Continuation on Gas price cap + Energy crisis dominates EU summit + Kaili removed

Dear reader,

To be continued: Yesterday, the EU energy ministers failed again to conclude their negotiations on the gas price cap. On Monday, there is to be a final round on the exact level of the price cap. You can read about the points on which an agreement was reached yesterday in the news section.

Many member states fear a creeping exodus of the industry due to high energy prices. At the upcoming EU summit, the heads of state and government are therefore likely to have an in-depth discussion about the US government’s Inflation Reduction Act – as well as a possible European response to the multi-billion investment program. There is still a long way to go for an agreement. The sovereign wealth fund proposed by Commission President Ursula von der Leyen is meeting with resistance. Meanwhile, the German industry says: “It’s not about billions in subsidies, but about simplicity and reliability of support.” Till Hoppe, Manuel Berkel, Eric Bonse, and Stephan Israel preview the summit.

In today’s Opinion, Bärbel Kofler takes a look at the EU Supply Chain Act. The aim, she says, must be for laws on corporate due diligence to have an impact on the ground, i.e. where the violations of people and the environment occur. For this to succeed, several preconditions are needed, writes the Parliamentary State Secretary to the German Federal Minister for Economic Cooperation and Development – including effective and easily accessible legal action for those affected.

Your
Sarah Schaefer

EU summit: energy crisis dominates agenda again

By

Till Hoppe

The member states were able to close some major construction sites in time for the EU summit: The EU ambassadors defused the dispute with Hungary over frozen funds, and in return Prime Minister Viktor Orbán cleared the way for financial aid to Ukraine and the implementation of the global minimum tax.

Nevertheless, diplomats expect that Thursday’s one-day summit could drag on well into the night. That’s because the energy ministers were unable to resolve their dispute over a gas price cap on Tuesday as hoped (see news section). Czech Energy Minister Jozef Síkela said the ministers wanted to find an agreement next Monday. Nevertheless, the heads of state and government could of course call up the issue on their own initiative.

German Economics Minister Robert Habeck named one possible subject for negotiation for the chiefs, namely the interpretation of the summit conclusions from the end of October. At that time, the heads of state had declared that they wanted to prevent “excessive prices” on the gas market in the future. Yesterday, however, the Council of Ministers was once again unable to clarify precisely this question of the exact level of the price cap. “If the Council were to indicate what it meant by excessive prices, that would certainly facilitate implementation here,” Habeck said.

Resistance to sovereignty fund

Before that, the heads of state and government will meet their colleagues from the Asean countries on Wednesday. The aim is to deepen cooperation with the ten Southeast Asian countries. Chancellor Olaf Scholz is counting on countries such as Thailand, Malaysia, and Vietnam to break the dependence of the economy on China.

High energy prices are fueling concerns in many member states about what a senior EU diplomat calls its “silent exodus” of industry. Leaders will therefore discuss what tools they can use to counter the US government’s lure under the Inflation Reduction Act, as well as those of other countries. Opinions still diverge considerably.

On Monday, Commission President Ursula von der Leyen had spoken out in favor of a sovereignty fund that would not be financed solely from existing EU pots. There is opposition to this from the “frugal” states, including Germany. The Covid Next Generation EU recovery program is “still filled to the brim,” according to German government circles. “That means we are not suffering from a shortage of possible funding.”

Berlin wants to relax state aid law

Above all, the business community is calling for better locational conditions in the EU, and Patricia Lips, Vice Chairwoman of the CDU/CSU parliamentary group in the German Bundestag, is also calling for a “consistent reduction in bureaucracy and burdens.”

The German government is relying primarily on national subsidy programs and wants to loosen the corset of EU state aid law to this end. The IRA, it says, makes it possible to support companies much more directly and quickly, for example, via tax credits. “This kind of support would simply not be possible in Europe without a change in the law.” For example, he said, the temporary crisis aid framework also imposes quite a few conditions and restrictions that enormously complicate the disbursement of electricity and gas price brakes to large consumers in Germany.

Talks with Washington ‘very constructive’

German industry argues similarly: “It’s not about billions in subsidies, but about simplicity and reliability of support,” says Karl Haeusgen, President of the VDMA. “Here, we can certainly learn from the United States.” Haeusgen cites the IPCEI subsidy programs as an example: The mechanical engineering association had considered launching an IPCEI for raw material supply. Given the time-consuming application process, “the idea was buried again,” he says.

However, the German government is confident that it will be able to achieve improvements to the IRA for domestic automakers and the energy-intensive industry in the negotiations with Washington. Talks with the US government were “very constructive” and were continuing intensively during the week. Chancellor Scholz had spoken about this at length with US President Joe Biden and coordinated intensively with many European heads of state and government.

More aid and weapons for Ukraine

In addition, Ukraine is once again at the top of the agenda of the EU summit. New decisions are not expected, because the Council has done good preparatory work: Thus, an aid loan totaling €18 billion was launched, which can probably be secured from the EU budget after the agreement with Hungary. In addition, the financial ceiling for the European Peace Facility will be increased by €2 billion. The money is to be used to finance weapons.

Council President Charles Michel wants to hold an in-depth debate on how the EU can secure its financial and military aid in the long term. The sanctions could also cause debate. The ninth sanctions package has not yet been adopted; it is to be discussed by the EU ambassadors on Wednesday.

Contribution candidate Bosnia

The heads of state and government will also welcome Bosnia and Herzegovina as a candidate country. Before accession negotiations can begin, however, the country must implement a list of 14 key priorities – the focus is on strengthening the rule of law, fighting corruption and organized crime.

