Federal Finance Minister Christian Lindner (FDP) and his party are not only causing a stir in Berlin at the moment but also in Brussels. Stefan Braun and Till Hoppe report on what the two camps within the party are all about.
The clock is ticking: By the time of the EU summit on Thursday, the dispute over the internal combustion engine phase-out and the role of e-fuels is supposed to be resolved. Lukas Scheid knows what the Commission’s new proposal contains.
Your Josephin Hartwig
Feature
FDP: self-assertion at the expense of the EU
Christian Lindner only informed his colleagues from the other EU countries shortly before the start of the Euro Group meeting last Monday: Germany would not support the joint declaration on the reform of fiscal rules as it stood, the German finance minister sent out. Most of the other ministers were caught off guard; after all, the German government had agreed to the text at the level of state secretaries and EU ambassadors.
Lindner’s maneuver made some waves in Brussels. And that’s exactly what the FDP leader seemed to be aiming for. This is the role that the Liberals seem to be playing at the moment, whether on the domestic stage in Berlin or in Brussels: as those who fight for their convictions and, if necessary, stand up to their coalition and EU partners. Transport Minister Volker Wissing has been making headlines for three weeks now with his late no to the 2035 phase-out of internal combustion vehicles.
Provoke to impress
Behind this is a tough consideration. After the latest election debacles in Lower Saxony and continually poor poll results, which have been hovering around the five-percent hurdle for months, the party leadership has made a decision: The FDP must be recognizable, it must be noticeable, and in case of doubt, it must cause harm. And that works best with provocations that are perceived as such.
When weighed against this, the customs of the Brussels establishment, which are important for the functioning of the EU compromise machinery, obviously play a subordinate role. “It’s about self-assertion,” says a longtime FDP deputy who was there before the big defeat in 2013. In the list of priorities, the will to survive is greater than sensitivity to Brussels.
Habeck: German politics suffer damage
In this strategy, criticism from the Greens or Paris, for example, serves to raise the country’s own profile rather than doing any harm. “At the moment, German politics and also Germany’s representation of interests suffer damage,” warned German Economy Minister Robert Habeck yesterday. “We are losing debates, we are getting too little support for our projects.”
Michael Link, the European policy spokesman for the FDP parliamentary group in the German Bundestag, disagrees: “Of course, there is criticism from those who have a different opinion on the internal combustion engine,” he says. “But I can’t see that Germany has suffered any damage to its reputation as a result; on the contrary, our position is receiving support from various sides.” As the largest member state, Germany always has a special responsibility to work to build consensus in the EU, he said. But that also applies to the Commission, which has shown no willingness to submit a proposal on e-fuels as agreed.
FDP ministers get in the way
However, this is by no means the first time that FDP ministers have single-handedly and belatedly stalled decision-making processes on European issues.
Last spring, Volker Wissing intervened only after his ministry had supported the approval of the internal combustion engine phase-out in the German government for weeks and months.
In the case of the directive on women in management positions, it was Justice Minister Marco Buschmann who was late in the game. After some back and forth within the coalition, the German government had conditionally approved the outcome of the trilogue negotiations. According to EU diplomats, however, the Ministry of Justice attempted to add further points, some of them new, during the subsequent legal examination. The unusual intervention was fruitless but delayed the entire process.
In the case of the directive for better working conditions for platform workers, the coalition partners initially agreed on a common position, and the German government actively negotiated with the Council for months. Then, however, the FDP side – apparently under pressure from Lindner – suddenly terminated the agreement. As a result, Berlin had to abstain in the EPSCO Council, much to the annoyance of the other participating houses and the member states allied in the matter.
‘Europe is a matter for the boss, but the boss is not around’
As a result, other member states already regard Berlin as unreliable and difficult to predict. “The problems in the coalition are thus becoming a European problem,” says an EU diplomat. Therefore, he says, it is time for Chancellor Olaf Scholz to step in. “Europe is a matter for the boss, but the boss is not around.”
The Secretary General of the European Movement Germany, Bernd Hüttemann, also warns: “If one retroactively calls agreements into question again after rehearsed negotiations, this may be understandable in the matter, but it has fatal consequences for the credibility of German government action in the EU”.
Central players change
German EU Ambassador Michael Clauß warned in an internal wire report months ago that coordination difficulties within the federal government were reducing Germany’s influence at the EU level. The coalition government had set out to improve coordination of European policy within the federal government. Coordination rounds at different hierarchical levels are intended to ensure that contentious issues are clarified and that Berlin can position itself at an early stage.
However, this approach failed several times in the first 15 months of the coalition. Whether things will get better soon is questionable. Several key players in Germany’s European policy will soon be leaving their posts: Carsten Pillath, the state secretary in charge at the Ministry of Finance, is retiring, and his successor, Heiko Thoms, has considerably less EU experience. In the Foreign Office, State Secretary Andreas Michaelis is going to Washington as ambassador; his successor has not yet been decided. And EU Ambassador Clauß is also set to leave in the summer after five years in Brussels.
Two camps within the FDP
But a political dispute like the one over the internal combustion engine cannot be resolved by good coordination at the civil servant level anyway, argues FDP politician Link – it is an expression of a “profound disagreement between the Greens and the Liberals on the issue of technological openness”.
Within the ranks of the liberals, however, there are still two groups that are almost diametrically opposed in their view of politics. One group considers the functioning of a coalition to be a value in itself. When the polls are bad, however, they lose out to those who are looking for a profile and their own headlines. It is this second group that is currently setting the tone – and is likely to feel vindicated now that the FDP is on everyone’s lips, in Brussels as well as in Berlin. Stefan Braun and Till Hoppe
Climate & Environment
Climate Policy
European policy
Combustion engine dispute: no agreement despite Commission proposal
In the middle of last week, German Transport Minister Volker Wissing (FDP) called for a perspective for “e-fuels only” vehicles in order to avert the complete end of internal combustion engines in 2035. A short time later, the Commission presented a corresponding draft for supplementary legislation. In the draft, which is available to Table.Media, the existing legislation on exhaust emission standards for passenger cars (Euro 5 and Euro 6) is taken up – as demanded by Wissing.
