For some laws, it is crunch time and therefore a difficult phase for the co-legislators. On the one hand, they want to finish the trilogue as quickly as possible in order to complete the project before the end of the legislative period. On the other hand, they do not want to complete it just because of the time pressure.
The Carbon Removal Certification Framework (CRCF) also finds itself in this dilemma: the final trilogue is due to reach an agreement today, Monday. Negotiators from the Parliament, Council and Commission are expected to negotiate through the night, as too many points are still open for a quick agreement.
The Commission proposal and Council position are clearly too lax for Parliament. MEPs want clear sustainability criteria for the certification of carbon removals. If an extraction project has no demonstrable effect on the climate, it should not receive certification. However, the Council and Commission are satisfied if it has no negative impact.
It is also still unclear what may be done with the certificates. Here, the Parliament is also more ambitious and calls for clear guidelines on the circumstances under which a company may describe itself or its product as climate-neutral by purchasing additional removal certificates. The Commission does not want to make any specifications in this regard and to only subsequently clarify open questions via delegated acts. Parliament, in turn, wants to prevent this, as it has hardly any say in delegated acts.
So it is going to be a long night with an open outcome.
Have a good start to the week!
The Belgian Council Presidency and the Parliament’s negotiators agreed on a hard-fought reform of the EU debt rules last weekend. The final agreement text, available to Table.Media, contains a new derogation that was not included in either the Council or the Parliament’s position in this form.
The new debt rules define net government spending as the key parameter. Together with the member states, the EU Commission defines a net expenditure path that should lead to debt reduction for heavily indebted countries. When compliance with this net expenditure path is reviewed, the new exception now states that national government expenditure to co-finance European programs is not included in the calculation of net expenditure.
“This means that national expenditure for co-financing can be maintained or increased without affecting compliance with the net expenditure path,” explains an EU official. A reduction in this expenditure, in turn, would not create any financial policy leeway and would thus protect the implementation of EU programs. This should further enable public investment triggered by European money.
Currently, the figures for national co-financing are still modest. According to the Commission, this mainly exists in cohesion policy and in parts of the Common Agricultural Policy (CAP). According to the Commission, €163 billion in national co-financing is planned for cohesion policy for the period from 2021 to 2027, i.e. around €23 billion per year. That is only 0.16 percent of the EU’s GDP.
The figures vary greatly between the EU member states. Germany’s national co-financing averages around an annual €2.9 billion, which is only 0.07 percent of German GDP. The EU contribution to German cohesion projects is almost the same. In Italy, the amount of national co-financing is €4.6 billion, or 0.22 percent of GDP.
In Greece, national co-financing averages €742 million per year, or 0.37 percent of Greek GDP. However, the EU’s contribution is much higher, amounting to 1.47 percent of GDP.
These figures are irrelevant at the beginning. When the four- or seven-year fiscal plans of the heavily indebted member states are defined after the adoption of the debt rule towards the end of this year, they must comply with the safety lines. This means that they should lead to a reduction in debt and push the structural deficit below 1.5 percent of GDP, regardless of the national co-financing of EU programs.
However, once the fiscal plan is in place, it is no longer the compliance with the debt level or the structural deficit that is reviewed but net expenditure. This opens the door for additional fiscal leeway. Member states would be free to increase their national co-financing rate of EU programs without increasing their net expenditure as defined by the debt rules.
According to an EU official, member states can revise their program documents and increase the national co-financing rate. “This step would automatically improve the leverage effect of cohesion policy by increasing the volume of investment,” she said, adding: “The Commission encourages member states to do this.”
However, it remains to be seen how great this leverage effect will be. The national co-financing rate is legally unlimited. However, as the deficit ceiling of three percent of GDP still applies in the new debt rules, national co-financing cannot be increased indefinitely. The EU debt rules remain restrictive despite the exemption.
With a deficit of over three percent, a member state falls into an “Excessive Deficit Procedure” (EDP). The government concerned must then reduce the structural deficit each year, not just net expenditure. Italy, whose government deficit is currently above three percent, is therefore unable to create any additional scope for investment by increasing the national co-financing rate for the time being.
The situation is different in Greece. According to the Commission’s forecast, the country will have a deficit of just one percent of GDP this year. It could thus increase its national co-financing rate without being restricted by the debt rules. Like Greece, Portugal and Cyprus can also use this exception to create a new scope for investment. Austria and Germany could also do this under the EU debt rules but are restricted by their national debt brakes.
