Dear reader,
German Minister for Labor Hubertus Heil (SPD) is a staunch advocate for employee rights. At the Social Europe conference in November, for example, he emphasized the importance of strong European works councils for a strong Europe.
However, Germany is likely to abstain in the Council of EU Labor Ministers, which is due to adopt a position on the European Works Council Directive today. The reason for this is once again the concerns of the Liberals, who have already prevented Germany from supporting the Platform Work Directive or the EU Supply Chain Act. It was useless in these cases: in the end, both laws were passed without Germany.
Observers expect a similar outcome today, with the EPSCO taking the first step towards reaching a general position on the European Works Councils. The disgruntlement at the lack of a position from Germany, the largest EU member state, is almost physically palpable. SPD MEP Gaby Bischoff, for example, commented with annoyance: “The ‘German Votes’ in the social sector must finally come to an end if Germany wants to live up to its claim to shape Europe.”
Minister Heil’s opponent is an influential German CDU MEP of all people – Dennis Radtke. He is driving forward important labor market policy dossiers from Parliament. He was the rapporteur for European works councils in the last legislature and also helped the Platform Work Directive to achieve a breakthrough.
Even though the Council is now adopting the general approach on European Works Councils after a relatively short period, the issue is far from over. Dossiers from the areas of employment and social affairs generally have a hard time at EU level. The parliamentarians on the EMPL employment committee, who were able to agree on the text in April , also had to realize this – the decision on their negotiating mandate, however, had to be postponed. Here, too, there is potential for further disagreement.
I wish you a good day!
Feature
Why the new EU debt rules still have to pass their toughest test
It has been long awaited, now the time has come. The EU Commission is applying the hard-fought new EU debt rules for the first time. On Wednesday, the EU Commission presented its recommendations for the economic and budget policies of the EU member states. For France, Poland, Italy, Belgium, Hungary, Slovakia and Malta, the Commission also announced the launch of proceedings for “excessive” deficits. The countries thus join Romania, which is already subject to an excessive deficit procedure.
The Commission will submit the official proposal to initiate the excessive deficit procedure to the EU Council in the first weeks of July. The Council of Finance Ministers should then decide as early as July 16 whether it intends to follow the Commission’s request.
Member states that are subject to an excessive deficit procedure must reduce their structural primary deficit by at least 0.5 percentage points each year until their deficit falls below the three percent limit set out in the EU treaties. The governments concerned will therefore have to plan significant spending cuts or additional revenue for their 2025 budget. Whether they will actually do this is uncertain given the political obstacles.
New French government financially restricted
The situation is particularly unclear in France. In 2023, the public deficit amounted to 5.5 percent of GDP. The Commission estimates a deficit of 5.3 percent for 2024 and 5.0 percent for 2025 – well above the three percent mark. At the same time, France will have a new government with the new elections at the beginning of July. Both the right-wing populist Front National and the left-wing party alliance “Nouveau Front Populaire” are unlikely to want to adhere to the EU Commission’s austerity targets.
In April next year, the countries in the excessive deficit procedure must submit a progress report on their budgetary adjustments. In June 2025, the EU Commission would then have the opportunity to propose further measures if countries in the excessive deficit procedure do not meet the requirements. It will then become clear whether there is the political will to force France and other large member states such as Poland and Italy to comply with the rules. In the past, France was spared by the EU Commission and the EU Council due to its political weight, even if it exceeded the deficit limit.
For the EPP, the credibility of the rules is at stake
CSU MEP Markus Ferber hopes that the EU will enforce its rules this time. “If the Stability and Growth Pact is to be credible, violations must also have consequences“, he explained in a press release. This is “nothing less than the acid test for the new Stability and Growth Pact”.
For Green MEP Rasmus Andresen, however, the Commission’s decision shows that the reform of the EU debt rules was a mistake. “If the countries against which proceedings have now been initiated want to comply with the new budget consolidation requirements, they would lose considerable economic power”, he said in a press release. This would damage the European economy as a whole and prevent urgently needed investments. Economists had already warned during the negotiations on the reform of the debt rules that the reform took too little account of the need for additional investment.
Some countries that exceed the three percent deficit limit in 2023 will be spared an excessive deficit procedure, for example Estonia, Spain and the Czech Republic. Under the new EU debt rules, the EU Commission can waive an excessive deficit procedure if the deficit is close to the three percent limit or if it only exceeds the limit temporarily or exceptionally.
Longer-term orientation
However, the debt rules do not only affect countries against which an excessive deficit procedure has been initiated. Under the new regime, all member states must submit medium-term fiscal plans for the next four or seven years. For member states with a debt level of more than sixty percent of GDP, these fiscal plans must lead to a reduction in the debt level in the medium term.
Member states can apply to submit a fiscal plan for seven years instead of four if they can demonstrate that they are implementing growth-promoting reforms and investments. In addition, the fiscal plans should not only be based on budget figures, but also take other economic factors into account as part of holistic debt sustainability analyses.
According to Zsolt Darvas, Senior Research Fellow at the Brussels think tank Bruegel, these debt sustainability analyses will also require high budget consolidations. And in some cases, these are even higher than the 0.5 percentage points envisaged by the excessive deficit procedure.
Conflicts foreseeable in the fall
On Friday, the European Commission will submit its proposal for the “technical trajectory” – the planned development of net expenditure over the coming years – to the member states. On the basis of this proposal, national government officials and Commission officials will discuss calculation methods and model assumptions at a technical level before the national governments present their own proposal for the multi-annual fiscal plan in September.
