EU industry ministers are meeting today at the informal Competitiveness Council in Budapest to exchange views on the future of the European economy. The agenda includes a discussion on the future of the automotive industry, a debate on the European Competitiveness Deal, and a discussion on the effect of artificial intelligence on the European economy.
Minister for Economic Affairs Robert Habeck and French Industry Minister Roland Lescure are being represented and are not traveling to Budapest in person. The ministers cannot be blamed for their absence, as the Hungarian Council Presidency does not appear to be interested in making concrete progress.
The supporting program that kicked off the informal Council meeting yesterday included a meeting with the MOL Group. The Hungarian oil and gas group is one of the few major European companies that continues to operate its Russian business. Several of Viktor Orbán’s confidants sit on the MOL Group’s supervisory board, and the group’s CEO is an avowed opponent of the Russia sanctions.
Following the pattern of Orbán’s trips to Kyiv, Moscow and Beijing, the Hungarian Council Presidency is also focusing on provocation at the informal Competitiveness Council. “Make Europe Great Again” is the Council Presidency’s slogan, but after just one week it is clear that EU policy will look anything but “great” in this six-month period.
Following the parliamentary elections in France, talks for a new government have begun. The left-wing alliance Nouveau Front Populaire (NFP) is claiming the post of prime minister as the winner of the election and announced on Monday that it intends to present a candidate within a week. However, the parties in the alliance are facing difficult talks: prominent representatives of the Socialists, Communists and Greens have explicitly ruled out making Jean-Luc Mélenchon, the radical leader of the strongest left-wing party La France Insoumise (LFI), head of government.
The left-wing alliance would also need partners to form a stable majority in the new National Assembly. However: “The antagonism between LFI and Macron’s camp limits the possibility of a grand coalition between the left and the center”, says Célia Belin, Head of the Paris Office at the European Council on Foreign Relations (ECFR).
Even if Mélenchon is marginalized, the overlaps between the Socialists and Les Républicains are very small, states Johannes Lindner, Co-Director of the Jacques Delors Centre at the Berlin Hertie School. He expects very difficult and protracted talks – especially as French politics has no experience with coalition governments.
The Nouveau Front Populaire surprisingly won the most seats in the National Assembly in the second round of voting on Sunday, ahead of President Emmanuel Macron’s “Ensemble” alliance. Although the far-right Rassemblement National (RN) also received the most votes in the second round, it was only able to win the third most constituencies under the French majority voting system. On Monday, Macron asked his former Prime Minister Gabriel Attal to remain in office for now.
Johannes Lindner sees the party system “in the process of profound reinvention”. The unclear majority also means a shift in power: “The election result strengthens parliament and weakens the president“, he says. As a result, it will be up to the parties to reorganize the majority in the coming days and weeks. “Emmanuel Macron will at most have a role as a moderator, which will certainly not be easy for the president.”
The situation is exceptional for France and opens the door to various scenarios.
A minority government is currently being discussed in Paris. With 182 MPs, the left-wing alliance Nouveau Front Populaire (NFP) has become the strongest political force in the National Assembly. Thanks to this legitimacy, it could appoint a government without having an absolute majority in the Assembly. This was the case with the two former prime ministers Élisabeth Borne and Gabriel Attal, who only had a relative majority of 246 of the 577 seats in the Assembly between 2022 and 2024.
However, a minority government presupposes that support for legislative texts must be negotiated on a case-by-case basis. It also means that the NFP would need votes from Macron’s camp. However, the positions of the NFP and Macron’s government alliance are sometimes far apart. The NFP wants to abolish the pension reform, introduce taxation of the “super-rich” and increase the minimum wage to €1,600 net. Proposals that the president’s centrist camp rejects.
The idea is not new: an alliance between the Macron camp and the center-right party Les Républicains (LR). This alliance would allow Ensemble to continue to lead the government, although the camp has emerged weakened from the elections: the allied parties won 163 seats, compared to 245 in 2022 and more than 300 MPs in 2017.
