Interview with Anna Lührmann + Energy pa • Table.Briefings

Dear reader,

After a long and bitter dispute, the EU Commission and the Polish government have agreed on a plan for the disbursement of billions of euros in COVID-19 aid. Today, EU Commission President Ursula von der Leyen is expected in Warsaw, where she will present the details of the agreement.

Anna Lührmann, Minister of State for Europe at the German Foreign Office, reacted cautiously to the EU Commission’s decision to release the reconstruction fund for Poland. It still needs to be thoroughly examined whether the progress made in the area of rule of law in Poland is sufficient, the Green politician said in an interview with Table.Media. “What is clear is that there are no discounts on the rule of law – it is the foundation of the EU.”

In the interview, Lührmann also calls for a “serious debate” on the principle of unanimity in the EU. “We are too slow,” she says of Europe’s ability to act against the backdrop of Hungary’s blockade on the oil embargo.

This blockade continued yesterday: Actually, the decision-making process for the sixth sanctions package was finally supposed to get underway. But now Hungary is demanding further changes. This time it is about sanctions against the Russian Orthodox Church leader Patriarch Kirill. Read more in the news.

Hennig Vöpel, director of the Center for European Policy (cep), also sees a need for reform in the EU. Europe is experiencing a historic moment, he writes in Standpunkt. Current events call for “nothing more and nothing less than a new European constitution.

Lots of wind and sun and a “consistent industrialization policy” that inspires confidence among foreign companies and governments – Egypt is considered a good partner for the production of green hydrogen. In the future, the EU and Cairo want to cooperate closely in this area. But when it comes to large-scale projects, the Egyptian government is sometimes hesitant, writes Katja Scherer. So far, there is no national hydrogen strategy. This would determine how much of the country’s wind and solar power potential it wants to release for export.

Your
Sarah Schaefer

Anna Lührmann: “No discounts on the rule of law”

Anna Lührmann (Greens) is Minister of State for Europe and Climate at the Federal Foreign Office.

Minister of State, Hungary in particular held up the oil embargo against Russia for weeks. How capable is the EU of acting in this conflict?

The case shows that the EU is capable of finding compromises despite diverging interests among member states. Yet, we are too slow and the lowest common denominator agreements are rarely optimal. The case, therefore, shows above all that unanimity in the EU inhibits us and delays rapid action. I would like us to have a serious debate on this now. At the conference on the future of Europe, citizens clearly stated that the European Union must become more capable of acting in foreign policy and speak with one voice. It is high time we addressed this issue.

However, many governments have so far been unwilling to give up their veto power in foreign and security policy.

I see a greater openness here among many member states than before, including in Central and Eastern Europe. I am therefore cautiously optimistic that things could move forward.

How do you envisage this in concrete terms?

The crux, of course, is that you need unanimity to abolish unanimity. However, under the impression of the Russian war of aggression against Ukraine, there is some momentum in this direction. On the one hand, there is the passerelle clause, which is already laid out in the Lisbon Treaty. It would also be conceivable to take intermediate steps, for example, to ensure that not just one country can prevent a decision.

Could the issue already occupy the EU summit at the end of June?

The upcoming summit will deal with three interrelated issues: the EU accession prospects of Ukraine, Moldova, and Georgia and the overdue start of accession negotiations with Northern Macedonia and Albania; the discussion on Wider Europe, i.e. the question raised by French President Emmanuel Macron, Council President Charles Michel and others as to whether there is a need for new forms of institutional connection between our neighborhood and the EU; and the results of the Future Conference and the institutional reform of the EU. I very much hope that the conclusions will then set out how we intend to proceed with the institutional reforms.

States willing to integrate should move forward

Macron’s proposal for a Political Community for candidate countries was not received very enthusiastically by Chancellor Olaf Scholz. So the German government does not support the idea?

This is currently being discussed intensively in Germany and other EU member states. A similar impulse came from Italy, President Macron has taken it up, and Austria has recently taken a very positive position on it. For us, it is crucial that we keep our promise to the countries of the Western Balkans and begin accession negotiations with Northern Macedonia and Albania in June.

