Recently, Germany has repeatedly attracted attention in Europe for either failing to take a clear stand or for only making a statement when it is actually already too late. This has caused a lot of trouble in Brussels. On the other hand, Germany’s position on the Stability and Growth Pact has always been quite clear. But that does not mean that everyone else follows suit. The German government has intervened once again because it feels that Germany’s positions have not been sufficiently taken into account, analyzes my colleague Till Hoppe.
An EU pension system that was supposed to cover parliamentarians who did not receive pensions from their national states until a reform of the parliamentary statute is proving to be less than reliable. The EU had set up a pension fund for this purpose, which is now running out of money, as Markus Grabitz reports.
However, Germany has always been able to rely on its Permanent Representative in Brussels. And will continue to do so. EU Ambassador Michael Clauß will remain in office for another year, as the Foreign Office has confirmed to Table.Media.
Have a good start to the week,
The EU Commission appears to be prepared to make some concessions to the German government on the planned reform of EU fiscal rules. The Brussels authority is discussing flanking its own approach of individually negotiated debt reduction paths with the member states with uniform benchmarks, as Berlin demanded. However, Brussels says that this must take into account that there is a majority in the Council in favor of the Commission’s approach.
Previously, the German government had intervened at a high political level in Brussels. A draft of the new rules circulated by the Commission had not taken sufficient account of German positions, according to government circles in Berlin.
The Commission wants to replace the uniform rules of the Stability and Growth Pact with a new framework that takes greater account of the different circumstances in the individual countries. For example, the authority wants to prepare a long-term debt carrying-capacity analysis in each case and negotiate debt reduction with the individual government on that basis.
At present, the Commission is working at full speed to turn this approach into a draft law. This is expected to be presented on Wednesday, but the final decision will not be made until today, Monday.
At the beginning of April, the German government sent a position paper agreed upon between the SPD, the Greens, and the FDP to Brussels. In it, Berlin basically accepts the Commission’s approach of negotiating bilateral paths for debt reduction with the member states. However, the coalition insists that this be done within fixed guard rails:
With these firm guidelines, the coalition wants to ensure the Commission is not too permissive in its negotiations with governments on debt reduction paths. After all, the high level of debt in some member states is a real problem, according to Berlin. In addition, the German government is insisting that enforcement of the rules should be more clearly regulated in the Commission proposal than was the case in the draft.
It is supported by the economic policy spokesman of the EPP in the European Parliament, Markus Ferber (CSU): “The German finance minister must stand firm in Brussels and insist on strict quantitative criteria.” The Stability and Growth Pact has, above all, a problem with its poor enforcement, “and the Commission is largely responsible for that,” says Ferber.
Commission President Ursula von der Leyen and Vice President Valdis Dombrovskis recognize that the German government has a point with its demand for benchmarks. Differently interpreted statements by Dombrovskis in an interview caused irritation in Berlin last week, but this has been cleared up.
However, the demands in the German position paper also go too far for this camp: In essence, they amount to a continuation of the previous, less effective rules of the Stability Pact, according to Brussels. The concern in the Commission is “that the preferred approach with country-specific debt sustainability analyses would de facto be undermined by numerical benchmarks and safeguards,” explains Nils Redeker, Deputy Director of the Jacques Delors Center in Berlin.
The German government has had difficulties finding political allies for its cause. The traditional alliance of stability-oriented states is crumbling. Austria and Luxembourg are on the same line, Berlin says, and Poland and the Baltic states also support the idea in principle.
With Sweden, however, a traditionally “frugal” country is currently out of the picture, as Stockholm has to hold back as acting Council presidency. Finland, on the other hand, is busy forming a government.
The Dutch, who traditionally insist on strict debt rules, in turn only partially support the German demands, as does Ireland. The Hague sees itself as a bridge builder between Berlin and Paris, which strictly rejects the demanded benchmarks. The Hague recently submitted its own non-paper, which is intended to outline possible lines of compromise. The Hague explicitly backs the Commission’s country-specific approach but argues for certain “minimum requirements” for the bilaterally agreed debt reduction paths, as the paper puts it.
Berlin acknowledges that Germany is on the defensive in the discussion. In the absence of support, the German government has already moved away from its fundamental opposition to the Commission’s approach of imposing austerity requirements on individual countries on the basis of a debt carrying-capacity analysis. In the position paper, the government has also agreed to a spending rule – which is already a great concession, according to a statement in Berlin.
