bulgaria could lift its veto on the start of accession talks with North Macedonia and thus also clear the way for Albania, it was hoped in the course of the day. The French presidency had last sounded out a compromise between Sofia and Skopje. “I very much hope that everyone will now jump over their shadows,” German Chancellor Olaf Scholz said in his government statement to the Bundestag. The EU must finally give the green light for accession negotiations with Albania and North Macedonia.
In the evening, however, hopes of a deal seemed to be dashed for the time being after a successful vote of no confidence against the Bulgarian government. German Chancellor Olaf Scholz had previously expressed a clear commitment of the EU states to the accession of the six Western Balkan countries: “Now it is valid, we want and we need the Western Balkans in the European Union”.
Almost 20 years ago in Thessaloniki, the EU held out the prospect of accession to the states there, but this has not materialized to date. In view of the lack of progress, it should not come as a surprise that some of the participants, such as Albania’s Prime Minister Edi Rama, had considered canceling the Western Balkans summit. Those countries deserve just as clear an answer as Ukraine and Moldova, Scholz said. In the case of the two states, he said, he would do his utmost to ensure that the EU states here unanimously said yes: “27 times yes to candidate status.”
Europe stands united at the side of the Ukrainian people, the chancellor assured. “We will continue to provide Ukraine with massive support – financial, economic, humanitarian, political and, not least, with the supply of weapons,” he said, adding, “And for as long as Ukraine needs our support.” To organize the aid, Scholz wants to convene an international conference of experts as part of Germany’s G7 presidency. An agreement must be reached on which investments will move Ukraine forward most quickly on its European path, the SPD politician said.
The discussion about “wider Europe” is on the agenda this evening. French President Emmanuel Macron launched the idea of a “Communauté Politique Europeenne” (CPE) at the informal summit in Versailles and has since elaborated somewhat in a one-page nonpaper. “We expect more details,” said one diplomat. The paper is not very informative, he said. The idea is apparently to create a forum. Not as a replacement for the enlargement process, but as a parallel event.
There would be a general debate in the evening, which would certainly not be the last. EU Council President Charles Michel (“European Geopolitical Community”), Italian party leader and former Prime Minister Enrico Letta (“European Confederation”), and Austria’s Foreign Minister Alexander Schallenberg had launched similar pushes for gradual integration into the EU. The French model is the most advanced, according to an EU diplomat. However, it was unclear what the criteria for participation in the format might be and how strongly it would be structured.
There is no calendar for possible meetings of the CPE. It will depend on the format. First, the criteria for participation and function must be clarified. A forum for all countries that share the democratic values of the EU is possible. In addition to the accession candidates, the forum could also be open to former members such as Great Britain, Switzerland, or Liechtenstein.
The question is, however, what exactly is the added value for the candidate countries and whether the possible audience might not be too heterogeneous in the end. An annual conference like the meeting of the Asem states is not yet a structure. However, a more structured forum to discuss transport, energy or health issues, or other topics with a geopolitical dimension is also conceivable. with Till Hoppe
This law will create a stir: The new requirements for sustainability reporting (Corporate Sustainability Reporting Directive, CSRD) will affect around 50,000 companies in the EU. From 2024, these companies will have to disclose more precise data on their environmental, social, and governance impacts – according to uniform standards. Late on Tuesday evening, the Council, Parliament, and Commission agreed on the details of the directive.
The fourth and final trilogue was originally scheduled to take place at the beginning of June but was then postponed indefinitely. The Council and Parliament disagreed on key points, including the requirements for audits, the inclusion of non-EU companies, rules for SMEs, and the treatment of subsidiaries. After further deliberations by the Permanent Representations Committee, consensus was finally reached the day before yesterday.
“Until now, information on a company’s impact on the environment, human rights, and labor ethics has been patchy, unreliable, and easy to abuse,” said Pascal Durand (Renew), the Parliament’s rapporteur. “Some companies don’t report. Others report what they want.” Investors, consumers, and shareholders would suffer significant disadvantages as a result.
“This is a game-changing moment in terms of corporate reporting,” said Financial Markets Commissioner Mairead McGuinness. “For the first time, sustainability reporting will be put on an equal footing with financial reporting, as both are equally important.” She said the agreement creates clarity and uniform standards for companies, as well as a balance between the interests of companies, investors, and civil society.
The new regulations apply to companies with more than 250 employees and more than €40 million in sales, as well as to all listed companies. These are also responsible for assessing the information at the level of their subsidiaries. Companies already affected by the previously applicable Non-Financial Reporting Directive (NFRD) will have to report from 2024; new companies will have to report from 2025.
Listed SMEs must also report, but they still have the option to opt out until 2028. In this way, the CSRD takes into account smaller companies that first have to build up structures for reporting.