The Commission will respond in November with its own recommendations on the multi-annual fiscal plans, which must be approved by the Council of Finance Ministers in December. “There could be a conflict here”, Zsolt Darvas told Table.Briefings. In addition to the countries in the excessive deficit procedure, a dispute is also likely to arise with Spain, Finland and Croatia in the course of the fall.
Translation missing.
AI Act: Why the German government needs to speed up implementation
The AI Act is not yet in force. However, politicians and companies are urging the German government to make rapid progress with preparations. “The content of the AI Act has been finalized since mid-March. We expect the German government to now swiftly present the draft for an implementation law“, says digital politician Ronja Kemmer (CDU). Missing the deadline, as the traffic lights did with the Digital Services Act, must not happen with the AI Act.
The industry itself must also hurry to develop the necessary standards, says Robert Kilian, board member of the KI-Bundesverband. Technical standardization, for example within the framework of the German Institute for Standardization (DIN) or the European Committee for Electrotechnical Standardization (CENELEC), is not the primary task of politicians, but of industry representatives. “We all have to step on the gas pedal together. It is a joint task to bring out these technical standards as quickly as possible.”
Examining the ‘enforcement requirements’
The AI Act will enter into force 20 days after publication in the Official Journal of the EU. This is expected in July. The Federal Ministry of Economic Affairs and the Federal Ministry of Justice are responsible for its implementation. The Federal Government is currently examining implementation requirements and options resulting from the AI Regulation, according to the BMWK. The review is being carried out with the participation of the other ministries and with the involvement of the federal states and relevant stakeholders.
In this context, the BMWK refers to the timetable for the implementation deadlines set out in the AI Regulation. This stipulates that the authority structure must be set up and the provisions on penalties and fines must be regulated within twelve months of entry into force.
Under no circumstances should the state take that long, says Robert Kilian. “Companies are complaining about considerable legal uncertainty. This needs to be countered, also by creating points of contact. And these points of contact lie with the authorities.” The introduction of the corresponding compliance systems, the possible adaptation of products and the training of employees all take months, if not years, says Kilian. And this requires guidance from the relevant authorities.
Tight transition periods for companies
In view of this, the transition periods are comparatively demanding. The AI Act provides that:
- Member states must phase out prohibited systems within six months of entry into force;
- The obligations for general AI governance become applicable after twelve months;
- All provisions of the AI Act become applicable after 24 months, including the obligations for high-risk systems in accordance with Annex III (list of high-risk use cases);
- After 36 months, the obligations for high-risk systems set out in Annex II (List of Union harmonization legislation) apply.
Until the first deadline expires, every company must create an AI inventory. “Only if I know which AI systems I’m actually using can I be sure that there aren’t any prohibited applications”, says Kilian.
The timetable set by the AI regulation is ambitious, according to Maximilian Funke-Kaiser, digital policy spokesperson for the FDP parliamentary group in the Bundestag. “But I don’t see any danger of it being met. The various ministries are working together cooperatively, with the involvement of civil society, associations and industry.”
Adjustments necessary in many areas
Changes are not only necessary in the areas that fall within the remit of the BMWK and the BMJ. Adjustments are necessary in practically all areas. Here are a few examples:
- Federal Data Protection Act (BDSG): Necessary adjustments concern the processing of personal data, in particular biometric data. Relevant articles in the AI Act: Article 5 (prohibition of certain AI practices), Article 52 (transparency obligations when processing personal data) and Article 60 (requirements for biometric identification systems).
- Product Safety Act (ProdSG): Integration of safety and conformity assessment procedures for high-risk AI systems. Relevant articles: Article 6 (Requirements for high-risk AI systems), Article 46 (Conformity assessment procedures).
- Telemedia Act (TMG): Labeling obligations for AI-generated content and transparency requirements. Relevant articles: Article 52 (transparency obligations), Article 52(3) (labeling of AI-generated content).
- Labor law regulations (e.g. Works Constitution Act): Protection of employee rights when using high-risk AI systems. Relevant articles: Article 29 (transparency and information obligations), Article 54 (obligations of operators of high-risk AI systems).
- Criminal Code (StGB) and Code of Criminal Procedure (StPO): Regulation of the use of AI systems in criminal prosecution. Relevant articles: Article 5 (Prohibition of certain AI practices), Article 74 (Specific requirements for law enforcement and border management).
Controversial: biometric remote recognition
The German government can also regulate how it wants to deal with the remote biometric recognition (“mass surveillance”) of people in public spaces. In the coalition agreement, the coalition parties stipulated: “Biometric recognition in public spaces and automated state scoring systems using AI must be ruled out under European law.”
This was not successful. However, the AI Act gives the member states some leeway. In Germany, both the Ministry of Justice and the Ministry of the Interior are responsible. The FDP is particularly clear on the issue of AI-supported biometric remote recognition: “As the FDP, we reject the establishment of a surveillance state and will use this leeway to ban the technology”, says Maximilian Funke-Kaiser. Minister for Justice Marco Buschmann agrees. Interior Minister Nancy Faeser, on the other hand, would like to see more access rights for security authorities.
Key question: Who should supervise?
There are also different opinions on the question of who should conduct market surveillance and who should be the notifying authority. The Federal Network Agency, which already acts as coordinator for the Digital Services Act, is one of the bodies under discussion. However, the data protection officers are also being considered.
“Successful implementation will largely depend on us achieving a national supervisory structure that is bundled as much as possible at the federal level, an efficient one-stop store as a point of contact for companies”, demands Ronja Kemmer, for example. Despite many previous prophecies of doom that this would not be possible due to federally divided responsibilities, the hearing in the Digital Committee once again made it clear “that solutions are definitely possible here with the necessary political will”.