In practice, administrative hurdles will limit a rapid increase in the national co-financing rate. For example, if Greece wanted to increase national co-financing by one percentage point of GDP, it would have to find meaningful additional cohesion projects worth €2 billion a year. This is no easy task.
In recent years, there have been complications and delays when working with cohesion funds. On the one hand, because regional and local authorities are often involved, and on the other hand because cohesion projects are associated with a high level of bureaucracy.
Zsolt Darvas, Senior Fellow at the economic policy think tank Bruegel, also believes that the exception in the debt rule will not have a major impact on the fiscal policy of the EU states for the time being. He also does not think it will significantly strengthen the EU’s cohesion policy. In his opinion, however, it is possible that the exception could become relevant later.
For example, a new EU program to finance climate, digital or defense investments could in future rely on national co-financing independently of cohesion policy in order to conserve the EU budget. Member states could participate financially in such programs without having to deviate from their net spending path.
The conclusion that Volodymyr Zelenskiy drew after 724 days of war against his country was drastic: “Our resistance has prevented the destruction of the rules-based world,” he said at the Munich Security Conference in the morning. Immediately before the Ukrainian President, German Chancellor Olaf Scholz spoke with cautious optimism of “a silver lining on the horizon” – and assured Ukraine that Germany’s support was “broad and extensive”, “but above all, it is long-term.”
Following the signing of the security agreement with Ukraine in Berlin, Scholz’s attempt to pose as Europe’s leader in military support for Kyiv the following morning in Munich was unmistakable. In 2024, Germany had almost doubled its military aid to more than €7 billion and pledges for the coming years amounting to €6 billion would be added, said the Chancellor. He very much hoped “that similar decisions would be taken in all EU capitals.”
After closing ranks with Scholz, Zelenskiy thanked his Western allies for their support of his country. However, he made no secret of the fact that both the German pledge and that of French President Emmanuel Macron were only a consequence of the goal of the G7 states agreed in Vilnius last July to support Kyiv militarily and financially in the long term as part of a “security partnership.”
“If we don’t act now, Putin will succeed in turning the next few years into a catastrophe,” said Zelenskiy, warning urgently of dangers for other European countries: “If Ukraine is left alone, then you will see what happens: Russia will destroy us, destroy the Baltic states, destroy Poland – it is capable of doing so.”
It is no secret that Zelenskiy sees the best protection for his country in joining NATO. But NATO Secretary General Jens Stoltenberg was not tempted to fuel this debate on the main stage of the Bayerischer Hof this morning. Instead, he reiterated his concern that “the situation on the battlefield” could be influenced to Ukraine’s disadvantage in view of the blockade of a $60 billion aid package in the US Congress.
Scholz had previously attempted to counter the impression created by former President Donald Trump’s controversial statements that the cohesion of NATO was at risk: “Let me also make it clear: any relativization of NATO’s guarantee of assistance only benefits those who – like Putin – want to weaken us,” he said to applause from the audience.
Constanze Stelzenmüller, Director of the Center on the United States and Europe at the Brookings Institution in Washington, doubts that Germany and the European NATO states are really prepared for a change of government in Washington. “Europe needs a Plan B or even a Plan C. Trump says every day what he intends to do,” Stelzenmüller told Table.Media. “You can see an international agenda that is coldly transactional and, in case of doubt, tells allies: We set the tune.”
According to Stelzenmüller, Germany will only be able to fulfill its role as a leading European power if it succeeds in consistently continuing the decoupling from Russia that it began since the invasion in 2022. “No one could have imagined that we would free ourselves from Russian gas so quickly. Nobody could have imagined that we would spend so much on weapons.” This path must be continued, especially in security policy.
Whether Scholz’s political commitments are really backed up by hard figures could be called into question in the early evening. Defense Minister Boris Pistorius will then address how the “state, economy and society can jointly create resilience in times of change” in the rooftop lounge of the Bayerischer Hof.
“More than ever, we have to ensure that our deterrence remains in line with modern requirements,” Scholz had clarified in the morning, but, at the same time, stated that eighty percent of the €100 billion special fund for the Bundeswehr had already been contractually committed. Resolving this conflict of objectives will continue to occupy German security policy for a long time after Munich.
The guns do the talking in Brussels. Shots were fired in the Brussels municipality of Schaerbeek on Saturday night. They followed shootings last Wednesday, Tuesday and Sunday.
