Table.Briefing: Europe

Foreign strategy with focus on cyber component + Macron’s challenger + DMA includes EU firms + DSA: Parliament adjourns

  • Foreign policy strategy: “Strategic Compass” with strong cyber component
  • France: Who is challenging Emmanuel Macron?
  • DMA: European companies also within scope
  • Study: loopholes in CO2 limit regulations
  • EEA: 307,000 deaths from fine particulate matter pollution
  • Inflation: Lagarde rejects tighter monetary policy
  • NGOs appeal to Scholz: Do not classify nuclear energy as sustainable
  • Profile: Susanne Dehmel – regulating innovation with caution
Dear reader,

The French presidency of the EU Council in January 2022 also brings the French presidential election closer. The incumbent president Emmanuel Macron has been conspicuously reticent so far: Officially, he is not yet a candidate. Tanja Kuchenbecker analyses the strategy behind this, takes a look at the issues Macron’s challengers are tackling and the chances of former Brexit chief negotiator Michel Barnier.

One thing is certain: Platform regulation will be a priority of the French EU Council Presidency. The French want to pass the Digital Markets Act (DMA) and the Digital Services Act (DSA) as quickly as possible. But while the positions in the Council are converging, the negotiations in the EU Parliament are stalling. The MEPs were nevertheless able to resolve one major point of contention yesterday.

Although the “Strategic Compass” will not be adopted until next year, EU foreign ministers already discussed a draft of the new foreign policy strategy at their meeting in Brussels yesterday. Eric Bonse reports on how the EU plans to defend itself against cyberattacks, disinformation campaigns, and other “hybrid threats”.

Your
Jasmin Kohl
Image of Jasmin  Kohl

Feature

Foreign policy strategy: “Strategic Compass” with strong cyber component

The so-called “Strategic Compass” was drawn up by the European External Action Service (EEAS); to be adopted in March 2022. Until then, numerous changes to the 32-page draft are to be expected, according to Brussels Council circles.

However, it is already clear that the EU wants to expand its capacities in the area of information technology and the Internet. For it is precisely here – in a foreign policy “new territory” – that EU diplomats have identified a particularly large number of new dangers.

“Europe is in danger” is how High Representative for Foreign Affairs Josep Borrell sums up his analysis. The line between war and peace has become blurred. In addition to disinformation and cyberattacks, he cites the control of sensitive technologies such as artificial intelligence and quantum computers as examples.

In all these areas, the EU must take action itself to not risk a “strategic loss of importance”. The “Compass” lists some examples. In the field of AI, in addition to new “intelligent” combat aircraft and systems, the development of unmanned floating platforms is planned to monitor seas over large areas.

In the area of “cyberspace”, which, like oceans and space, is identified as a new field of conflict, the EU plans to develop defensive and offensive capabilities. Both the military and civilian sectors are to contribute to this. A new “cyber-industrial ecosystem” is mentioned as a goal:

In the area of cybersecurity, we will swiftly operationalize the European Cybersecurity Competence Centre to develop a strong European cyber industrial ecosystem, support companies specializing in cybersecurity, and further increase cybersecurity and cyberdefense skills at EU level.” – Draft Strategic Compass, page 23

According to the EEAS, we must not only be better prepared for cyberattacks but also be able to defend against them and even strike back. The draft strategy speaks of protect, detect, defend and deter”. The goal is to react “decisively” to cyberattacks – and not only (as before) with sanctions (Europe.Table reported).

This refers primarily to Russia, which is also repeatedly addressed in the topic of disinformation. “Hybrid tactics, cyberattacks, and disinformation are part of the reality of dealing with Russia,” the strategy says. However, this should not be seen as a historical inevitability, the EU experts say.

The EU was bound to Russia by “common interests and shared values” and would therefore also strive for a rapprochement in areas such as climate protection. However, “aggressive acts” must be dealt with decisively. A separate department has already been set up in the EEAS to combat disinformation, but much remains to be done in the area of cyberdefense. And the member states remain responsible in principle.

  • Artificial intelligence
  • Cybersecurity
  • Data
  • Data protection
  • Digitization

France: Who is challenging Emmanuel Macron?

President Emmanuel Macron is keeping a low profile and has not yet officially announced his candidacy for the presidential election next April 10th and 24th. Nevertheless, Macron is the potential candidate around whom everything revolves. No one can get past him. There is no doubt in France that he will run again. In the background, Macron, who is at the center of the political spectrum, is already pulling the strings for re-election.

“Le Figaro” already wrote about his “secret plan for the 2022 campaign”. All over the country, Macron supporters are already campaigning for him behind the scenes. They are supposed to cover all regions of France, cities and rural areas, and mobilize regional politicians. They are being offered the chance to work democratically on the election program.

Macron wants to remain visible as president for as long as possible, and that’s why he’s not yet entering the election campaign himself. Political scientist Dominique Reynié explained why the incumbent president is nevertheless already the favorite: “His crisis management in the pandemic is viewed positively. And he is committed to Europe, the French like that.” They are very attached to the euro and their purchasing power, Reynié said.

The 43-year-old Macron will campaign during France’s EU Council presidency, which begins in January, and will highlight his European achievements and plans. The pro-European is also campaigning for a strong France in the EU. Recently, he again held out the prospect of subsidies for domestic industry with his France 2030 investment plan. He is trying to steer the campaign theme more towards economics, where his strength lies away from immigration and security, which have already been major issues for the right. He also spoke out in favor of more climate neutrality through nuclear power.

Far-right: more than just Le Pen

The far-right Marine Le Pen of the Rassemblement National (RN) is clearly positioning herself against Macron. The 53-year-old revisits the antagonisms that defined the 2017 election campaign, saying the French have a choice between a “cold globalist” (Macron) and a defender of the nation. “In recent times, the fronts have crystallized,” Paul Maurice, political scientist at the Ifri research institute for international relations, pointed out in the interview: “President Emmanuel Macron cemented the division of sentiments into globalists and pro-Europeans on the one hand, and nationalists on the other, to make his position clear to Marine Le Pen.”

Le Pen is campaigning on the theme of “freedoms, beloved freedoms” and reproaches Macron for having restricted freedoms too much in the pandemic. She is fighting for more French sovereignty but is no longer proclaiming an exit from the EU and the euro, which scared off potential voters in the last presidential election. She also wants to nationalize highways and more nuclear power. Macron’s confidants hope that he will run against Le Pen again in the runoff election in order to repeat the victory of 2017.