Maximilian Funke-Kaiser proposes that AI supervision should initially be located within the Federal Network Agency. “In a second step, we should separate the entire digital supervision, including the AI authority and the Digital Services Coordinator, from the Federal Network Agency and set up a separate digital agency.”
In contrast, the online retailer Zalando is in favor of anchoring AI supervision with the state data protection authorities. A significant proportion of AI use cases already involve the processing of personal data. “This is the responsibility of the state data protection authorities, which have already built up expertise in this area”, argues Daniel Enke, Director of Public Affairs at Zalando. “Alternative solutions entail the risk that companies will have to discuss the same use cases with different authorities – in the worst case with conflicting interpretations.” This is basically what everyone wants to avoid.
- Arbeitnehmerrechte
- Artificial intelligence
- Artificial Intelligence Regulation
- BMWK
- Digital policy
Translation missing.
News
ECR becomes third-strongest parliamentary group – and overtakes Renew
The Group of European Conservatives and Reformists (ECR) in the European Parliament has grown to 83 members in a second accession round. The Eurosceptic group has thus ousted Renew from third place in Parliament.
The following new MEPs were formally admitted at the Group meeting in Brussels on Wednesday:
- Kristoffer Storm from the Danish Democrats party (Danmarksdemokraterne).
- Ivaylo Vulchev from the Bulgarian party “There is such a people” (Има такъв народ, ITN).
- Aurelijus Veryga from the Lithuanian Farmers and Greens Party (Lietuvos valstiečių ir žaliųjų sąjunga).
- French MEPs Marion Maréchal, Guillaume Peltier and Laurence Trochu. They were previously members of the far-right party Reconquête.
- Claudiu-Richard Tarziu, Gheorghe Piperea, Maria-Georgiana Teodorescu, Adrian-George Axinia and Serban Dimitrie Sturdza from the Alliance for the Union of Romanians (Alianţa pentru Unirea Românilor, AUR).
The constituent meeting of the group with the election of the chairperson is scheduled for June 26. lei
Germany delays adoption of new EU sanctions package against Russia
The EU countries have been unable to agree on a 14th package of sanctions against Russia due to a blockade by Germany. Despite the removal of a clause, Berlin did not want to agree to the package, diplomats told Reuters news agency on Wednesday.
Officials from the 27 EU countries have been debating the package for over a month. The new measures include a ban on Russian LNG shipments and that “EU operators” can be held responsible for sanctions violations by subsidiaries and partners in third countries.
Squabble between red and green
Germany’s hesitation was partly due to an internal disagreement between the Foreign Ministry and the Federal Chancellery, diplomats and a source familiar with the matter said.
The deleted clause was an extension of the so-called “no-Russia clause” to subsidiaries in third countries. The clause would have forced these subsidiaries to “contractually prohibit re-export to Russia and re-export for use in Russia”, according to a draft of an earlier version of the package.
The clause under Article 12G was deleted in a compromise text circulated to member states shortly before the ambassadors met late Wednesday afternoon, they said. The ambassadors plan to continue their debate on Thursday, Reuters reports. rtr
The CDU/CSU group is playing poker for these committee chairs
The group of CDU/CSU MEPs in the European Parliament is discussing who will succeed Rainer Wieland as Vice-President of the European Parliament. Sabine Verheyen, Vice-President of the NRW CDU, MEP since 2009 and most recently Chair of the Culture Committee (CULT), is said to have ambitions to succeed the long-standing Vice-President.
The decision is linked to the question of which committees the 29-strong German delegation would like to chair. The delegation, which is chaired by Daniel Caspary, is calling for a stronger focus on legislative committees. This could mean that the CDU/CSU group will no longer reach for the Foreign Affairs Committee in the first round when allocating committee chairs. The Committee on Foreign Affairs (AFET) was chaired by David McAllister, who is also Vice-President of the EPP.
Entitlement to one of 14 Vice-President posts
Instead, the delegation could initially move to the Agriculture Committee (AGRI), which would again be chaired by Norbert Lins. The Industry Committee (ITRE) is also being considered, with Christian Ehler as a possible candidate. If the Committee on Foreign Affairs is not drawn, David McAllister could also run instead of Verheyen as a candidate for the post of Vice-President of the European Parliament, to which the German group is entitled.
In the last legislative period, the German group chaired four committees (AFET, AGRI, CULT, CONT). The Polish delegation has 23 MEPs and is the second-largest national group after the German delegation with 29 MEPs. Spain has the third largest delegation with 22 MEPs. Poland and Spain have significantly increased the number of their EPP MEPs and will make more demands than last time.
Three instead of four committee chairs?
The German group will select the candidate for the Vice-President’s post on July 15 in Strasbourg. As heads of the CDU/CSU delegation, Caspary and Angelika Niebler will negotiate with the heads of the other national delegations about the committee chairs. Caspary was up against Sven Simon in last week’s election for the chair of the German group. Simon received eleven out of 28 votes. Caspary received 16 votes with one abstention. The group of younger MEPs around Sven Simon is demanding that they also be taken into account when the posts are allocated. They are hoping for a position as deputy for the German group.
In 2019, six political groups in the European Parliament reached an agreement not to give the far-right ID Group the committee it was entitled to according to D’Hondt. They had formed a so-called cordon sanitaire to keep the radical right-wingers away from positions of responsibility in the committees and on the Parliamentary Bureau. The AGRI chairmanship, which belonged to the ID parliamentary group, then fell to Norbert Lins. It is expected that the parliamentary groups will once again agree on a cordon sanitaire. However, the CDU/CSU group will probably only be allowed to chair two or three committees in the future instead of four as in the previous mandate. There are 14 Vice-Presidents in the European Parliament.