The EU has rediscovered the strategic importance of the region against the background of Russian influence. After a positive decision on Bosnia, only Kosovo would be left without status. President Vjosa Osmani has announced that she will supply for membership in time for the summit. with Manuel Berkel, Eric Bonse, and Stephan Israel

Corruption in European Parliament: Kaili removed as parliamentary Vice-President

Belgian police have seized €1.5 million in the case of Eva Kaili, an MEP suspected of corruption. The money was seized during raids on Friday and Monday at several homes and offices in Brussels. Kaili, until now one of 14 Vice Presidents of the European Parliament, was removed as Vice President by the European Parliament yesterday with a majority of 625 votes in favor, one against, and two abstentions. She has not yet returned her mandate. Kaili has stated through a lawyer that she was not guilty of anything. She was expelled from the S&D group in the European Parliament and from the Greek socialist party PASOK.

Kaili is the most prominent defendant in the corruption case, which involves large-scale bribery by a Gulf state not named by prosecutors. According to reports, it is the World Cup host country Qatar. Other defendants include employees of several NGOs working for human rights. Four people are in custody. On Monday and Tuesday, offices at the Strasbourg seat of Parliament were searched. There is talk of ten offices, including the office of a staff member of Socialist MEP Pietro Bartolo and the office of civil servant Mychelle Rieu. Rieu works in the subcommittee on human rights. On Wednesday, Kaili is scheduled to testify before a judge in Brussels.

Links between NGOs and EP

So far, the exact circumstances of the corruption case are unclear. In the European Parliament, the accusations focus on Kaili and the Belgian Socialist MEP Marc Tarabella. The S&D group also expelled Tarabella on Tuesday. Belgian Socialist Maria Arena, who heads the subcommittee on human rights, is also temporarily suspending her post. The background to this is the searched office of her assistant, who used to work for the NGO Fight Impunity.

Apparently, NGOs like Fight Impunity have a central role in the corruption case. The NGO Fight Impunity was founded by former MEP Pier Antonio Panzeri when he left the European Parliament in 2019. Panzeri was head of the Subcommittee on Human Rights during his time in the European Parliament. His former colleague is the partner of Kaili, with whom Kaili has a one-and-a-half-year-old daughter.

At the same address in Brussels, where the NGO Fight Impunity is located, several other NGOs related to human rights have their mailbox. It is striking that in the NGOs, several former EU commissioners have functions on the board, such as Emma Bonino, the former Foreign Affairs Commissioner Federica Mogherini, and the former Migration Commissioner Dimitris Avramopoulos. There are further links between the NGO Fight Impunity and the European Parliament: Doriano Dragoni, now an advisor in the European Parliament on budgetary control, co-founded the NGO.

14 deputies in Qatar friendship circle

Daniel Caspary (CDU), head of the German group, says: “The Kaili case clearly shows the weaknesses of the current rules for NGOs.” He said NGO funding and financial structures need to become much more transparent. “We demand that, in the future, NGOs also disclose how and from where they are financed and which principals are behind them.” The fact that non-governmental organizations allegedly disguised as human rights organizations offensively represent the interests of authoritarian third countries in return for money, which in turn trample human rights themselves, is staggering, Caspary continued.

In addition, unofficial friendship groups are coming into focus. In addition to the official parliamentary groups, which also maintain relations with members of Parliament on the Arabian Peninsula, there is a Qatar friendship group in the European Parliament, to which 14 members of Parliament from several political groups belong. The list is accessible on the website of the Qatar Embassy in Belgium. Kaili is not listed.

When members of the friendship circles are invited on trips, there is no indication of who paid for the trip or whether gifts were exchanged. According to the Statute for Members of Parliament, any gift valued at more than €150 must be handed in at the parliamentary administration. Charlotte Wirth and Markus Grabitz

Council continues negotiations on gas price cap

The energy ministers agreed on some critical points for the gas price cap yesterday, but the Council Presidency does not expect a decision until Dec. 19. The level of the gas price cap is to be clarified there, said Czech Industry Minister Jozef Síkela in the evening. For the first time, Síkela hinted at wanting to bring about a majority decision on Monday if necessary.

This can be seen as a strong indication of the will to adopt the regulation. After the meeting, German Economics Minister Robert Habeck also said that a majority decision could be reached on Monday. However, he said he preferred an agreement with which everyone was satisfied.

OTC transactions only ‘provisionally’ without price cap

However, according to Síkela, the ministers were able to agree in principle on four previously contentious issues yesterday:

The gas price cap is not to apply to OTC transactions “for the time being.” Síkela and Energy Commissioner Kadri Simson said there would be an impact assessment on this later.
There is to be another assessment on whether gas hubs other than the TTF will be covered by the price cap. Síkela called this an “opt-in possibility.”
The evaluation of the whole mechanism is to be brought forward by the end of February.
A strengthening of the automatic deactivation of the market correction mechanism to ensure the security of supply and financial market stability.

On Tuesday, the Council Presidency prepared another version of the draft regulation. According to Síkela, the necessary period for triggering the mechanism was shortened to three days for both price levels that would have to be exceeded – i.e. the derivative price and the spread to the LNG index. This step could lead to a much more frequent activation of the mechanism.

Emergency ordinances still only adoptable as a package

Simson also said there was an agreement to extend the mechanism scope from front-month contracts to contracts of up to one year – which would also be a significant extension of the gas price cap. According to experts, a restriction to the front month would have left the most scope for circumvention, in addition to excluding OTC and spot transactions.

Also scheduled for adoption on Dec. 19 are, with the market correction mechanism, the two emergency regulations for joint gas purchases and faster-permitting procedures for renewable energy. A blocking minority among the states had linked the three dossiers. ber

REPowerEU: outcome of the vote uncertain

In early December, compromise amendments to the text, which aims to speed up the introduction of renewable energy, had been found. But the rapporteur, Markus Pieper (EPP), eventually decided to table new amendments, which met with fierce criticism. The outcome of the vote today, Wednesday, is therefore uncertain.