Moreover, the Commission and the government in Paris only want to stipulate what they have declared as their intended target. On Thursday, Finance Minister Bruno Le Maire issued the goal of reducing the French debt burden from 111.6 percent of GDP at the end of 2022 to 108.3 percent by 2027. This essentially corresponds to the parameters in the German proposal, according to the coalition.
The Commission must now weigh the pros and cons: If it ignores the German government’s position to a large extent in its proposals, Berlin is likely to be stubborn, says Redeker. “Finance Minister Lindner could thus publicly profile himself as the guardian of sound public finances in Europe.” An EU diplomat warns that Germany must not isolate itself in the EU again.
If, on the other hand, the Commission takes up the German demands for numerical benchmarks and safeguards, tough negotiations on their concrete level would follow, the economist expects. After all, these would be decisive for the savings targets set for the member states.
In any case, time is pressing, says Redeker, “because the new set of rules actually has to be in place by the end of the year.”
The European Parliament is considering three options for its supplementary pension system, which is threatened with bankruptcy. Based on a capital fund, the pension system has not accepted members since 2009. Around 1,000 people still have claims to payments from the system. These are former MEPs and their surviving dependents. The payment obligations are expected to extend into the 2080s.
There are still around €50 million in the fund. Around €20 million flows out each year. The fund is threatened with insolvency within the next two years. It is said the actuarial claims amount to around €300 million. The deficit is thus about €250 million. The highest annual payment obligations are expected in 2027 at €27 million.
This is a voluntary pension fund established in 1989. Until the reform of the Statute for Members of the European Parliament in 2009, MEPs received their salaries via the national parliaments. Pension provisions also ran through the federal states. In some member states, there was no pension provision for MEPs.
Until 2009, these MEPs, in particular, took advantage of the offer and paid part of their salaries into the fund. The MEPs made their own contribution and received a subsidy from the European Parliament. The fund was closed in 2009.
The voluntary pension system has incurred high losses over the years. Its financial strength has suffered even more during the financial crisis and the low-interest phase. The looming bankruptcy has been known for a long time. But so far, the respective presidents of the European Parliament have done little to avert insolvency.
Claims to the fund had already been reduced once in the past. Claimants had filed lawsuits against this. The ECJ dismissed these lawsuits. However, the reductions do not change the precarious situation of the system.
Parliament President Roberta Metsola faces the threat of bankruptcy. On her initiative, the presidium has discussed three options.
A decision has not been made. According to reports, there could be a second orientation debate at the upcoming meeting of the Executive Board.
The Statute for Members of the European Parliament came into force in July 2009. Since then, all MEPs have received the same salary, currently €9,808.67 per month before taxes and contributions. Pension provision is also the same: starting at the age of 63, there is an entitlement to a pension: for each full year as an MEP, 3.5 percent of the salary is acquired as an entitlement. The entitlement amounts to a maximum of 70 percent.
In 2009, all MEPs who had previously been members of the European Parliament had to decide whether they would remain in the old system and draw their salaries, pensions, and transitional allowances from the national system or whether they would switch to the single European system. Two MEPs from Germany, who are still members of the Parliament today, decided at the time not to switch to the European system. According to reports, no current German MEP is affected by the impending bankruptcy of the pension system.
France, Ukraine and the Baltic States have expressed dismay over the remarks of China’s ambassador in Paris. Lu Shaye questioned the sovereignty of former Soviet states such as Ukraine and the Baltic countries in a television interview. On Sunday, the French government expressed its “full solidarity” with all the states in question, which had gained their independence “after decades of oppression”.
It called on China to clarify whether Lu’s remarks reflected the official position or not. “On Ukraine specifically, it was internationally recognized within borders including Crimea in 1991 by the entire international community, including China,” a spokesperson for France’s Foreign Ministry said.
The Chinese ambassador’s statements will also be discussed at the Council of EU Foreign Ministers today, Monday, Latvia’s Foreign Minister Edgars Rinkēvičs said. He expects “a strong and unified EU response”, Rinkēvičs wrote on Twitter. His Estonian counterpart Margus Tsahkna criticized it as “a misinterpretation of history”.
In an interview broadcast on Friday by the French television station LCI, Lu said that Crimea historically belongs to Russia and was offered to Ukraine by the former Soviet leader Nikita Khrushchev.
When asked whether Crimea belonged to Ukraine, the diplomat said that it would all depend on the way this issue is looked at. Following an interjection by the moderator that the Black Sea peninsula occupied by Russia since 2014 is part of Ukraine under international law, Lu replied: “These ex-USSR countries don’t have actual status in international law because there is no international agreement to materialize their sovereign status.”