The EPP Group has re-elected Manfred Weber as its Chairman. He received 161 votes in favor, with two abstentions and eight votes against. Weber has led the group since 2014 and ten deputies were also elected. With 188 MEPs, the EPP is the largest group. mgr
Green Group: Reintke and Eickhout elected co-chairs
The only two candidates for the chairmanship of the Greens/EFA group, Terry Reintke and Bas Eickhout, were elected to office by MEPs on Wednesday morning. “We are the reliable and constructive partner for a democratic, pro-European majority”, emphasized Reintke. As the Green Group, they want to promote the Green Deal, invest in green industries that make the European Union competitive and create jobs.
Reintke already held the post in the last legislature following the resignation of Ska Keller. Eickhout was previously Deputy Chairman and is now the successor to Belgian Philippe Lamberts, who has left the European Parliament. luk
Shein and Temu: E-commerce associations demand a level playing field
Ecommerce Europe, along with 16 other national e-commerce associations, is calling for fair competition and more effective enforcement of EU laws against non-EU based actors. In their open letter, they demand that “e-commerce players active in the Union but based in non-EU countries should play by the same rules as EU-based businesses”. This is to ensure that EU-based companies are not at a competitive disadvantage.
The background to these demands is the rapid success of Asian e-commerce giants like Shein and Temu. These companies leverage significant financial resources and aggressive marketing strategies to quickly penetrate the European market. Additionally, the signatories claim that these companies benefit from state subsidies in their home countries, further boosting their competitiveness. The letter criticizes these practices as leading to unfair competition, disadvantaging EU businesses.
E-commerce associations criticize inadequate oversight
The associations point out that EU-based companies are subject to extensive laws and high compliance costs, which non-EU based actors often do not follow. National authorities are frequently understaffed and poor coordination hampers the enforcement of EU regulations. This gives non-EU actors, who ignore these rules, an unfair competitive edge. The commercial practices of these actors also raise questions about compliance with consumer protection, product safety, data protection, privacy, environmental and tax laws, according to the signatories.
The associations, therefore, call on the Commission, member states, and relevant authorities to provide all necessary resources to monitor and sanction non-EU based actors as thoroughly as EU-based ones. They emphasize the need for deeper collaboration and coordination among EU member states and their authorities. This could ensure consistent application of regulations, thereby fostering genuine equality of opportunity within the EU’s internal market. vis
Aviation emissions: Low-cost airlines criticize EU exemptions for long-haul flights
The European low-cost airlines Ryanair, Easyjet and Wizz Air call for non-CO2 emissions from all flights – including international long-haul flights – to be recorded and disclosed. From 2025, airlines in Europe will have to collect and disclose emissions from soot, nitrogen oxides and water vapor in addition to direct carbon emissions in emissions trading for the first time. However, the European Commission plans to exempt long-haul flights from the monitoring regulations for non-CO2 emissions.
According to the European Union Aviation Safety Agency, airlines’ non-CO2 emissions have at least as much of an impact on global warming as their carbon emissions. A draft Commission proposal for the new rules seen by Reuters suggests exempting international flights from the rules for two years. “Such reporting shall only be required in respect of routes involving two aerodromes located in the European Economic Area,” the proposal states. Flights from the EEA to Switzerland or the UK are also to be included.
“The blanket exclusion of extra-EEA routes would give the misleading impression that these routes create no non-CO2 warming effects, misdirecting all future non-CO2 mitigation measures,” the airlines said in a joint statement distributed to EU governments. rtr/luk
What the new Belgian government could look like
The formation of a new Belgian government is making progress – at least on paper. On Wednesday, King Philippe received the Flemish nationalist Bart De Wever at the Royal Palace in Brussels to receive an interim report on the exploratory talks.
No details of the content were revealed. However, De Wever has apparently come closer to his goal of forming a coalition at the federal level similar to the one in Flanders. It would be supported by De Wever’s nationalist N-VA party, but also by the Liberals, Christian Socialists and the Flemish Social Democrats.
Government could ‘mirror’ the regions
In Brussels, there is even talk of a “mirror coalition”, as the Liberals and Christian Socialists are also negotiating a governing alliance in French-speaking Wallonia. It would then be mirrored at the federal level, which should significantly increase political coherence.
King Philippe instructed De Wever to press ahead with the talks and present a further report on June 26. The meeting was overshadowed by the EU Commission’s decision to initiate an excessive deficit procedure against Belgium. This could restrict the fiscal policy scope of the future government and make it more difficult to form a government.
Is Belgium complying with debt rules?
The EU Commission complains that the Kingdom is in breach of the Maastricht thresholds (3.0 and 60 percent) with a new debt of 4.4 percent of GDP and a debt level of 105.2 percent. According to the Brussels authority, there is no improvement in sight. It criticizes the lack of planning certainty and budget discipline in the regions – especially in the highly indebted Wallonia.
If the EU finance ministers confirm the excessive deficit procedure, Belgium will have to present a budget plan on Sept. 20 that provides for a gradual reduction in deficits. However, it is unclear whether there will be a new federal government in Brussels by then – and whether it can agree to tighten its belt.
According to calculations by the think tank Bruegel, Belgium would have to cut government spending by three percent of economic output over the next four years. This is likely to lead to considerable social and economic upheaval. The trade unions have already announced “resistance” to the “austerity policy”. ebo
Must-Reads
Personnel
Urban Keussen was elected as the new President of the European association of public utilities Cedec on Wednesday. He succeeds Florian Bieberbach, the head of Münchner Stadtwerke (SWM), who had led Cedec since 2019. Keussen is Chief Technology Officer at EWE and was previously a manager in Eon’s distribution grid business and head of the German transmission grid operator Tennet.