Markus Pieper has broken the “gentlemen’s agreement” by introducing his own amendments to relax environmental regulations in favor of renewable energy development, complain parliamentarians from other groups who are part of the negotiations. In particular, he wants to make Natura 2000 sites accessible to renewable energy projects if they “do not significantly affect the conservation objective of the site.” He also wants to roll back the exclusion of bioenergy in the so-called “go-to areas” – the preferred areas for the introduction of renewable energies.

The Greens, on the other hand, want to exclude not only biomass power plants but also new hydropower plants from the “go-to areas.” Some groups indicated that they would vote for the old compromise amendments.

Commission not enthusiastic

The Commission is also not enthusiastic about the new amendments proposed by Markus Pieper. “There are some amendments that worry us,” European Commission Vice President Frans Timmermans said in his speech to the plenary yesterday. He stressed that biomass burning plants can be built anywhere. “That is why the Commission proposes to exclude them from the favorable areas, contrary to what you are asking for in some amendments,” he said.

The trilogue negotiations for the review of the Renewable Energies Directive (RED 3) are currently underway. This involves the share targets for renewables in industry, buildings, and transport, as well as the paths leading to these targets (for example, hydrogen or biomass).

With the REPowerEU plan proposed in May this year, the Commission made a proposal for faster permitting procedures (RED 4), which the Council would like to see addressed earlier with its own regulation (RED 5) based on the emergency paragraph (Article 122). RED 5 – which does not involve the Parliament – may come into force as early as the beginning of next year, but will apply for a maximum of 12 months. cst

UN: Nuclear fusion could be of great help in fighting climate change

The United Nations has welcomed the historic breakthrough in the field of nuclear fusion with an eye on climate change. “It is an extremely important development that could be of great help in the fight against climate change,” spokesman Stéphane Dujarric said Tuesday in New York. In doing so, he stressed that it could be a long time before the regular production of clean electricity using the method of fusing nuclear nuclei. “There is a crisis happening now.” Thus, the private sector and governments should not in any way slow down their efforts in saving carbon.

Earlier, the US government said that scientists had succeeded for the first time in producing more energy than they used when fusing atomic nuclei. In the future, nuclear fusion could possibly be used to generate huge amounts of electricity in a climate-neutral and safe manner. However, there are still severe technical hurdles to be overcome before the process can be used commercially. dpa

EU to jointly implement global minimum tax

German Finance Minister Christian Lindner has welcomed the EU compromise for joint implementation of the global minimum tax. “The path is cleared for implementation in the EU,” the FDP leader said in Berlin on Tuesday. Work on a corresponding directive should begin quickly. Germany plans to bring the 15 percent minimum tax for larger companies into force in 2024. There should also be an ambitious timetable in Europe.

“It will not increase the burden on our economy,” Lindner also tweeted. There will be more fairness to locations that rely on tax dumping, he said. The minimum tax is intended to ensure greater tax fairness worldwide, especially to make internationally active and digital corporations more accountable, which today often pay hardly any taxes due to clever profit shifting.

The EU had agreed on a compromise with Hungary late Monday night. This also clears the path for further Ukraine aid of €18 billion. In exchange, the sum of the blocked billion payments to Hungary was reduced in the dispute over violations of the rule of law principles. rtr

Council Presidency presents third compromise paper on the Data Act

As previously announced, the Czech Council Presidency presented a third compromise proposal for the Data Act at a working-level meeting on December 13. This means that the dossier now passes to the Swedish Council Presidency.

The most important changes in the third compromise paper on the Data Act are:

Clarification of the interplay between the Data Act and the GDPR: The GDPR imposes a number of personal data obligations on data holders. The amendments clarify where such obligations are imposed and where they are not.
New Definitions of Data: The amendments distinguish between raw, edited, and processed data. The concept of “data generated by the use of a product or related service” complements the recently added concept of “readily available data,” both of which now work together.
Improving interoperability of data processing services: Measures are foreseen to encourage parallel use of multiple data processing services (multi-cloud approach), for example, by removing obstacles that prevent customers from porting their data or by eliminating data egress fees. There are new definitions of data egress charges and switching charges when switching service providers.

Among other changes, the Czech Presidency proposes to extend the period of application of the future regulation from twelve to 18 months. It also asks the Commission to examine the impact of the regulation on trade secrets – as well as the ability of the competent authorities to ensure the implementation of the new rules. vis

EU Commission to certify adequate data protection level for USA

Yesterday afternoon, the EU Commission presented its draft for an adequacy decision for the US under the EU-US Data Privacy Framework. This explains in detail the assurances given by the US to ensure better protection of personal data in the US collected originally under the General Data Protection Regulation.

On 134 pages, including annexes, the Commission explains how the system should work in the future: As with Safe Harbor and Privacy Shield, the predecessors of the EU-US DPF, US companies are to register with the Federal Trade Commission, providing assurances that go beyond US law. Complementary, the US government has adjusted the powers of the intelligence agencies, imposing stricter rules on their handling of personal data by presidential order and expanding the legal recourse available to non-US citizens on suspicion of illegal data use.

The draft adequacy decision under Article 45 GDPR will now be examined by the Member States and the supervisory authorities, which will issue an opinion that is not binding on the Commission. The European Parliament can accept or reject the proposal by majority vote, but this is currently considered unlikely. The Commission and the US had been negotiating the matter for almost a year and a half. fst

EU Supply Chain Act must work on the ground

From Bärbel Kofler

Bärbel Kofler is Parliamentary State Secretary to the German Federal Minister for Economic Cooperation and Development.