Macron is also calling for member states willing to integrate to be able to move forward in a kind of core Europe within the EU. Angela Merkel has always rejected this. What is the new German government’s position on this?

We stated in the coalition agreement that it is possible to move forward together in certain areas – as long as this is open to all member states. In my discussions with other governments, but also in the Bundestag, I see that many are concerned with these issues. It remains a balancing act that requires caution and tact. Nevertheless, member states willing to integrate should be able to move forward – as already laid out in the current treaties.

Internal centrifugal forces in the EU have increased in recent years, keyword: rule of law. Does the threat from Russia now require leniency from the governments in Poland and Hungary?

One thing is clear: there can be no discounts on the rule of law – it is the foundation of the EU. The issue is therefore a top priority for us. Russia’s attack on Ukraine is also an attack on our European foundation of values, because we stand for a different model of society based on freedom, democracy, and the rule of law. That is why we as the EU must be very clear not only externally, but also internally.

“Central to maintaining solidarity”

The EU Commission has agreed with the Polish government on a plan for the disbursement of COVID-19 aid, and the disciplinary chamber of the Supreme Court is to be abolished. Do you agree with the agreement?

I am pleased to see progress in the area of the rule of law. Whether this is sufficient must now be thoroughly examined. The law is not yet available in its final version, nor are the announced further measures. What is important is that the judges who were appointed in accordance with EU law at the time can actually continue to work.

The oil embargo has severely tested the EU’s unity vis-à-vis Russia. The next acid test is coming – Gazprom is cutting off gas to one state after another. Will solidarity hold here?

Some arrangements have been made, for example on joint gas purchases. Solidarity within the EU is very strong, and it will continue to be so. This is a moment when we grow stronger together through solidarity. That is why it is absolutely central that we preserve it.

The German government has itself been sharply criticized, for example, for dragging its feet on arms deliveries to Ukraine. Is Germany not living up to its leadership role?

We are doing more than we are credited with, from arms deliveries to humanitarian support for Ukraine. We continue to work with our partners to make more possible in the area of arms deliveries as well. This is also recognized by our international partners and friends. The EU can only function if there is an understanding that we are moving forward together.

Energy partnership with Egypt: Why the country is an important partner for the EU

It will be six months before Egypt is fully at the center of global attention. The country is hosting the UN Climate Change Conference COP27 in November. And preparations for it are already underway. The Egyptian government is reorganizing its energy sector – in the direction of sustainability. And the EU is presenting itself as an important partner in this.

The EU and Egypt want to cooperate more closely in the future, especially in the production of green hydrogen. This was agreed by EU Climate Commissioner Frans Timmermanns and Egypt’s Foreign Minister Sameh Shoukry at a meeting in April. “Given Egypt’s significant potential to drive a just and inclusive green transition [economy],” they want to explore “further cooperation through investment, exchange of expertise and technology,” according to a joint statement.

Just like the German government, the EU hopes to achieve its climate targets by importing green hydrogen. And Egypt should and will supply this hydrogen.

Egypt is considered a good partner not only because it has a lot of wind and sun – in other words, good geographical conditions for hydrogen production. The Egyptian government has also attracted attention in recent years with its consistent industrialization policy, says Stefan Liebing, chairman of the Africa Association of German Business. “That has created confidence among foreign companies and governments.”

The Egyptian government, for example, had three new combined-cycle gas turbine power plants built by the German Siemens Group between 2015 and 2018. And the Benban solar park in the Egyptian desert – another of the country’s flagship projects – is considered one of the largest in the world.

“Regional hub for energy”

Egypt is therefore structurally capable of implementing large-scale projects in the energy sector. For the EU, this is an important prerequisite for planning and implementing hydrogen projects with the country. From Brussels’ point of view, it is also promising that Egypt is pursuing ambitious goals in the energy sector. The country is already an energy exporter because of its gas reserves. And in the future, it wants to further expand its position as a “regional hub for energy,” writes the German foreign trade promotion agency GTAI. With regard to its own supply, the government plans to generate 42 percent of its energy from renewable sources by 2035. By the end of the year, this figure is expected to reach 20 percent.