Zemmour: identity politics as ideology

But for some weeks now, the Islamophobic TV star Eric Zemmour has been attracting attention and, according to some polls, could even get more votes than Le Pen. The 63-year-old Zemmour has no program and no party – and has not yet officially registered as a candidate. According to French media, he apparently plans to do so in late November. He is concerned with national identity, caters to Islamophobia, and wants to ban foreign first names. He calls for an end to immigration. He also doesn’t want a Frexit because he considers it too much of an economic insecurity.

Consistently, Macron places himself ahead in the polls at around 25 percent in the first round of voting. Zemmour is in a head-to-head race with Le Pen. Polls even saw him in second place with around 17-18 percent of the vote, ahead of Le Pen with 16 percent. But in recent polls, he has dropped back down to 14 percent, while Le Pen has caught up, reaching 17-18 percent.

If Zemmour makes it to the runoff, Macron could get 58 percent and Zemmour 42 percent, according to a Harris Interactive poll. Against Le Pen, Macron could win 55 percent versus 45 percent. It is also conceivable that another conservative could pass the two, the most difficult option for Macron in the runoff. Pollsters are constantly testing candidates barely six months before the election. Ifop demoscope Frédéric Dabi said, “The uncertainty for the runoff is high.”

Experts observed that France had seen a shift to the right since 2015. “If you take the total, candidates from left-wing parties are around 25 percent,” Dabi said. Assassinations and the immigration wave have accelerated the shift to the right in France. The two far-right candidates are joined on the right spectrum by votes for the conservatives.

Conservatives: Barnier without a chance, Bertrand with a gap to Macron

They could get between 9 and 14 percent, depending on who runs. The former Brexit chief negotiator Michel Barnier has the least chances. Valérie Pécresse, president of the Ile-de-France region around Paris, is in the middle with 10-11 percent and Xavier Bertrand, president of the Hauts-de-France region and former labor minister, is in first place. Bertrand, 56, was also tested against Macron in polls. According to them, Macron would win with 54 versus 46 percent in the runoff.

The Conservatives, however, have not yet determined their candidate. That is planned for December 4th at a party meeting. Their programs are similar: Security, immigration, pensions, and energy issues play a major role, and they present themselves as pro-European. Conservatives find themselves squeezed between Macron, who also attracts moderate right-wing voters, and the extreme right fringe of Le Pen and Zemmour. The field is small. The daily Le Monde, therefore, analyzed: “The 2022 elections are existential for the conservatives.” Once again, the future of a major popular party is at stake.

Left-of-center: Melénchon, Jadot and Hidalgo with moderate prospects

The Socialists have already seen how a once-great party goes down. After Socialist President François Hollande, things went steeply downhill. The 62-year-old Socialist mayor of Paris, Anne Hidalgo, declared her candidacy in September. But she can’t quite get off the ground, with polls showing her bobbing along at 5-6 percent. Her range of issues is between green and social. She fights against car emissions, advocates bicycle lanes, and wants to build more social housing.

The daughter of Spanish immigrants said, “I want all the children of France to have the same opportunity that I got.” She accused Macron of dividing society. Her problem: Her policies in Paris, where she has been mayor since 2014, have many supporters but also many critics who say the city is dirty and unsafe. She’s also too entrenched in Paris, even though she’s been touring the country for weeks to make up for that shortcoming. The Socialists are encouraged by the strengthened position of the Social Democrats in France.

Hidalgo had hoped to win over the Greens, but with Yannick Jadot (54), they’ve put up their own candidate, and the climate debate is playing into his hands. The French Greens are not in favor of phasing out nuclear power immediately, only in about 20 years’ time. Jadot sees nuclear power as a transitional solution before renewable energies are better developed. He is currently polling at around 7-8 percent. Left-wing politician Jean-Luc Mélenchon is doing slightly better with 9 percent. According to polls, voters of Jadot and Hidalgo could even switch to Macron in the first round to vote “useful” and stop the extreme right, according to a study by the Jean-Jaures Foundation. In any case, competition for Macron from the left spectrum seems highly unlikely at the moment. Tanja Kuchenbecker

  • eric zemmour
  • European policy
  • France

News

DMA: European companies also within scope

The representatives of the political groups in the European Parliament have settled one of the main points of contention in the Digital Markets Act (DMA): According to which criteria a platform should be classified as a gatekeeper and thus fall within the scope of the law. According to negotiating circles, the compromise provides that the threshold for the market value should be €80 billion. Moreover, it should be sufficient for a company to be active in only one market segment at its core.

With the bed broker Booking.com, a company based in Europe, would also fall under the law, which is supposed to regulate the business practices of platforms with market power. The rapporteur of the European Parliament, Andreas Schwab (CDU/EVP), had insisted that only companies with at least two “core platform services” should be considered as gatekeepers. This would presumably have meant that only the large US digital groups would fall under the DMA.

Not only the Social Democrats, the Greens, and the Left had opposed this. The Council is also in favor of being able to regulate companies that are strong in just one business area. Moreover, the Member States set the market value threshold lower – they want to retain the Commission’s proposal of €65 billion.

There is still no agreement in the European Parliament on the second main point of contention: personalized advertising. At a round of negotiations at the technical level, the parliamentary groups were unable to reach a compromise on Monday. Christian Democrats and Liberals continued to refuse to ban gatekeeper platforms from using the data of minors and particularly sensitive information such as religious beliefs or sexual orientation, S&D shadow rapporteur Evelyne Gebhardt told Europe.Table. “For the S&D, these are essential issues.” However, the Socialists appear to have backed away from their call for a blanket ban on personalized advertising.

Difficulty in finding compromises in DSA

A ban on personalized advertising is also being discussed in the Digital Services Act (DSA), with similarly hardened fronts, as negotiating circles report. However, finding a compromise on other points is also much more difficult than in the DMA. The mood in the negotiation rounds is sometimes diffuse and chaotic.