“The country is on the right. We have to govern on the right”, said Interior Minister Gérald Darmanin, a former follower of President Nicolas Sarkozy. However, the LR party also emerged weakened from the elections after party leader Éric Ciotti surprisingly announced an alliance with the Rassemblement National, which triggered a serious crisis in the party. Célia Belin analyzes that Macron may be prepared to open up to Les Républicains and other small right-wing groups, which together have won just over 60 seats. This would not be enough for an absolute majority, but could enable the formation of a center-right minority government.
However, one thing is certain in both scenarios: without a clear majority, a minority government would have to live with the risk of a vote of no confidence in the National Assembly, the so-called “motion de censure”.
If the situation becomes politically deadlocked, a technical government could be appointed, Benjamin Morel, Professor of Public Law at the Universite Paris II, told the radio station France Info. This would be made up of experts and personalities without a political orientation to manage the official business. Such a government could also implement some reforms with the specific support of the various blocs in the National Assembly.
However, this concept would be new for France. Although technicians headed governments such as Raymond Barre in 1976 and Jean Castex in 2020, both of these figures had a political mandate and a majority in the National Assembly.
But even a technical government would still be threatened by a motion of no confidence, which could be tabled by the Nouveau Front Populaire, Les Républicains or the Rassemblement National. Apart from the short-term relief at the defeat of the far right, these elections open up new uncertainty and instability, says Camille Lons of ECFR: parties would be forced to form coalitions and make concessions – “something that is not normally foreseen in French political culture”.
If none of the previous scenarios work, France would therefore be plunged into a deep institutional crisis, as Macron would not be able to dissolve the National Assembly before July 2025. There has never been such a scenario since the founding of the Fifth Republic.
There was relief in Berlin and other European capitals that the EU-critical RN did not win in Paris. “It is good news for Europe that pro-European forces have a majority in the French parliament”, said Anna Lührmann (Greens), Minister of State for Europe at the Federal Foreign Office.
Experts assume that French European policy will largely stay on course. No sharp changes of course are expected in foreign and security policy either, as Macron has the prerogative here as president. “However, French politics will continue to be divided and difficult to steer, which will reduce France’s influence on the European and international stage“, says Célia Belin.
However, Johannes Lindner from the Jacques Delors Centre warns the German government against seeking short-term advantages: “In this difficult situation, Germany should continue to invest in its relationship with France and resist the possible temptation to exploit its weakness.” For example, Berlin should encourage the EU Commission to submit a bold proposal for the Multiannual Financial Framework, which is due in summer 2025.
However, Friedrich Heinemann from the Centre for European Economic Research believes it is unrealistic for the German government to support an ambitious expansion of the EU budget or a new EU debt program in view of the strengthened extremes in France. “It is hardly conceivable that a German government would secure the financial policy of a France drifting towards fiscal populism with even higher German EU guarantees without being punished by voters.”
There are also fears in the industry that a left-wing French government could erect further barriers to trade. Further integration of the EU internal market or even the adoption of new trade agreements would probably be difficult, warns Thilo Brodtmann, Managing Director of the mechanical engineering association VDMA. Chancellor Olaf Scholz recently criticized the lack of progress on trade agreements with the Mercosur states, for example, where Macron has already put the brakes on massively.
The far-right group “Patriots for Europe”, which was founded on Monday, starts the parliamentary term with 84 seats. This makes it the third largest group in the European Parliament , overtaking the conservative ECR Group. As things stand, the latter has 78 seats, two more than the liberal Renew.
The new “Patriots for Europe” group has merged with the former far-right ID group. With the following delegations:
The following have also joined:
The group leader will be Jordan Bardella from the Rassemblement National, who already led the ID Group. The group has MEPs from twelve Member States. The requirements for forming a political group are therefore met: 23 MEPs from at least seven Member States. The 16 MEPs from the German AfD delegation are not part of the new group. They are therefore not entitled to the privileges of group status.
The cordon sanitaire, which previously excluded ID MPs from access to important posts in parliament, is also to apply to the new far-right parliamentary group. The cordon sanitaire does not apply directly to ECR MEPs. However, the pro-European groups EPP, S&D, Renew and Greens want to take a very close look at the ECR candidates for committee chairs and vice-presidents and not elect any EU opponents to positions of responsibility.