Deeds show that these are not just empty promises. According to the German-Arab Chamber of Industry and Commerce, the Egyptian government has designated a good 7600 square kilometers as potential areas for renewable energy projects. The first projects for the production of green hydrogen are already underway. A consortium of companies led by the Norwegian company Scatec ASA wants to build a hydrogen plant on the Suez Canal near Ain Sokhna. The German Thyssenkrupp Group and the Belgian DEME Group have also expressed interest in on-site production.

The Egyptian government is still hesitant to release such projects on a large scale, says Jan Noether, head of the German-Arab Chamber of Industry and Commerce. The reason: “Egypt still lacks a national hydrogen strategy embedded in the national energy strategy.” In plain language, this means that the Egyptian government is indeed very interested in establishing itself as a hydrogen exporter and partner of the EU. First, however, it must clarify for itself: How much of its wind and solar power potential does it want to use to make its own economy greener? And how much does it want to release for export?

Energy partnership with Germany

The European Development Bank is currently preparing a hydrogen market study for the country. This should be available by the UN Climate Change Conference COP27 and serve as the basis for the national hydrogen strategy. With regard to Germany, there are also further hurdles to be cleared. For example, an energy partnership between Egypt and the EU has existed since 2018. European companies that implement energy projects locally are therefore entitled to government funding. However, this does not yet apply to German companies because the energy partnership has yet to be sealed at the national level. This is due to happen in July, when Egypt’s President Al-Sisi comes to Germany.

Beyond the political framework conditions, it remains to be seen what plans companies will present for hydrogen production in Egypt. In principle, the country does offer good conditions for foreign direct investment, says Stefan Liebing of the Africa Association of German Business. “Companies usually get large projects in Egypt financed by banks, as the default risk for loans is considered comparatively low.” However, companies must first check which hydrogen projects are profitable at all.

In addition to his work at the Africa Association, Liebing runs the Hamburg-based consulting company Conjuncta GmbH, which is currently implementing hydrogen projects in Angola and South Africa. He says: ” Good locations for green hydrogen are not so easy to find. Companies need both good solar and good wind power conditions on site. Only then can they produce hydrogen around the clock and make optimal use of their expensive plants. Otherwise, he says, green hydrogen has not been competitive in price so far. In addition, the plants must be well supplied with water, for example by a desalination plant on the coast. And they need good logistical connections so that the hydrogen can be transported away.

Cairo could become a pioneer on the continent

The requirements for good locations are therefore high – and it remains to be seen how many companies will decide to produce locally. In principle, however, closer cooperation between the EU and Egypt offers advantages for both sides. One of the Egyptian government’s most important goals is to create more jobs, says Jan Noether of the German-Arab Chamber of Industry and Commerce. The country has a well-educated, young population looking for economic prospects. “And the production of green hydrogen brings exactly such well-paying, future-oriented jobs.”

For the EU, on the other hand, Egypt is an important ally, especially with a view to the COP27. Cairo could become a pioneer both in its own energy transition and in the export of green energy, says management consultant Stefan Liebing. That would set an example for all of Africa: “If Egypt proves that you can combine economic growth and climate protection, other African countries will follow suit.” From the EU’s perspective, that would be desirable – but it means making common cause with a dictatorial regime. Katja Scherer, WirtschaftinAfrika.de

EU Commission approves plan for disbursement of COVID-19 aid to Poland

After months of dispute with the Polish government, the EU Commission has agreed on a plan for the disbursement of billions of euros in COVID-19 aid. This was announced by EU Economic Commissioner Paolo Gentiloni on Wednesday. EU Commission President Ursula von der Leyen will be in Warsaw this Thursday to present details of the agreement.

It was preceded by a bitter dispute over Polish judicial reforms, which critics say curtail the independence of Polish judges. Von der Leyen had always demanded that crucial reforms be reversed. However, it will be some time before Poland actually receives money from the €800 billion COVID-19 Fund. First, the country must achieve interim goals agreed upon in the reconstruction plan.