After the shadow rapporteurs rejected almost all the proposals of the rapporteur Christel Schaldemose (DK/S&D) at their meeting last week, the Dane unceremoniously canceled a meeting planned for yesterday, Monday. Instead, it will take place next Tuesday during the plenary session in Strasbourg. In addition to Schaldemose’s proposal for strict deletion periods, which she has since withdrawn (Europe.Table reported), her proposal on due diligence and the liability of online marketplaces, in particular, went too far for many MEPs. tho/koj

  • Digital policy
  • Digitization

Study: loopholes in CO2 limit regulations

Loopholes in the EU directive on CO2 fleet limits for cars are delaying the electrification of road transport and delaying climate protection. This was the conclusion of a study by the environmental association Transport and Environment (T&E) presented on Monday. Without the weaknesses in the current EU rules, carmakers would have to sell 840,000 more purely electric cars to meet their targets, the organization says.

The German manufacturers in particular, above all Daimler and BMW, would make use of the loopholes and thus even exceed their targets in some cases – but only on paper. This is made possible by numerous sales of so-called plug-in hybrids. In addition to a combustion engine, these vehicles also have an electric drive, which means that, at least in theory, they consume little fuel and can be credited to the carmakers’ balance sheets accordingly.

In practice, however, the CO2 pollution from hybrids is at least twice as high as the assumed value because users fall back on the combustion engine too often, according to T&E. The authors of the study are certain: Without backdoors like these, Daimler and BMW would clearly miss their targets.

“Daimler, Volkswagen AG, and BMW tout themselves as environmentally friendly, but behind this façade, they use every little loophole to delay the shift to zero-emission vehicles,” says Stef Cornelis, director of T&E Germany. He calls on the EU to take this into account when revising the directive.

Emissions from road traffic have continued to rise in recent years, and cars alone are currently responsible for 13 percent of EU-wide CO2 emissions. The EU wants to tackle the problem: The adjustment of CO2 limits for passenger cars as part of the Fit for 55 package envisages a 100 percent reduction in emissions by 2035, which is de facto equivalent to phasing out internal combustion vehicles. In addition, an emissions trading system (ETS) is to be introduced for road transport.

The year 2040 was put into play for the global phase-out of the internal combustion engine (Europe.Table reported) at the world climate conference in Glasgow last week. However, Germany and some leading manufacturers, including VW and BMW, have not signed a corresponding agreement. til

  • Climate & Environment
  • Climate protection
  • Emissions
  • Mobility

EEA: 307,000 deaths from fine particulate matter pollution

According to the European Environment Agency’s latest estimates, 307,000 people died prematurely due to exposure to fine particulate matter pollution in the EU in 2019. That is the result of an updated study on the “Health impacts of air pollution in Europe” presented by the EEA on Monday. According to the study, at least 58%, or 178,000, of these deaths could have been avoided if all EU Member States had reached the WHO’s new air quality guideline level of 5 µg/m3.

For particulate matter, this is 5 µg/m3. In the EU, however, air quality is only considered to be poor if it exceeds 25 µg/m3. This is in blatant contradiction to the precautionary principle enshrined in the European Treaties, criticizes MEP Jutta Paulus (Greens). The upcoming revision of the EU Air Quality Directive should reflect the new recommendations of the World Health Organisation.

Nevertheless, air quality in Europe improved in 2019 compared to 2018, the EEA says. As part of the Green Deal, the EU’s Action Plan on Air Pollution sets a target to reduce premature deaths from particulate matter pollution by at least 55 percent by 2030 compared to 2005. According to the EEA, the EU is on track to meet this target, as the number of such deaths fell by about a third between 2005 and 2019.

“To breathe clean air should be a fundamental human right. Even with improvements in air quality over the past years in our region, we still have a long way to go,” says WHO Regional Director for Europe, Dr. Hans Henri Kluge. Man-made particulate matter is produced, for example, by combustion processes in motor vehicles, power and district heating plants, waste incinerators, residential furnaces and heaters, and certain industrial processes. til

  • Climate & Environment
  • Climate protection
  • Environmental policy
  • Health

NGOs to Scholz: Nuclear energy is not sustainable

129 non-governmental organizations from Europe have sent an open letter to the likely next German Chancellor Olaf Scholz (SPD), calling on him not to classify nuclear energy as sustainable. Scholz must confirm the German veto on this, the letter to the still-acting German finance minister says. The German government must lobby the EU Commission to ensure that neither nuclear energy nor fossil gas are classified as sustainable. For investors, it is important which forms of energy receive an appropriate seal of approval. France, in particular, which is heavily dependent on nuclear energy, is campaigning for this.

Nuclear energy is unsustainable due to high safety risks, pollution, and the unsolved waste problem. Fossil gas causes large amounts of climate-damaging greenhouse gases, especially methane, along its extraction and transport chain,” the 129 signatories said. The letter is supported by German environmental associations such as Nabu, BUND, and Greenpeace, among others.

The Greens had already called on the German EU Commission President Ursula von der Leyen to prevent greenwashing in the so-called taxonomy. In other words, non-sustainable forms of energy should not be recognized as green. Brussels should wait for the formation of a government in Germany. The SPD, Greens, and FDP are currently negotiating the first traffic light coalition in the federal government. rtr

  • Climate & Environment
  • Climate protection
  • Natural gas
  • Nuclear power
  • Sustainability

Lagarde rejects tighter monetary policy

Despite rapidly rising prices, ECB President Christine Lagarde has rejected calls for a tighter monetary policy. At a hearing in the European Parliament on Monday, she admitted that the strong surge in inflation is likely to last longer than initially thought. But she said no departure from the policy of cheap money was indicated at present: “If we were to introduce tightening measures now, it would do much more harm than good,” she said. Even suggesting tightening in the short term would hurt the euro area economy. The latter is on the mend, she said and could surpass its pre-crisis level toward the end of the year.

Lagarde reiterated that a rate hike in 2022 was very unlikely. However, she did not want to get involved in speculation about the key interest rate in 2023. The inflation rate in the euro area was 4.1 percent in October, the highest in over 13 years. Against this backdrop, Deutsche Bank CEO Christian Sewing believes monetary policy must take countermeasures: “The supposed panacea of recent years – low-interest rates with seemingly stable prices – has lost its effect, and now we are struggling with the side effects,” he said at Euro Finance Week in Frankfurt.