Accordingly, the Commission proposes to create a new vehicle category for vehicles that run exclusively on carbon neutral fuels (e-fuels). These are to be designed “so that they cannot run on other types of fuels“. The car is also supposed to use a fuel-monitoring device to detect when it would be refueled with conventional fuels. In that case, the systemwould have to prevent the vehicle from starting at all. Manufacturers would have to ensure that monitoring devices and refueling systems are protected against tampering, it adds.
Wissing’s conditions not met
For vehicle manufacturers, this is likely to be a massive hurdle to building such vehicles at all, as high development costs and only a small sales market could be expected. The Reuters news agency reported on Tuesday that the Commission’s condition that cars must distinguish CO2-neutral fuels from fossil fuels would be problematic for Germany because car manufacturers would have to develop new engines.
This means that even if the Commission’s draft moves in the direction of an “e-fuels only” solution, the Ministry of Transport is likely to see a need for improvements to create a realistic perspective for e-fuels. The FDP had renegotiated this in the coalition agreement and in a recital of the revised EU fleet limits. Two of Wissing’s demands were not taken into account by the Commission: A crediting of “e-fuels only” vehicles against manufacturers’ fleet limits and the inclusion of a definition for fully CO2-neutral fuels in the fleet limits legislation.
Der Spiegel even reported on Tuesday that Wissing had already completely rejected the Commission proposal. When asked by Table.Media, the Ministry of Transport would not confirm this, but the fact that an agreement has still not been reached suggests that the proposal does not meet the minister’s expectations. “We are interested in a quick clarification, but it must be resilient and binding,” the ministry said. This means the current proposal does not yet meet these criteria.
The Federal Environment Ministry apparently sees things quite differently. “As far as we know, the proposal of the commission, the recital would be taken into account in the sense of the FDP and nothing should stand in the way of an approval“, it is said from circles of the ministry.
Clarification until the EU summit
Another outstanding issue: It is not clear from the Commission’s draft which EU legislation applies. Should the Commission wish to implement its proposal via an implementing act, it would have to consult with the member states. This would not be necessary in the case of a delegated act, but the EU Parliament and Council of Ministers would have the opportunity to object.
Yesterday, Minister of State for Europe Anna Lührmann (Greens) said in Brussels that she expects the whole issue to be resolved before the EU summit, which begins on Thursday. Lührmann again stressed that it had been agreed that the trilogue result would apply. At the same time, the German government is talking with the EU Commission about how the recital will be implemented in concrete terms. “I assume that these talks will be concluded before the summit.” with dpa
Climate & Environment
Climate Policy
Flottengrenzwerte
Transport policy
News
New roadmap for the AI Act in parliament
The rapporteurs for the AI Act in the EU Parliament have presented a new timetable. According to this, the consultations are to be completed in April. Until then, two more technical and three political meetings are scheduled. At least, as Kai Zenner from the office of EPP MEP Axel Voss tweeted, the negotiators have now worked through the entire text and many recitals.
In the technical meeting on Monday, the definition of general purpose AI and responsibilities along the value chain were on the agenda. On Tuesday, the topics included sandboxes (AI reallabs) and enforcement.
General Purpose AI (GPAI) is capable of performing a variety of tasks, while specialized AI systems are programmed to perform specific tasks. The topic has gained a lot of attention due to the publication of the large language model ChatGPT.
Definition of general purpose AI
The rapporteurs had proposed as a definition: “‘general purpose AI system’ means an AI system that is trained on broad data at scale, is designed for generality of output, and can be adapted to a wide range of tasks.’” Among other things, however, the Greens objected to the fact that this definition limits GPAI to machine learning methods. This excludes other methods, such as reinforcement learning or evolutionary algorithms.
While the Greenswanta broad applicability of the definition, the EPPprefersa narrower definition. The negotiators have apparently agreed to replace general purpose AI with ‘foundation model’ in the definition.
For the negotiators and even more so for observers, it is difficult to discern what there is actually a final agreement on. This is also due to the way in which the rapporteurs Brando Benifei (S&D) and Dragoş Tudorache (Renew) conduct the negotiations, which even MEPs find difficult to get used to, because only comments are collected at the meetings, but no decisions are made.
The dates for the upcoming political meetings are scheduled for March 29, April 13 and April 19. The trilogue could then begin in May. vis
Artificial intelligence
Artificial Intelligence Regulation
Digital policy
European Parliament
French parliament votes in favor of nuclear plan
On Tuesday, the French parliament voted by a large majority in favor of the government’s nuclear investment plan. The nuclear renewal plan, the centerpiece of which is the planned construction of six new nuclear reactors, was approved with 402 votes in favor and 130 against. Only on Monday, 278 deputies supported a motion of no confidence in the government tabled by the opposition. This was only nine votes short of the 287 votes needed to topple the government.
“Following the Senate last month, tonight the House of Commons also voted overwhelmingly in favor of the nuclear plan … the result of a collective effort to tackle climate change and guarantee our energy sovereignty,” tweeted Prime Minister Elisabeth Borne.
Macron wants to push through new reforms
President Emmanuel Macron wants to win back the initiative with new reforms in the coming weeks after his government almost failed on pension reform. Nuclear energy is one of the issues on which his party sees eye-to-eye with the conservative Les Republicains and the far-right Rassemblement National.
“Our goal is to make France a great carbon-free and sovereign nation,” Energy Minister Agnès Pannier-Runacher tweeted, adding that this is the first building block for the “immense project of revitalizing our nuclear industry”.
In the race to build new nuclear power plants, administrative procedures are unlikely to slow either the extension of the life of existing reactors or the construction of new ones.
Construction of an EPR2 nuclear reactor to begin soon
Macron wants to begin construction of a first next-generation EPR2 nuclear reactor before the end of his second five-year term in May 2027as part of a €52 billion plan to build six new reactors.