“This agreement is extremely unsatisfactory for German SMEs,” said Angelika Niebler (CSU), a member of the responsible legal committee. “The fact that SMEs listed on the stock exchange are now to be obliged to report on sustainability after all may pose huge challenges for the companies concerned.”
Matthias Bianchi of the Deutscher Mittelstands-Bund (DMB), on the other hand, saw the glass half full and welcomed the fact that “only” listed SMEs were affected. “It is also positive that the transition periods for these companies have been extended,” Bianchi said. “Nevertheless, SMEs should have the topic of sustainability reporting and CSRD on their agenda and get involved early.”
In the future, companies must publish the information in a separate section of their management report. In addition, the directive introduces a certification requirement for sustainability reporting. “The European market for non-accounting audits will be standardized, much stricter and more transparent,” Pascal Durand commented. “The Parliament has succeeded in getting member states to open up the audit market to make room for new certified players and not just leave it in the hands of the big financial auditors.”
Following pressure from the Parliament, companies based outside the EU with net sales in the EU of at least €150 million and at least one subsidiary or branch must also submit a report on ESG impacts.
The European Financial Reporting Advisory Group (EFRAG) will develop two sets of reporting standards: The general standards for reporting are to be presented in June 2023, followed by standards for high-risk industries one year later. EFRAG is currently conducting a public consultation on this in the member states.
The European Commission aims to advance the implementation of its biodiversity and farm-to-fork strategies with a regulation on the use of pesticides and a law to restore nature. The proposals are intended to help prevent the collapse of ecosystems and ensure food security, the agency announced Wednesday. Food security in particular, however, will be severely jeopardized by the plans, agriculture representatives criticize.
The drafts should actually have been presented in March, but this was postponed by three months due to the war in Ukraine. Now it is clear: By 2030, the use of chemical pesticides in the EU is to be halved and completely banned in sensitive areas. Damaged ecosystems are to be renatured, with binding targets for the member states to restore nature.
This is not necessarily accompanied by an increase in protected areas, the Commission stressed. Renaturation does not exclude economic activities; rather, it is about production in harmony with nature. Therefore, by 2030, renaturation measures should be implemented on at least 20 percent of all marine and terrestrial areas in the EU.
Goals include:
Around €100 billion are to be earmarked for the measures from the current multi-year financial framework. In order to do justice to national peculiarities in implementation, science and industry are to be involved in drawing up the national plans. But the dispute seems pre-programmed.
Johan Rockström, director of the Potsdam Institute for Climate Impact Research (PIK), calls the measures “urgently needed”. For environmentalists, the plans do not go far enough. The German branch of Friends of the Earth (BUND), for example, criticized the Commission for backing down at the last minute from its plan to reserve ten percent of agricultural land for nature. The agricultural and forestry sectors are up in arms against the proposals.
These are far removed from the reality of life for EU citizens and would jeopardize the safeguarding of resources, says Ivo von Trotha, a member of the Executive Committee of the Federation of German Forest Owners’ Associations (AGDW) and vice president of the European umbrella organization. The Commission also undermines the principle of subsidiarity with its proposal to shape the targets by means of delegated acts.
For the German Farmers’ Association (DBV), the Commission’s proposals are at odds with current food security challenges. “Farmers work with and in nature and need the land to produce food. At the same time, in Germany alone, about 1.5 million hectares of agricultural land have been lost to overdevelopment since 1990,” says DBV Secretary General Bernhard Krüsken. Land and nature conservation must not be shifted one-sidedly onto agriculture.
“The publication of the conservation package comes at an inopportune time,” says agricultural politician Christine Schneider (CDU). The global food supply is massively threatened by the war in Ukraine, which would be exacerbated by the Commission’s proposals, the MEP said. This is because they would result in significant yield reductions.
Nature conservation and food security are not contradictory, argues Jutta Paulus (Greens), shadow rapporteur for the renaturation law. In view of the ongoing extinction of species, it is high time for legislation, she says.
Organic farmers specifically welcome the proposal to reduce the use of chemical pesticides by half. The organic sector has long complained that pesticides can be transmitted through the air, which is why residues are increasingly being detected in organically produced food. However, these organic products would then no longer be allowed to be labeled as such.
However, the key to greater sustainability does not lie in rigid reduction targets but above all, in innovative solutions, including more precise application with the help of digitization, says Frank Gemmer, Managing Director of the German Agricultural Industry Association. The use of pesticides in Germany has already been significantly reduced in recent years. This must not be allowed to put us at a competitive disadvantage.
Similar concerns were already expressed by the Council of EU Agriculture Ministers at a meeting last week. Several countries sharply criticized the plans, saying they did not take into account the different situations in the member states. In addition to the EU Parliament, the Agriculture Council must also approve the proposed legislation.