The ECB has kept the key interest rate at a record low of 0.0 percent since March 2016. The so-called deposit rate has been at minus 0.5 percent since September 2019. Financial institutions have to pay extra if they park excess funds at the central bank. According to the head of the authority, Mark Branson, the financial supervisory authority BaFin sees the permanently low-interest rates as one of the biggest risks for the industry: “If interest rates remain this low, they will increasingly damage the business model of banks or life insurance companies that rely on interest rate transformations.”

According to Spanish central bank chief Pablo Hernandez de Cos, however, the turnaround in interest rates expected in the money market is unlikely to happen even in the second half of 2022. The conditions set by the ECB for this would not be met by then. In the outlook updated in the summer, the ECB virtually locked in the low-interest record rates for a long time, thus providing investors with guidance.

EU Commission: inflation pressures remain high

Lagarde’s deputy Luis de Guindos stressed that in the short term, supply bottlenecks and rising energy costs remain the main threats to economic recovery and the inflation outlook. The current period of elevated inflation could be longer than anticipated a few months ago. This view is also reflected in the forecasts of the EU Commission.

The Commission predicts that inflationary pressure in the eurozone will remain high for the time being. It expects prices to rise by 2.4 percent in 2021. This is above the ECB’s target, which is aiming for a figure of 2.0 percent as ideal for the economy. According to the EU Commission, the rate is also likely to be higher in 2022, when it will be 2.2 percent. Brussels is only signaling the all-clear for 2023 at 1.4 percent.

In September, the ECB economists had estimated an inflation rate of 1.7 percent for 2022, which is expected to fall to 1.5 percent in 2023. At the next interest rate meeting in mid-December, the ECB will present updated projections that will also cover 2024. rtr

  • Eurozone
  • Finance
  • Financial policy

Profile

Susanne Dehmel: regulating innovation with caution

Susanne Dehmel, Member of the Executive Board at Bitkom

Susanne Dehmel has been a member of the management board of the industry association Bitkom for seven years and is responsible for key areas for the association and its members, such as law, security, and artificial intelligence. The topics, currently especially AI, bring with them many points of contact with the ongoing discussions in Brussels. “In our opinion, both national policy-makers in Germany and those at the European level have a duty to advocate the responsible use of AI in business, the public sector, and society,” says Dehmel.

In terms of legislation, the European proposal for an AI regulation, the “AI Act”, is a key project. This would give Europe the chance to take on a global pioneering role, says Dehmel. It would be about the regulatory framework for human-centered AI without at the same time nipping innovation in the bud. Bitkom has members from the very big players in the industry, but some come from the SME or startup milieu. “Small companies and startups, in particular, need breathing room when developing new AI applications and business models based on them. If they are overburdened with too many formal requirements, innovation will be slowed down,” Dehmel says.

When asked why she decided to pursue a career in an association instead of a law firm after studying law in Passau, Freiburg, and Cardiff, she answers: “I was initially attracted by the topic of copyright law, which is why I joined Bitkom, and also by the mixture of political work and contract negotiations.” For her, it is exciting to explore the extent to which existing legislation can be applied to new issues that arise when using digital technologies.

For her work on AI-relevant topics, she, as a non-specialist, also has to fundamentally penetrate the technological details. “For that, I don’t need to know every detail, but at least keep an eye on the broad functionalities, modes of action, and relevant trends,” she says. She was also able to apply this knowledge and the combination of technological and legal understanding to her work as an expert member of the German Bundestag’s AI Enquête from 2018 to 2020.

While Dehmel has deep knowledge of the regulatory risks of AI technologies, companies don’t take that for granted. A study by consulting giant McKinsey said less than half of all companies working in the AI sphere were aware of these risks. “With our members, we have discussed the upcoming proposals from the European Commission and will continue to work hard on them,” Dehmel explains. “By discussing concrete use cases, we try to make tangible what impact this regulation will have on business activities.”

For her, as a lawyer, the issue of legal certainty is paramount. “The devil is in the detail here. In our opinion, for example, the definition of AI is far too broad. We recommend focusing on the narrow scope of self-learning systems in Machine Learning and Deep Learning. Simple statistical methods, statistical inference, and deductive methods should not fall under the AI Act,” Dehmel said. Moreover, it is still unclear how exactly it should be proven whether an AI application complies with the regulatory intentions. Therefore, her conclusion is that the actual legal practice in everyday life will decide whether the AI Act will be a success or not. As a specialist, she, therefore, continues to have her hands full. Constantin Eckner

  • Artificial intelligence
  • Artificial Intelligence Regulation
  • Data
  • Digitization
  • Platforms

Apéro

Semiconductor issues are ultimately a matter for the boss – that was the message Commission President Ursula von der Leyen wanted to send yesterday with her visit to Veldhoven near Eindhoven in the Netherlands, which was planned at short notice. The city of 45,000 inhabitants is the headquarters of “Advanced Semiconductor Materials Lithography” (ASML). The company produces lithography systems that are essential for the manufacture of semiconductors and is described by the head of the Commission as a “European digital champion”.

Because ASML “will play an important role in our efforts to make Europe more competitive and to gain sovereignty in the technology sector,” as the woman from Lower Saxony announced in a press release. This is exactly what von der Leyen wants to achieve with the European Chips Act, which is scheduled for the second quarter of 2022 according to the Commission’s work program.

At von der Leyen’s side: Prime Minister Mark Rutte, Internal Market Commissioner Thierry Breton, and Competition Commissioner Margrethe Vestager. The short trip to the Netherlands thus also served another purpose: team building. Because the IPCEI dispute (Europe.Table reported) between Breton and Vestager is not the only area where the two Commissioners are far apart.

But teambuilding has clear limits at the Commission: The Frenchman and the Dane are no longer present at the joint working dinner with Rutte: a matter for the boss. Given Rutte’s reputation as – to put it mildly – a thrifty host, however, this should lead to little envy, at least from a culinary point of view.