The plan comes at a time when France has suffered months of major outages at its existing fleet of 56 reactors. As a result, nuclear power production fell to a 30-year low, while the first-generation EPR under construction at Flamanville in western France is years behind schedule and billions over budget. rtr
Council wants regulated gas prices for SMEs
In the event of future energy crises, the EU states want to retain the permanent option of setting low gas prices, even for small and medium-sized enterprises. This emerges from the latest draft of the Swedish Council Presidency on the amendment of the Gas Market Directive from Tuesday, which is available to Table.Media. The seventh draft amendment is to be discussed today by the permanent representatives of the member states.
In an unusual move, member states want to enshrine in the Gas Market Directive that the price regulation mechanism from the new Electricity Market Directive will be adopted. According to a Presidency note, “The references in the proposed new article to the Commission’s proposal on electricity market design mean that any changes to that text will automatically apply in the context of this new article of the gas directive. This means that the content of this new article will depend on the legislative deliberations on the corresponding electricity market design proposal.”
Similar rules to be created for household customers
The Commission presented the draft for the new electricity market design only last week. It is intended to enable member states to set regulated prices for SMEs in the event of an electricity crisis. A similar regulation already exists for household customers in the Electricity Market Directive. With the amendment of the Gas Market Directive, it should already be applied to the gas price for household customers. According to the latest draft, an extension to the electricity price for SMEs is now to be followed up for the gas market as well.
On March 28, EU energy ministers in the Council plan to decide on the general approach to the gas market package before it enters the trilogue. ber
Gas prices
Natural gas
Legal Affairs Committee calls for higher penalties for environmental crimes
The European Parliament’s Legal Affairs Committee has voted in favor of expanding criminal environmental crimes and tougher sanctions. In their meeting on Tuesday, the members of the body voted unanimously in favor of the report by Antonius Manders (EPP).
“The damage caused by environmental crime has a profound impact on human health and the state of our planet,” said the Dutch MEP. The often cross-border crimes must be fought at EU level with deterrent sanctions, he said. To this end, cooperation between member states must bestrengthened and the judiciary and police must be trained accordingly, Manders said.
Specifically, the committee calls for crimes that result in death or serious damage to health and the environment to be punishable by at least ten years imprisonment. In the case of environmental crimes, companies should pay fines amounting to at least ten percent of their average global sales over the past three years. The EU Commission envisages only five percent here. In addition, companies should also face exclusion from public funds and withdrawal of licenses, as well as being responsible for restoring the environment and compensating victims.
Extension of the scope of offences
MEPs also advocated expanding the list of punishable offenses. The list includes, among others, illegal timber trade, illegal exploitation of water resources, pollution by shipping, violations of EU chemical legislation, cultivation of genetically modified organisms and behavior that leads to forest fires.
It should also be possible to report the offenses anonymously. Every two years, the Commission is to review the implementation of the directive by the member states and, if necessary, update the list of offenses.
Green Claims Directive: environmental footprint not suitable
The Commission does notwant to use the environmentalfootprint methodology for assessing the environmental impact of products, services and organizations. A draft of the Green Claims Directive leaked yesterday by French news platform Contexte calls the environmental footprint inappropriate compared to an earlier version. Instead, a more flexible approachis to beadopted. The final version of the draft is to be presented today.
“The methodology does not yet cover all relevant impact categories for all product groups,” the document says. Therefore, they could “provide an incomplete picture of the environmental performance of a product in the context of green claims.” In addition, many environmental claims would also relate to aspects such as durability, reusability, repairability, recyclability and the use of natural ingredients, for which theecological footprint would not be suitable as a sole method. For these reasons, the Commission chooses a more flexible approach rather than a single standard method, it explains in the document.
Commission decides against standard method
The Product Environmental Footprint (PEF) and Organization Environmental Footprint (OEF) methodologies developed by the Commission are designed to help companies make informed statements about the impacts of their products and their organization. Specific category rules (PEFCR, OEFSR) aim to calculate the environmental footprint of specific product groups. The Commission has been testing the application of this methodology for several years; with regard to the Green Claims Directive, its suitability was controversial.
The Green Claims Directive introduces minimum requirements for the substantiation and communication of environmental claims. Before the claims are used in commercial communication, they must also be verified by a third party. The aim is to protect consumers from greenwashing and enable them to make informed purchasing decisions based on credible claims and labels. It also aims to improve the competitiveness of companies that want to offer environmentally sustainable products and services.
The final version of the draft legislation will be presented by the Commission at noon today, together with the Right to Repair bill. Consumer advocates hope for an effective legislative package to strengthen more sustainable consumption models. leo
The banking industry in the euro area ended the past year with solid capital ratios, according to the ECB’s chief banking supervisor Andrea Enria. “Banks’ capital and liquidity positions remained solid and well above the minimum requirements,” Enria told the EU Parliament’s Economic and Monetary Affairs Committee (ECON) in Brussels on Tuesday. At year-end 2022, the institutions’ Common Equity Tier 1 (CET 1) capital ratio stood at 15.3 percent, according to Enria. It had still stood at 14.7 percent at the end of the third quarter of 2022.
Enria also pointed to progress with regard to the profitability ofinstitutions. Banks had achieved a return on equity (RoE) of 7.7 percent in the fourth quarter of 2022. This is the highest level since the start of the banking union. In the third quarter of 2022, the figure had been 7.6 percent.
Enria also called on euro-area financial institutions to be vigilant in the face of an uncertain economic situation. “The first set of challenges is cyclical,” he explained. If the energy crisis is not resolved, he said, the credit risk on loans to companies with highly energy-dependent businessescouldincrease.