The committee chairs and vice-presidencies that do not go to the “Patriots for Europe” and possibly the ECR will then be distributed among the pro-European groups. The EPP, S&D, Renew and Greens are currently negotiating how exactly this will be done in their intergroup talks on cooperation in the new legislature, which are likely to take at least another week.
It should have been decided last Thursday which parliamentary group would draw which committees according to the D’Hondt formula. However, the timetable was thrown into disarray by the delayed reorganization of the far-right camp. According to the key, the Social Democrats, as the second largest group, are entitled to five committee chairs. How these will be divided among the delegations is still the subject of intensive negotiations within the S&D. It is therefore still unclear whether Bernd Lange will remain chairman of the Trade Committee.
Viktor Orbán is on a “Peace Mission 3.0”. This is what Hungary’s Prime Minister called his trip to China on Monday. He met China’s party and state leader Xi Jinping in Beijing to discuss the war in Ukraine. Before his trip to China, Orbán visited Kyiv and Moscow. Budapest took over the rotating presidency of the EU Council just a few days ago.
And so it seems that Viktor Orbán is doing everything right: Holding talks with the direct warring parties, plus Russia’s most important ally China. But Orbán’s trip to China reveals three fundamental problems above all:
Accordingly, there are no concrete proposals from Orbán’s travel diplomacy. Instead, Xi merely fired off rhetorical smoke grenades. On Monday, China’s party and state leader once again spoke out in favor of a ceasefire followed by negotiations. The situation in Ukraine must be cooled down as much as possible. Xi did not say exactly how this should happen or what steps Beijing itself could take. His recipe: “Positive Energy” is needed, whatever that means.
Orbán’s analysis is correct. “The number of countries that can talk to both warring parties is decreasing”, he says. “Hungary is slowly becoming the only country in Europe that can talk to everyone.” In addition to Ukraine and Russia, China must also be included as the most important partner of ruler Vladimir Putin. It therefore seems sensible to also seek talks with Beijing.
But even in Russia, it became clear that Moscow, like Beijing, is less about peace and more about propaganda. This is how Vladimir Putin interpreted it: Orbán had come to Moscow as a top representative of the Council of the European Union. The picture is similar in Beijing. There is no talk of war there, but still of a crisis in Ukraine – a choice of words that once again shows how Beijing really thinks about the brutal Russian war of aggression. The Chinese side of CCTV shows a clearly different focus of the discussions: the excellent Sino-Hungarian relations.
There is growing concern in Europe’s capitals about Orbán’s self-declared role as a “peace broker”, say diplomats in Brussels. It must be clear that the head of government is only representing his own country and not the EU. Orbán has deliberately created ambiguity, for example by using the logo of Hungary’s EU presidency during his travels.
According to diplomats, the EU ambassadors are expected to demand clarity from Hungary’s representative at their next regular meeting on Wednesday. Hungary’s ambassador will probably want to inform his colleagues about the head of government’s travels. However, various member states are more interested in discussing the role of Hungary’s presidency in principle.
Plans to take the Council presidency away from Budapest are also being taken out of the drawers again, say the diplomats. However, this plan is more of a threat and the likelihood of it being implemented is low. After just seven days under the Hungarian EU presidency, however, the irritation is great. Orbán’s trips were unprepared and not coordinated.
EU ambassadors are also preparing for the meeting of foreign ministers on July 22. Until then, the tension will continue to rise and Orbán’s “peace diplomacy” will certainly be an issue, also because Hungary is still single-handedly blocking seven billion euros from the Peace Facility. All other 26 member states are on board. Some wondered where else Orbán would turn up after Kyiv, Moscow and Beijing.
Charles Michel and Ursula von der Leyen had both criticized Orbán’s trip to Moscow. Hungary’s head of government had no mandate, said the Council President. Appeasement would not stop Vladimir Putin, said the Commission President. Last week, the Commission’s traditional trip to the capital of the Council Presidency had already not taken place and had instead been announced for the fall. The latest development “seriously calls into question” the Commission’s visit to Budapest in the fall, a spokesperson said on Monday.
