The main suspect in the European Parliament’s corruption scandal, deposed Vice-President Eva Kaili, is at large again. An investigating judge in Brussels ruled yesterday that she could take off her ankle monitor and leave her apartment again.
Her former parliamentary group, the socialist S&D, expelled the Greek woman after the allegations became known. But Kaili still has her mandate. Will she now return to Parliament and take up her work as a non-attached deputy? The opportunity for a first public appearance would come at the mini-plenary session on Wednesday and Thursday in Brussels.
The Commission, like the European Parliament, wanted to draw consequences from the scandal of bribery and alleged influence of third countries such as Morocco and Qatar on decisions of the Parliament. Věra Jourová, the Commissioner for Values, is currently working on the proposal for an independent ethics body, responsible at least for the Parliament and the Commission. According to reports, the proposal will not come on Wednesday as announced, but on June 7.
Advocates of stricter ethics rules in Parliament won’t be thrilled. Already, they consider Jourová’s plans “toothless” and far too late.
We hope you have a wonderful Pentecost!
Basically, everyone agreed: Berlin, Paris, the EU Commission and German industry supported introducing stricter subsidy controls for non-European companies. During its EU Council presidency, the French government ensured that the regulation on foreign subsidies was hurriedly passed last year. The new rules will enter into force on July 12 – but considerable anger is mounting.
The industry fears being swamped by reporting obligations. “The Commission must ensure that the implementation does not overburden companies”, warns Nadine Rossmann, a Federation of German Industries consultant. The first draft of the implementing regulation was “simply not feasible for multinational companies“. In the meantime, however, the Commission signals to make significant amendments.
A spokesperson merely said that the Commission was currently evaluating stakeholder feedback and aimed to adopt the rules before July 12. The Brussels-based authority presented its draft implementing regulation in February and held a public consultation. The regulation and the accompanying questionnaire set out which financial contributions from foreign governments companies must disclose to the Commission when bidding for public contracts in the EU or acquiring a company.
The Foreign Subsidies Regulation is primarily aimed at China: The Commission will be able to intervene if massively subsidized Chinese companies acquire European businesses or use predatory pricing to win public contracts. In order to be WTO-compatible, however, the rules also apply to European companies active outside the EU. “German and European companies were not in the focus of the legislator, but are now particularly affected if they strive for diligent implementation”, says Sarah Blazek, partner at the law firm Noerr.
The first draft of the Commission’s implementing regulation startled not only the industry, but also the German government. Germany’s Economy Minister Robert Habeck is said to have personally urged Brussels to avoid unnecessary bureaucratic costs for the industry. The Commission has now presented a substantially revised draft.
The fundamental problem is that the Foreign Subsidies Regulation only generally mentions “financial contributions” from foreign governments, which companies must disclose if they plan a takeover or participate in a public tender. In this broad sense, this would mean that companies must also declare electricity supply or lease contracts concluded at market conditions in third countries, says Nadine Rossmann from the BDI. In government-related sectors like health care, companies would even have to disclose virtually every business transaction, says Sarah Blazek of the law firm Noerr, and that for the past three years. So far, companies usually do not record such benefits separately.
Therefore, Habeck and the BDI are urging the Commission to focus its implementation on potentially problematic subsidies and introduce higher thresholds. In the meantime, the Commission seems willing to focus the reporting obligation on certain areas also considered particularly problematic in EU state aid law. These include, for example, aid to struggling companies, unlimited loan guarantees or direct aid in the event of a takeover (Article 5 of the Regulation).
Moreover, companies should not have to list each financial contribution individually, says BDI representative Rossmann: “An aggregated list by country and type of contribution would be more appropriate”.
Such concessions by the Commission would stem the flood of information, which the authority could hardly process given the limited staff at the Directorate-General for Competition. This would possibly create some loopholes, says Blazek. “But the Commission can always dig deeper if it sees indications of distortions of competition”. And Rossmann argues: “It is more expedient to allow the new instrument to get started first instead of unnecessarily accumulating huge amounts of information”.
Taiwanese semiconductor manufacturer TSMC is openly discussing its planned investment in Dresden for the first time. The project is making good progress, said Kevin Zhang, Senior Vice President for Business Development, in Amsterdam in front of journalists. The final decision will be made in August at a board meeting.