Within one year, between February 1, 2023 and February 14, 2024, there were 19 shootings, as calculated by the Belgian daily newspaper Le Soir. And as the newspaper’s graphic shows, the shootings are not limited to the outskirts of the city. Even popular districts of the European bubble such as Saint-Gilles and Ixelles are not spared. One parliamentary assistant, for example, reports that she changed her route to parliament after witnessing street battles related to drug trafficking. She now avoids the Porte de Hal, even if this increases her travel time.
“Yesterday it was intimidation, today it’s an execution. We are in a conflict between groups who want to control a neighborhood,” commented the mayor of Saint-Gilles, Jean Spinette. This area of the capital is indeed described as a “drug drive-in,” where dealers have set up shop on doorsteps. According to the local authorities, the drug trade has now passed into the hands of organized crime and is the result of a “national phenomenon” linked to the massive drug trade via the port of Antwerp and the increasing use of crack cocaine.
There are not only shootings. The people of Brussels are noticing that crack cocaine in particular is spreading in their city. Hundreds of drug addicts and dealers congregate in several metro stations, and the police now count dozens of incidents every day. The security officers of the Brussels transport company have been urged to be careful since one of them was sprayed with ammonia, which is used to make crack cocaine, a few weeks ago. Their unions are threatening to strike if the situation continues. The management promises them reinforcements and the establishment of a special unit to refer drug users to specialized facilities.
Unfortunately, the political response is not on a par with the danger, political observers in Belgium note. This is due to the division of powers between the various levels of political responsibility. Instead of seeing the problem as a national challenge that needs to be tackled as quickly as possible, “irresponsible political reflexes” are at work, the daily Le Soir continues. “The municipalities complain about the lack of funds from the Confederation, which in turn complains about the poor organization of the municipalities, etc.”
It is this disorganization that criminal organizations thrive on. Perhaps it is even these weak points that allow them to thrive in Belgium, just as terrorism or the arms trade have been able to proliferate.
In the summer, the director of the Federal Criminal Police in Brussels warned in the press: “In some parts of the world, you can see that these organizations have taken control of the state because it has not mobilized all its forces to combat the phenomenon. We are not yet in such a situation in Belgium, but we must mobilize to prevent it.” One might wonder whether anyone can still hear him amid the shootings.
For some laws, it is crunch time and therefore a difficult phase for the co-legislators. On the one hand, they want to finish the trilogue as quickly as possible in order to complete the project before the end of the legislative period. On the other hand, they do not want to complete it just because of the time pressure.
The Carbon Removal Certification Framework (CRCF) also finds itself in this dilemma: the final trilogue is due to reach an agreement today, Monday. Negotiators from the Parliament, Council and Commission are expected to negotiate through the night, as too many points are still open for a quick agreement.
The Commission proposal and Council position are clearly too lax for Parliament. MEPs want clear sustainability criteria for the certification of carbon removals. If an extraction project has no demonstrable effect on the climate, it should not receive certification. However, the Council and Commission are satisfied if it has no negative impact.
It is also still unclear what may be done with the certificates. Here, the Parliament is also more ambitious and calls for clear guidelines on the circumstances under which a company may describe itself or its product as climate-neutral by purchasing additional removal certificates. The Commission does not want to make any specifications in this regard and to only subsequently clarify open questions via delegated acts. Parliament, in turn, wants to prevent this, as it has hardly any say in delegated acts.
So it is going to be a long night with an open outcome.
Have a good start to the week!
The Belgian Council Presidency and the Parliament’s negotiators agreed on a hard-fought reform of the EU debt rules last weekend. The final agreement text, available to Table.Media, contains a new derogation that was not included in either the Council or the Parliament’s position in this form.
The new debt rules define net government spending as the key parameter. Together with the member states, the EU Commission defines a net expenditure path that should lead to debt reduction for heavily indebted countries. When compliance with this net expenditure path is reviewed, the new exception now states that national government expenditure to co-finance European programs is not included in the calculation of net expenditure.
“This means that national expenditure for co-financing can be maintained or increased without affecting compliance with the net expenditure path,” explains an EU official. A reduction in this expenditure, in turn, would not create any financial policy leeway and would thus protect the implementation of EU programs. This should further enable public investment triggered by European money.
Currently, the figures for national co-financing are still modest. According to the Commission, this mainly exists in cohesion policy and in parts of the Common Agricultural Policy (CAP). According to the Commission, €163 billion in national co-financing is planned for cohesion policy for the period from 2021 to 2027, i.e. around €23 billion per year. That is only 0.16 percent of the EU’s GDP.