But what about China’s peace efforts in Ukraine? Rather meager. Officially, China claims to be neutral. But Chinese customs data, American intelligence information and findings on the battlefields in Ukraine show how much China supports the Russian war machine.
Instead of peace, Beijing is pursuing a much greater goal: the division of the West. And so it is no coincidence that Orbán and Xi are meeting just one day before the upcoming NATO summit in Washington. This is because US President Joe Biden and the other heads of state and government are likely to decide on further support for Ukraine. In its summit communiqué, NATO plans to criticize China for its support of the Russian invasion of Ukraine, according to diplomatic circles.
Xi said in Beijing on Monday: “It is hoped that Hungary will play a positive role in promoting relations between China and the EU during its presidency. After all, Orbán has shaped his country into a Chinese asset within the EU, which Beijing needs more than ever. While Brussels is focusing on de-risking, Budapest is firmly on Beijing’s side.
It is Hungary that repeatedly vetoes EU proposals in which China is condemned for human rights violations or in relation to Hong Kong or Taiwan. According to research by the Budapest-based online portal “Valasz Online“, around 60 percent of vetoes relating to Russia or China have come from Hungary in the past six years. Against this backdrop, Orbán’s peace mission 3.0 appears in a different light.
Following the 2019 European Parliament elections, Brussels was focused on climate action. Sustainability and transformation were the dominant themes. Von der Leyen’s response: The Green Deal. Five years later, everything seems different. Concerns about security, migration and deindustrialization are at the forefront. From a corporate perspective, however, the answer remains the same: The Green Deal must be continued and complemented by a green industrial deal. Otherwise, Europe’s industry risks falling behind.
According to MIT, $265 billion flowed into green technologies in the USA in 2023. This marked a 40 percent increase from the previous year when Joe Biden passed the Inflation Reduction Act (IRA). $40 billion in state funds triggered $220 billion in private investments. Employment numbers rose, growth rates climbed and key technology development received a significant boost. This is expected to significantly enhance the country’s independence, resilience and security in the future.
Security, growth, climate action – a triad that Ursula von der Leyen also desires for her re-election to the EU Parliament on July 18. She must accommodate her alliance of the EPP, Social Democrats and Liberals and strengthen it with additional votes from the Greens or the ECR. The EU Council’s agreed agenda clearly focuses on security and competitiveness, points that could be well combined with a green industrial deal.
From the perspective of the Foundation for Climate Economy, a green industrial deal must focus on achieving climate targets. The planned interim climate target for 2040 plays a crucial role in guiding the path towards climate neutrality. Top priority must be given to the expansion of renewables, electrolyzers and networks. Alongside an integrated electricity market and a pragmatic approach to hydrogen ramp-up (better blue than nothing), this could alleviate high energy prices in the EU. It would also be beneficial for companies to have relief from reporting and due diligence obligations that tie up many resources.
However, none of this is possible without money. According to estimates by the Commission, achieving climate neutrality requires an investment surplus of more than $620 billion per year. Private capital could cover much of this, making the swift finalization of the European Capital Markets Union urgently necessary. The same applies to introducing a transformation category within the sustainable finance framework. Currently, investment goals are only labeled green if they are already low in CO2 emissions. To mobilize more capital for transformation, there also needs to be a label for companies with CO2 emissions and ambitious reduction strategies. Otherwise, industry will miss out on green capital providers.
On the other hand, when it comes to infrastructure spending, the transformation will also require government grants. For example, in the form of European climate action contracts that can cover start-up funding and operating costs to make green technologies directly competitive. If green leading markets are added, establishing an anticipated demand for clean technologies from the EU, a similar dynamic to that in the USA could unfold in Europe as well. Those looking to make their location fit for the challenges of the 21st century must invest heavily in industrial transformation rather than taking small steps. The IRA has set the example.
Sabine Nallinger is the CEO of the Foundation for Climate Economy, an independent CEO initiative promoting corporate climate action in Germany.