Poland had already submitted its COVID-19 reconstruction plan in May 2021. In order to receive money from the EU’s so-called Reconstruction and Resilience Facility (RRF), member states must submit a plan with investment and reform projects, which should actually be assessed by the Commission within two months. However, the approval of the Polish plan has been postponed. According to the EU Commission, Poland can receive €23.9 billion in grants and an additional €11.5 billion in loans. Now the Council of the 27 EU member states still has to approve the Polish plan.

However, the dispute over Polish judicial reform between Brussels and Warsaw stood in the way and was sometimes bitterly fought. As late as October, von der Leyen and Polish Prime Minister Mateusz Morawiecki had a personal confrontation in the European Parliament in Strasbourg. dpa

Hungary blocks sixth sanctions package again

Hungary on Wednesday blocked the adoption of the sixth sanctions package in the Permanent Representatives Committee (COREPER) with new demands. A lot of technical groundwork had been done to put the leaders’ agreement on the oil embargo into a legal text, an EU diplomat said. This was appreciated at the meeting of EU ambassadors.

Hungary, however, had demanded that the Russian Orthodox Patriarch Kirill be removed from the sanctions list. Other member states had opposed the move. The patriarch is said to be on the sanctions list as a close confidant of Vladimir Putin and an explicit supporter of his war course in Ukraine. Kirill is said to be very wealthy and owns several luxury properties in the EU.

Hungary’s Prime Minister Viktor Orbán has long opposed adding the church leader to the list. This is an even more important matter than the oil embargo. The French presidency is trying to find a way out in consultations with member states. The EU ambassadors want to make a new attempt today in Luxembourg on the sidelines of a ministerial meeting.

Hungary has already obtained a temporary exemption from the oil embargo and is to be able to purchase Russian oil via the Druzhba pipeline for an unlimited period of time for the time being. sti

Green light for introduction of the euro in Croatia

According to a final assessment by the EU Commission, Croatia meets the requirements for the introduction of the common currency euro. As the Brussels authority announced on Wednesday, this means that the outstanding EU decisions on the changeover could be taken. Croatia wants to replace its national currency, the kuna, with the euro starting next year.

EU Commission President Ursula von der Leyen said: “Less than a decade after joining the EU, Croatia is now ready to join the euro area on January 1.” This will strengthen the Croatian economy and bring benefits to citizens, businesses and society as a whole. Croatia’s adoption of the euro will also strengthen the euro, he added.

Croatia has been trying for years to meet the criteria for admission to the euro club. As of January 1, 2015, Lithuania was the last country to join the group of countries with the common currency, becoming the 19th member. Under the EU treaties, all member states except Denmark are obliged to join the single currency as soon as they meet the requirements. However, several states are not pursuing this vigorously – they include Sweden and Hungary, for example.

The formal decision on the introduction of the euro in Croatia is to be taken by the Council of the 27 EU member states in the first half of July. However, difficulties are not expected after the clear assessment of the EU Commission. dpa

ETS and CBAM: Two new compromises before final vote

Ahead of the vote in the plenary of the EU Parliament on a large part of the Fit for 55 package next week, negotiators from the various political groups have found new compromises. There are new proposals both on the ambition level of the existing Emissions Trading Scheme (ETS) and on the introduction of a Carbon Boundary Adjustment Mechanism (CBAM). In both cases, however, these proposals have not yet gained a majority in Parliament, as they lack the support of another major parliamentary group.

At the CBAM, Renew and S&D agreed that the mechanism should replace the free allocation of CO2 allowances for the industry as early as the end of 2032. In the ENVI committee, a majority for 2030 was reached just two weeks ago with the support of the Greens but without the EPP.

Discount for sustainable exports

In addition, the new compromise of the Liberals and Social Democrats provides for the continued issuance of free certificates for sustainably produced products of European producers in the CBAM sectors that are intended for export. This is intended to ensure that European export companies are not at a disadvantage on the international market due to the CO2 pricing in the ETS and still have protection against carbon leakage. The lack of regulation for exports is a key point of criticism of the CBAM, which the German government has also consistently cited (Europe.Table reported).