The Chinese Foreign Ministry did not initially react to the diplomat’s remarks. The Chinese top diplomat is considered one of the most extreme “Wolf Warriors”. So far, Beijing has refrained from expressing too much support for the ambassador’s behavior, but Lu has not been publicly kept in line either.
The three Baltic countries of Estonia, Latvia and Lithuania, as well as Ukraine, which used to be part of the Soviet Union, reacted in much the same way as France. “It is strange to hear an absurd version of the “history of Crimea” from a representative of a country that is scrupulous about its thousand-year history,” Mychajlo Podolyak, a senior adviser to Ukrainian President Volodymyr Zelenskiy, wrote on Twitter. “If you want to be a major political player, do not parrot the propaganda of Russian outsiders.”
The Baltic States have been members of the EU and NATO for years – they have already taken formal steps. Latvia’s Foreign Minister Rinkēvičs announced on Twitter on Saturday evening that he summoned the chargé d’affaires of the Chinese embassy in Riga for Monday due to the “completely unacceptable” remarks. He said the move had been coordinated with Lithuania and Estonia. “We expect explanation from the Chinese side and complete retraction of this statement,” Rinkēvičs said.
Lithuania’s Foreign Minister Gabrielius Landsbergis posted a screenshot of the interview on Twitter: “If anyone is still wondering why the Baltic States don’t trust China to ‘broker peace in Ukraine’, here’s a Chinese ambassador arguing that Crimea is Russian and our countries’ borders have no legal basis.”
Estonia, Latvia and Lithuania were occupied alternately by the Soviet Union and Germany during the Second World War. After the end of the war, the three small Baltic Sea states in north-eastern Europe were forced to become Soviet republics for decades. It was not until 1991 that they gained their independence.
Lu Shaye is no stranger to scandalous statements. He regularly lashed out on Twitter against French journalists, think tanks and China experts. Among other things, the press team of the Chinese embassy called French academic Antoine Bondaz a “little thug” and a “crazy hyena”. Lu ignored a subsequent summons by the French Foreign Ministry.
Commenting on the white-paper protests, he said they had been exploited by foreign forces. Following Nancy Pelosi’s visit to Taiwan, Lu declared twice that the Taiwanese people, misguided by the USA and their own government, would first have to be re-educated after being conquered.
The European Commission’s proposed Net-Zero Industry Act aims to reduce greenhouse gas emissions in the industrial sector to zero by 2050. By 2030, at least 40 percent of EU demand for clean technologies will be met in Europe. The regulation will require member states to develop national plans to decarbonize the industry. It will also support the development of carbon capture and storage (CCUS) technologies by setting a target of storing 50 million tons of carbon annually by 2030.
This act is supposed to be a response to the US Inflation Reduction Act (IRA) and is part of the European Green Deal, which aims to make the EU climate neutral by 2050. Unfortunately, no clear vision can be identified in the European strategy, and worse, its deadlines and execution lack credibility.
Targets have been set without any scientific assessment of their achievability via new technologies. Policy guidelines are important, but they must be based on facts.
The targets are either unclear (for example, what should “clean technologies from domestic production” mean in concrete terms?), unrealistic (at the current state of the art, few industries know how to achieve net-zero emissions), or not ambitious enough (the overall CCUS target is equivalent to only 1.5 percent of total EU emissions).
There is also no implementation approach (“execution is everything”) and a massive scientific and technological offensive aimed at developing new breakthrough technologies but also accelerating the maturation and cost reduction of existing clean technologies is lacking. The example of green hydrogen, which currently costs three to four times more than carbon-emitting gray hydrogen, shows that the ‘green incremental cost’ is not addressed head-on.
In contrast, the IRA has a very simple execution plan: to lower the “green premium” for carbon-reducing technologies and investments – on the condition that they are realized in the United States.
The IRA has a clear protectionist component but is meant to be celebrated as an acceleration of the energy transition. So far, the Green Deal has failed to do this, although it must be said that the precise data for conclusive evaluation are lacking. However, the usual problem of EU policy, to focus on investment plans instead of a precise and independent outcome assessment, is already showing.
European and US plans nevertheless remain far from a truly innovative industrial policy. At JEDI – the Joint European Disruptive Initiative – we argue that it must be supported by three pillars:
To keep Europe relevant in the 21st century, we need a radical change in the functioning of the EU.