The figures vary greatly between the EU member states. Germany’s national co-financing averages around an annual €2.9 billion, which is only 0.07 percent of German GDP. The EU contribution to German cohesion projects is almost the same. In Italy, the amount of national co-financing is €4.6 billion, or 0.22 percent of GDP.
In Greece, national co-financing averages €742 million per year, or 0.37 percent of Greek GDP. However, the EU’s contribution is much higher, amounting to 1.47 percent of GDP.
These figures are irrelevant at the beginning. When the four- or seven-year fiscal plans of the heavily indebted member states are defined after the adoption of the debt rule towards the end of this year, they must comply with the safety lines. This means that they should lead to a reduction in debt and push the structural deficit below 1.5 percent of GDP, regardless of the national co-financing of EU programs.
However, once the fiscal plan is in place, it is no longer the compliance with the debt level or the structural deficit that is reviewed but net expenditure. This opens the door for additional fiscal leeway. Member states would be free to increase their national co-financing rate of EU programs without increasing their net expenditure as defined by the debt rules.
According to an EU official, member states can revise their program documents and increase the national co-financing rate. “This step would automatically improve the leverage effect of cohesion policy by increasing the volume of investment,” she said, adding: “The Commission encourages member states to do this.”
However, it remains to be seen how great this leverage effect will be. The national co-financing rate is legally unlimited. However, as the deficit ceiling of three percent of GDP still applies in the new debt rules, national co-financing cannot be increased indefinitely. The EU debt rules remain restrictive despite the exemption.
With a deficit of over three percent, a member state falls into an “Excessive Deficit Procedure” (EDP). The government concerned must then reduce the structural deficit each year, not just net expenditure. Italy, whose government deficit is currently above three percent, is therefore unable to create any additional scope for investment by increasing the national co-financing rate for the time being.
The situation is different in Greece. According to the Commission’s forecast, the country will have a deficit of just one percent of GDP this year. It could thus increase its national co-financing rate without being restricted by the debt rules. Like Greece, Portugal and Cyprus can also use this exception to create a new scope for investment. Austria and Germany could also do this under the EU debt rules but are restricted by their national debt brakes.
In practice, administrative hurdles will limit a rapid increase in the national co-financing rate. For example, if Greece wanted to increase national co-financing by one percentage point of GDP, it would have to find meaningful additional cohesion projects worth €2 billion a year. This is no easy task.
In recent years, there have been complications and delays when working with cohesion funds. On the one hand, because regional and local authorities are often involved, and on the other hand because cohesion projects are associated with a high level of bureaucracy.
Zsolt Darvas, Senior Fellow at the economic policy think tank Bruegel, also believes that the exception in the debt rule will not have a major impact on the fiscal policy of the EU states for the time being. He also does not think it will significantly strengthen the EU’s cohesion policy. In his opinion, however, it is possible that the exception could become relevant later.
For example, a new EU program to finance climate, digital or defense investments could in future rely on national co-financing independently of cohesion policy in order to conserve the EU budget. Member states could participate financially in such programs without having to deviate from their net spending path.
The conclusion that Volodymyr Zelenskiy drew after 724 days of war against his country was drastic: “Our resistance has prevented the destruction of the rules-based world,” he said at the Munich Security Conference in the morning. Immediately before the Ukrainian President, German Chancellor Olaf Scholz spoke with cautious optimism of “a silver lining on the horizon” – and assured Ukraine that Germany’s support was “broad and extensive”, “but above all, it is long-term.”
Following the signing of the security agreement with Ukraine in Berlin, Scholz’s attempt to pose as Europe’s leader in military support for Kyiv the following morning in Munich was unmistakable. In 2024, Germany had almost doubled its military aid to more than €7 billion and pledges for the coming years amounting to €6 billion would be added, said the Chancellor. He very much hoped “that similar decisions would be taken in all EU capitals.”
After closing ranks with Scholz, Zelenskiy thanked his Western allies for their support of his country. However, he made no secret of the fact that both the German pledge and that of French President Emmanuel Macron were only a consequence of the goal of the G7 states agreed in Vilnius last July to support Kyiv militarily and financially in the long term as part of a “security partnership.”
“If we don’t act now, Putin will succeed in turning the next few years into a catastrophe,” said Zelenskiy, warning urgently of dangers for other European countries: “If Ukraine is left alone, then you will see what happens: Russia will destroy us, destroy the Baltic states, destroy Poland – it is capable of doing so.”