True success would be announced if Breton and Vestager were to share a ride for the return journey to Brussels, some 120 km away. They would have a lot to discuss on the two-hour drive – for example, the revision of the competition rules. That’s on the Commission’s agenda for tomorrow, but with the next disagreement between the two politicians looming, observers expect it to be postponed. Jasmin Kohl

  • Chips Act
  • Digital policy
  • IPCEI
  • Semiconductor
  • Thierry Breton
  • Ursula von der Leyen

Europe.Table Editorial Office

EUROPE.TABLE EDITORS

Licenses:
    • Foreign policy strategy: “Strategic Compass” with strong cyber component
    • France: Who is challenging Emmanuel Macron?
    • DMA: European companies also within scope
    • Study: loopholes in CO2 limit regulations
    • EEA: 307,000 deaths from fine particulate matter pollution
    • Inflation: Lagarde rejects tighter monetary policy
    • NGOs appeal to Scholz: Do not classify nuclear energy as sustainable
    • Profile: Susanne Dehmel – regulating innovation with caution
    Dear reader,

    The French presidency of the EU Council in January 2022 also brings the French presidential election closer. The incumbent president Emmanuel Macron has been conspicuously reticent so far: Officially, he is not yet a candidate. Tanja Kuchenbecker analyses the strategy behind this, takes a look at the issues Macron’s challengers are tackling and the chances of former Brexit chief negotiator Michel Barnier.

    One thing is certain: Platform regulation will be a priority of the French EU Council Presidency. The French want to pass the Digital Markets Act (DMA) and the Digital Services Act (DSA) as quickly as possible. But while the positions in the Council are converging, the negotiations in the EU Parliament are stalling. The MEPs were nevertheless able to resolve one major point of contention yesterday.

    Although the “Strategic Compass” will not be adopted until next year, EU foreign ministers already discussed a draft of the new foreign policy strategy at their meeting in Brussels yesterday. Eric Bonse reports on how the EU plans to defend itself against cyberattacks, disinformation campaigns, and other “hybrid threats”.

    Your
    Jasmin Kohl
    Image of Jasmin  Kohl

    Feature

    Foreign policy strategy: “Strategic Compass” with strong cyber component

    The so-called “Strategic Compass” was drawn up by the European External Action Service (EEAS); to be adopted in March 2022. Until then, numerous changes to the 32-page draft are to be expected, according to Brussels Council circles.

    However, it is already clear that the EU wants to expand its capacities in the area of information technology and the Internet. For it is precisely here – in a foreign policy “new territory” – that EU diplomats have identified a particularly large number of new dangers.

    “Europe is in danger” is how High Representative for Foreign Affairs Josep Borrell sums up his analysis. The line between war and peace has become blurred. In addition to disinformation and cyberattacks, he cites the control of sensitive technologies such as artificial intelligence and quantum computers as examples.

    In all these areas, the EU must take action itself to not risk a “strategic loss of importance”. The “Compass” lists some examples. In the field of AI, in addition to new “intelligent” combat aircraft and systems, the development of unmanned floating platforms is planned to monitor seas over large areas.

    In the area of “cyberspace”, which, like oceans and space, is identified as a new field of conflict, the EU plans to develop defensive and offensive capabilities. Both the military and civilian sectors are to contribute to this. A new “cyber-industrial ecosystem” is mentioned as a goal:

    In the area of cybersecurity, we will swiftly operationalize the European Cybersecurity Competence Centre to develop a strong European cyber industrial ecosystem, support companies specializing in cybersecurity, and further increase cybersecurity and cyberdefense skills at EU level.” – Draft Strategic Compass, page 23

    According to the EEAS, we must not only be better prepared for cyberattacks but also be able to defend against them and even strike back. The draft strategy speaks of protect, detect, defend and deter”. The goal is to react “decisively” to cyberattacks – and not only (as before) with sanctions (Europe.Table reported).

    This refers primarily to Russia, which is also repeatedly addressed in the topic of disinformation. “Hybrid tactics, cyberattacks, and disinformation are part of the reality of dealing with Russia,” the strategy says. However, this should not be seen as a historical inevitability, the EU experts say.

    The EU was bound to Russia by “common interests and shared values” and would therefore also strive for a rapprochement in areas such as climate protection. However, “aggressive acts” must be dealt with decisively. A separate department has already been set up in the EEAS to combat disinformation, but much remains to be done in the area of cyberdefense. And the member states remain responsible in principle.

    • Artificial intelligence
    • Cybersecurity
    • Data
    • Data protection
    • Digitization

    France: Who is challenging Emmanuel Macron?

    President Emmanuel Macron is keeping a low profile and has not yet officially announced his candidacy for the presidential election next April 10th and 24th. Nevertheless, Macron is the potential candidate around whom everything revolves. No one can get past him. There is no doubt in France that he will run again. In the background, Macron, who is at the center of the political spectrum, is already pulling the strings for re-election.

    “Le Figaro” already wrote about his “secret plan for the 2022 campaign”. All over the country, Macron supporters are already campaigning for him behind the scenes. They are supposed to cover all regions of France, cities and rural areas, and mobilize regional politicians. They are being offered the chance to work democratically on the election program.

    Macron wants to remain visible as president for as long as possible, and that’s why he’s not yet entering the election campaign himself. Political scientist Dominique Reynié explained why the incumbent president is nevertheless already the favorite: “His crisis management in the pandemic is viewed positively. And he is committed to Europe, the French like that.” They are very attached to the euro and their purchasing power, Reynié said.

    The 43-year-old Macron will campaign during France’s EU Council presidency, which begins in January, and will highlight his European achievements and plans. The pro-European is also campaigning for a strong France in the EU. Recently, he again held out the prospect of subsidies for domestic industry with his France 2030 investment plan. He is trying to steer the campaign theme more towards economics, where his strength lies away from immigration and security, which have already been major issues for the right. He also spoke out in favor of more climate neutrality through nuclear power.

    Far-right: more than just Le Pen

    The far-right Marine Le Pen of the Rassemblement National (RN) is clearly positioning herself against Macron. The 53-year-old revisits the antagonisms that defined the 2017 election campaign, saying the French have a choice between a “cold globalist” (Macron) and a defender of the nation. “In recent times, the fronts have crystallized,” Paul Maurice, political scientist at the Ifri research institute for international relations, pointed out in the interview: “President Emmanuel Macron cemented the division of sentiments into globalists and pro-Europeans on the one hand, and nationalists on the other, to make his position clear to Marine Le Pen.”

    Le Pen is campaigning on the theme of “freedoms, beloved freedoms” and reproaches Macron for having restricted freedoms too much in the pandemic. She is fighting for more French sovereignty but is no longer proclaiming an exit from the EU and the euro, which scared off potential voters in the last presidential election. She also wants to nationalize highways and more nuclear power. Macron’s confidants hope that he will run against Le Pen again in the runoff election in order to repeat the victory of 2017.