Recently, Germany has repeatedly attracted attention in Europe for either failing to take a clear stand or for only making a statement when it is actually already too late. This has caused a lot of trouble in Brussels. On the other hand, Germany’s position on the Stability and Growth Pact has always been quite clear. But that does not mean that everyone else follows suit. The German government has intervened once again because it feels that Germany’s positions have not been sufficiently taken into account, analyzes my colleague Till Hoppe.
An EU pension system that was supposed to cover parliamentarians who did not receive pensions from their national states until a reform of the parliamentary statute is proving to be less than reliable. The EU had set up a pension fund for this purpose, which is now running out of money, as Markus Grabitz reports.
However, Germany has always been able to rely on its Permanent Representative in Brussels. And will continue to do so. EU Ambassador Michael Clauß will remain in office for another year, as the Foreign Office has confirmed to Table.Media.
Have a good start to the week,
The EU Commission appears to be prepared to make some concessions to the German government on the planned reform of EU fiscal rules. The Brussels authority is discussing flanking its own approach of individually negotiated debt reduction paths with the member states with uniform benchmarks, as Berlin demanded. However, Brussels says that this must take into account that there is a majority in the Council in favor of the Commission’s approach.
Previously, the German government had intervened at a high political level in Brussels. A draft of the new rules circulated by the Commission had not taken sufficient account of German positions, according to government circles in Berlin.
The Commission wants to replace the uniform rules of the Stability and Growth Pact with a new framework that takes greater account of the different circumstances in the individual countries. For example, the authority wants to prepare a long-term debt carrying-capacity analysis in each case and negotiate debt reduction with the individual government on that basis.
At present, the Commission is working at full speed to turn this approach into a draft law. This is expected to be presented on Wednesday, but the final decision will not be made until today, Monday.
At the beginning of April, the German government sent a position paper agreed upon between the SPD, the Greens, and the FDP to Brussels. In it, Berlin basically accepts the Commission’s approach of negotiating bilateral paths for debt reduction with the member states. However, the coalition insists that this be done within fixed guard rails:
With these firm guidelines, the coalition wants to ensure the Commission is not too permissive in its negotiations with governments on debt reduction paths. After all, the high level of debt in some member states is a real problem, according to Berlin. In addition, the German government is insisting that enforcement of the rules should be more clearly regulated in the Commission proposal than was the case in the draft.
It is supported by the economic policy spokesman of the EPP in the European Parliament, Markus Ferber (CSU): “The German finance minister must stand firm in Brussels and insist on strict quantitative criteria.” The Stability and Growth Pact has, above all, a problem with its poor enforcement, “and the Commission is largely responsible for that,” says Ferber.
Commission President Ursula von der Leyen and Vice President Valdis Dombrovskis recognize that the German government has a point with its demand for benchmarks. Differently interpreted statements by Dombrovskis in an interview caused irritation in Berlin last week, but this has been cleared up.
However, the demands in the German position paper also go too far for this camp: In essence, they amount to a continuation of the previous, less effective rules of the Stability Pact, according to Brussels. The concern in the Commission is “that the preferred approach with country-specific debt sustainability analyses would de facto be undermined by numerical benchmarks and safeguards,” explains Nils Redeker, Deputy Director of the Jacques Delors Center in Berlin.
The German government has had difficulties finding political allies for its cause. The traditional alliance of stability-oriented states is crumbling. Austria and Luxembourg are on the same line, Berlin says, and Poland and the Baltic states also support the idea in principle.
With Sweden, however, a traditionally “frugal” country is currently out of the picture, as Stockholm has to hold back as acting Council presidency. Finland, on the other hand, is busy forming a government.
The Dutch, who traditionally insist on strict debt rules, in turn only partially support the German demands, as does Ireland. The Hague sees itself as a bridge builder between Berlin and Paris, which strictly rejects the demanded benchmarks. The Hague recently submitted its own non-paper, which is intended to outline possible lines of compromise. The Hague explicitly backs the Commission’s country-specific approach but argues for certain “minimum requirements” for the bilaterally agreed debt reduction paths, as the paper puts it.
Berlin acknowledges that Germany is on the defensive in the discussion. In the absence of support, the German government has already moved away from its fundamental opposition to the Commission’s approach of imposing austerity requirements on individual countries on the basis of a debt carrying-capacity analysis. In the position paper, the government has also agreed to a spending rule – which is already a great concession, according to a statement in Berlin.