In addition, the economic slowdown at the end of 2022 was accompanied by a resurgence incorporate defaults, he said. Increased vigilance with regard to a deterioration in credit quality is therefore called for. rtr
European policy
Ambassador warns Netherlands against ASML restrictions
China’s ambassador to the Netherlands has warned of a deterioration of bilateral relations if the EU country implements its planned export ban on semiconductor machinery manufacturer ASML. The Netherlands would thus jeopardize its leading position in chip technologyby cutting itself off from the world’s largest market, Chinese Ambassador Tan Jian said, according to the Financieele Dagblad. Such export restrictions would be “bad for China, bad for the Netherlands and world trade – and will have a negative impact on our relations and economic cooperation,” Tan said. “This will not be without consequence. I will not speculate on countermeasures, but China will not take this lightly.”
In early March, Foreign Trade Minister Liesje Schreinemacher announced that the Netherlands would further restrict the sale of ASML and ASMI advanced chip-making equipment. By doing so, the Netherlands wants to “prevent Dutch goods from contributing to undesirable end uses, like military deployment or in weapons of mass destruction”, she explained. The Netherlands would thus follow US chip sanctions.
According to Tan, the boycott would undermine international trade regulations and ASML’s leading position in global technology. “You are a small country, and you have always been the standard bearer for free trade. You keep your lead by selling to China and reinvesting the proceeds,” the diplomat told The Hague. If China cannot buy the ASML machines, he said, the People’s Republic will have no choice but to build its own. ari
Chips
ECJ ruling: compensation claims by diesel buyers easier in future
The European Court of Justice (ECJ) is lowering the hurdles for diesel buyers to sue for damages in cases of inadmissible emissions technology. The carmakers could be liable even if they had simply acted negligently without intent to defraud, the Luxembourg judges ruled on Tuesday in a Mercedes case.
Mercedes is not concerned: “Mercedes-Benz vehicles that were or are affected by a recall can continue to be used permanently without restriction after appropriate software updates. How national courts will apply the ECJ’s decision in relation to national law remains to be seen,” the automaker announced on Tuesday after the ruling.
The decision from Luxembourg could have a major impact on German case law. This is because at the Federal Court of Justice (BGH), plaintiffs previously only had a chance to claim damages if they had been deliberately and intentionally deceived by the manufacturer in an immoral manner. These strict criteria were only met in the case of the VW EA189 scandal engine. According to the ECJ, negligence is now sufficient – which is easier to prove.
Almost 2,000 appeals and complaints still on hold
The judges in Germany must now implement these requirements. In order to await the ECJ ruling, courts of all instances had put masses of diesel cases on hold in which this issue was at stake. At the moment, more than 1,900 appeals and non-admission appeals are pending at the Federal Supreme Court alone; the clear majority had been put on hold for the time being because of the ECJ proceedings. However, the ECJ ruling has by no means clarified all the issues. For example, it remains to be seen how much money affected car buyers will be entitled to.
The background to the proceedings was a claim for damages from Germany against Mercedes-Benz because of a so-called thermal window. Thermal windows are part of the engine control system that throttle exhaust gas purification at cooler temperatures. Car manufacturers argue that this is necessary to protect the engine. Environmental organizations, on the other hand, see this as an instrument that helps make the emissions of cars appear smaller under test conditions than they are in real road traffic. The ECJ considers these thermal windows to be permissible only within very narrow limits.
Thermal windows were also used as standard by other manufacturers. Since the ECJ ruling relates to inadmissible defeat devices in general, it could also be applicable to other functionalities in the exhaust technology of diesel cars, which are currently being scrutinized by the courts. dpa
Heads
Vanessa Cann – the risk of lagging behind on AI
Vanessa Cann is executive director at the German AI Association and, among other things, works to ensure that start-ups can develop their full potential.
Progress on the subject of artificial intelligence (AI)is too slow in Germany and Europe, according to Vanessa Cann. The 30-year-old is managing director at the German AI Association, in which more than 400 companiesare networked. “AI start-ups from Europe should be able to play at the top of the world,” Cann says. “That’s our aspiration.”
Vanessa Cann actually wanted to get into politics herself: In 2016, she ran for the Green Party in Mannheim for the Baden-Württemberg state parliament. After studying political science, Cann worked in a consulting firm on artificial intelligence, working for technology companies from Silicon Valley on their lobbying positions. “I noticed that politics and companies very much talk past each other when it comes to AI,” Cann says. That’s the intersection she works at today.
Criticism of the AI Act
The EU wants to regulate artificial intelligence in the future with the Artificial Intelligence Act (AI Act for short), and Parliament is currently discussing the draft. The new rules are intended to classify AI technologies into risk categories. Among other things, the draft plans to ban applications such as social scoring and to regulate technologies with increased risk more closely. Vanessa Cann is critical of this because too many start-ups fall into this category: “The definitions are too broad,” she says. A study by the German AI Association found that up to 50 percent of the companies surveyed put their technology in this category, while the Commission only assumes up to 15 percent.
The AI Act would have consequences for start-ups and small businesses in particular: It leads to double regulation and is an additional burden, Cann says. There are already strict regulations for sensitive areas such as medicine or finance. Her suggestion: Instead of new regulation, the EU shouldrather expand existing industry rules to include AI: “I don’t think there is a need for the AI Act,” Cann emphasizes. “Now we should ensure it provides legal clarity and promotes innovation in Europe.”
Helping small businesses
The AI Act is coming, and the trilogue with the Council and the Commission will begin after the negotiations in Parliament. Vanessa Cann now calls for a guideline to the legal text that explains to companies exactly what they have to do. She draws parallels with the General Data Protection Regulation (GDPR): When it came into force, many companies were afraid of doing something wrong. Now, she says, it is important that start-ups, in particular, receive clear recommendations so that they do not have to seek expensive legal advice. Otherwise, it would be more difficult for them to develop their technology in Europe.
What’s next for artificial intelligence in the future? “The next big step is generative AI,” Cann reports. This refers to so-called general purpose AI, such as the software behind ChatGPT. Europe urgently needs to develop its own models as well, says the executive director of the German AI Association: “Otherwise, after platforms and cloud computing, this will be the next technology that missed the boat.” Jana Hemmersmeier
Federal Finance Minister Christian Lindner (FDP) and his party are not only causing a stir in Berlin at the moment but also in Brussels. Stefan Braun and Till Hoppe report on what the two camps within the party are all about.