The Supply Chain Due Diligence Act comes into force on January 1, 2023 – a milestone for strengthening and protecting human rights and environmental standards along global supply chains. At the same time, negotiations for an EU-wide supply chain regulation – the Corporate Sustainability Due Diligence Directive – are in full swing. This will finally make corporate due diligence binding – a long overdue step.

However, the current debate surrounding the legal regulations is focusing primarily on the potential challenges for German and European companies. What the developments are really about is often pushed into the background: improving living conditions along global supply chains and strengthening the rights of those affected. We must live up to this claim – both with the German Supply Chain Due Diligence Act and with regard to the planned EU Supply Chain Law.

Women and girls particularly at risk

Because the abuses in the global value chains with over 450 million employees are numerous. Many products and raw materials for the German and European markets are produced or extracted under intolerable environmental and working conditions, for starvation wages or even with the help of exploitative child labor. According to the latest figures from the International Labor Organization (ILO), 27.6 million people worldwide perform forced labor, including more than 3.3 million children.

Vulnerable and marginalized groups, in particular, such as women and girls, often experience multiple discrimination and gender-based forms of violence in all sectors – whether as seamstresses in textile factories, as farmers in the fields, or in the service sector. The Covid-19 pandemic has further exacerbated this gender-based inequality.

Exploitation also in Europe

The negative impact on the environment is also enormous: Textile production, for example, uses 43 million tons of chemicals per year. When factories discharge these directly into surrounding waters via their wastewater, they also endanger the health of people in neighboring communities. The textile sector also accounts for more than one-third of the microplastics in the world’s oceans.

However, human rights violations and environmental damage do not only take place far away but also in Europe, for example, in the form of the exploitation of migrant workers in German slaughterhouses.

All these examples make it clear: Laws on corporate due diligence must take effect above all where the violations of people and the environment take place. But how do we achieve this desired effectiveness – especially given the EU law?

Reducing legal hurdles

Those affected by human rights violations need effective legal action. Civil liability in EU regulation is therefore essential. This will particularly benefit vulnerable or marginalized groups such as women, who suffer most from low wages and workplace violence. The design of liability standards is also crucial: We need a fair distribution of the burden of proof: it cannot be the case that those affected have to prove that an international company has not fulfilled its due diligence obligations – in most cases, this will not be possible. In addition, as also provided for in the German Supply Chain Act, it must be ensured that non-governmental organizations and trade unions can enforce the rights of those affected in civil proceedings in their own name – an important provision for reducing legal hurdles.
Grievance mechanisms as part of corporate due diligence must be easily accessible to all potentially affected rights holders. This also applies to civil society organizations and trade unions. At the same time, whistleblowers must be protected from reprisals. Only in this way can an effective redress and reparation succeed.
The scope of the draft of the EU Supply Chain Law must not be limited to “established business relationships” in the area of indirect suppliers. This construct creates false incentives. Informal or short-term business relationships in particular pose a higher risk of human rights violations. This is particularly evident in the textile sector, where rapidly changing contractual relationships are commonplace and, at the same time, exploitation of seamstresses is not uncommon. We thus need a risk-based approach, as it is internationally known and recognized.
It is important that the protection of the climate and the environment are also comprehensively included in the due diligence obligations. This is particularly vital for people in developing countries, who are already suffering the most from the consequences of climate change. However, the transition to an environmentally and climate-friendly way of doing business can only succeed if everyone participates in this “Just Transition” – and European companies in particular play a central role in this.

For what is really at stake – better working and living conditions along global value chains – we thus need government and corporate commitment as well as clear and effective legal frameworks. Of course, this cannot happen without the necessary support. The BMZ is thus currently expanding existing national offerings for companies and civil society to the EU level.

Because one thing is certain: We will only achieve effectiveness if private and voluntary instruments, on the one hand, and governmental and binding instruments, on the other, are interlinked – entirely in the interests of those affected in our value chains.

The climate club, which Olaf Scholz officially established as G7 chair on Monday, apparently offers no protection against international trade barriers such as the Carbon Border Adjustment Mechanism (CBAM). This was made clear by CBAM rapporteur Mohammed Chahim (S&D) on Tuesday. Shortly before, the trilogue reached an agreement on the scope and functioning of the CBAM (Europe.Table reported). Chahim said the climate club has no link to the CBAM. Exceptions to the climate tariff would only exist for countries with their own carbon price.

Thus, the original idea of Scholz’s campaign hit to take away the fear of the CBAM, especially from EU partner countries, is gone. The aim of the club used to be to grant countries with ambitious climate policies exemptions from climate policy trade barriers. When Scholz first communicated the idea, the introduction of the CBAM was already being discussed among the 27 EU countries. The link between the two ideas was obvious.

Degraded from climate pioneers’ club to discussion forum

Jochen Flasbarth, Germany’s most renowned climate politician, even said in an interview with Europe.Table, as the then State Secretary in the Ministry of the Environment, that in an “ideal world” with climate clubs there would be no need for CBAM at all. It is now well known that we are far away from this ideal world. In the meantime, the BMWK, where the club is located, states that the club does not aim to “promote specific instruments (such as CBAM) or to encourage their use.”

According to a BMWK spokeswoman, the climate club is intended to provide its members with “a forum for general exchange on carbon leakage risks and their mitigation.” A forum? That sounds much weaker than it did at the outset when membership in the climate club was to be tied to high hurdles. Among them: plans for climate neutrality and emissions reduction, and the recording and pricing of industrial emissions.