EU industry ministers are meeting today at the informal Competitiveness Council in Budapest to exchange views on the future of the European economy. The agenda includes a discussion on the future of the automotive industry, a debate on the European Competitiveness Deal, and a discussion on the effect of artificial intelligence on the European economy.
Minister for Economic Affairs Robert Habeck and French Industry Minister Roland Lescure are being represented and are not traveling to Budapest in person. The ministers cannot be blamed for their absence, as the Hungarian Council Presidency does not appear to be interested in making concrete progress.
The supporting program that kicked off the informal Council meeting yesterday included a meeting with the MOL Group. The Hungarian oil and gas group is one of the few major European companies that continues to operate its Russian business. Several of Viktor Orbán’s confidants sit on the MOL Group’s supervisory board, and the group’s CEO is an avowed opponent of the Russia sanctions.
Following the pattern of Orbán’s trips to Kyiv, Moscow and Beijing, the Hungarian Council Presidency is also focusing on provocation at the informal Competitiveness Council. “Make Europe Great Again” is the Council Presidency’s slogan, but after just one week it is clear that EU policy will look anything but “great” in this six-month period.
Following the parliamentary elections in France, talks for a new government have begun. The left-wing alliance Nouveau Front Populaire (NFP) is claiming the post of prime minister as the winner of the election and announced on Monday that it intends to present a candidate within a week. However, the parties in the alliance are facing difficult talks: prominent representatives of the Socialists, Communists and Greens have explicitly ruled out making Jean-Luc Mélenchon, the radical leader of the strongest left-wing party La France Insoumise (LFI), head of government.
The left-wing alliance would also need partners to form a stable majority in the new National Assembly. However: “The antagonism between LFI and Macron’s camp limits the possibility of a grand coalition between the left and the center”, says Célia Belin, Head of the Paris Office at the European Council on Foreign Relations (ECFR).
Even if Mélenchon is marginalized, the overlaps between the Socialists and Les Républicains are very small, states Johannes Lindner, Co-Director of the Jacques Delors Centre at the Berlin Hertie School. He expects very difficult and protracted talks – especially as French politics has no experience with coalition governments.
The Nouveau Front Populaire surprisingly won the most seats in the National Assembly in the second round of voting on Sunday, ahead of President Emmanuel Macron’s “Ensemble” alliance. Although the far-right Rassemblement National (RN) also received the most votes in the second round, it was only able to win the third most constituencies under the French majority voting system. On Monday, Macron asked his former Prime Minister Gabriel Attal to remain in office for now.
Johannes Lindner sees the party system “in the process of profound reinvention”. The unclear majority also means a shift in power: “The election result strengthens parliament and weakens the president“, he says. As a result, it will be up to the parties to reorganize the majority in the coming days and weeks. “Emmanuel Macron will at most have a role as a moderator, which will certainly not be easy for the president.”
The situation is exceptional for France and opens the door to various scenarios.
A minority government is currently being discussed in Paris. With 182 MPs, the left-wing alliance Nouveau Front Populaire (NFP) has become the strongest political force in the National Assembly. Thanks to this legitimacy, it could appoint a government without having an absolute majority in the Assembly. This was the case with the two former prime ministers Élisabeth Borne and Gabriel Attal, who only had a relative majority of 246 of the 577 seats in the Assembly between 2022 and 2024.
However, a minority government presupposes that support for legislative texts must be negotiated on a case-by-case basis. It also means that the NFP would need votes from Macron’s camp. However, the positions of the NFP and Macron’s government alliance are sometimes far apart. The NFP wants to abolish the pension reform, introduce taxation of the “super-rich” and increase the minimum wage to €1,600 net. Proposals that the president’s centrist camp rejects.
The idea is not new: an alliance between the Macron camp and the center-right party Les Républicains (LR). This alliance would allow Ensemble to continue to lead the government, although the camp has emerged weakened from the elections: the allied parties won 163 seats, compared to 245 in 2022 and more than 300 MPs in 2017.