The clock is ticking: By the time of the EU summit on Thursday, the dispute over the internal combustion engine phase-out and the role of e-fuels is supposed to be resolved. Lukas Scheid knows what the Commission’s new proposal contains.
Your Josephin Hartwig
Feature
FDP: self-assertion at the expense of the EU
Christian Lindner only informed his colleagues from the other EU countries shortly before the start of the Euro Group meeting last Monday: Germany would not support the joint declaration on the reform of fiscal rules as it stood, the German finance minister sent out. Most of the other ministers were caught off guard; after all, the German government had agreed to the text at the level of state secretaries and EU ambassadors.
Lindner’s maneuver made some waves in Brussels. And that’s exactly what the FDP leader seemed to be aiming for. This is the role that the Liberals seem to be playing at the moment, whether on the domestic stage in Berlin or in Brussels: as those who fight for their convictions and, if necessary, stand up to their coalition and EU partners. Transport Minister Volker Wissing has been making headlines for three weeks now with his late no to the 2035 phase-out of internal combustion vehicles.
Provoke to impress
Behind this is a tough consideration. After the latest election debacles in Lower Saxony and continually poor poll results, which have been hovering around the five-percent hurdle for months, the party leadership has made a decision: The FDP must be recognizable, it must be noticeable, and in case of doubt, it must cause harm. And that works best with provocations that are perceived as such.
When weighed against this, the customs of the Brussels establishment, which are important for the functioning of the EU compromise machinery, obviously play a subordinate role. “It’s about self-assertion,” says a longtime FDP deputy who was there before the big defeat in 2013. In the list of priorities, the will to survive is greater than sensitivity to Brussels.
Habeck: German politics suffer damage
In this strategy, criticism from the Greens or Paris, for example, serves to raise the country’s own profile rather than doing any harm. “At the moment, German politics and also Germany’s representation of interests suffer damage,” warned German Economy Minister Robert Habeck yesterday. “We are losing debates, we are getting too little support for our projects.”
Michael Link, the European policy spokesman for the FDP parliamentary group in the German Bundestag, disagrees: “Of course, there is criticism from those who have a different opinion on the internal combustion engine,” he says. “But I can’t see that Germany has suffered any damage to its reputation as a result; on the contrary, our position is receiving support from various sides.” As the largest member state, Germany always has a special responsibility to work to build consensus in the EU, he said. But that also applies to the Commission, which has shown no willingness to submit a proposal on e-fuels as agreed.
FDP ministers get in the way
However, this is by no means the first time that FDP ministers have single-handedly and belatedly stalled decision-making processes on European issues.
Last spring, Volker Wissing intervened only after his ministry had supported the approval of the internal combustion engine phase-out in the German government for weeks and months.
In the case of the directive on women in management positions, it was Justice Minister Marco Buschmann who was late in the game. After some back and forth within the coalition, the German government had conditionally approved the outcome of the trilogue negotiations. According to EU diplomats, however, the Ministry of Justice attempted to add further points, some of them new, during the subsequent legal examination. The unusual intervention was fruitless but delayed the entire process.
In the case of the directive for better working conditions for platform workers, the coalition partners initially agreed on a common position, and the German government actively negotiated with the Council for months. Then, however, the FDP side – apparently under pressure from Lindner – suddenly terminated the agreement. As a result, Berlin had to abstain in the EPSCO Council, much to the annoyance of the other participating houses and the member states allied in the matter.
‘Europe is a matter for the boss, but the boss is not around’
As a result, other member states already regard Berlin as unreliable and difficult to predict. “The problems in the coalition are thus becoming a European problem,” says an EU diplomat. Therefore, he says, it is time for Chancellor Olaf Scholz to step in. “Europe is a matter for the boss, but the boss is not around.”
The Secretary General of the European Movement Germany, Bernd Hüttemann, also warns: “If one retroactively calls agreements into question again after rehearsed negotiations, this may be understandable in the matter, but it has fatal consequences for the credibility of German government action in the EU”.
Central players change
German EU Ambassador Michael Clauß warned in an internal wire report months ago that coordination difficulties within the federal government were reducing Germany’s influence at the EU level. The coalition government had set out to improve coordination of European policy within the federal government. Coordination rounds at different hierarchical levels are intended to ensure that contentious issues are clarified and that Berlin can position itself at an early stage.
However, this approach failed several times in the first 15 months of the coalition. Whether things will get better soon is questionable. Several key players in Germany’s European policy will soon be leaving their posts: Carsten Pillath, the state secretary in charge at the Ministry of Finance, is retiring, and his successor, Heiko Thoms, has considerably less EU experience. In the Foreign Office, State Secretary Andreas Michaelis is going to Washington as ambassador; his successor has not yet been decided. And EU Ambassador Clauß is also set to leave in the summer after five years in Brussels.
Two camps within the FDP
But a political dispute like the one over the internal combustion engine cannot be resolved by good coordination at the civil servant level anyway, argues FDP politician Link – it is an expression of a “profound disagreement between the Greens and the Liberals on the issue of technological openness”.
Within the ranks of the liberals, however, there are still two groups that are almost diametrically opposed in their view of politics. One group considers the functioning of a coalition to be a value in itself. When the polls are bad, however, they lose out to those who are looking for a profile and their own headlines. It is this second group that is currently setting the tone – and is likely to feel vindicated now that the FDP is on everyone’s lips, in Brussels as well as in Berlin. Stefan Braun and Till Hoppe
Climate & Environment
Climate Policy
European policy
Combustion engine dispute: no agreement despite Commission proposal
In the middle of last week, German Transport Minister Volker Wissing (FDP) called for a perspective for “e-fuels only” vehicles in order to avert the complete end of internal combustion engines in 2035. A short time later, the Commission presented a corresponding draft for supplementary legislation. In the draft, which is available to Table.Media, the existing legislation on exhaust emission standards for passenger cars (Euro 5 and Euro 6) is taken up – as demanded by Wissing.