The EU and Germany are aggressively courting the market leader in advanced chips. The automotive industry, in particular, is pushing to bring back the vital components within the EU. This is also an important building block for the “de-risking” strategy that currently dominates the China debate. A conflict involving or with China should not cripple the entire industry. TSMC’s main site in Hsinchu is potentially threatened by a Chinese grab for Taiwan.
A TSMC site in Dresden has been under discussion for some time. The Taiwanese company is already building new factories in the US and Japan, also at the request of the respective governments. Now it’s Europe‘s turn. Therefore, the company was able to negotiate high subsidies. It has strong arguments that the state should provide an incentive for the investment:
According to reports, TSMC will receive €3 to €4 billion from the state, which is nearly half of the project’s total cost of around €10 billion. Local partners being considered include semiconductor specialist Infineon and automotive supplier Bosch. Collaboration with national champions is common. In Japan, the technology company Sony and automotive supplier Denso are also involved.
The higher costs in Germany partly justify the subsidies. However, they also reflect a worldwide race for subsidies. China itself is currently allocating ¥1 trillion (€130 billion) to the semiconductor sector. All major economies are acting similarly at present: They want or need to become more independent from others.
China is under particular pressure as the US effectively cuts off the country’s access to high-tech semiconductors. Europe is acting hastily due to the shock of dependence on Russia following the invasion of Ukraine, but the idea of establishing a semiconductor facility had already emerged long before. The US is allocating $1.5 trillion for the Chips and Science Act which aims to bring technologies back to the country. Enormous sums are being invested globally in the semiconductor industry by taxpayers.
Europe now sees the danger that subventioned semiconductors manufactured in China will be gratefully accepted by customers. Chinese state-owned enterprises could thus displace European competitors and become indispensable.
The EU Commission is countering this, among other things, with its Chips Act, which provides incentives for semiconductor manufacturing. The EU aims to double its share of global semiconductor production by 2030. Under the Chips Act, it is mobilizing €43 billion for this purpose. TSMC is likely to tap into funds from the program.
The new chip factory in Dresden is very welcome from the perspective of the German industry, but TSMC is by no means offering Europe the latest technology here. Most likely, the company is building a factory for semiconductor generations that were current around the year 2010. Specifically, these are chips with feature sizes of 28 nanometers and larger.
However, the current technical limit that only TSMC reaches is at three nanometers, with the market currently utilizing seven-nanometer chips for high-end applications. The smaller the number, the faster, more energy-efficient and cooler the chips run. Modern AI applications require the immense computing power that is possible in the single-digit nanometer range.
However, for the simpler computers in today’s cars, 28-nanometer chips are still perfectly adequate, which is why Germany eagerly seized the opportunity. Chips of this performance class are already being produced in Europe – even in Dresden.
TSMC will continue to manufacture the most advanced chips with tiny feature sizes in Taiwan for the foreseeable future. This is also in the interest of the threatened island republic. The “Silicon Shield” against China works when the US fears the failure of system-critical suppliers and therefore has a concrete motivation for military assistance.
TSMC is currently definitely of systemic relevance. This also has to do with how the industry has developed. The providers with the best technology have prevailed over decades – and only a few companies remain that actually produce physically.
The well-known names in the chip business, such as Intel, AMD, Nvidia, Infineon, Apple or Qualcomm, have TSMC implement their ideas and put their name on them. The clients have the advantage of not having to invest capital in buildings, machinery and employees, yet they can still offer the most advanced products.
The potential investment partners Bosch and Infineon already operate their own factories in the Dresden region. They would be the ideal customers for the products from the new TSMC facility, which the Taiwanese company could manufacture on their behalf. Bosch manufactures semiconductor components for the automotive industry here.
EU agriculture ministers will meet in Brussels next Tuesday. One of the main courses will be talks with the Ukrainian Minister of Agriculture, who will attend the meeting. Also on the menu: Portugal’s agriculture minister will talk about the drought in his country and its impact on the national agricultural sector.
A distinctive feature of the agricultural sector is that it is both a victim of and a solution to climate change. This paradox feeds the political tensions around the agricultural part of the Fit for 55 package. For it is a fact: Global warming and the recurring droughts it causes highlight the vulnerability of the agricultural system.