Moreover, the Commission and the government in Paris only want to stipulate what they have declared as their intended target. On Thursday, Finance Minister Bruno Le Maire issued the goal of reducing the French debt burden from 111.6 percent of GDP at the end of 2022 to 108.3 percent by 2027. This essentially corresponds to the parameters in the German proposal, according to the coalition.
The Commission must now weigh the pros and cons: If it ignores the German government’s position to a large extent in its proposals, Berlin is likely to be stubborn, says Redeker. “Finance Minister Lindner could thus publicly profile himself as the guardian of sound public finances in Europe.” An EU diplomat warns that Germany must not isolate itself in the EU again.
If, on the other hand, the Commission takes up the German demands for numerical benchmarks and safeguards, tough negotiations on their concrete level would follow, the economist expects. After all, these would be decisive for the savings targets set for the member states.
In any case, time is pressing, says Redeker, “because the new set of rules actually has to be in place by the end of the year.”
The European Parliament is considering three options for its supplementary pension system, which is threatened with bankruptcy. Based on a capital fund, the pension system has not accepted members since 2009. Around 1,000 people still have claims to payments from the system. These are former MEPs and their surviving dependents. The payment obligations are expected to extend into the 2080s.
There are still around €50 million in the fund. Around €20 million flows out each year. The fund is threatened with insolvency within the next two years. It is said the actuarial claims amount to around €300 million. The deficit is thus about €250 million. The highest annual payment obligations are expected in 2027 at €27 million.
This is a voluntary pension fund established in 1989. Until the reform of the Statute for Members of the European Parliament in 2009, MEPs received their salaries via the national parliaments. Pension provisions also ran through the federal states. In some member states, there was no pension provision for MEPs.
Until 2009, these MEPs, in particular, took advantage of the offer and paid part of their salaries into the fund. The MEPs made their own contribution and received a subsidy from the European Parliament. The fund was closed in 2009.
The voluntary pension system has incurred high losses over the years. Its financial strength has suffered even more during the financial crisis and the low-interest phase. The looming bankruptcy has been known for a long time. But so far, the respective presidents of the European Parliament have done little to avert insolvency.
Claims to the fund had already been reduced once in the past. Claimants had filed lawsuits against this. The ECJ dismissed these lawsuits. However, the reductions do not change the precarious situation of the system.
Parliament President Roberta Metsola faces the threat of bankruptcy. On her initiative, the presidium has discussed three options.
A decision has not been made. According to reports, there could be a second orientation debate at the upcoming meeting of the Executive Board.
The Statute for Members of the European Parliament came into force in July 2009. Since then, all MEPs have received the same salary, currently €9,808.67 per month before taxes and contributions. Pension provision is also the same: starting at the age of 63, there is an entitlement to a pension: for each full year as an MEP, 3.5 percent of the salary is acquired as an entitlement. The entitlement amounts to a maximum of 70 percent.
In 2009, all MEPs who had previously been members of the European Parliament had to decide whether they would remain in the old system and draw their salaries, pensions, and transitional allowances from the national system or whether they would switch to the single European system. Two MEPs from Germany, who are still members of the Parliament today, decided at the time not to switch to the European system. According to reports, no current German MEP is affected by the impending bankruptcy of the pension system.
France, Ukraine and the Baltic States have expressed dismay over the remarks of China’s ambassador in Paris. Lu Shaye questioned the sovereignty of former Soviet states such as Ukraine and the Baltic countries in a television interview. On Sunday, the French government expressed its “full solidarity” with all the states in question, which had gained their independence “after decades of oppression”.
It called on China to clarify whether Lu’s remarks reflected the official position or not. “On Ukraine specifically, it was internationally recognized within borders including Crimea in 1991 by the entire international community, including China,” a spokesperson for France’s Foreign Ministry said.
The Chinese ambassador’s statements will also be discussed at the Council of EU Foreign Ministers today, Monday, Latvia’s Foreign Minister Edgars Rinkēvičs said. He expects “a strong and unified EU response”, Rinkēvičs wrote on Twitter. His Estonian counterpart Margus Tsahkna criticized it as “a misinterpretation of history”.
In an interview broadcast on Friday by the French television station LCI, Lu said that Crimea historically belongs to Russia and was offered to Ukraine by the former Soviet leader Nikita Khrushchev.
When asked whether Crimea belonged to Ukraine, the diplomat said that it would all depend on the way this issue is looked at. Following an interjection by the moderator that the Black Sea peninsula occupied by Russia since 2014 is part of Ukraine under international law, Lu replied: “These ex-USSR countries don’t have actual status in international law because there is no international agreement to materialize their sovereign status.”