Accordingly, the Commission proposes to create a new vehicle category for vehicles that run exclusively on carbon neutral fuels (e-fuels). These are to be designed “so that they cannot run on other types of fuels“. The car is also supposed to use a fuel-monitoring device to detect when it would be refueled with conventional fuels. In that case, the systemwould have to prevent the vehicle from starting at all. Manufacturers would have to ensure that monitoring devices and refueling systems are protected against tampering, it adds.
Wissing’s conditions not met
For vehicle manufacturers, this is likely to be a massive hurdle to building such vehicles at all, as high development costs and only a small sales market could be expected. The Reuters news agency reported on Tuesday that the Commission’s condition that cars must distinguish CO2-neutral fuels from fossil fuels would be problematic for Germany because car manufacturers would have to develop new engines.
This means that even if the Commission’s draft moves in the direction of an “e-fuels only” solution, the Ministry of Transport is likely to see a need for improvements to create a realistic perspective for e-fuels. The FDP had renegotiated this in the coalition agreement and in a recital of the revised EU fleet limits. Two of Wissing’s demands were not taken into account by the Commission: A crediting of “e-fuels only” vehicles against manufacturers’ fleet limits and the inclusion of a definition for fully CO2-neutral fuels in the fleet limits legislation.
Der Spiegel even reported on Tuesday that Wissing had already completely rejected the Commission proposal. When asked by Table.Media, the Ministry of Transport would not confirm this, but the fact that an agreement has still not been reached suggests that the proposal does not meet the minister’s expectations. “We are interested in a quick clarification, but it must be resilient and binding,” the ministry said. This means the current proposal does not yet meet these criteria.
The Federal Environment Ministry apparently sees things quite differently. “As far as we know, the proposal of the commission, the recital would be taken into account in the sense of the FDP and nothing should stand in the way of an approval“, it is said from circles of the ministry.
Clarification until the EU summit
Another outstanding issue: It is not clear from the Commission’s draft which EU legislation applies. Should the Commission wish to implement its proposal via an implementing act, it would have to consult with the member states. This would not be necessary in the case of a delegated act, but the EU Parliament and Council of Ministers would have the opportunity to object.
Yesterday, Minister of State for Europe Anna Lührmann (Greens) said in Brussels that she expects the whole issue to be resolved before the EU summit, which begins on Thursday. Lührmann again stressed that it had been agreed that the trilogue result would apply. At the same time, the German government is talking with the EU Commission about how the recital will be implemented in concrete terms. “I assume that these talks will be concluded before the summit.” with dpa
Climate & Environment
Climate Policy
Flottengrenzwerte
Transport policy
News
New roadmap for the AI Act in parliament
The rapporteurs for the AI Act in the EU Parliament have presented a new timetable. According to this, the consultations are to be completed in April. Until then, two more technical and three political meetings are scheduled. At least, as Kai Zenner from the office of EPP MEP Axel Voss tweeted, the negotiators have now worked through the entire text and many recitals.
In the technical meeting on Monday, the definition of general purpose AI and responsibilities along the value chain were on the agenda. On Tuesday, the topics included sandboxes (AI reallabs) and enforcement.
General Purpose AI (GPAI) is capable of performing a variety of tasks, while specialized AI systems are programmed to perform specific tasks. The topic has gained a lot of attention due to the publication of the large language model ChatGPT.
Definition of general purpose AI
The rapporteurs had proposed as a definition: “‘general purpose AI system’ means an AI system that is trained on broad data at scale, is designed for generality of output, and can be adapted to a wide range of tasks.’” Among other things, however, the Greens objected to the fact that this definition limits GPAI to machine learning methods. This excludes other methods, such as reinforcement learning or evolutionary algorithms.
While the Greenswanta broad applicability of the definition, the EPPprefersa narrower definition. The negotiators have apparently agreed to replace general purpose AI with ‘foundation model’ in the definition.
For the negotiators and even more so for observers, it is difficult to discern what there is actually a final agreement on. This is also due to the way in which the rapporteurs Brando Benifei (S&D) and Dragoş Tudorache (Renew) conduct the negotiations, which even MEPs find difficult to get used to, because only comments are collected at the meetings, but no decisions are made.
The dates for the upcoming political meetings are scheduled for March 29, April 13 and April 19. The trilogue could then begin in May. vis
Artificial intelligence
Artificial Intelligence Regulation
Digital policy
European Parliament
French parliament votes in favor of nuclear plan
On Tuesday, the French parliament voted by a large majority in favor of the government’s nuclear investment plan. The nuclear renewal plan, the centerpiece of which is the planned construction of six new nuclear reactors, was approved with 402 votes in favor and 130 against. Only on Monday, 278 deputies supported a motion of no confidence in the government tabled by the opposition. This was only nine votes short of the 287 votes needed to topple the government.
“Following the Senate last month, tonight the House of Commons also voted overwhelmingly in favor of the nuclear plan … the result of a collective effort to tackle climate change and guarantee our energy sovereignty,” tweeted Prime Minister Elisabeth Borne.
Macron wants to push through new reforms
President Emmanuel Macron wants to win back the initiative with new reforms in the coming weeks after his government almost failed on pension reform. Nuclear energy is one of the issues on which his party sees eye-to-eye with the conservative Les Republicains and the far-right Rassemblement National.
“Our goal is to make France a great carbon-free and sovereign nation,” Energy Minister Agnès Pannier-Runacher tweeted, adding that this is the first building block for the “immense project of revitalizing our nuclear industry”.
In the race to build new nuclear power plants, administrative procedures are unlikely to slow either the extension of the life of existing reactors or the construction of new ones.
Construction of an EPR2 nuclear reactor to begin soon
Macron wants to begin construction of a first next-generation EPR2 nuclear reactor before the end of his second five-year term in May 2027as part of a €52 billion plan to build six new reactors.