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Europe.Table Editorial Team
EUROPE.TABLE EDITORIAL OFFICE
Dear reader,
German Minister for Labor Hubertus Heil (SPD) is a staunch advocate for employee rights. At the Social Europe conference in November, for example, he emphasized the importance of strong European works councils for a strong Europe.
However, Germany is likely to abstain in the Council of EU Labor Ministers, which is due to adopt a position on the European Works Council Directive today. The reason for this is once again the concerns of the Liberals, who have already prevented Germany from supporting the Platform Work Directive or the EU Supply Chain Act. It was useless in these cases: in the end, both laws were passed without Germany.
Observers expect a similar outcome today, with the EPSCO taking the first step towards reaching a general position on the European Works Councils. The disgruntlement at the lack of a position from Germany, the largest EU member state, is almost physically palpable. SPD MEP Gaby Bischoff, for example, commented with annoyance: “The ‘German Votes’ in the social sector must finally come to an end if Germany wants to live up to its claim to shape Europe.”
Minister Heil’s opponent is an influential German CDU MEP of all people – Dennis Radtke. He is driving forward important labor market policy dossiers from Parliament. He was the rapporteur for European works councils in the last legislature and also helped the Platform Work Directive to achieve a breakthrough.
Even though the Council is now adopting the general approach on European Works Councils after a relatively short period, the issue is far from over. Dossiers from the areas of employment and social affairs generally have a hard time at EU level. The parliamentarians on the EMPL employment committee, who were able to agree on the text in April , also had to realize this – the decision on their negotiating mandate, however, had to be postponed. Here, too, there is potential for further disagreement.
I wish you a good day!
Feature
Why the new EU debt rules still have to pass their toughest test
It has been long awaited, now the time has come. The EU Commission is applying the hard-fought new EU debt rules for the first time. On Wednesday, the EU Commission presented its recommendations for the economic and budget policies of the EU member states. For France, Poland, Italy, Belgium, Hungary, Slovakia and Malta, the Commission also announced the launch of proceedings for “excessive” deficits. The countries thus join Romania, which is already subject to an excessive deficit procedure.
The Commission will submit the official proposal to initiate the excessive deficit procedure to the EU Council in the first weeks of July. The Council of Finance Ministers should then decide as early as July 16 whether it intends to follow the Commission’s request.
Member states that are subject to an excessive deficit procedure must reduce their structural primary deficit by at least 0.5 percentage points each year until their deficit falls below the three percent limit set out in the EU treaties. The governments concerned will therefore have to plan significant spending cuts or additional revenue for their 2025 budget. Whether they will actually do this is uncertain given the political obstacles.
New French government financially restricted
The situation is particularly unclear in France. In 2023, the public deficit amounted to 5.5 percent of GDP. The Commission estimates a deficit of 5.3 percent for 2024 and 5.0 percent for 2025 – well above the three percent mark. At the same time, France will have a new government with the new elections at the beginning of July. Both the right-wing populist Front National and the left-wing party alliance “Nouveau Front Populaire” are unlikely to want to adhere to the EU Commission’s austerity targets.
In April next year, the countries in the excessive deficit procedure must submit a progress report on their budgetary adjustments. In June 2025, the EU Commission would then have the opportunity to propose further measures if countries in the excessive deficit procedure do not meet the requirements. It will then become clear whether there is the political will to force France and other large member states such as Poland and Italy to comply with the rules. In the past, France was spared by the EU Commission and the EU Council due to its political weight, even if it exceeded the deficit limit.
For the EPP, the credibility of the rules is at stake
CSU MEP Markus Ferber hopes that the EU will enforce its rules this time. “If the Stability and Growth Pact is to be credible, violations must also have consequences“, he explained in a press release. This is “nothing less than the acid test for the new Stability and Growth Pact”.
For Green MEP Rasmus Andresen, however, the Commission’s decision shows that the reform of the EU debt rules was a mistake. “If the countries against which proceedings have now been initiated want to comply with the new budget consolidation requirements, they would lose considerable economic power”, he said in a press release. This would damage the European economy as a whole and prevent urgently needed investments. Economists had already warned during the negotiations on the reform of the debt rules that the reform took too little account of the need for additional investment.
Some countries that exceed the three percent deficit limit in 2023 will be spared an excessive deficit procedure, for example Estonia, Spain and the Czech Republic. Under the new EU debt rules, the EU Commission can waive an excessive deficit procedure if the deficit is close to the three percent limit or if it only exceeds the limit temporarily or exceptionally.
Longer-term orientation
However, the debt rules do not only affect countries against which an excessive deficit procedure has been initiated. Under the new regime, all member states must submit medium-term fiscal plans for the next four or seven years. For member states with a debt level of more than sixty percent of GDP, these fiscal plans must lead to a reduction in the debt level in the medium term.
Member states can apply to submit a fiscal plan for seven years instead of four if they can demonstrate that they are implementing growth-promoting reforms and investments. In addition, the fiscal plans should not only be based on budget figures, but also take other economic factors into account as part of holistic debt sustainability analyses.
According to Zsolt Darvas, Senior Research Fellow at the Brussels think tank Bruegel, these debt sustainability analyses will also require high budget consolidations. And in some cases, these are even higher than the 0.5 percentage points envisaged by the excessive deficit procedure.
Conflicts foreseeable in the fall
On Friday, the European Commission will submit its proposal for the “technical trajectory” – the planned development of net expenditure over the coming years – to the member states. On the basis of this proposal, national government officials and Commission officials will discuss calculation methods and model assumptions at a technical level before the national governments present their own proposal for the multi-annual fiscal plan in September.