    Zemmour: identity politics as ideology

    But for some weeks now, the Islamophobic TV star Eric Zemmour has been attracting attention and, according to some polls, could even get more votes than Le Pen. The 63-year-old Zemmour has no program and no party – and has not yet officially registered as a candidate. According to French media, he apparently plans to do so in late November. He is concerned with national identity, caters to Islamophobia, and wants to ban foreign first names. He calls for an end to immigration. He also doesn’t want a Frexit because he considers it too much of an economic insecurity.

    Consistently, Macron places himself ahead in the polls at around 25 percent in the first round of voting. Zemmour is in a head-to-head race with Le Pen. Polls even saw him in second place with around 17-18 percent of the vote, ahead of Le Pen with 16 percent. But in recent polls, he has dropped back down to 14 percent, while Le Pen has caught up, reaching 17-18 percent.

    If Zemmour makes it to the runoff, Macron could get 58 percent and Zemmour 42 percent, according to a Harris Interactive poll. Against Le Pen, Macron could win 55 percent versus 45 percent. It is also conceivable that another conservative could pass the two, the most difficult option for Macron in the runoff. Pollsters are constantly testing candidates barely six months before the election. Ifop demoscope Frédéric Dabi said, “The uncertainty for the runoff is high.”

    Experts observed that France had seen a shift to the right since 2015. “If you take the total, candidates from left-wing parties are around 25 percent,” Dabi said. Assassinations and the immigration wave have accelerated the shift to the right in France. The two far-right candidates are joined on the right spectrum by votes for the conservatives.

    Conservatives: Barnier without a chance, Bertrand with a gap to Macron

    They could get between 9 and 14 percent, depending on who runs. The former Brexit chief negotiator Michel Barnier has the least chances. Valérie Pécresse, president of the Ile-de-France region around Paris, is in the middle with 10-11 percent and Xavier Bertrand, president of the Hauts-de-France region and former labor minister, is in first place. Bertrand, 56, was also tested against Macron in polls. According to them, Macron would win with 54 versus 46 percent in the runoff.

    The Conservatives, however, have not yet determined their candidate. That is planned for December 4th at a party meeting. Their programs are similar: Security, immigration, pensions, and energy issues play a major role, and they present themselves as pro-European. Conservatives find themselves squeezed between Macron, who also attracts moderate right-wing voters, and the extreme right fringe of Le Pen and Zemmour. The field is small. The daily Le Monde, therefore, analyzed: “The 2022 elections are existential for the conservatives.” Once again, the future of a major popular party is at stake.

    Left-of-center: Melénchon, Jadot and Hidalgo with moderate prospects

    The Socialists have already seen how a once-great party goes down. After Socialist President François Hollande, things went steeply downhill. The 62-year-old Socialist mayor of Paris, Anne Hidalgo, declared her candidacy in September. But she can’t quite get off the ground, with polls showing her bobbing along at 5-6 percent. Her range of issues is between green and social. She fights against car emissions, advocates bicycle lanes, and wants to build more social housing.

    The daughter of Spanish immigrants said, “I want all the children of France to have the same opportunity that I got.” She accused Macron of dividing society. Her problem: Her policies in Paris, where she has been mayor since 2014, have many supporters but also many critics who say the city is dirty and unsafe. She’s also too entrenched in Paris, even though she’s been touring the country for weeks to make up for that shortcoming. The Socialists are encouraged by the strengthened position of the Social Democrats in France.

    Hidalgo had hoped to win over the Greens, but with Yannick Jadot (54), they’ve put up their own candidate, and the climate debate is playing into his hands. The French Greens are not in favor of phasing out nuclear power immediately, only in about 20 years’ time. Jadot sees nuclear power as a transitional solution before renewable energies are better developed. He is currently polling at around 7-8 percent. Left-wing politician Jean-Luc Mélenchon is doing slightly better with 9 percent. According to polls, voters of Jadot and Hidalgo could even switch to Macron in the first round to vote “useful” and stop the extreme right, according to a study by the Jean-Jaures Foundation. In any case, competition for Macron from the left spectrum seems highly unlikely at the moment. Tanja Kuchenbecker

    • eric zemmour
    • European policy
    • France

    News

    DMA: European companies also within scope

    The representatives of the political groups in the European Parliament have settled one of the main points of contention in the Digital Markets Act (DMA): According to which criteria a platform should be classified as a gatekeeper and thus fall within the scope of the law. According to negotiating circles, the compromise provides that the threshold for the market value should be €80 billion. Moreover, it should be sufficient for a company to be active in only one market segment at its core.

    With the bed broker Booking.com, a company based in Europe, would also fall under the law, which is supposed to regulate the business practices of platforms with market power. The rapporteur of the European Parliament, Andreas Schwab (CDU/EVP), had insisted that only companies with at least two “core platform services” should be considered as gatekeepers. This would presumably have meant that only the large US digital groups would fall under the DMA.

    Not only the Social Democrats, the Greens, and the Left had opposed this. The Council is also in favor of being able to regulate companies that are strong in just one business area. Moreover, the Member States set the market value threshold lower – they want to retain the Commission’s proposal of €65 billion.

    There is still no agreement in the European Parliament on the second main point of contention: personalized advertising. At a round of negotiations at the technical level, the parliamentary groups were unable to reach a compromise on Monday. Christian Democrats and Liberals continued to refuse to ban gatekeeper platforms from using the data of minors and particularly sensitive information such as religious beliefs or sexual orientation, S&D shadow rapporteur Evelyne Gebhardt told Europe.Table. “For the S&D, these are essential issues.” However, the Socialists appear to have backed away from their call for a blanket ban on personalized advertising.

    Difficulty in finding compromises in DSA

    A ban on personalized advertising is also being discussed in the Digital Services Act (DSA), with similarly hardened fronts, as negotiating circles report. However, finding a compromise on other points is also much more difficult than in the DMA. The mood in the negotiation rounds is sometimes diffuse and chaotic.