The plan comes at a time when France has suffered months of major outages at its existing fleet of 56 reactors. As a result, nuclear power production fell to a 30-year low, while the first-generation EPR under construction at Flamanville in western France is years behind schedule and billions over budget. rtr
Council wants regulated gas prices for SMEs
In the event of future energy crises, the EU states want to retain the permanent option of setting low gas prices, even for small and medium-sized enterprises. This emerges from the latest draft of the Swedish Council Presidency on the amendment of the Gas Market Directive from Tuesday, which is available to Table.Media. The seventh draft amendment is to be discussed today by the permanent representatives of the member states.
In an unusual move, member states want to enshrine in the Gas Market Directive that the price regulation mechanism from the new Electricity Market Directive will be adopted. According to a Presidency note, “The references in the proposed new article to the Commission’s proposal on electricity market design mean that any changes to that text will automatically apply in the context of this new article of the gas directive. This means that the content of this new article will depend on the legislative deliberations on the corresponding electricity market design proposal.”
Similar rules to be created for household customers
The Commission presented the draft for the new electricity market design only last week. It is intended to enable member states to set regulated prices for SMEs in the event of an electricity crisis. A similar regulation already exists for household customers in the Electricity Market Directive. With the amendment of the Gas Market Directive, it should already be applied to the gas price for household customers. According to the latest draft, an extension to the electricity price for SMEs is now to be followed up for the gas market as well.
On March 28, EU energy ministers in the Council plan to decide on the general approach to the gas market package before it enters the trilogue. ber
Gas prices
Natural gas
Legal Affairs Committee calls for higher penalties for environmental crimes
The European Parliament’s Legal Affairs Committee has voted in favor of expanding criminal environmental crimes and tougher sanctions. In their meeting on Tuesday, the members of the body voted unanimously in favor of the report by Antonius Manders (EPP).
“The damage caused by environmental crime has a profound impact on human health and the state of our planet,” said the Dutch MEP. The often cross-border crimes must be fought at EU level with deterrent sanctions, he said. To this end, cooperation between member states must bestrengthened and the judiciary and police must be trained accordingly, Manders said.
Specifically, the committee calls for crimes that result in death or serious damage to health and the environment to be punishable by at least ten years imprisonment. In the case of environmental crimes, companies should pay fines amounting to at least ten percent of their average global sales over the past three years. The EU Commission envisages only five percent here. In addition, companies should also face exclusion from public funds and withdrawal of licenses, as well as being responsible for restoring the environment and compensating victims.
Extension of the scope of offences
MEPs also advocated expanding the list of punishable offenses. The list includes, among others, illegal timber trade, illegal exploitation of water resources, pollution by shipping, violations of EU chemical legislation, cultivation of genetically modified organisms and behavior that leads to forest fires.
It should also be possible to report the offenses anonymously. Every two years, the Commission is to review the implementation of the directive by the member states and, if necessary, update the list of offenses.
Green Claims Directive: environmental footprint not suitable
The Commission does notwant to use the environmentalfootprint methodology for assessing the environmental impact of products, services and organizations. A draft of the Green Claims Directive leaked yesterday by French news platform Contexte calls the environmental footprint inappropriate compared to an earlier version. Instead, a more flexible approachis to beadopted. The final version of the draft is to be presented today.
“The methodology does not yet cover all relevant impact categories for all product groups,” the document says. Therefore, they could “provide an incomplete picture of the environmental performance of a product in the context of green claims.” In addition, many environmental claims would also relate to aspects such as durability, reusability, repairability, recyclability and the use of natural ingredients, for which theecological footprint would not be suitable as a sole method. For these reasons, the Commission chooses a more flexible approach rather than a single standard method, it explains in the document.
Commission decides against standard method
The Product Environmental Footprint (PEF) and Organization Environmental Footprint (OEF) methodologies developed by the Commission are designed to help companies make informed statements about the impacts of their products and their organization. Specific category rules (PEFCR, OEFSR) aim to calculate the environmental footprint of specific product groups. The Commission has been testing the application of this methodology for several years; with regard to the Green Claims Directive, its suitability was controversial.
The Green Claims Directive introduces minimum requirements for the substantiation and communication of environmental claims. Before the claims are used in commercial communication, they must also be verified by a third party. The aim is to protect consumers from greenwashing and enable them to make informed purchasing decisions based on credible claims and labels. It also aims to improve the competitiveness of companies that want to offer environmentally sustainable products and services.
The final version of the draft legislation will be presented by the Commission at noon today, together with the Right to Repair bill. Consumer advocates hope for an effective legislative package to strengthen more sustainable consumption models. leo
The banking industry in the euro area ended the past year with solid capital ratios, according to the ECB’s chief banking supervisor Andrea Enria. “Banks’ capital and liquidity positions remained solid and well above the minimum requirements,” Enria told the EU Parliament’s Economic and Monetary Affairs Committee (ECON) in Brussels on Tuesday. At year-end 2022, the institutions’ Common Equity Tier 1 (CET 1) capital ratio stood at 15.3 percent, according to Enria. It had still stood at 14.7 percent at the end of the third quarter of 2022.
Enria also pointed to progress with regard to the profitability ofinstitutions. Banks had achieved a return on equity (RoE) of 7.7 percent in the fourth quarter of 2022. This is the highest level since the start of the banking union. In the third quarter of 2022, the figure had been 7.6 percent.
Enria also called on euro-area financial institutions to be vigilant in the face of an uncertain economic situation. “The first set of challenges is cyclical,” he explained. If the energy crisis is not resolved, he said, the credit risk on loans to companies with highly energy-dependent businessescouldincrease.