On Wednesday afternoon, the MEPs of the EU Parliament voted in the second attempt for the reform of the European Emissions Trading System (ETS). After failing to secure a majority for the parliamentary position just 14 days ago, the three major political groups (EPP, S&D, and Renew) had already agreed on joint compromises last week. These were adopted at the plenary session in Brussels with a broad majority of 439 votes in favor, 157 votes against, and 32 abstentions.
The compromise includes the expiry of free emission rights for the industry to protect against carbon leakage in 2032. However, the meltdown of free allocations is not to begin until 2027, instead of 2026, as the Commission had proposed. This was the point on which the vote failed two weeks ago, when compromises elsewhere failed to find majorities or ensured that the report was rejected outright.
Now, the agreement calls for free allocations to drop to 93 percent in 2027, 84 percent in 2028, 69 percent in 2029, 50 percent in 2030, 25 percent in 2031, and finally completely eliminated in 2032. This means that free emissions allowances will melt away more slowly at first, and all the more quickly at a later date.
At the same time, the Carbon Border Adjustment Mechanism (CBAM) will compensate for the elimination of free allocations as carbon leakage protection. The CBAM will be introduced for the affected sectors at the same rate and to the same extent as the free allocations melt down. There was also a broad majority in Parliament on Wednesday for the introduction of the CBAM.
In addition to the sectors proposed by the Commission (iron and steel, refineries, cement, basic organic chemicals, and fertilizers), the Parliament demands that the CBAM also covers organic chemicals, plastics, hydrogen, and ammonia. Before that, the EU Commission is to evaluate their inclusion in an impact assessment. This is causing criticism from the chemical industry. The proven system of free allocations as carbon leakage protection will be undermined “if chemical products are included in the planned CO2 border adjustment,” says Jörg Rothermel, head of the VCI‘s energy, climate protection and raw materials department. “If the prices for CO2 certificates continue to rise, the whole system will blow up in our face.” There would then be no need to compete with other world regions at all.
Also part of the compromise: The ETS’s ambition to reduce emissions will be increased by initially removing 70 million CO2 allowances from the market in 2024 and another 50 million in 2026. The so-called linear reduction factor for the CO2 cap (CAP) is also to be raised to 4.4 percent annually by 2026, to 4.5 percent from 2029 and finally to 4.6 percent from 2029. This will reduce the ETS CAP by a total of 63 percent by 2030.
The introduction of a Social Climate Fund was also approved by the EU Parliament on Wednesday. This is intended to provide better relief for households particularly affected by rising energy prices in the future. The fund is also to be financed by the revenues of the second ETS for building heating and road traffic.
With the Parliament’s position now established, the only thing missing is the Council’s general orientation. This could follow as early as next Tuesday at the meeting of the environment ministers of the 27 EU member states. There, two fault lines will crystallize, especially with regard to the date of introduction of the ETS 2 and the significance of the Social Climate Fund.
The first is to postpone the introduction of ETS 2 from 2026 to 2027. This postponement by one year seems to be the acceptable maximum for a number of member states, first and foremost Germany. As a reminder, the EU Parliament is calling for introduction in 2029 to give member states time to adjust.
The second fault line concerns the Social Climate Fund and the question of how to distribute the revenues from ETS 2. Once again, the blockade comes mainly from Germany, which does not want to reconsider the way the money is distributed. For a large number of member states, however, an agreement on the Social Climate Fund is a prerequisite for an agreement on ETS 2. In other words, there is a risk that there will be no agreement on either ETS 2 or Social Climate Fund next week.
On the other hand, a consensus is emerging among member states on the end of free allocations for 2035, even though France had originally proposed 2030. This means that tough negotiations between the positions of the Parliament and the member states lie ahead in the trilogue. luk/cst
Putin’s war of aggression has shattered the German strategy of hope that economic interdependence can be the engine for a change of values in autocratic states. The fact that Germany continued to build the Nord Stream II Baltic Sea pipeline with little self-reflection and in opposition to its European neighbours and even its security guarantor, the US, is incomprehensible from today’s perspective. Despite the Crimean annexation as well as the war in eastern Ukraine, influence on European elections and targeted pinpricks by the Kremlin in the form of political assassinations, Germany continued down the dead-end road of energy dependency. Meanwhile, democratic change in Putin’s Russia had disappeared from the horizon of history, but cheap energy prices beckoned.
Against the backdrop of this shambles, the German government now has a responsibility to act more consistently in a pan-European and strictly value-oriented manner. It must therefore work for a new liberal-democratic integration landscape in Europe, which should of course be guided by free trade principles and Germany’s interest. But it must also be clear that human rights, the rule of law and democracy are central guarantors of our prosperity. Because ducking away and selling out to dictators with a contempt for human rights costs not only prosperity but also human lives in the medium and long term.