    After the shadow rapporteurs rejected almost all the proposals of the rapporteur Christel Schaldemose (DK/S&D) at their meeting last week, the Dane unceremoniously canceled a meeting planned for yesterday, Monday. Instead, it will take place next Tuesday during the plenary session in Strasbourg. In addition to Schaldemose’s proposal for strict deletion periods, which she has since withdrawn (Europe.Table reported), her proposal on due diligence and the liability of online marketplaces, in particular, went too far for many MEPs. tho/koj

    • Digital policy
    • Digitization

    Study: loopholes in CO2 limit regulations

    Loopholes in the EU directive on CO2 fleet limits for cars are delaying the electrification of road transport and delaying climate protection. This was the conclusion of a study by the environmental association Transport and Environment (T&E) presented on Monday. Without the weaknesses in the current EU rules, carmakers would have to sell 840,000 more purely electric cars to meet their targets, the organization says.

    The German manufacturers in particular, above all Daimler and BMW, would make use of the loopholes and thus even exceed their targets in some cases – but only on paper. This is made possible by numerous sales of so-called plug-in hybrids. In addition to a combustion engine, these vehicles also have an electric drive, which means that, at least in theory, they consume little fuel and can be credited to the carmakers’ balance sheets accordingly.

    In practice, however, the CO2 pollution from hybrids is at least twice as high as the assumed value because users fall back on the combustion engine too often, according to T&E. The authors of the study are certain: Without backdoors like these, Daimler and BMW would clearly miss their targets.

    “Daimler, Volkswagen AG, and BMW tout themselves as environmentally friendly, but behind this façade, they use every little loophole to delay the shift to zero-emission vehicles,” says Stef Cornelis, director of T&E Germany. He calls on the EU to take this into account when revising the directive.

    Emissions from road traffic have continued to rise in recent years, and cars alone are currently responsible for 13 percent of EU-wide CO2 emissions. The EU wants to tackle the problem: The adjustment of CO2 limits for passenger cars as part of the Fit for 55 package envisages a 100 percent reduction in emissions by 2035, which is de facto equivalent to phasing out internal combustion vehicles. In addition, an emissions trading system (ETS) is to be introduced for road transport.

    The year 2040 was put into play for the global phase-out of the internal combustion engine (Europe.Table reported) at the world climate conference in Glasgow last week. However, Germany and some leading manufacturers, including VW and BMW, have not signed a corresponding agreement. til

    • Climate & Environment
    • Climate protection
    • Emissions
    • Mobility

    EEA: 307,000 deaths from fine particulate matter pollution

    According to the European Environment Agency’s latest estimates, 307,000 people died prematurely due to exposure to fine particulate matter pollution in the EU in 2019. That is the result of an updated study on the “Health impacts of air pollution in Europe” presented by the EEA on Monday. According to the study, at least 58%, or 178,000, of these deaths could have been avoided if all EU Member States had reached the WHO’s new air quality guideline level of 5 µg/m3.

    For particulate matter, this is 5 µg/m3. In the EU, however, air quality is only considered to be poor if it exceeds 25 µg/m3. This is in blatant contradiction to the precautionary principle enshrined in the European Treaties, criticizes MEP Jutta Paulus (Greens). The upcoming revision of the EU Air Quality Directive should reflect the new recommendations of the World Health Organisation.

    Nevertheless, air quality in Europe improved in 2019 compared to 2018, the EEA says. As part of the Green Deal, the EU’s Action Plan on Air Pollution sets a target to reduce premature deaths from particulate matter pollution by at least 55 percent by 2030 compared to 2005. According to the EEA, the EU is on track to meet this target, as the number of such deaths fell by about a third between 2005 and 2019.

    “To breathe clean air should be a fundamental human right. Even with improvements in air quality over the past years in our region, we still have a long way to go,” says WHO Regional Director for Europe, Dr. Hans Henri Kluge. Man-made particulate matter is produced, for example, by combustion processes in motor vehicles, power and district heating plants, waste incinerators, residential furnaces and heaters, and certain industrial processes. til

    • Climate & Environment
    • Climate protection
    • Environmental policy
    • Health

    NGOs to Scholz: Nuclear energy is not sustainable

    129 non-governmental organizations from Europe have sent an open letter to the likely next German Chancellor Olaf Scholz (SPD), calling on him not to classify nuclear energy as sustainable. Scholz must confirm the German veto on this, the letter to the still-acting German finance minister says. The German government must lobby the EU Commission to ensure that neither nuclear energy nor fossil gas are classified as sustainable. For investors, it is important which forms of energy receive an appropriate seal of approval. France, in particular, which is heavily dependent on nuclear energy, is campaigning for this.

    Nuclear energy is unsustainable due to high safety risks, pollution, and the unsolved waste problem. Fossil gas causes large amounts of climate-damaging greenhouse gases, especially methane, along its extraction and transport chain,” the 129 signatories said. The letter is supported by German environmental associations such as Nabu, BUND, and Greenpeace, among others.

    The Greens had already called on the German EU Commission President Ursula von der Leyen to prevent greenwashing in the so-called taxonomy. In other words, non-sustainable forms of energy should not be recognized as green. Brussels should wait for the formation of a government in Germany. The SPD, Greens, and FDP are currently negotiating the first traffic light coalition in the federal government. rtr

    • Climate & Environment
    • Climate protection
    • Natural gas
    • Nuclear power
    • Sustainability

    Lagarde rejects tighter monetary policy

    Despite rapidly rising prices, ECB President Christine Lagarde has rejected calls for a tighter monetary policy. At a hearing in the European Parliament on Monday, she admitted that the strong surge in inflation is likely to last longer than initially thought. But she said no departure from the policy of cheap money was indicated at present: “If we were to introduce tightening measures now, it would do much more harm than good,” she said. Even suggesting tightening in the short term would hurt the euro area economy. The latter is on the mend, she said and could surpass its pre-crisis level toward the end of the year.

    Lagarde reiterated that a rate hike in 2022 was very unlikely. However, she did not want to get involved in speculation about the key interest rate in 2023. The inflation rate in the euro area was 4.1 percent in October, the highest in over 13 years. Against this backdrop, Deutsche Bank CEO Christian Sewing believes monetary policy must take countermeasures: “The supposed panacea of recent years – low-interest rates with seemingly stable prices – has lost its effect, and now we are struggling with the side effects,” he said at Euro Finance Week in Frankfurt.