It thus seems more than doubtful that this watered-down climate club will nevertheless be able to appease criticism of the European CBAM from third countries. Moreover, it is far from clear what will happen to the climate club under the upcoming Japanese G7 presidency. It may simply peter out as a well-intentioned but poorly implemented idea. Lukas Scheid

EUROPE.TABLE EDITORS

Till
Hoppe

Charlotte
Wirth

Falk
Steiner

Timo
Landenberger

Corinna
Visser

Lukas
Knigge

Eric
Bonse

Sarah
Schaefer

Manuel
Berkel

Lisa-Martina
Klein

Markus
Grabitz

Stephan
Israel

Claire
Stam

Dear reader,

To be continued: Yesterday, the EU energy ministers failed again to conclude their negotiations on the gas price cap. On Monday, there is to be a final round on the exact level of the price cap. You can read about the points on which an agreement was reached yesterday in the news section.

Many member states fear a creeping exodus of the industry due to high energy prices. At the upcoming EU summit, the heads of state and government are therefore likely to have an in-depth discussion about the US government’s Inflation Reduction Act – as well as a possible European response to the multi-billion investment program. There is still a long way to go for an agreement. The sovereign wealth fund proposed by Commission President Ursula von der Leyen is meeting with resistance. Meanwhile, the German industry says: “It’s not about billions in subsidies, but about simplicity and reliability of support.” Till Hoppe, Manuel Berkel, Eric Bonse, and Stephan Israel preview the summit.

In today’s Opinion, Bärbel Kofler takes a look at the EU Supply Chain Act. The aim, she says, must be for laws on corporate due diligence to have an impact on the ground, i.e. where the violations of people and the environment occur. For this to succeed, several preconditions are needed, writes the Parliamentary State Secretary to the German Federal Minister for Economic Cooperation and Development – including effective and easily accessible legal action for those affected.

Your
Sarah Schaefer

EU summit: energy crisis dominates agenda again

By

Till Hoppe

The member states were able to close some major construction sites in time for the EU summit: The EU ambassadors defused the dispute with Hungary over frozen funds, and in return Prime Minister Viktor Orbán cleared the way for financial aid to Ukraine and the implementation of the global minimum tax.

Nevertheless, diplomats expect that Thursday’s one-day summit could drag on well into the night. That’s because the energy ministers were unable to resolve their dispute over a gas price cap on Tuesday as hoped (see news section). Czech Energy Minister Jozef Síkela said the ministers wanted to find an agreement next Monday. Nevertheless, the heads of state and government could of course call up the issue on their own initiative.

German Economics Minister Robert Habeck named one possible subject for negotiation for the chiefs, namely the interpretation of the summit conclusions from the end of October. At that time, the heads of state had declared that they wanted to prevent “excessive prices” on the gas market in the future. Yesterday, however, the Council of Ministers was once again unable to clarify precisely this question of the exact level of the price cap. “If the Council were to indicate what it meant by excessive prices, that would certainly facilitate implementation here,” Habeck said.

Resistance to sovereignty fund

Before that, the heads of state and government will meet their colleagues from the Asean countries on Wednesday. The aim is to deepen cooperation with the ten Southeast Asian countries. Chancellor Olaf Scholz is counting on countries such as Thailand, Malaysia, and Vietnam to break the dependence of the economy on China.

High energy prices are fueling concerns in many member states about what a senior EU diplomat calls its “silent exodus” of industry. Leaders will therefore discuss what tools they can use to counter the US government’s lure under the Inflation Reduction Act, as well as those of other countries. Opinions still diverge considerably.

On Monday, Commission President Ursula von der Leyen had spoken out in favor of a sovereignty fund that would not be financed solely from existing EU pots. There is opposition to this from the “frugal” states, including Germany. The Covid Next Generation EU recovery program is “still filled to the brim,” according to German government circles. “That means we are not suffering from a shortage of possible funding.”

Berlin wants to relax state aid law

Above all, the business community is calling for better locational conditions in the EU, and Patricia Lips, Vice Chairwoman of the CDU/CSU parliamentary group in the German Bundestag, is also calling for a “consistent reduction in bureaucracy and burdens.”

The German government is relying primarily on national subsidy programs and wants to loosen the corset of EU state aid law to this end. The IRA, it says, makes it possible to support companies much more directly and quickly, for example, via tax credits. “This kind of support would simply not be possible in Europe without a change in the law.” For example, he said, the temporary crisis aid framework also imposes quite a few conditions and restrictions that enormously complicate the disbursement of electricity and gas price brakes to large consumers in Germany.

Talks with Washington ‘very constructive’

German industry argues similarly: “It’s not about billions in subsidies, but about simplicity and reliability of support,” says Karl Haeusgen, President of the VDMA. “Here, we can certainly learn from the United States.” Haeusgen cites the IPCEI subsidy programs as an example: The mechanical engineering association had considered launching an IPCEI for raw material supply. Given the time-consuming application process, “the idea was buried again,” he says.

However, the German government is confident that it will be able to achieve improvements to the IRA for domestic automakers and the energy-intensive industry in the negotiations with Washington. Talks with the US government were “very constructive” and were continuing intensively during the week. Chancellor Scholz had spoken about this at length with US President Joe Biden and coordinated intensively with many European heads of state and government.

More aid and weapons for Ukraine

In addition, Ukraine is once again at the top of the agenda of the EU summit. New decisions are not expected, because the Council has done good preparatory work: Thus, an aid loan totaling €18 billion was launched, which can probably be secured from the EU budget after the agreement with Hungary. In addition, the financial ceiling for the European Peace Facility will be increased by €2 billion. The money is to be used to finance weapons.

Council President Charles Michel wants to hold an in-depth debate on how the EU can secure its financial and military aid in the long term. The sanctions could also cause debate. The ninth sanctions package has not yet been adopted; it is to be discussed by the EU ambassadors on Wednesday.

Contribution candidate Bosnia

The heads of state and government will also welcome Bosnia and Herzegovina as a candidate country. Before accession negotiations can begin, however, the country must implement a list of 14 key priorities – the focus is on strengthening the rule of law, fighting corruption and organized crime.