The German government should therefore live up to its own claim as a proactive shaper of a “Zeitenwende” with the aim of strengthening a democratic Europe based on the rule of law. The largest member state of the EU must not duck away from the current discussion on further EU accessions, but must, in accordance with the European treaties (Article 49 TEU), be at the forefront of working on a perspective for all European states that share our values. It was therefore right for Chancellor Olaf Scholz to speak out in favor of an accession perspective for Ukraine and Moldova last week in Kyiv, in close coordination with France and Italy.
But this promise can only be an intermediate step: First, the German government should throw its political weight as representative of the largest EU member state into the European Council negotiations tomorrow, so that all heads of state follow this path and grant EU candidate status to both countries threatened by Russian imperalism.
Secondly, the German government must continue to be the best critical advocate for the EU enlargement process with our neighbors to the east and southeast. There must be no repetition of a political dragging out of the accession talks with Ukraine and Moldova, as is the sad reality today in most Western Balkan countries despite the EU promise of the 2003 Thessaloniki Declaration. Fulfilment of the Copenhagen criteria alone should dictate progress in the accession process. This also means that the German government should push for an immediate start of EU accession negotiations with North Macedonia and Albania. After all, any shifting of this responsibility will only further open the door to nationalism, autocracy and the Russian sphere of influence in the Balkan region, the EU’s inner courtyard. The Chancellor’s trip and the new office of the Federal Government’s Special Envoy for the Western Balkans provide the right impetus in this regard.
Thirdly, the German government should force the debate in the EU on the negotiations with Serbia, Montenegro and also Turkey, which are also still on the table today. A long-term perspective on how these countries could be included in a European integration area of democracy and the rule of law despite all political and historical hurdles is currently missing. The Copenhagen criteria must apply fully in as many European countries as possible, because they serve the people and peace.
Fourthly, an informal political structure going beyond this, as proposed by French President Emmanuel Macron as the “European Political Community“, can support coordination and political rapprochement. However, such intergovernmental “summititis” should not undermine actual and legal integration achievements of our European partners.
Closely linked to the question of reorganizing Europe’s integration landscape is the need for an active German claim to shape Europe’s institutions to make them fit for the “Zeitenwende”. This applies not only to the European Union but also to the Council of Europe, for which a critical window of opportunity for a reorientation towards its democratic DNA has opened after the Russian expulsion. Both institutions must be strengthened in their ability to act and react quickly if the European continent is not to become a pawn in the global power game.
The Conference on the Future of Europe has put forward 49 encouraging reform proposals for the EU that set a concrete agenda. These reforms should be implemented using all options, including the possibility of enhanced cooperation, the use of Passerelle clauses and of course the debate on treaty changes through a Convention.
Germany’s security can only be strengthened in the broad alliance of European democracies and not by going it alone with autocracies in economic and trade policy. Let us therefore bury the value-empty principle of “change through trade” and instead work together on a European integration landscape that draws its strength from its shared values of democracy and the rule of law.
Today, the heads of state and government of the EU and the Western Balkan countries are meeting in Brussels to discuss the next round of EU enlargement. On the agenda of the EU summit are, of course, the membership applications of Ukraine, Moldova, and Georgia. Eric Bonse and Till Hoppe give an overview of what to expect from the summit, which seems to lack a clear direction.
China is already putting out feelers to countries like Serbia, and as a result, the EU can under no circumstances afford to hesitate any longer and must finally officially start accession talks with the Western Balkan countries warns Mario Holzner, Director of the Vienna Institute for International Economic Studies in an interview with Europe.Table.
An important agreement has now been reached on sustainability reporting: Unlisted companies and companies based outside the EU are also affected by the reporting obligation. Leonie Düngefeld analyzes what applies to which company sizes and from when.
Timo Landenberger has looked at the Commission’s proposal for the nature conservation legislative package. It contains a lot of good things – fewer pesticides, extensive renaturation – but the agricultural and forestry sectors are still up in arms.
Today’s Opinion by Linn Selle, President of the European Movement Germany, also revolves around the potential new members of the EU, but here she focuses primarily on the German government. The EU’s largest member state must not duck out of the current debate, she writes.
Amid severe crises, the EU is preparing for a new round of enlargement. At the EU summit today, the membership applications of Ukraine, Moldova, and Georgia are on the agenda. In addition, the Union’s 27 heads of state and government want to discuss the proposal for a new “European political community” made by French President Emmanuel Macron. The meeting will be preceded by an informal Western Balkans summit, but no decisions are expected.
On Friday, the meeting continues with a euro summit in an expanded format (i.e., 27). In the presence of ECB President Christine Lagarde, the topics will be inflation, the threat of fragmentation due to rising spreads and high sovereign debt, but also the energy crisis, and EU sanctions against Russia. The Conference on the Future of Europe’s proposals on reforming the EU (including abolishing unanimity in foreign policy) are also on the agenda.