The Chinese Foreign Ministry did not initially react to the diplomat’s remarks. The Chinese top diplomat is considered one of the most extreme “Wolf Warriors”. So far, Beijing has refrained from expressing too much support for the ambassador’s behavior, but Lu has not been publicly kept in line either.
The three Baltic countries of Estonia, Latvia and Lithuania, as well as Ukraine, which used to be part of the Soviet Union, reacted in much the same way as France. “It is strange to hear an absurd version of the “history of Crimea” from a representative of a country that is scrupulous about its thousand-year history,” Mychajlo Podolyak, a senior adviser to Ukrainian President Volodymyr Zelenskiy, wrote on Twitter. “If you want to be a major political player, do not parrot the propaganda of Russian outsiders.”
The Baltic States have been members of the EU and NATO for years – they have already taken formal steps. Latvia’s Foreign Minister Rinkēvičs announced on Twitter on Saturday evening that he summoned the chargé d’affaires of the Chinese embassy in Riga for Monday due to the “completely unacceptable” remarks. He said the move had been coordinated with Lithuania and Estonia. “We expect explanation from the Chinese side and complete retraction of this statement,” Rinkēvičs said.
Lithuania’s Foreign Minister Gabrielius Landsbergis posted a screenshot of the interview on Twitter: “If anyone is still wondering why the Baltic States don’t trust China to ‘broker peace in Ukraine’, here’s a Chinese ambassador arguing that Crimea is Russian and our countries’ borders have no legal basis.”
Estonia, Latvia and Lithuania were occupied alternately by the Soviet Union and Germany during the Second World War. After the end of the war, the three small Baltic Sea states in north-eastern Europe were forced to become Soviet republics for decades. It was not until 1991 that they gained their independence.
Lu Shaye is no stranger to scandalous statements. He regularly lashed out on Twitter against French journalists, think tanks and China experts. Among other things, the press team of the Chinese embassy called French academic Antoine Bondaz a “little thug” and a “crazy hyena”. Lu ignored a subsequent summons by the French Foreign Ministry.
Commenting on the white-paper protests, he said they had been exploited by foreign forces. Following Nancy Pelosi’s visit to Taiwan, Lu declared twice that the Taiwanese people, misguided by the USA and their own government, would first have to be re-educated after being conquered.
The European Commission’s proposed Net-Zero Industry Act aims to reduce greenhouse gas emissions in the industrial sector to zero by 2050. By 2030, at least 40 percent of EU demand for clean technologies will be met in Europe. The regulation will require member states to develop national plans to decarbonize the industry. It will also support the development of carbon capture and storage (CCUS) technologies by setting a target of storing 50 million tons of carbon annually by 2030.
This act is supposed to be a response to the US Inflation Reduction Act (IRA) and is part of the European Green Deal, which aims to make the EU climate neutral by 2050. Unfortunately, no clear vision can be identified in the European strategy, and worse, its deadlines and execution lack credibility.
Targets have been set without any scientific assessment of their achievability via new technologies. Policy guidelines are important, but they must be based on facts.
The targets are either unclear (for example, what should “clean technologies from domestic production” mean in concrete terms?), unrealistic (at the current state of the art, few industries know how to achieve net-zero emissions), or not ambitious enough (the overall CCUS target is equivalent to only 1.5 percent of total EU emissions).
There is also no implementation approach (“execution is everything”) and a massive scientific and technological offensive aimed at developing new breakthrough technologies but also accelerating the maturation and cost reduction of existing clean technologies is lacking. The example of green hydrogen, which currently costs three to four times more than carbon-emitting gray hydrogen, shows that the ‘green incremental cost’ is not addressed head-on.
In contrast, the IRA has a very simple execution plan: to lower the “green premium” for carbon-reducing technologies and investments – on the condition that they are realized in the United States.
The IRA has a clear protectionist component but is meant to be celebrated as an acceleration of the energy transition. So far, the Green Deal has failed to do this, although it must be said that the precise data for conclusive evaluation are lacking. However, the usual problem of EU policy, to focus on investment plans instead of a precise and independent outcome assessment, is already showing.
European and US plans nevertheless remain far from a truly innovative industrial policy. At JEDI – the Joint European Disruptive Initiative – we argue that it must be supported by three pillars:
To keep Europe relevant in the 21st century, we need a radical change in the functioning of the EU.