The EU has rediscovered the strategic importance of the region against the background of Russian influence. After a positive decision on Bosnia, only Kosovo would be left without status. President Vjosa Osmani has announced that she will supply for membership in time for the summit. with Manuel Berkel, Eric Bonse, and Stephan Israel

Corruption in European Parliament: Kaili removed as parliamentary Vice-President

Belgian police have seized €1.5 million in the case of Eva Kaili, an MEP suspected of corruption. The money was seized during raids on Friday and Monday at several homes and offices in Brussels. Kaili, until now one of 14 Vice Presidents of the European Parliament, was removed as Vice President by the European Parliament yesterday with a majority of 625 votes in favor, one against, and two abstentions. She has not yet returned her mandate. Kaili has stated through a lawyer that she was not guilty of anything. She was expelled from the S&D group in the European Parliament and from the Greek socialist party PASOK.

Kaili is the most prominent defendant in the corruption case, which involves large-scale bribery by a Gulf state not named by prosecutors. According to reports, it is the World Cup host country Qatar. Other defendants include employees of several NGOs working for human rights. Four people are in custody. On Monday and Tuesday, offices at the Strasbourg seat of Parliament were searched. There is talk of ten offices, including the office of a staff member of Socialist MEP Pietro Bartolo and the office of civil servant Mychelle Rieu. Rieu works in the subcommittee on human rights. On Wednesday, Kaili is scheduled to testify before a judge in Brussels.

Links between NGOs and EP

So far, the exact circumstances of the corruption case are unclear. In the European Parliament, the accusations focus on Kaili and the Belgian Socialist MEP Marc Tarabella. The S&D group also expelled Tarabella on Tuesday. Belgian Socialist Maria Arena, who heads the subcommittee on human rights, is also temporarily suspending her post. The background to this is the searched office of her assistant, who used to work for the NGO Fight Impunity.

Apparently, NGOs like Fight Impunity have a central role in the corruption case. The NGO Fight Impunity was founded by former MEP Pier Antonio Panzeri when he left the European Parliament in 2019. Panzeri was head of the Subcommittee on Human Rights during his time in the European Parliament. His former colleague is the partner of Kaili, with whom Kaili has a one-and-a-half-year-old daughter.

At the same address in Brussels, where the NGO Fight Impunity is located, several other NGOs related to human rights have their mailbox. It is striking that in the NGOs, several former EU commissioners have functions on the board, such as Emma Bonino, the former Foreign Affairs Commissioner Federica Mogherini, and the former Migration Commissioner Dimitris Avramopoulos. There are further links between the NGO Fight Impunity and the European Parliament: Doriano Dragoni, now an advisor in the European Parliament on budgetary control, co-founded the NGO.

14 deputies in Qatar friendship circle

Daniel Caspary (CDU), head of the German group, says: “The Kaili case clearly shows the weaknesses of the current rules for NGOs.” He said NGO funding and financial structures need to become much more transparent. “We demand that, in the future, NGOs also disclose how and from where they are financed and which principals are behind them.” The fact that non-governmental organizations allegedly disguised as human rights organizations offensively represent the interests of authoritarian third countries in return for money, which in turn trample human rights themselves, is staggering, Caspary continued.

In addition, unofficial friendship groups are coming into focus. In addition to the official parliamentary groups, which also maintain relations with members of Parliament on the Arabian Peninsula, there is a Qatar friendship group in the European Parliament, to which 14 members of Parliament from several political groups belong. The list is accessible on the website of the Qatar Embassy in Belgium. Kaili is not listed.

When members of the friendship circles are invited on trips, there is no indication of who paid for the trip or whether gifts were exchanged. According to the Statute for Members of Parliament, any gift valued at more than €150 must be handed in at the parliamentary administration. Charlotte Wirth and Markus Grabitz

Council continues negotiations on gas price cap

The energy ministers agreed on some critical points for the gas price cap yesterday, but the Council Presidency does not expect a decision until Dec. 19. The level of the gas price cap is to be clarified there, said Czech Industry Minister Jozef Síkela in the evening. For the first time, Síkela hinted at wanting to bring about a majority decision on Monday if necessary.

This can be seen as a strong indication of the will to adopt the regulation. After the meeting, German Economics Minister Robert Habeck also said that a majority decision could be reached on Monday. However, he said he preferred an agreement with which everyone was satisfied.

OTC transactions only ‘provisionally’ without price cap

However, according to Síkela, the ministers were able to agree in principle on four previously contentious issues yesterday:

The gas price cap is not to apply to OTC transactions “for the time being.” Síkela and Energy Commissioner Kadri Simson said there would be an impact assessment on this later.
There is to be another assessment on whether gas hubs other than the TTF will be covered by the price cap. Síkela called this an “opt-in possibility.”
The evaluation of the whole mechanism is to be brought forward by the end of February.
A strengthening of the automatic deactivation of the market correction mechanism to ensure the security of supply and financial market stability.

On Tuesday, the Council Presidency prepared another version of the draft regulation. According to Síkela, the necessary period for triggering the mechanism was shortened to three days for both price levels that would have to be exceeded – i.e. the derivative price and the spread to the LNG index. This step could lead to a much more frequent activation of the mechanism.

Emergency ordinances still only adoptable as a package

Simson also said there was an agreement to extend the mechanism scope from front-month contracts to contracts of up to one year – which would also be a significant extension of the gas price cap. According to experts, a restriction to the front month would have left the most scope for circumvention, in addition to excluding OTC and spot transactions.