“This will be a geopolitical summit,” said an insider in charge of the preparations. All topics are directly or indirectly related to Russia’s war of aggression in Ukraine and the consequences for Europe. However, a clear geopolitical strategy is not emerging. While Ukraine can look forward to a warm welcome, the Western Balkans must prepare for a cold shower.
In his invitation, EU Council President Charles Michel asked the heads of state and government to grant candidate status to Ukraine and Moldova. He made no recommendation on the Western Balkans. “It is now time to confirm that the future of Ukraine, Moldova, and Georgia lies in the EU,” the letter said. “I will ask you to grant candidate status to Ukraine and Moldova.”
Diplomats from several EU countries said that there was a unanimous “yes” to this recommendation. Against the backdrop of the Russian invasion of Ukraine, there was no alternative to approval. To be sure, the EU has never invited a country at war. However, a refusal would encourage Kremlin leader Vladimir Putin to continue his aggression. Putin should not be given the right to veto EU accession, one diplomat said.
The Europeans in the Western Balkans have been less proactive. Twenty years after the Balkan wars, they do not want to change their hesitant enlargement policy, which is tied to countless conditions. Austria and some other countries have warned against putting Ukraine on the fast track and leaving the Balkans hanging. However, this is unlikely to have any practical consequences.
There is no junket between the Western Balkans and Ukraine, a diplomat said. Croatia, Slovenia, and Austria want to push for granting Bosnia and Herzegovina candidate status or at least lowering the hurdle. The EU Commission is pushing for Bosnia to first work through a list of 14 conditions. The EU would also be obliged to finally lift the visa requirement for Kosovo. France and the Netherlands are blocking this for domestic political reasons. All other Balkan states now enjoy visa-free travel.
The 27 heads of state and government at the Balkan summit were counting on at least one breakthrough: Bulgaria could lift its veto on the start of accession talks with North Macedonia and thus also clear the way for Albania, it was hoped in the course of the day. The French presidency had last sounded out a compromise between Sofia and Skopje. “I very much hope that everyone will now jump over their shadows,” German Chancellor Olaf Scholz said in his government statement to the Bundestag. The EU must finally give the green light for accession negotiations with Albania and North Macedonia.
In the evening, however, hopes of a deal seemed to be dashed for the time being after a successful vote of no confidence against the Bulgarian government. German Chancellor Olaf Scholz had previously expressed a clear commitment of the EU states to the accession of the six Western Balkan countries: “Now it is valid, we want and we need the Western Balkans in the European Union”.
Almost 20 years ago in Thessaloniki, the EU held out the prospect of accession to the states there, but this has not materialized to date. In view of the lack of progress, it should not come as a surprise that some of the participants, such as Albania’s Prime Minister Edi Rama, had considered canceling the Western Balkans summit. Those countries deserve just as clear an answer as Ukraine and Moldova, Scholz said. In the case of the two states, he said, he would do his utmost to ensure that the EU states here unanimously said yes: “27 times yes to candidate status.”
Europe stands united at the side of the Ukrainian people, the chancellor assured. “We will continue to provide Ukraine with massive support – financial, economic, humanitarian, political and, not least, with the supply of weapons,” he said, adding, “And for as long as Ukraine needs our support.” To organize the aid, Scholz wants to convene an international conference of experts as part of Germany’s G7 presidency. An agreement must be reached on which investments will move Ukraine forward most quickly on its European path, the SPD politician said.
The discussion about “wider Europe” is on the agenda this evening. French President Emmanuel Macron launched the idea of a “Communauté Politique Europeenne” (CPE) at the informal summit in Versailles and has since elaborated somewhat in a one-page nonpaper. “We expect more details,” said one diplomat. The paper is not very informative, he said. The idea is apparently to create a forum. Not as a replacement for the enlargement process, but as a parallel event.
There would be a general debate in the evening, which would certainly not be the last. EU Council President Charles Michel (“European Geopolitical Community”), Italian party leader and former Prime Minister Enrico Letta (“European Confederation”), and Austria’s Foreign Minister Alexander Schallenberg had launched similar pushes for gradual integration into the EU. The French model is the most advanced, according to an EU diplomat. However, it was unclear what the criteria for participation in the format might be and how strongly it would be structured.
There is no calendar for possible meetings of the CPE. It will depend on the format. First, the criteria for participation and function must be clarified. A forum for all countries that share the democratic values of the EU is possible. In addition to the accession candidates, the forum could also be open to former members such as Great Britain, Switzerland, or Liechtenstein.