The Commission will respond in November with its own recommendations on the multi-annual fiscal plans, which must be approved by the Council of Finance Ministers in December. “There could be a conflict here”, Zsolt Darvas told Table.Briefings. In addition to the countries in the excessive deficit procedure, a dispute is also likely to arise with Spain, Finland and Croatia in the course of the fall.
Translation missing.
AI Act: Why the German government needs to speed up implementation
The AI Act is not yet in force. However, politicians and companies are urging the German government to make rapid progress with preparations. “The content of the AI Act has been finalized since mid-March. We expect the German government to now swiftly present the draft for an implementation law“, says digital politician Ronja Kemmer (CDU). Missing the deadline, as the traffic lights did with the Digital Services Act, must not happen with the AI Act.
The industry itself must also hurry to develop the necessary standards, says Robert Kilian, board member of the KI-Bundesverband. Technical standardization, for example within the framework of the German Institute for Standardization (DIN) or the European Committee for Electrotechnical Standardization (CENELEC), is not the primary task of politicians, but of industry representatives. “We all have to step on the gas pedal together. It is a joint task to bring out these technical standards as quickly as possible.”
Examining the ‘enforcement requirements’
The AI Act will enter into force 20 days after publication in the Official Journal of the EU. This is expected in July. The Federal Ministry of Economic Affairs and the Federal Ministry of Justice are responsible for its implementation. The Federal Government is currently examining implementation requirements and options resulting from the AI Regulation, according to the BMWK. The review is being carried out with the participation of the other ministries and with the involvement of the federal states and relevant stakeholders.
In this context, the BMWK refers to the timetable for the implementation deadlines set out in the AI Regulation. This stipulates that the authority structure must be set up and the provisions on penalties and fines must be regulated within twelve months of entry into force.
Under no circumstances should the state take that long, says Robert Kilian. “Companies are complaining about considerable legal uncertainty. This needs to be countered, also by creating points of contact. And these points of contact lie with the authorities.” The introduction of the corresponding compliance systems, the possible adaptation of products and the training of employees all take months, if not years, says Kilian. And this requires guidance from the relevant authorities.
Tight transition periods for companies
In view of this, the transition periods are comparatively demanding. The AI Act provides that:
- Member states must phase out prohibited systems within six months of entry into force;
- The obligations for general AI governance become applicable after twelve months;
- All provisions of the AI Act become applicable after 24 months, including the obligations for high-risk systems in accordance with Annex III (list of high-risk use cases);
- After 36 months, the obligations for high-risk systems set out in Annex II (List of Union harmonization legislation) apply.
Until the first deadline expires, every company must create an AI inventory. “Only if I know which AI systems I’m actually using can I be sure that there aren’t any prohibited applications”, says Kilian.
The timetable set by the AI regulation is ambitious, according to Maximilian Funke-Kaiser, digital policy spokesperson for the FDP parliamentary group in the Bundestag. “But I don’t see any danger of it being met. The various ministries are working together cooperatively, with the involvement of civil society, associations and industry.”
Adjustments necessary in many areas
Changes are not only necessary in the areas that fall within the remit of the BMWK and the BMJ. Adjustments are necessary in practically all areas. Here are a few examples:
- Federal Data Protection Act (BDSG): Necessary adjustments concern the processing of personal data, in particular biometric data. Relevant articles in the AI Act: Article 5 (prohibition of certain AI practices), Article 52 (transparency obligations when processing personal data) and Article 60 (requirements for biometric identification systems).
- Product Safety Act (ProdSG): Integration of safety and conformity assessment procedures for high-risk AI systems. Relevant articles: Article 6 (Requirements for high-risk AI systems), Article 46 (Conformity assessment procedures).
- Telemedia Act (TMG): Labeling obligations for AI-generated content and transparency requirements. Relevant articles: Article 52 (transparency obligations), Article 52(3) (labeling of AI-generated content).
- Labor law regulations (e.g. Works Constitution Act): Protection of employee rights when using high-risk AI systems. Relevant articles: Article 29 (transparency and information obligations), Article 54 (obligations of operators of high-risk AI systems).
- Criminal Code (StGB) and Code of Criminal Procedure (StPO): Regulation of the use of AI systems in criminal prosecution. Relevant articles: Article 5 (Prohibition of certain AI practices), Article 74 (Specific requirements for law enforcement and border management).
Controversial: biometric remote recognition
The German government can also regulate how it wants to deal with the remote biometric recognition (“mass surveillance”) of people in public spaces. In the coalition agreement, the coalition parties stipulated: “Biometric recognition in public spaces and automated state scoring systems using AI must be ruled out under European law.”
This was not successful. However, the AI Act gives the member states some leeway. In Germany, both the Ministry of Justice and the Ministry of the Interior are responsible. The FDP is particularly clear on the issue of AI-supported biometric remote recognition: “As the FDP, we reject the establishment of a surveillance state and will use this leeway to ban the technology”, says Maximilian Funke-Kaiser. Minister for Justice Marco Buschmann agrees. Interior Minister Nancy Faeser, on the other hand, would like to see more access rights for security authorities.
Key question: Who should supervise?
There are also different opinions on the question of who should conduct market surveillance and who should be the notifying authority. The Federal Network Agency, which already acts as coordinator for the Digital Services Act, is one of the bodies under discussion. However, the data protection officers are also being considered.
“Successful implementation will largely depend on us achieving a national supervisory structure that is bundled as much as possible at the federal level, an efficient one-stop store as a point of contact for companies”, demands Ronja Kemmer, for example. Despite many previous prophecies of doom that this would not be possible due to federally divided responsibilities, the hearing in the Digital Committee once again made it clear “that solutions are definitely possible here with the necessary political will”.