The sector is also vulnerable because it has not yet succeeded in making the environmental transition – whether by reducing greenhouse gas emissions or reducing reliance on pesticides. Unlike the energy sector, it has not yet moved structurally onto a low-carbon path and the transition is still ahead of it.
How this transition can succeed is the subject of bitter disputes in Brussels. The European Commission’s proposals to restore nature and reduce pesticides were rejected this week by the AGRI and PECH parliamentary committees.
The AGRI Committee’s rejection has caused such a stir in the otherwise subdued corridors of Rue Wiertz because that body carries a very special weight on Europe’s political chessboard. “Everyone is afraid of the farmers”, says a source close to the European Parliament.
In the debates between the head of the Green Deal, Frans Timmermans, and the committee, many of the parliamentarians emphasized that they themselves were farmers or came from farming families. Their biographies give them a special coloring: Could one imagine MEPs on the ITRE Committee, which is responsible for energy issues, pointing out that they are electricians or come from families involved in the energy sector?
While the AGRI committee’s political clout is undisputed, its behavior raises questions: Could the committee have dug its own grave by rejecting Timmermans’ verve-laced proposal? After all, when legislators vote against a proposal, they lose the opportunity to influence the debate through their own amendments and by participating in the drafting of the legislation.
Other parliamentarians, for example, point out that while they do not support the Commission’s proposal, they see sufficient scope for amendments. This is why they voted against the rejection: to secure their room for maneuvering.
The rejection by the two parliamentary committees means that the ENVI committee has a special significance – as well as its chairman, the Frenchman Pascal Canfin. He used to be a member of the Greens, but has since switched to Renew. This is the group to which, as is well known, Emmanuel Macron’s party also belongs.
The French president recently attracted attention with his call for a “regulatory pause” in the area of climate protection. This pause is to apply to both industry and agriculture, as this sector is of crucial importance to the French economy.
The ENVI committee will vote on the texts on June 15. And for the parliamentarians of the other groups, the question is whether the Renew group will take a unified position or not. Speaking to the press in Brussels, Pascal Canfin acknowledged “internal discussions” on the Renew bill.
The main suspect in the European Parliament’s corruption scandal, deposed Vice-President Eva Kaili, is at large again. An investigating judge in Brussels ruled yesterday that she could take off her ankle monitor and leave her apartment again.
Her former parliamentary group, the socialist S&D, expelled the Greek woman after the allegations became known. But Kaili still has her mandate. Will she now return to Parliament and take up her work as a non-attached deputy? The opportunity for a first public appearance would come at the mini-plenary session on Wednesday and Thursday in Brussels.
The Commission, like the European Parliament, wanted to draw consequences from the scandal of bribery and alleged influence of third countries such as Morocco and Qatar on decisions of the Parliament. Věra Jourová, the Commissioner for Values, is currently working on the proposal for an independent ethics body, responsible at least for the Parliament and the Commission. According to reports, the proposal will not come on Wednesday as announced, but on June 7.
Advocates of stricter ethics rules in Parliament won’t be thrilled. Already, they consider Jourová’s plans “toothless” and far too late.
We hope you have a wonderful Pentecost!
Basically, everyone agreed: Berlin, Paris, the EU Commission and German industry supported introducing stricter subsidy controls for non-European companies. During its EU Council presidency, the French government ensured that the regulation on foreign subsidies was hurriedly passed last year. The new rules will enter into force on July 12 – but considerable anger is mounting.
The industry fears being swamped by reporting obligations. “The Commission must ensure that the implementation does not overburden companies”, warns Nadine Rossmann, a Federation of German Industries consultant. The first draft of the implementing regulation was “simply not feasible for multinational companies“. In the meantime, however, the Commission signals to make significant amendments.
A spokesperson merely said that the Commission was currently evaluating stakeholder feedback and aimed to adopt the rules before July 12. The Brussels-based authority presented its draft implementing regulation in February and held a public consultation. The regulation and the accompanying questionnaire set out which financial contributions from foreign governments companies must disclose to the Commission when bidding for public contracts in the EU or acquiring a company.