The question is, however, what exactly is the added value for the candidate countries and whether the possible audience might not be too heterogeneous in the end. An annual conference like the meeting of the Asem states is not yet a structure. However, a more structured forum to discuss transport, energy or health issues, or other topics with a geopolitical dimension is also conceivable. with Till Hoppe
This law will create a stir: The new requirements for sustainability reporting (Corporate Sustainability Reporting Directive, CSRD) will affect around 50,000 companies in the EU. From 2024, these companies will have to disclose more precise data on their environmental, social, and governance impacts – according to uniform standards. Late on Tuesday evening, the Council, Parliament, and Commission agreed on the details of the directive.
The fourth and final trilogue was originally scheduled to take place at the beginning of June but was then postponed indefinitely. The Council and Parliament disagreed on key points, including the requirements for audits, the inclusion of non-EU companies, rules for SMEs, and the treatment of subsidiaries. After further deliberations by the Permanent Representations Committee, consensus was finally reached the day before yesterday.
“Until now, information on a company’s impact on the environment, human rights, and labor ethics has been patchy, unreliable, and easy to abuse,” said Pascal Durand (Renew), the Parliament’s rapporteur. “Some companies don’t report. Others report what they want.” Investors, consumers, and shareholders would suffer significant disadvantages as a result.
“This is a game-changing moment in terms of corporate reporting,” said Financial Markets Commissioner Mairead McGuinness. “For the first time, sustainability reporting will be put on an equal footing with financial reporting, as both are equally important.” She said the agreement creates clarity and uniform standards for companies, as well as a balance between the interests of companies, investors, and civil society.
The new regulations apply to companies with more than 250 employees and more than €40 million in sales, as well as to all listed companies. These are also responsible for assessing the information at the level of their subsidiaries. Companies already affected by the previously applicable Non-Financial Reporting Directive (NFRD) will have to report from 2024; new companies will have to report from 2025.
Listed SMEs must also report, but they still have the option to opt out until 2028. In this way, the CSRD takes into account smaller companies that first have to build up structures for reporting.
“This agreement is extremely unsatisfactory for German SMEs,” said Angelika Niebler (CSU), a member of the responsible legal committee. “The fact that SMEs listed on the stock exchange are now to be obliged to report on sustainability after all may pose huge challenges for the companies concerned.”
Matthias Bianchi of the Deutscher Mittelstands-Bund (DMB), on the other hand, saw the glass half full and welcomed the fact that “only” listed SMEs were affected. “It is also positive that the transition periods for these companies have been extended,” Bianchi said. “Nevertheless, SMEs should have the topic of sustainability reporting and CSRD on their agenda and get involved early.”
In the future, companies must publish the information in a separate section of their management report. In addition, the directive introduces a certification requirement for sustainability reporting. “The European market for non-accounting audits will be standardized, much stricter and more transparent,” Pascal Durand commented. “The Parliament has succeeded in getting member states to open up the audit market to make room for new certified players and not just leave it in the hands of the big financial auditors.”
Following pressure from the Parliament, companies based outside the EU with net sales in the EU of at least €150 million and at least one subsidiary or branch must also submit a report on ESG impacts.
The European Financial Reporting Advisory Group (EFRAG) will develop two sets of reporting standards: The general standards for reporting are to be presented in June 2023, followed by standards for high-risk industries one year later. EFRAG is currently conducting a public consultation on this in the member states.
The European Commission aims to advance the implementation of its biodiversity and farm-to-fork strategies with a regulation on the use of pesticides and a law to restore nature. The proposals are intended to help prevent the collapse of ecosystems and ensure food security, the agency announced Wednesday. Food security in particular, however, will be severely jeopardized by the plans, agriculture representatives criticize.
The drafts should actually have been presented in March, but this was postponed by three months due to the war in Ukraine. Now it is clear: By 2030, the use of chemical pesticides in the EU is to be halved and completely banned in sensitive areas. Damaged ecosystems are to be renatured, with binding targets for the member states to restore nature.
This is not necessarily accompanied by an increase in protected areas, the Commission stressed. Renaturation does not exclude economic activities; rather, it is about production in harmony with nature. Therefore, by 2030, renaturation measures should be implemented on at least 20 percent of all marine and terrestrial areas in the EU.
Goals include:
Around €100 billion are to be earmarked for the measures from the current multi-year financial framework. In order to do justice to national peculiarities in implementation, science and industry are to be involved in drawing up the national plans. But the dispute seems pre-programmed.
Johan Rockström, director of the Potsdam Institute for Climate Impact Research (PIK), calls the measures “urgently needed”. For environmentalists, the plans do not go far enough. The German branch of Friends of the Earth (BUND), for example, criticized the Commission for backing down at the last minute from its plan to reserve ten percent of agricultural land for nature. The agricultural and forestry sectors are up in arms against the proposals.