The second new compromise before the final vote was reached by Renew and the EPP without the Greens and S&D. It provides for only 70 million CO2 certificates to be withdrawn from the market in 2024, instead of the approximately 110 million proposed by the Commission. Nevertheless, in order not to lower the ambitions of the climate package, another 50 million CO2 allowances are to be canceled in 2026. The argument here: You don’t shock the market in one fell swoop and “overcompensate” for the previously lowered ambitions at a later date, explained rapporteur Peter Liese on Wednesday.

The ENVI compromise had even provided for the cancellation of 205 million allowances – with Renew support. The word from parliamentary circles is that the Greens and S&D are currently working on another proposal that would see the cancellation of 110 million allowances (i.e. a return to the Commission proposal). This is intended to get the Renew Group back on board. A minimum price of €60 per ton of CO2 is also still under discussion, according to Green shadow rapporteur Michael Bloss.

The vote in the plenary of the EU Parliament is scheduled for next week Tuesday (June 7). luk

Nitrate dispute: EU Commission accepts BMEL proposal

In the dispute between Germany and the EU Commission over the implementation of the Nitrates Directive, which has been going on for years, the parties have come closer to an agreement. The Brussels authority has apparently agreed to a proposal by the Ministry of Agriculture (BMEL) to significantly expand the so-called red areas, according to the BMEL. These are agricultural areas where nitrate pollution in the groundwater is particularly high and where 20 percent less fertilizer may therefore be applied.

According to the new proposal, the size of these areas is to increase from the current two to almost three million hectares. After intensive discussions, the Commission agreed to the draft and urged a speedy adoption, according to the BMEL’s statement. The aim is now for the planned expansion of the area to be passed in the Bundesrat before the summer break.

Fines in the billions

Agriculture Minister Cem Özdemir (Greens) appeals to his state colleagues to support the proposal. They do not want to “overstretch the Commission’s patience on the last few meters”. He also said that agriculture, which had “for too long been the victim of unfortunate delaying tactics,” must finally be given a reliable framework.

The EU Commission has repeatedly denounced the inadequate implementation of the Nitrates Directive in Germany in recent years and has already won several cases before the European Court of Justice (ECJ). If the directive is still not complied with and further proceedings are instituted, there is a threat of fines amounting to billions of euros.

Increased nitrate pollution is caused in particular by the excessive use of nitrogen fertilizers. Without this, however, yields on today’s scale would be unthinkable. Farmers therefore fear crop losses and complain about additional bureaucracy and necessary investments due to the new proposal. The EU Nitrate Directive serves to protect health and nature and dates back to 1991. Apart from Germany, only Belgium and Italy still violate the limits. til

The “European Moment”: tipping Point for the future of the EU

By Henning Vöpel

Henning Vöpel is Director of the Center for European Policy and Professor of Economics at the BSP Business and Law School.

There are moments in life, as in history, when decisions set the course, as it were. Decisions that significantly change directions and processes. Such moments usually define a time window of conscious shaping – or of irreversible procrastination and omission. When it closes, it may not be possible to reopen it for many years.

Europe is currently experiencing such a moment. The pandemic, which has still not been fully overcome, and above all Russia’s war of aggression against Ukraine, which is contrary to international law, require short-term responses that cannot be prepared for years as is usually the case. Lengthy coordination processes are converging into a moment when courage, vision and wisdom are needed to quickly chart the right course and overcome obstacles. In the history of Europe, it has almost always been moments like these when an emulsion of historical possibility and political vision lifted Europe to the next level.

It is in the nature of such moments that they contain as great opportunities as they do risks. A decision that is both courageous and wise therefore requires being clear about what answers the present requires and what paths into the future manifest themselves as a result.

The current events, which in their totality and in their historical context define a “European moment,” in a sense force an adjustment of the previous integration process and thus no more and no less than a new European constitution. The scope must therefore not be underestimated, either politically or institutionally.

In such moments, there is not only the danger of missing a historical window of opportunity, as described above, but at the same time the danger of tipping points, i.e., dynamics that become irreversible after a certain point. Politically necessary and perhaps opportune responses in the present can lead to institutionally problematic developments in the future.