Maximilian Funke-Kaiser proposes that AI supervision should initially be located within the Federal Network Agency. “In a second step, we should separate the entire digital supervision, including the AI authority and the Digital Services Coordinator, from the Federal Network Agency and set up a separate digital agency.”
In contrast, the online retailer Zalando is in favor of anchoring AI supervision with the state data protection authorities. A significant proportion of AI use cases already involve the processing of personal data. “This is the responsibility of the state data protection authorities, which have already built up expertise in this area”, argues Daniel Enke, Director of Public Affairs at Zalando. “Alternative solutions entail the risk that companies will have to discuss the same use cases with different authorities – in the worst case with conflicting interpretations.” This is basically what everyone wants to avoid.
- Arbeitnehmerrechte
- Artificial intelligence
- Artificial Intelligence Regulation
- BMWK
- Digital policy
Translation missing.
News
ECR becomes third-strongest parliamentary group – and overtakes Renew
The Group of European Conservatives and Reformists (ECR) in the European Parliament has grown to 83 members in a second accession round. The Eurosceptic group has thus ousted Renew from third place in Parliament.
The following new MEPs were formally admitted at the Group meeting in Brussels on Wednesday:
- Kristoffer Storm from the Danish Democrats party (Danmarksdemokraterne).
- Ivaylo Vulchev from the Bulgarian party “There is such a people” (Има такъв народ, ITN).
- Aurelijus Veryga from the Lithuanian Farmers and Greens Party (Lietuvos valstiečių ir žaliųjų sąjunga).
- French MEPs Marion Maréchal, Guillaume Peltier and Laurence Trochu. They were previously members of the far-right party Reconquête.
- Claudiu-Richard Tarziu, Gheorghe Piperea, Maria-Georgiana Teodorescu, Adrian-George Axinia and Serban Dimitrie Sturdza from the Alliance for the Union of Romanians (Alianţa pentru Unirea Românilor, AUR).
The constituent meeting of the group with the election of the chairperson is scheduled for June 26. lei
Germany delays adoption of new EU sanctions package against Russia
The EU countries have been unable to agree on a 14th package of sanctions against Russia due to a blockade by Germany. Despite the removal of a clause, Berlin did not want to agree to the package, diplomats told Reuters news agency on Wednesday.
Officials from the 27 EU countries have been debating the package for over a month. The new measures include a ban on Russian LNG shipments and that “EU operators” can be held responsible for sanctions violations by subsidiaries and partners in third countries.
Squabble between red and green
Germany’s hesitation was partly due to an internal disagreement between the Foreign Ministry and the Federal Chancellery, diplomats and a source familiar with the matter said.
The deleted clause was an extension of the so-called “no-Russia clause” to subsidiaries in third countries. The clause would have forced these subsidiaries to “contractually prohibit re-export to Russia and re-export for use in Russia”, according to a draft of an earlier version of the package.
The clause under Article 12G was deleted in a compromise text circulated to member states shortly before the ambassadors met late Wednesday afternoon, they said. The ambassadors plan to continue their debate on Thursday, Reuters reports. rtr
The CDU/CSU group is playing poker for these committee chairs
The group of CDU/CSU MEPs in the European Parliament is discussing who will succeed Rainer Wieland as Vice-President of the European Parliament. Sabine Verheyen, Vice-President of the NRW CDU, MEP since 2009 and most recently Chair of the Culture Committee (CULT), is said to have ambitions to succeed the long-standing Vice-President.
The decision is linked to the question of which committees the 29-strong German delegation would like to chair. The delegation, which is chaired by Daniel Caspary, is calling for a stronger focus on legislative committees. This could mean that the CDU/CSU group will no longer reach for the Foreign Affairs Committee in the first round when allocating committee chairs. The Committee on Foreign Affairs (AFET) was chaired by David McAllister, who is also Vice-President of the EPP.
Entitlement to one of 14 Vice-President posts
Instead, the delegation could initially move to the Agriculture Committee (AGRI), which would again be chaired by Norbert Lins. The Industry Committee (ITRE) is also being considered, with Christian Ehler as a possible candidate. If the Committee on Foreign Affairs is not drawn, David McAllister could also run instead of Verheyen as a candidate for the post of Vice-President of the European Parliament, to which the German group is entitled.
In the last legislative period, the German group chaired four committees (AFET, AGRI, CULT, CONT). The Polish delegation has 23 MEPs and is the second-largest national group after the German delegation with 29 MEPs. Spain has the third largest delegation with 22 MEPs. Poland and Spain have significantly increased the number of their EPP MEPs and will make more demands than last time.
Three instead of four committee chairs?
The German group will select the candidate for the Vice-President’s post on July 15 in Strasbourg. As heads of the CDU/CSU delegation, Caspary and Angelika Niebler will negotiate with the heads of the other national delegations about the committee chairs. Caspary was up against Sven Simon in last week’s election for the chair of the German group. Simon received eleven out of 28 votes. Caspary received 16 votes with one abstention. The group of younger MEPs around Sven Simon is demanding that they also be taken into account when the posts are allocated. They are hoping for a position as deputy for the German group.
In 2019, six political groups in the European Parliament reached an agreement not to give the far-right ID Group the committee it was entitled to according to D’Hondt. They had formed a so-called cordon sanitaire to keep the radical right-wingers away from positions of responsibility in the committees and on the Parliamentary Bureau. The AGRI chairmanship, which belonged to the ID parliamentary group, then fell to Norbert Lins. It is expected that the parliamentary groups will once again agree on a cordon sanitaire. However, the CDU/CSU group will probably only be allowed to chair two or three committees in the future instead of four as in the previous mandate. There are 14 Vice-Presidents in the European Parliament.