Also scheduled for adoption on Dec. 19 are, with the market correction mechanism, the two emergency regulations for joint gas purchases and faster-permitting procedures for renewable energy. A blocking minority among the states had linked the three dossiers. ber

REPowerEU: outcome of the vote uncertain

In early December, compromise amendments to the text, which aims to speed up the introduction of renewable energy, had been found. But the rapporteur, Markus Pieper (EPP), eventually decided to table new amendments, which met with fierce criticism. The outcome of the vote today, Wednesday, is therefore uncertain.

Markus Pieper has broken the “gentlemen’s agreement” by introducing his own amendments to relax environmental regulations in favor of renewable energy development, complain parliamentarians from other groups who are part of the negotiations. In particular, he wants to make Natura 2000 sites accessible to renewable energy projects if they “do not significantly affect the conservation objective of the site.” He also wants to roll back the exclusion of bioenergy in the so-called “go-to areas” – the preferred areas for the introduction of renewable energies.

The Greens, on the other hand, want to exclude not only biomass power plants but also new hydropower plants from the “go-to areas.” Some groups indicated that they would vote for the old compromise amendments.

Commission not enthusiastic

The Commission is also not enthusiastic about the new amendments proposed by Markus Pieper. “There are some amendments that worry us,” European Commission Vice President Frans Timmermans said in his speech to the plenary yesterday. He stressed that biomass burning plants can be built anywhere. “That is why the Commission proposes to exclude them from the favorable areas, contrary to what you are asking for in some amendments,” he said.

The trilogue negotiations for the review of the Renewable Energies Directive (RED 3) are currently underway. This involves the share targets for renewables in industry, buildings, and transport, as well as the paths leading to these targets (for example, hydrogen or biomass).

With the REPowerEU plan proposed in May this year, the Commission made a proposal for faster permitting procedures (RED 4), which the Council would like to see addressed earlier with its own regulation (RED 5) based on the emergency paragraph (Article 122). RED 5 – which does not involve the Parliament – may come into force as early as the beginning of next year, but will apply for a maximum of 12 months. cst

UN: Nuclear fusion could be of great help in fighting climate change

The United Nations has welcomed the historic breakthrough in the field of nuclear fusion with an eye on climate change. “It is an extremely important development that could be of great help in the fight against climate change,” spokesman Stéphane Dujarric said Tuesday in New York. In doing so, he stressed that it could be a long time before the regular production of clean electricity using the method of fusing nuclear nuclei. “There is a crisis happening now.” Thus, the private sector and governments should not in any way slow down their efforts in saving carbon.

Earlier, the US government said that scientists had succeeded for the first time in producing more energy than they used when fusing atomic nuclei. In the future, nuclear fusion could possibly be used to generate huge amounts of electricity in a climate-neutral and safe manner. However, there are still severe technical hurdles to be overcome before the process can be used commercially. dpa

EU to jointly implement global minimum tax

German Finance Minister Christian Lindner has welcomed the EU compromise for joint implementation of the global minimum tax. “The path is cleared for implementation in the EU,” the FDP leader said in Berlin on Tuesday. Work on a corresponding directive should begin quickly. Germany plans to bring the 15 percent minimum tax for larger companies into force in 2024. There should also be an ambitious timetable in Europe.

“It will not increase the burden on our economy,” Lindner also tweeted. There will be more fairness to locations that rely on tax dumping, he said. The minimum tax is intended to ensure greater tax fairness worldwide, especially to make internationally active and digital corporations more accountable, which today often pay hardly any taxes due to clever profit shifting.

The EU had agreed on a compromise with Hungary late Monday night. This also clears the path for further Ukraine aid of €18 billion. In exchange, the sum of the blocked billion payments to Hungary was reduced in the dispute over violations of the rule of law principles. rtr

Council Presidency presents third compromise paper on the Data Act

As previously announced, the Czech Council Presidency presented a third compromise proposal for the Data Act at a working-level meeting on December 13. This means that the dossier now passes to the Swedish Council Presidency.

The most important changes in the third compromise paper on the Data Act are:

Clarification of the interplay between the Data Act and the GDPR: The GDPR imposes a number of personal data obligations on data holders. The amendments clarify where such obligations are imposed and where they are not.
New Definitions of Data: The amendments distinguish between raw, edited, and processed data. The concept of “data generated by the use of a product or related service” complements the recently added concept of “readily available data,” both of which now work together.
Improving interoperability of data processing services: Measures are foreseen to encourage parallel use of multiple data processing services (multi-cloud approach), for example, by removing obstacles that prevent customers from porting their data or by eliminating data egress fees. There are new definitions of data egress charges and switching charges when switching service providers.

Among other changes, the Czech Presidency proposes to extend the period of application of the future regulation from twelve to 18 months. It also asks the Commission to examine the impact of the regulation on trade secrets – as well as the ability of the competent authorities to ensure the implementation of the new rules. vis

EU Commission to certify adequate data protection level for USA

Yesterday afternoon, the EU Commission presented its draft for an adequacy decision for the US under the EU-US Data Privacy Framework. This explains in detail the assurances given by the US to ensure better protection of personal data in the US collected originally under the General Data Protection Regulation.

On 134 pages, including annexes, the Commission explains how the system should work in the future: As with Safe Harbor and Privacy Shield, the predecessors of the EU-US DPF, US companies are to register with the Federal Trade Commission, providing assurances that go beyond US law. Complementary, the US government has adjusted the powers of the intelligence agencies, imposing stricter rules on their handling of personal data by presidential order and expanding the legal recourse available to non-US citizens on suspicion of illegal data use.

The draft adequacy decision under Article 45 GDPR will now be examined by the Member States and the supervisory authorities, which will issue an opinion that is not binding on the Commission. The European Parliament can accept or reject the proposal by majority vote, but this is currently considered unlikely. The Commission and the US had been negotiating the matter for almost a year and a half. fst

EU Supply Chain Act must work on the ground

From Bärbel Kofler

The Supply Chain Due Diligence Act comes into force on January 1, 2023 – a milestone for strengthening and protecting human rights and environmental standards along global supply chains. At the same time, negotiations for an EU-wide supply chain regulation – the Corporate Sustainability Due Diligence Directive – are in full swing. This will finally make corporate due diligence binding – a long overdue step.