“The country is on the right. We have to govern on the right”, said Interior Minister Gérald Darmanin, a former follower of President Nicolas Sarkozy. However, the LR party also emerged weakened from the elections after party leader Éric Ciotti surprisingly announced an alliance with the Rassemblement National, which triggered a serious crisis in the party. Célia Belin analyzes that Macron may be prepared to open up to Les Républicains and other small right-wing groups, which together have won just over 60 seats. This would not be enough for an absolute majority, but could enable the formation of a center-right minority government.
However, one thing is certain in both scenarios: without a clear majority, a minority government would have to live with the risk of a vote of no confidence in the National Assembly, the so-called “motion de censure”.
If the situation becomes politically deadlocked, a technical government could be appointed, Benjamin Morel, Professor of Public Law at the Universite Paris II, told the radio station France Info. This would be made up of experts and personalities without a political orientation to manage the official business. Such a government could also implement some reforms with the specific support of the various blocs in the National Assembly.
However, this concept would be new for France. Although technicians headed governments such as Raymond Barre in 1976 and Jean Castex in 2020, both of these figures had a political mandate and a majority in the National Assembly.
But even a technical government would still be threatened by a motion of no confidence, which could be tabled by the Nouveau Front Populaire, Les Républicains or the Rassemblement National. Apart from the short-term relief at the defeat of the far right, these elections open up new uncertainty and instability, says Camille Lons of ECFR: parties would be forced to form coalitions and make concessions – “something that is not normally foreseen in French political culture”.
If none of the previous scenarios work, France would therefore be plunged into a deep institutional crisis, as Macron would not be able to dissolve the National Assembly before July 2025. There has never been such a scenario since the founding of the Fifth Republic.
There was relief in Berlin and other European capitals that the EU-critical RN did not win in Paris. “It is good news for Europe that pro-European forces have a majority in the French parliament”, said Anna Lührmann (Greens), Minister of State for Europe at the Federal Foreign Office.
Experts assume that French European policy will largely stay on course. No sharp changes of course are expected in foreign and security policy either, as Macron has the prerogative here as president. “However, French politics will continue to be divided and difficult to steer, which will reduce France’s influence on the European and international stage“, says Célia Belin.
However, Johannes Lindner from the Jacques Delors Centre warns the German government against seeking short-term advantages: “In this difficult situation, Germany should continue to invest in its relationship with France and resist the possible temptation to exploit its weakness.” For example, Berlin should encourage the EU Commission to submit a bold proposal for the Multiannual Financial Framework, which is due in summer 2025.
However, Friedrich Heinemann from the Centre for European Economic Research believes it is unrealistic for the German government to support an ambitious expansion of the EU budget or a new EU debt program in view of the strengthened extremes in France. “It is hardly conceivable that a German government would secure the financial policy of a France drifting towards fiscal populism with even higher German EU guarantees without being punished by voters.”
There are also fears in the industry that a left-wing French government could erect further barriers to trade. Further integration of the EU internal market or even the adoption of new trade agreements would probably be difficult, warns Thilo Brodtmann, Managing Director of the mechanical engineering association VDMA. Chancellor Olaf Scholz recently criticized the lack of progress on trade agreements with the Mercosur states, for example, where Macron has already put the brakes on massively.
The far-right group “Patriots for Europe”, which was founded on Monday, starts the parliamentary term with 84 seats. This makes it the third largest group in the European Parliament , overtaking the conservative ECR Group. As things stand, the latter has 78 seats, two more than the liberal Renew.
The new “Patriots for Europe” group has merged with the former far-right ID group. With the following delegations:
The following have also joined:
The group leader will be Jordan Bardella from the Rassemblement National, who already led the ID Group. The group has MEPs from twelve Member States. The requirements for forming a political group are therefore met: 23 MEPs from at least seven Member States. The 16 MEPs from the German AfD delegation are not part of the new group. They are therefore not entitled to the privileges of group status.
The cordon sanitaire, which previously excluded ID MPs from access to important posts in parliament, is also to apply to the new far-right parliamentary group. The cordon sanitaire does not apply directly to ECR MEPs. However, the pro-European groups EPP, S&D, Renew and Greens want to take a very close look at the ECR candidates for committee chairs and vice-presidents and not elect any EU opponents to positions of responsibility.