The Foreign Subsidies Regulation is primarily aimed at China: The Commission will be able to intervene if massively subsidized Chinese companies acquire European businesses or use predatory pricing to win public contracts. In order to be WTO-compatible, however, the rules also apply to European companies active outside the EU. “German and European companies were not in the focus of the legislator, but are now particularly affected if they strive for diligent implementation”, says Sarah Blazek, partner at the law firm Noerr.
The first draft of the Commission’s implementing regulation startled not only the industry, but also the German government. Germany’s Economy Minister Robert Habeck is said to have personally urged Brussels to avoid unnecessary bureaucratic costs for the industry. The Commission has now presented a substantially revised draft.
The fundamental problem is that the Foreign Subsidies Regulation only generally mentions “financial contributions” from foreign governments, which companies must disclose if they plan a takeover or participate in a public tender. In this broad sense, this would mean that companies must also declare electricity supply or lease contracts concluded at market conditions in third countries, says Nadine Rossmann from the BDI. In government-related sectors like health care, companies would even have to disclose virtually every business transaction, says Sarah Blazek of the law firm Noerr, and that for the past three years. So far, companies usually do not record such benefits separately.
Therefore, Habeck and the BDI are urging the Commission to focus its implementation on potentially problematic subsidies and introduce higher thresholds. In the meantime, the Commission seems willing to focus the reporting obligation on certain areas also considered particularly problematic in EU state aid law. These include, for example, aid to struggling companies, unlimited loan guarantees or direct aid in the event of a takeover (Article 5 of the Regulation).
Moreover, companies should not have to list each financial contribution individually, says BDI representative Rossmann: “An aggregated list by country and type of contribution would be more appropriate”.
Such concessions by the Commission would stem the flood of information, which the authority could hardly process given the limited staff at the Directorate-General for Competition. This would possibly create some loopholes, says Blazek. “But the Commission can always dig deeper if it sees indications of distortions of competition”. And Rossmann argues: “It is more expedient to allow the new instrument to get started first instead of unnecessarily accumulating huge amounts of information”.
Taiwanese semiconductor manufacturer TSMC is openly discussing its planned investment in Dresden for the first time. The project is making good progress, said Kevin Zhang, Senior Vice President for Business Development, in Amsterdam in front of journalists. The final decision will be made in August at a board meeting.
The EU and Germany are aggressively courting the market leader in advanced chips. The automotive industry, in particular, is pushing to bring back the vital components within the EU. This is also an important building block for the “de-risking” strategy that currently dominates the China debate. A conflict involving or with China should not cripple the entire industry. TSMC’s main site in Hsinchu is potentially threatened by a Chinese grab for Taiwan.
A TSMC site in Dresden has been under discussion for some time. The Taiwanese company is already building new factories in the US and Japan, also at the request of the respective governments. Now it’s Europe‘s turn. Therefore, the company was able to negotiate high subsidies. It has strong arguments that the state should provide an incentive for the investment:
According to reports, TSMC will receive €3 to €4 billion from the state, which is nearly half of the project’s total cost of around €10 billion. Local partners being considered include semiconductor specialist Infineon and automotive supplier Bosch. Collaboration with national champions is common. In Japan, the technology company Sony and automotive supplier Denso are also involved.
The higher costs in Germany partly justify the subsidies. However, they also reflect a worldwide race for subsidies. China itself is currently allocating ¥1 trillion (€130 billion) to the semiconductor sector. All major economies are acting similarly at present: They want or need to become more independent from others.
China is under particular pressure as the US effectively cuts off the country’s access to high-tech semiconductors. Europe is acting hastily due to the shock of dependence on Russia following the invasion of Ukraine, but the idea of establishing a semiconductor facility had already emerged long before. The US is allocating $1.5 trillion for the Chips and Science Act which aims to bring technologies back to the country. Enormous sums are being invested globally in the semiconductor industry by taxpayers.
Europe now sees the danger that subventioned semiconductors manufactured in China will be gratefully accepted by customers. Chinese state-owned enterprises could thus displace European competitors and become indispensable.
The EU Commission is countering this, among other things, with its Chips Act, which provides incentives for semiconductor manufacturing. The EU aims to double its share of global semiconductor production by 2030. Under the Chips Act, it is mobilizing €43 billion for this purpose. TSMC is likely to tap into funds from the program.