    The ECB has kept the key interest rate at a record low of 0.0 percent since March 2016. The so-called deposit rate has been at minus 0.5 percent since September 2019. Financial institutions have to pay extra if they park excess funds at the central bank. According to the head of the authority, Mark Branson, the financial supervisory authority BaFin sees the permanently low-interest rates as one of the biggest risks for the industry: “If interest rates remain this low, they will increasingly damage the business model of banks or life insurance companies that rely on interest rate transformations.”

    According to Spanish central bank chief Pablo Hernandez de Cos, however, the turnaround in interest rates expected in the money market is unlikely to happen even in the second half of 2022. The conditions set by the ECB for this would not be met by then. In the outlook updated in the summer, the ECB virtually locked in the low-interest record rates for a long time, thus providing investors with guidance.

    EU Commission: inflation pressures remain high

    Lagarde’s deputy Luis de Guindos stressed that in the short term, supply bottlenecks and rising energy costs remain the main threats to economic recovery and the inflation outlook. The current period of elevated inflation could be longer than anticipated a few months ago. This view is also reflected in the forecasts of the EU Commission.

    The Commission predicts that inflationary pressure in the eurozone will remain high for the time being. It expects prices to rise by 2.4 percent in 2021. This is above the ECB’s target, which is aiming for a figure of 2.0 percent as ideal for the economy. According to the EU Commission, the rate is also likely to be higher in 2022, when it will be 2.2 percent. Brussels is only signaling the all-clear for 2023 at 1.4 percent.

    In September, the ECB economists had estimated an inflation rate of 1.7 percent for 2022, which is expected to fall to 1.5 percent in 2023. At the next interest rate meeting in mid-December, the ECB will present updated projections that will also cover 2024. rtr

    • Eurozone
    • Finance
    • Financial policy

    Profile

    Susanne Dehmel: regulating innovation with caution

    Susanne Dehmel, Member of the Executive Board at Bitkom

    Susanne Dehmel has been a member of the management board of the industry association Bitkom for seven years and is responsible for key areas for the association and its members, such as law, security, and artificial intelligence. The topics, currently especially AI, bring with them many points of contact with the ongoing discussions in Brussels. “In our opinion, both national policy-makers in Germany and those at the European level have a duty to advocate the responsible use of AI in business, the public sector, and society,” says Dehmel.

    In terms of legislation, the European proposal for an AI regulation, the “AI Act”, is a key project. This would give Europe the chance to take on a global pioneering role, says Dehmel. It would be about the regulatory framework for human-centered AI without at the same time nipping innovation in the bud. Bitkom has members from the very big players in the industry, but some come from the SME or startup milieu. “Small companies and startups, in particular, need breathing room when developing new AI applications and business models based on them. If they are overburdened with too many formal requirements, innovation will be slowed down,” Dehmel says.

    When asked why she decided to pursue a career in an association instead of a law firm after studying law in Passau, Freiburg, and Cardiff, she answers: “I was initially attracted by the topic of copyright law, which is why I joined Bitkom, and also by the mixture of political work and contract negotiations.” For her, it is exciting to explore the extent to which existing legislation can be applied to new issues that arise when using digital technologies.

    For her work on AI-relevant topics, she, as a non-specialist, also has to fundamentally penetrate the technological details. “For that, I don’t need to know every detail, but at least keep an eye on the broad functionalities, modes of action, and relevant trends,” she says. She was also able to apply this knowledge and the combination of technological and legal understanding to her work as an expert member of the German Bundestag’s AI Enquête from 2018 to 2020.

    While Dehmel has deep knowledge of the regulatory risks of AI technologies, companies don’t take that for granted. A study by consulting giant McKinsey said less than half of all companies working in the AI sphere were aware of these risks. “With our members, we have discussed the upcoming proposals from the European Commission and will continue to work hard on them,” Dehmel explains. “By discussing concrete use cases, we try to make tangible what impact this regulation will have on business activities.”

    For her, as a lawyer, the issue of legal certainty is paramount. “The devil is in the detail here. In our opinion, for example, the definition of AI is far too broad. We recommend focusing on the narrow scope of self-learning systems in Machine Learning and Deep Learning. Simple statistical methods, statistical inference, and deductive methods should not fall under the AI Act,” Dehmel said. Moreover, it is still unclear how exactly it should be proven whether an AI application complies with the regulatory intentions. Therefore, her conclusion is that the actual legal practice in everyday life will decide whether the AI Act will be a success or not. As a specialist, she, therefore, continues to have her hands full. Constantin Eckner

    • Artificial intelligence
    • Artificial Intelligence Regulation
    • Data
    • Digitization
    • Platforms

    Apéro

    Semiconductor issues are ultimately a matter for the boss – that was the message Commission President Ursula von der Leyen wanted to send yesterday with her visit to Veldhoven near Eindhoven in the Netherlands, which was planned at short notice. The city of 45,000 inhabitants is the headquarters of “Advanced Semiconductor Materials Lithography” (ASML). The company produces lithography systems that are essential for the manufacture of semiconductors and is described by the head of the Commission as a “European digital champion”.

    Because ASML “will play an important role in our efforts to make Europe more competitive and to gain sovereignty in the technology sector,” as the woman from Lower Saxony announced in a press release. This is exactly what von der Leyen wants to achieve with the European Chips Act, which is scheduled for the second quarter of 2022 according to the Commission’s work program.

    At von der Leyen’s side: Prime Minister Mark Rutte, Internal Market Commissioner Thierry Breton, and Competition Commissioner Margrethe Vestager. The short trip to the Netherlands thus also served another purpose: team building. Because the IPCEI dispute (Europe.Table reported) between Breton and Vestager is not the only area where the two Commissioners are far apart.

    But teambuilding has clear limits at the Commission: The Frenchman and the Dane are no longer present at the joint working dinner with Rutte: a matter for the boss. Given Rutte’s reputation as – to put it mildly – a thrifty host, however, this should lead to little envy, at least from a culinary point of view.

    True success would be announced if Breton and Vestager were to share a ride for the return journey to Brussels, some 120 km away. They would have a lot to discuss on the two-hour drive – for example, the revision of the competition rules. That’s on the Commission’s agenda for tomorrow, but with the next disagreement between the two politicians looming, observers expect it to be postponed. Jasmin Kohl

    • Chips Act
    • Digital policy
    • IPCEI
    • Semiconductor
    • Thierry Breton
    • Ursula von der Leyen

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