The EPP Group has re-elected Manfred Weber as its Chairman. He received 161 votes in favor, with two abstentions and eight votes against. Weber has led the group since 2014 and ten deputies were also elected. With 188 MEPs, the EPP is the largest group. mgr
Green Group: Reintke and Eickhout elected co-chairs
The only two candidates for the chairmanship of the Greens/EFA group, Terry Reintke and Bas Eickhout, were elected to office by MEPs on Wednesday morning. “We are the reliable and constructive partner for a democratic, pro-European majority”, emphasized Reintke. As the Green Group, they want to promote the Green Deal, invest in green industries that make the European Union competitive and create jobs.
Reintke already held the post in the last legislature following the resignation of Ska Keller. Eickhout was previously Deputy Chairman and is now the successor to Belgian Philippe Lamberts, who has left the European Parliament. luk
Shein and Temu: E-commerce associations demand a level playing field
Ecommerce Europe, along with 16 other national e-commerce associations, is calling for fair competition and more effective enforcement of EU laws against non-EU based actors. In their open letter, they demand that “e-commerce players active in the Union but based in non-EU countries should play by the same rules as EU-based businesses”. This is to ensure that EU-based companies are not at a competitive disadvantage.
The background to these demands is the rapid success of Asian e-commerce giants like Shein and Temu. These companies leverage significant financial resources and aggressive marketing strategies to quickly penetrate the European market. Additionally, the signatories claim that these companies benefit from state subsidies in their home countries, further boosting their competitiveness. The letter criticizes these practices as leading to unfair competition, disadvantaging EU businesses.
E-commerce associations criticize inadequate oversight
The associations point out that EU-based companies are subject to extensive laws and high compliance costs, which non-EU based actors often do not follow. National authorities are frequently understaffed and poor coordination hampers the enforcement of EU regulations. This gives non-EU actors, who ignore these rules, an unfair competitive edge. The commercial practices of these actors also raise questions about compliance with consumer protection, product safety, data protection, privacy, environmental and tax laws, according to the signatories.
The associations, therefore, call on the Commission, member states, and relevant authorities to provide all necessary resources to monitor and sanction non-EU based actors as thoroughly as EU-based ones. They emphasize the need for deeper collaboration and coordination among EU member states and their authorities. This could ensure consistent application of regulations, thereby fostering genuine equality of opportunity within the EU’s internal market. vis
Aviation emissions: Low-cost airlines criticize EU exemptions for long-haul flights
The European low-cost airlines Ryanair, Easyjet and Wizz Air call for non-CO2 emissions from all flights – including international long-haul flights – to be recorded and disclosed. From 2025, airlines in Europe will have to collect and disclose emissions from soot, nitrogen oxides and water vapor in addition to direct carbon emissions in emissions trading for the first time. However, the European Commission plans to exempt long-haul flights from the monitoring regulations for non-CO2 emissions.
According to the European Union Aviation Safety Agency, airlines’ non-CO2 emissions have at least as much of an impact on global warming as their carbon emissions. A draft Commission proposal for the new rules seen by Reuters suggests exempting international flights from the rules for two years. “Such reporting shall only be required in respect of routes involving two aerodromes located in the European Economic Area,” the proposal states. Flights from the EEA to Switzerland or the UK are also to be included.
“The blanket exclusion of extra-EEA routes would give the misleading impression that these routes create no non-CO2 warming effects, misdirecting all future non-CO2 mitigation measures,” the airlines said in a joint statement distributed to EU governments. rtr/luk
What the new Belgian government could look like
The formation of a new Belgian government is making progress – at least on paper. On Wednesday, King Philippe received the Flemish nationalist Bart De Wever at the Royal Palace in Brussels to receive an interim report on the exploratory talks.
No details of the content were revealed. However, De Wever has apparently come closer to his goal of forming a coalition at the federal level similar to the one in Flanders. It would be supported by De Wever’s nationalist N-VA party, but also by the Liberals, Christian Socialists and the Flemish Social Democrats.
Government could ‘mirror’ the regions
In Brussels, there is even talk of a “mirror coalition”, as the Liberals and Christian Socialists are also negotiating a governing alliance in French-speaking Wallonia. It would then be mirrored at the federal level, which should significantly increase political coherence.
King Philippe instructed De Wever to press ahead with the talks and present a further report on June 26. The meeting was overshadowed by the EU Commission’s decision to initiate an excessive deficit procedure against Belgium. This could restrict the fiscal policy scope of the future government and make it more difficult to form a government.
Is Belgium complying with debt rules?
The EU Commission complains that the Kingdom is in breach of the Maastricht thresholds (3.0 and 60 percent) with a new debt of 4.4 percent of GDP and a debt level of 105.2 percent. According to the Brussels authority, there is no improvement in sight. It criticizes the lack of planning certainty and budget discipline in the regions – especially in the highly indebted Wallonia.
If the EU finance ministers confirm the excessive deficit procedure, Belgium will have to present a budget plan on Sept. 20 that provides for a gradual reduction in deficits. However, it is unclear whether there will be a new federal government in Brussels by then – and whether it can agree to tighten its belt.
According to calculations by the think tank Bruegel, Belgium would have to cut government spending by three percent of economic output over the next four years. This is likely to lead to considerable social and economic upheaval. The trade unions have already announced “resistance” to the “austerity policy”. ebo
Must-Reads
Personnel
Urban Keussen was elected as the new President of the European association of public utilities Cedec on Wednesday. He succeeds Florian Bieberbach, the head of Münchner Stadtwerke (SWM), who had led Cedec since 2019. Keussen is Chief Technology Officer at EWE and was previously a manager in Eon’s distribution grid business and head of the German transmission grid operator Tennet.
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