The new chip factory in Dresden is very welcome from the perspective of the German industry, but TSMC is by no means offering Europe the latest technology here. Most likely, the company is building a factory for semiconductor generations that were current around the year 2010. Specifically, these are chips with feature sizes of 28 nanometers and larger.
However, the current technical limit that only TSMC reaches is at three nanometers, with the market currently utilizing seven-nanometer chips for high-end applications. The smaller the number, the faster, more energy-efficient and cooler the chips run. Modern AI applications require the immense computing power that is possible in the single-digit nanometer range.
However, for the simpler computers in today’s cars, 28-nanometer chips are still perfectly adequate, which is why Germany eagerly seized the opportunity. Chips of this performance class are already being produced in Europe – even in Dresden.
TSMC will continue to manufacture the most advanced chips with tiny feature sizes in Taiwan for the foreseeable future. This is also in the interest of the threatened island republic. The “Silicon Shield” against China works when the US fears the failure of system-critical suppliers and therefore has a concrete motivation for military assistance.
TSMC is currently definitely of systemic relevance. This also has to do with how the industry has developed. The providers with the best technology have prevailed over decades – and only a few companies remain that actually produce physically.
The well-known names in the chip business, such as Intel, AMD, Nvidia, Infineon, Apple or Qualcomm, have TSMC implement their ideas and put their name on them. The clients have the advantage of not having to invest capital in buildings, machinery and employees, yet they can still offer the most advanced products.
The potential investment partners Bosch and Infineon already operate their own factories in the Dresden region. They would be the ideal customers for the products from the new TSMC facility, which the Taiwanese company could manufacture on their behalf. Bosch manufactures semiconductor components for the automotive industry here.
EU agriculture ministers will meet in Brussels next Tuesday. One of the main courses will be talks with the Ukrainian Minister of Agriculture, who will attend the meeting. Also on the menu: Portugal’s agriculture minister will talk about the drought in his country and its impact on the national agricultural sector.
A distinctive feature of the agricultural sector is that it is both a victim of and a solution to climate change. This paradox feeds the political tensions around the agricultural part of the Fit for 55 package. For it is a fact: Global warming and the recurring droughts it causes highlight the vulnerability of the agricultural system.
The sector is also vulnerable because it has not yet succeeded in making the environmental transition – whether by reducing greenhouse gas emissions or reducing reliance on pesticides. Unlike the energy sector, it has not yet moved structurally onto a low-carbon path and the transition is still ahead of it.
How this transition can succeed is the subject of bitter disputes in Brussels. The European Commission’s proposals to restore nature and reduce pesticides were rejected this week by the AGRI and PECH parliamentary committees.
The AGRI Committee’s rejection has caused such a stir in the otherwise subdued corridors of Rue Wiertz because that body carries a very special weight on Europe’s political chessboard. “Everyone is afraid of the farmers”, says a source close to the European Parliament.
In the debates between the head of the Green Deal, Frans Timmermans, and the committee, many of the parliamentarians emphasized that they themselves were farmers or came from farming families. Their biographies give them a special coloring: Could one imagine MEPs on the ITRE Committee, which is responsible for energy issues, pointing out that they are electricians or come from families involved in the energy sector?
While the AGRI committee’s political clout is undisputed, its behavior raises questions: Could the committee have dug its own grave by rejecting Timmermans’ verve-laced proposal? After all, when legislators vote against a proposal, they lose the opportunity to influence the debate through their own amendments and by participating in the drafting of the legislation.
Other parliamentarians, for example, point out that while they do not support the Commission’s proposal, they see sufficient scope for amendments. This is why they voted against the rejection: to secure their room for maneuvering.
The rejection by the two parliamentary committees means that the ENVI committee has a special significance – as well as its chairman, the Frenchman Pascal Canfin. He used to be a member of the Greens, but has since switched to Renew. This is the group to which, as is well known, Emmanuel Macron’s party also belongs.
The French president recently attracted attention with his call for a “regulatory pause” in the area of climate protection. This pause is to apply to both industry and agriculture, as this sector is of crucial importance to the French economy.
The ENVI committee will vote on the texts on June 15. And for the parliamentarians of the other groups, the question is whether the Renew group will take a unified position or not. Speaking to the press in Brussels, Pascal Canfin acknowledged “internal discussions” on the Renew bill.