These are far removed from the reality of life for EU citizens and would jeopardize the safeguarding of resources, says Ivo von Trotha, a member of the Executive Committee of the Federation of German Forest Owners’ Associations (AGDW) and vice president of the European umbrella organization. The Commission also undermines the principle of subsidiarity with its proposal to shape the targets by means of delegated acts.
For the German Farmers’ Association (DBV), the Commission’s proposals are at odds with current food security challenges. “Farmers work with and in nature and need the land to produce food. At the same time, in Germany alone, about 1.5 million hectares of agricultural land have been lost to overdevelopment since 1990,” says DBV Secretary General Bernhard Krüsken. Land and nature conservation must not be shifted one-sidedly onto agriculture.
“The publication of the conservation package comes at an inopportune time,” says agricultural politician Christine Schneider (CDU). The global food supply is massively threatened by the war in Ukraine, which would be exacerbated by the Commission’s proposals, the MEP said. This is because they would result in significant yield reductions.
Nature conservation and food security are not contradictory, argues Jutta Paulus (Greens), shadow rapporteur for the renaturation law. In view of the ongoing extinction of species, it is high time for legislation, she says.
Organic farmers specifically welcome the proposal to reduce the use of chemical pesticides by half. The organic sector has long complained that pesticides can be transmitted through the air, which is why residues are increasingly being detected in organically produced food. However, these organic products would then no longer be allowed to be labeled as such.
However, the key to greater sustainability does not lie in rigid reduction targets but above all, in innovative solutions, including more precise application with the help of digitization, says Frank Gemmer, Managing Director of the German Agricultural Industry Association. The use of pesticides in Germany has already been significantly reduced in recent years. This must not be allowed to put us at a competitive disadvantage.
Similar concerns were already expressed by the Council of EU Agriculture Ministers at a meeting last week. Several countries sharply criticized the plans, saying they did not take into account the different situations in the member states. In addition to the EU Parliament, the Agriculture Council must also approve the proposed legislation.
On Wednesday afternoon, the MEPs of the EU Parliament voted in the second attempt for the reform of the European Emissions Trading System (ETS). After failing to secure a majority for the parliamentary position just 14 days ago, the three major political groups (EPP, S&D, and Renew) had already agreed on joint compromises last week. These were adopted at the plenary session in Brussels with a broad majority of 439 votes in favor, 157 votes against, and 32 abstentions.
The compromise includes the expiry of free emission rights for the industry to protect against carbon leakage in 2032. However, the meltdown of free allocations is not to begin until 2027, instead of 2026, as the Commission had proposed. This was the point on which the vote failed two weeks ago, when compromises elsewhere failed to find majorities or ensured that the report was rejected outright.
Now, the agreement calls for free allocations to drop to 93 percent in 2027, 84 percent in 2028, 69 percent in 2029, 50 percent in 2030, 25 percent in 2031, and finally completely eliminated in 2032. This means that free emissions allowances will melt away more slowly at first, and all the more quickly at a later date.
At the same time, the Carbon Border Adjustment Mechanism (CBAM) will compensate for the elimination of free allocations as carbon leakage protection. The CBAM will be introduced for the affected sectors at the same rate and to the same extent as the free allocations melt down. There was also a broad majority in Parliament on Wednesday for the introduction of the CBAM.
In addition to the sectors proposed by the Commission (iron and steel, refineries, cement, basic organic chemicals, and fertilizers), the Parliament demands that the CBAM also covers organic chemicals, plastics, hydrogen, and ammonia. Before that, the EU Commission is to evaluate their inclusion in an impact assessment. This is causing criticism from the chemical industry. The proven system of free allocations as carbon leakage protection will be undermined “if chemical products are included in the planned CO2 border adjustment,” says Jörg Rothermel, head of the VCI‘s energy, climate protection and raw materials department. “If the prices for CO2 certificates continue to rise, the whole system will blow up in our face.” There would then be no need to compete with other world regions at all.
Also part of the compromise: The ETS’s ambition to reduce emissions will be increased by initially removing 70 million CO2 allowances from the market in 2024 and another 50 million in 2026. The so-called linear reduction factor for the CO2 cap (CAP) is also to be raised to 4.4 percent annually by 2026, to 4.5 percent from 2029 and finally to 4.6 percent from 2029. This will reduce the ETS CAP by a total of 63 percent by 2030.
The introduction of a Social Climate Fund was also approved by the EU Parliament on Wednesday. This is intended to provide better relief for households particularly affected by rising energy prices in the future. The fund is also to be financed by the revenues of the second ETS for building heating and road traffic.
With the Parliament’s position now established, the only thing missing is the Council’s general orientation. This could follow as early as next Tuesday at the meeting of the environment ministers of the 27 EU member states. There, two fault lines will crystallize, especially with regard to the date of introduction of the ETS 2 and the significance of the Social Climate Fund.