In addition, the economic slowdown at the end of 2022 was accompanied by a resurgence incorporate defaults, he said. Increased vigilance with regard to a deterioration in credit quality is therefore called for. rtr
European policy
Ambassador warns Netherlands against ASML restrictions
China’s ambassador to the Netherlands has warned of a deterioration of bilateral relations if the EU country implements its planned export ban on semiconductor machinery manufacturer ASML. The Netherlands would thus jeopardize its leading position in chip technologyby cutting itself off from the world’s largest market, Chinese Ambassador Tan Jian said, according to the Financieele Dagblad. Such export restrictions would be “bad for China, bad for the Netherlands and world trade – and will have a negative impact on our relations and economic cooperation,” Tan said. “This will not be without consequence. I will not speculate on countermeasures, but China will not take this lightly.”
In early March, Foreign Trade Minister Liesje Schreinemacher announced that the Netherlands would further restrict the sale of ASML and ASMI advanced chip-making equipment. By doing so, the Netherlands wants to “prevent Dutch goods from contributing to undesirable end uses, like military deployment or in weapons of mass destruction”, she explained. The Netherlands would thus follow US chip sanctions.
According to Tan, the boycott would undermine international trade regulations and ASML’s leading position in global technology. “You are a small country, and you have always been the standard bearer for free trade. You keep your lead by selling to China and reinvesting the proceeds,” the diplomat told The Hague. If China cannot buy the ASML machines, he said, the People’s Republic will have no choice but to build its own. ari
Chips
ECJ ruling: compensation claims by diesel buyers easier in future
The European Court of Justice (ECJ) is lowering the hurdles for diesel buyers to sue for damages in cases of inadmissible emissions technology. The carmakers could be liable even if they had simply acted negligently without intent to defraud, the Luxembourg judges ruled on Tuesday in a Mercedes case.
Mercedes is not concerned: “Mercedes-Benz vehicles that were or are affected by a recall can continue to be used permanently without restriction after appropriate software updates. How national courts will apply the ECJ’s decision in relation to national law remains to be seen,” the automaker announced on Tuesday after the ruling.
The decision from Luxembourg could have a major impact on German case law. This is because at the Federal Court of Justice (BGH), plaintiffs previously only had a chance to claim damages if they had been deliberately and intentionally deceived by the manufacturer in an immoral manner. These strict criteria were only met in the case of the VW EA189 scandal engine. According to the ECJ, negligence is now sufficient – which is easier to prove.
Almost 2,000 appeals and complaints still on hold
The judges in Germany must now implement these requirements. In order to await the ECJ ruling, courts of all instances had put masses of diesel cases on hold in which this issue was at stake. At the moment, more than 1,900 appeals and non-admission appeals are pending at the Federal Supreme Court alone; the clear majority had been put on hold for the time being because of the ECJ proceedings. However, the ECJ ruling has by no means clarified all the issues. For example, it remains to be seen how much money affected car buyers will be entitled to.
The background to the proceedings was a claim for damages from Germany against Mercedes-Benz because of a so-called thermal window. Thermal windows are part of the engine control system that throttle exhaust gas purification at cooler temperatures. Car manufacturers argue that this is necessary to protect the engine. Environmental organizations, on the other hand, see this as an instrument that helps make the emissions of cars appear smaller under test conditions than they are in real road traffic. The ECJ considers these thermal windows to be permissible only within very narrow limits.
Thermal windows were also used as standard by other manufacturers. Since the ECJ ruling relates to inadmissible defeat devices in general, it could also be applicable to other functionalities in the exhaust technology of diesel cars, which are currently being scrutinized by the courts. dpa
Heads
Vanessa Cann – the risk of lagging behind on AI
Vanessa Cann is executive director at the German AI Association and, among other things, works to ensure that start-ups can develop their full potential.
Progress on the subject of artificial intelligence (AI)is too slow in Germany and Europe, according to Vanessa Cann. The 30-year-old is managing director at the German AI Association, in which more than 400 companiesare networked. “AI start-ups from Europe should be able to play at the top of the world,” Cann says. “That’s our aspiration.”
Vanessa Cann actually wanted to get into politics herself: In 2016, she ran for the Green Party in Mannheim for the Baden-Württemberg state parliament. After studying political science, Cann worked in a consulting firm on artificial intelligence, working for technology companies from Silicon Valley on their lobbying positions. “I noticed that politics and companies very much talk past each other when it comes to AI,” Cann says. That’s the intersection she works at today.
Criticism of the AI Act
The EU wants to regulate artificial intelligence in the future with the Artificial Intelligence Act (AI Act for short), and Parliament is currently discussing the draft. The new rules are intended to classify AI technologies into risk categories. Among other things, the draft plans to ban applications such as social scoring and to regulate technologies with increased risk more closely. Vanessa Cann is critical of this because too many start-ups fall into this category: “The definitions are too broad,” she says. A study by the German AI Association found that up to 50 percent of the companies surveyed put their technology in this category, while the Commission only assumes up to 15 percent.
The AI Act would have consequences for start-ups and small businesses in particular: It leads to double regulation and is an additional burden, Cann says. There are already strict regulations for sensitive areas such as medicine or finance. Her suggestion: Instead of new regulation, the EU shouldrather expand existing industry rules to include AI: “I don’t think there is a need for the AI Act,” Cann emphasizes. “Now we should ensure it provides legal clarity and promotes innovation in Europe.”
Helping small businesses
The AI Act is coming, and the trilogue with the Council and the Commission will begin after the negotiations in Parliament. Vanessa Cann now calls for a guideline to the legal text that explains to companies exactly what they have to do. She draws parallels with the General Data Protection Regulation (GDPR): When it came into force, many companies were afraid of doing something wrong. Now, she says, it is important that start-ups, in particular, receive clear recommendations so that they do not have to seek expensive legal advice. Otherwise, it would be more difficult for them to develop their technology in Europe.
What’s next for artificial intelligence in the future? “The next big step is generative AI,” Cann reports. This refers to so-called general purpose AI, such as the software behind ChatGPT. Europe urgently needs to develop its own models as well, says the executive director of the German AI Association: “Otherwise, after platforms and cloud computing, this will be the next technology that missed the boat.” Jana Hemmersmeier