It is no secret that Zelenskiy sees the best protection for his country in joining NATO. But NATO Secretary General Jens Stoltenberg was not tempted to fuel this debate on the main stage of the Bayerischer Hof this morning. Instead, he reiterated his concern that “the situation on the battlefield” could be influenced to Ukraine’s disadvantage in view of the blockade of a $60 billion aid package in the US Congress.
Scholz had previously attempted to counter the impression created by former President Donald Trump’s controversial statements that the cohesion of NATO was at risk: “Let me also make it clear: any relativization of NATO’s guarantee of assistance only benefits those who – like Putin – want to weaken us,” he said to applause from the audience.
Constanze Stelzenmüller, Director of the Center on the United States and Europe at the Brookings Institution in Washington, doubts that Germany and the European NATO states are really prepared for a change of government in Washington. “Europe needs a Plan B or even a Plan C. Trump says every day what he intends to do,” Stelzenmüller told Table.Media. “You can see an international agenda that is coldly transactional and, in case of doubt, tells allies: We set the tune.”
According to Stelzenmüller, Germany will only be able to fulfill its role as a leading European power if it succeeds in consistently continuing the decoupling from Russia that it began since the invasion in 2022. “No one could have imagined that we would free ourselves from Russian gas so quickly. Nobody could have imagined that we would spend so much on weapons.” This path must be continued, especially in security policy.
Whether Scholz’s political commitments are really backed up by hard figures could be called into question in the early evening. Defense Minister Boris Pistorius will then address how the “state, economy and society can jointly create resilience in times of change” in the rooftop lounge of the Bayerischer Hof.
“More than ever, we have to ensure that our deterrence remains in line with modern requirements,” Scholz had clarified in the morning, but, at the same time, stated that eighty percent of the €100 billion special fund for the Bundeswehr had already been contractually committed. Resolving this conflict of objectives will continue to occupy German security policy for a long time after Munich.
The guns do the talking in Brussels. Shots were fired in the Brussels municipality of Schaerbeek on Saturday night. They followed shootings last Wednesday, Tuesday and Sunday.
Within one year, between February 1, 2023 and February 14, 2024, there were 19 shootings, as calculated by the Belgian daily newspaper Le Soir. And as the newspaper’s graphic shows, the shootings are not limited to the outskirts of the city. Even popular districts of the European bubble such as Saint-Gilles and Ixelles are not spared. One parliamentary assistant, for example, reports that she changed her route to parliament after witnessing street battles related to drug trafficking. She now avoids the Porte de Hal, even if this increases her travel time.
“Yesterday it was intimidation, today it’s an execution. We are in a conflict between groups who want to control a neighborhood,” commented the mayor of Saint-Gilles, Jean Spinette. This area of the capital is indeed described as a “drug drive-in,” where dealers have set up shop on doorsteps. According to the local authorities, the drug trade has now passed into the hands of organized crime and is the result of a “national phenomenon” linked to the massive drug trade via the port of Antwerp and the increasing use of crack cocaine.
There are not only shootings. The people of Brussels are noticing that crack cocaine in particular is spreading in their city. Hundreds of drug addicts and dealers congregate in several metro stations, and the police now count dozens of incidents every day. The security officers of the Brussels transport company have been urged to be careful since one of them was sprayed with ammonia, which is used to make crack cocaine, a few weeks ago. Their unions are threatening to strike if the situation continues. The management promises them reinforcements and the establishment of a special unit to refer drug users to specialized facilities.
Unfortunately, the political response is not on a par with the danger, political observers in Belgium note. This is due to the division of powers between the various levels of political responsibility. Instead of seeing the problem as a national challenge that needs to be tackled as quickly as possible, “irresponsible political reflexes” are at work, the daily Le Soir continues. “The municipalities complain about the lack of funds from the Confederation, which in turn complains about the poor organization of the municipalities, etc.”
It is this disorganization that criminal organizations thrive on. Perhaps it is even these weak points that allow them to thrive in Belgium, just as terrorism or the arms trade have been able to proliferate.
In the summer, the director of the Federal Criminal Police in Brussels warned in the press: “In some parts of the world, you can see that these organizations have taken control of the state because it has not mobilized all its forces to combat the phenomenon. We are not yet in such a situation in Belgium, but we must mobilize to prevent it.” One might wonder whether anyone can still hear him amid the shootings.