The first is to postpone the introduction of ETS 2 from 2026 to 2027. This postponement by one year seems to be the acceptable maximum for a number of member states, first and foremost Germany. As a reminder, the EU Parliament is calling for introduction in 2029 to give member states time to adjust.
The second fault line concerns the Social Climate Fund and the question of how to distribute the revenues from ETS 2. Once again, the blockade comes mainly from Germany, which does not want to reconsider the way the money is distributed. For a large number of member states, however, an agreement on the Social Climate Fund is a prerequisite for an agreement on ETS 2. In other words, there is a risk that there will be no agreement on either ETS 2 or Social Climate Fund next week.
On the other hand, a consensus is emerging among member states on the end of free allocations for 2035, even though France had originally proposed 2030. This means that tough negotiations between the positions of the Parliament and the member states lie ahead in the trilogue. luk/cst
Putin’s war of aggression has shattered the German strategy of hope that economic interdependence can be the engine for a change of values in autocratic states. The fact that Germany continued to build the Nord Stream II Baltic Sea pipeline with little self-reflection and in opposition to its European neighbours and even its security guarantor, the US, is incomprehensible from today’s perspective. Despite the Crimean annexation as well as the war in eastern Ukraine, influence on European elections and targeted pinpricks by the Kremlin in the form of political assassinations, Germany continued down the dead-end road of energy dependency. Meanwhile, democratic change in Putin’s Russia had disappeared from the horizon of history, but cheap energy prices beckoned.
Against the backdrop of this shambles, the German government now has a responsibility to act more consistently in a pan-European and strictly value-oriented manner. It must therefore work for a new liberal-democratic integration landscape in Europe, which should of course be guided by free trade principles and Germany’s interest. But it must also be clear that human rights, the rule of law and democracy are central guarantors of our prosperity. Because ducking away and selling out to dictators with a contempt for human rights costs not only prosperity but also human lives in the medium and long term.
The German government should therefore live up to its own claim as a proactive shaper of a “Zeitenwende” with the aim of strengthening a democratic Europe based on the rule of law. The largest member state of the EU must not duck away from the current discussion on further EU accessions, but must, in accordance with the European treaties (Article 49 TEU), be at the forefront of working on a perspective for all European states that share our values. It was therefore right for Chancellor Olaf Scholz to speak out in favor of an accession perspective for Ukraine and Moldova last week in Kyiv, in close coordination with France and Italy.
But this promise can only be an intermediate step: First, the German government should throw its political weight as representative of the largest EU member state into the European Council negotiations tomorrow, so that all heads of state follow this path and grant EU candidate status to both countries threatened by Russian imperalism.
Secondly, the German government must continue to be the best critical advocate for the EU enlargement process with our neighbors to the east and southeast. There must be no repetition of a political dragging out of the accession talks with Ukraine and Moldova, as is the sad reality today in most Western Balkan countries despite the EU promise of the 2003 Thessaloniki Declaration. Fulfilment of the Copenhagen criteria alone should dictate progress in the accession process. This also means that the German government should push for an immediate start of EU accession negotiations with North Macedonia and Albania. After all, any shifting of this responsibility will only further open the door to nationalism, autocracy and the Russian sphere of influence in the Balkan region, the EU’s inner courtyard. The Chancellor’s trip and the new office of the Federal Government’s Special Envoy for the Western Balkans provide the right impetus in this regard.
Thirdly, the German government should force the debate in the EU on the negotiations with Serbia, Montenegro and also Turkey, which are also still on the table today. A long-term perspective on how these countries could be included in a European integration area of democracy and the rule of law despite all political and historical hurdles is currently missing. The Copenhagen criteria must apply fully in as many European countries as possible, because they serve the people and peace.
Fourthly, an informal political structure going beyond this, as proposed by French President Emmanuel Macron as the “European Political Community“, can support coordination and political rapprochement. However, such intergovernmental “summititis” should not undermine actual and legal integration achievements of our European partners.
Closely linked to the question of reorganizing Europe’s integration landscape is the need for an active German claim to shape Europe’s institutions to make them fit for the “Zeitenwende”. This applies not only to the European Union but also to the Council of Europe, for which a critical window of opportunity for a reorientation towards its democratic DNA has opened after the Russian expulsion. Both institutions must be strengthened in their ability to act and react quickly if the European continent is not to become a pawn in the global power game.
The Conference on the Future of Europe has put forward 49 encouraging reform proposals for the EU that set a concrete agenda. These reforms should be implemented using all options, including the possibility of enhanced cooperation, the use of Passerelle clauses and of course the debate on treaty changes through a Convention.
Germany’s security can only be strengthened in the broad alliance of European democracies and not by going it alone with autocracies in economic and trade policy. Let us therefore bury the value-empty principle of “change through trade” and instead work together on a European integration landscape that draws its strength from its shared values of democracy and the rule of law.