The committee chairs and vice-presidencies that do not go to the “Patriots for Europe” and possibly the ECR will then be distributed among the pro-European groups. The EPP, S&D, Renew and Greens are currently negotiating how exactly this will be done in their intergroup talks on cooperation in the new legislature, which are likely to take at least another week.
It should have been decided last Thursday which parliamentary group would draw which committees according to the D’Hondt formula. However, the timetable was thrown into disarray by the delayed reorganization of the far-right camp. According to the key, the Social Democrats, as the second largest group, are entitled to five committee chairs. How these will be divided among the delegations is still the subject of intensive negotiations within the S&D. It is therefore still unclear whether Bernd Lange will remain chairman of the Trade Committee.
Viktor Orbán is on a “Peace Mission 3.0”. This is what Hungary’s Prime Minister called his trip to China on Monday. He met China’s party and state leader Xi Jinping in Beijing to discuss the war in Ukraine. Before his trip to China, Orbán visited Kyiv and Moscow. Budapest took over the rotating presidency of the EU Council just a few days ago.
And so it seems that Viktor Orbán is doing everything right: Holding talks with the direct warring parties, plus Russia’s most important ally China. But Orbán’s trip to China reveals three fundamental problems above all:
Accordingly, there are no concrete proposals from Orbán’s travel diplomacy. Instead, Xi merely fired off rhetorical smoke grenades. On Monday, China’s party and state leader once again spoke out in favor of a ceasefire followed by negotiations. The situation in Ukraine must be cooled down as much as possible. Xi did not say exactly how this should happen or what steps Beijing itself could take. His recipe: “Positive Energy” is needed, whatever that means.
Orbán’s analysis is correct. “The number of countries that can talk to both warring parties is decreasing”, he says. “Hungary is slowly becoming the only country in Europe that can talk to everyone.” In addition to Ukraine and Russia, China must also be included as the most important partner of ruler Vladimir Putin. It therefore seems sensible to also seek talks with Beijing.
But even in Russia, it became clear that Moscow, like Beijing, is less about peace and more about propaganda. This is how Vladimir Putin interpreted it: Orbán had come to Moscow as a top representative of the Council of the European Union. The picture is similar in Beijing. There is no talk of war there, but still of a crisis in Ukraine – a choice of words that once again shows how Beijing really thinks about the brutal Russian war of aggression. The Chinese side of CCTV shows a clearly different focus of the discussions: the excellent Sino-Hungarian relations.
There is growing concern in Europe’s capitals about Orbán’s self-declared role as a “peace broker”, say diplomats in Brussels. It must be clear that the head of government is only representing his own country and not the EU. Orbán has deliberately created ambiguity, for example by using the logo of Hungary’s EU presidency during his travels.
According to diplomats, the EU ambassadors are expected to demand clarity from Hungary’s representative at their next regular meeting on Wednesday. Hungary’s ambassador will probably want to inform his colleagues about the head of government’s travels. However, various member states are more interested in discussing the role of Hungary’s presidency in principle.
Plans to take the Council presidency away from Budapest are also being taken out of the drawers again, say the diplomats. However, this plan is more of a threat and the likelihood of it being implemented is low. After just seven days under the Hungarian EU presidency, however, the irritation is great. Orbán’s trips were unprepared and not coordinated.
EU ambassadors are also preparing for the meeting of foreign ministers on July 22. Until then, the tension will continue to rise and Orbán’s “peace diplomacy” will certainly be an issue, also because Hungary is still single-handedly blocking seven billion euros from the Peace Facility. All other 26 member states are on board. Some wondered where else Orbán would turn up after Kyiv, Moscow and Beijing.
Charles Michel and Ursula von der Leyen had both criticized Orbán’s trip to Moscow. Hungary’s head of government had no mandate, said the Council President. Appeasement would not stop Vladimir Putin, said the Commission President. Last week, the Commission’s traditional trip to the capital of the Council Presidency had already not taken place and had instead been announced for the fall. The latest development “seriously calls into question” the Commission’s visit to Budapest in the fall, a spokesperson said on Monday.