However, the current debate surrounding the legal regulations is focusing primarily on the potential challenges for German and European companies. What the developments are really about is often pushed into the background: improving living conditions along global supply chains and strengthening the rights of those affected. We must live up to this claim – both with the German Supply Chain Due Diligence Act and with regard to the planned EU Supply Chain Law.

Women and girls particularly at risk

Because the abuses in the global value chains with over 450 million employees are numerous. Many products and raw materials for the German and European markets are produced or extracted under intolerable environmental and working conditions, for starvation wages or even with the help of exploitative child labor. According to the latest figures from the International Labor Organization (ILO), 27.6 million people worldwide perform forced labor, including more than 3.3 million children.

Vulnerable and marginalized groups, in particular, such as women and girls, often experience multiple discrimination and gender-based forms of violence in all sectors – whether as seamstresses in textile factories, as farmers in the fields, or in the service sector. The Covid-19 pandemic has further exacerbated this gender-based inequality.

Exploitation also in Europe

The negative impact on the environment is also enormous: Textile production, for example, uses 43 million tons of chemicals per year. When factories discharge these directly into surrounding waters via their wastewater, they also endanger the health of people in neighboring communities. The textile sector also accounts for more than one-third of the microplastics in the world’s oceans.

However, human rights violations and environmental damage do not only take place far away but also in Europe, for example, in the form of the exploitation of migrant workers in German slaughterhouses.

All these examples make it clear: Laws on corporate due diligence must take effect above all where the violations of people and the environment take place. But how do we achieve this desired effectiveness – especially given the EU law?

Reducing legal hurdles

Those affected by human rights violations need effective legal action. Civil liability in EU regulation is therefore essential. This will particularly benefit vulnerable or marginalized groups such as women, who suffer most from low wages and workplace violence. The design of liability standards is also crucial: We need a fair distribution of the burden of proof: it cannot be the case that those affected have to prove that an international company has not fulfilled its due diligence obligations – in most cases, this will not be possible. In addition, as also provided for in the German Supply Chain Act, it must be ensured that non-governmental organizations and trade unions can enforce the rights of those affected in civil proceedings in their own name – an important provision for reducing legal hurdles.
Grievance mechanisms as part of corporate due diligence must be easily accessible to all potentially affected rights holders. This also applies to civil society organizations and trade unions. At the same time, whistleblowers must be protected from reprisals. Only in this way can an effective redress and reparation succeed.
The scope of the draft of the EU Supply Chain Law must not be limited to “established business relationships” in the area of indirect suppliers. This construct creates false incentives. Informal or short-term business relationships in particular pose a higher risk of human rights violations. This is particularly evident in the textile sector, where rapidly changing contractual relationships are commonplace and, at the same time, exploitation of seamstresses is not uncommon. We thus need a risk-based approach, as it is internationally known and recognized.
It is important that the protection of the climate and the environment are also comprehensively included in the due diligence obligations. This is particularly vital for people in developing countries, who are already suffering the most from the consequences of climate change. However, the transition to an environmentally and climate-friendly way of doing business can only succeed if everyone participates in this “Just Transition” – and European companies in particular play a central role in this.

For what is really at stake – better working and living conditions along global value chains – we thus need government and corporate commitment as well as clear and effective legal frameworks. Of course, this cannot happen without the necessary support. The BMZ is thus currently expanding existing national offerings for companies and civil society to the EU level.

Because one thing is certain: We will only achieve effectiveness if private and voluntary instruments, on the one hand, and governmental and binding instruments, on the other, are interlinked – entirely in the interests of those affected in our value chains.

The climate club, which Olaf Scholz officially established as G7 chair on Monday, apparently offers no protection against international trade barriers such as the Carbon Border Adjustment Mechanism (CBAM). This was made clear by CBAM rapporteur Mohammed Chahim (S&D) on Tuesday. Shortly before, the trilogue reached an agreement on the scope and functioning of the CBAM (Europe.Table reported). Chahim said the climate club has no link to the CBAM. Exceptions to the climate tariff would only exist for countries with their own carbon price.

Thus, the original idea of Scholz’s campaign hit to take away the fear of the CBAM, especially from EU partner countries, is gone. The aim of the club used to be to grant countries with ambitious climate policies exemptions from climate policy trade barriers. When Scholz first communicated the idea, the introduction of the CBAM was already being discussed among the 27 EU countries. The link between the two ideas was obvious.

Degraded from climate pioneers’ club to discussion forum

Jochen Flasbarth, Germany’s most renowned climate politician, even said in an interview with Europe.Table, as the then State Secretary in the Ministry of the Environment, that in an “ideal world” with climate clubs there would be no need for CBAM at all. It is now well known that we are far away from this ideal world. In the meantime, the BMWK, where the club is located, states that the club does not aim to “promote specific instruments (such as CBAM) or to encourage their use.”

According to a BMWK spokeswoman, the climate club is intended to provide its members with “a forum for general exchange on carbon leakage risks and their mitigation.” A forum? That sounds much weaker than it did at the outset when membership in the climate club was to be tied to high hurdles. Among them: plans for climate neutrality and emissions reduction, and the recording and pricing of industrial emissions.

It thus seems more than doubtful that this watered-down climate club will nevertheless be able to appease criticism of the European CBAM from third countries. Moreover, it is far from clear what will happen to the climate club under the upcoming Japanese G7 presidency. It may simply peter out as a well-intentioned but poorly implemented idea. Lukas Scheid