But what about China’s peace efforts in Ukraine? Rather meager. Officially, China claims to be neutral. But Chinese customs data, American intelligence information and findings on the battlefields in Ukraine show how much China supports the Russian war machine.
Instead of peace, Beijing is pursuing a much greater goal: the division of the West. And so it is no coincidence that Orbán and Xi are meeting just one day before the upcoming NATO summit in Washington. This is because US President Joe Biden and the other heads of state and government are likely to decide on further support for Ukraine. In its summit communiqué, NATO plans to criticize China for its support of the Russian invasion of Ukraine, according to diplomatic circles.
Xi said in Beijing on Monday: “It is hoped that Hungary will play a positive role in promoting relations between China and the EU during its presidency. After all, Orbán has shaped his country into a Chinese asset within the EU, which Beijing needs more than ever. While Brussels is focusing on de-risking, Budapest is firmly on Beijing’s side.
It is Hungary that repeatedly vetoes EU proposals in which China is condemned for human rights violations or in relation to Hong Kong or Taiwan. According to research by the Budapest-based online portal “Valasz Online“, around 60 percent of vetoes relating to Russia or China have come from Hungary in the past six years. Against this backdrop, Orbán’s peace mission 3.0 appears in a different light.
Following the 2019 European Parliament elections, Brussels was focused on climate action. Sustainability and transformation were the dominant themes. Von der Leyen’s response: The Green Deal. Five years later, everything seems different. Concerns about security, migration and deindustrialization are at the forefront. From a corporate perspective, however, the answer remains the same: The Green Deal must be continued and complemented by a green industrial deal. Otherwise, Europe’s industry risks falling behind.
According to MIT, $265 billion flowed into green technologies in the USA in 2023. This marked a 40 percent increase from the previous year when Joe Biden passed the Inflation Reduction Act (IRA). $40 billion in state funds triggered $220 billion in private investments. Employment numbers rose, growth rates climbed and key technology development received a significant boost. This is expected to significantly enhance the country’s independence, resilience and security in the future.
Security, growth, climate action – a triad that Ursula von der Leyen also desires for her re-election to the EU Parliament on July 18. She must accommodate her alliance of the EPP, Social Democrats and Liberals and strengthen it with additional votes from the Greens or the ECR. The EU Council’s agreed agenda clearly focuses on security and competitiveness, points that could be well combined with a green industrial deal.
From the perspective of the Foundation for Climate Economy, a green industrial deal must focus on achieving climate targets. The planned interim climate target for 2040 plays a crucial role in guiding the path towards climate neutrality. Top priority must be given to the expansion of renewables, electrolyzers and networks. Alongside an integrated electricity market and a pragmatic approach to hydrogen ramp-up (better blue than nothing), this could alleviate high energy prices in the EU. It would also be beneficial for companies to have relief from reporting and due diligence obligations that tie up many resources.
However, none of this is possible without money. According to estimates by the Commission, achieving climate neutrality requires an investment surplus of more than $620 billion per year. Private capital could cover much of this, making the swift finalization of the European Capital Markets Union urgently necessary. The same applies to introducing a transformation category within the sustainable finance framework. Currently, investment goals are only labeled green if they are already low in CO2 emissions. To mobilize more capital for transformation, there also needs to be a label for companies with CO2 emissions and ambitious reduction strategies. Otherwise, industry will miss out on green capital providers.
On the other hand, when it comes to infrastructure spending, the transformation will also require government grants. For example, in the form of European climate action contracts that can cover start-up funding and operating costs to make green technologies directly competitive. If green leading markets are added, establishing an anticipated demand for clean technologies from the EU, a similar dynamic to that in the USA could unfold in Europe as well. Those looking to make their location fit for the challenges of the 21st century must invest heavily in industrial transformation rather than taking small steps. The IRA has set the example.
Sabine Nallinger is the CEO of the Foundation for Climate Economy, an independent CEO initiative promoting corporate climate action in Germany.