Three examples illustrate the EU’s dilemmas:

EU membership of Ukraine

Politically, there is probably no alternative to paving the way for Ukraine to join the EU. There is no other way to assert Europe’s sphere of influence against that of Russia or China. Full membership at a premature point in time, however, would further increase the already high heterogeneity of the EU, because as right as it is to bind Ukraine more closely to the EU, it is also undisputed that Ukraine is still far from fulfilling the requirements for membership today.

France’s President Emmanuel Macron has introduced as a “solution” the idea of a political community, which describes something akin to a European sphere of influence, or a renewed political idea of the former “West,” which at the time offered a vague but nevertheless attractive narrative for Eastern European countries to orient themselves toward the West.

Oil embargo

The EU’s (partial) oil embargo against Russia, which had just been decided, faced the problem that it would only be effective if it was supported by all EU countries. Anything else would have been a defeat for the EU and would only have strengthened Vladimir Putin’s intention to divide the EU over this issue. But if the energy policy dependencies and interests among the EU member states are very heterogeneous, unanimity can only be achieved through a “balance”. Or else, a common European energy policy can be defined, but this would mean further centralization. Even more: In the confrontation with Putin, the EU would have to be capable of ever-sharper levels of escalation.

In fact, however, with each additional step, agreement becomes more and more expensive or the effect less and less. Conversely, this institutional dysfunction increases the negotiating power of individual member states in asserting national interests, as shown, for example, by Hungary, which uses the EU’s unanimity rule to block decisions and extort its own benefits.

Pandemic Aids

Politically, the pandemic has required great European solidarity to overcome its health and economic consequences. In the course of this, the EU was granted to borrow over €750 billion collectively to finance the NextGenerationEU stimulus package. Here, too, a historically enforced political decision could significantly change the institutional development of the EU, namely if this temporary financing instrument were to establish itself as a permanent facility.

The crises and events of recent months have left the EU struggling for more stability internally and more sovereignty externally. The dilemma is that the EU would have to act faster to be more sovereign externally and at the same time more cohesive to be more stable internally. The tension between sovereignty and stability is largely determined by the institutional balance of the following trade-offs:

Unity and heterogeneity: The unity of the EU depends essentially on the heterogeneity of the interests of its member states. If unanimity does not exist, it must be established politically through negotiation. In this sense, heterogeneity is expensive and requires central means of compensation.

Power and subsidiarity: Heterogeneity can be “solved” with subsidiarity, in that decentrally differentiated solutions can be found. In important fields, however, especially those that determine defense and strategic capability, more central power is needed for the EU to be perceived as a geopolitical actor.

Responsibility and solidarity: The pandemic has shown that there are events that can only be overcome together. However, greater solidarity to increase resilience to crises and disasters must not lead to false incentives for less individual responsibility.

The model of different speeds is not new. And as plausible as it may seem politically, it is difficult to implement institutionally. This is because it must strengthen and speed up the core of the EU as a “club of the willing,” while at the same time tying the periphery with states such as Ukraine, northern Macedonia or Bosnia-Herzegovina more closely to the EU.

Europe must now, as it is historically challenged, provide far-sighted answers. There is no alternative to this at a time when the priority is not to harmonize small-scale policies to complete the Union, but to strengthen a common idea of Europe in the incipient geopolitical system competition.

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,

After a long and bitter dispute, the EU Commission and the Polish government have agreed on a plan for the disbursement of billions of euros in COVID-19 aid. Today, EU Commission President Ursula von der Leyen is expected in Warsaw, where she will present the details of the agreement.

Anna Lührmann, Minister of State for Europe at the German Foreign Office, reacted cautiously to the EU Commission’s decision to release the reconstruction fund for Poland. It still needs to be thoroughly examined whether the progress made in the area of rule of law in Poland is sufficient, the Green politician said in an interview with Table.Media. “What is clear is that there are no discounts on the rule of law – it is the foundation of the EU.”

In the interview, Lührmann also calls for a “serious debate” on the principle of unanimity in the EU. “We are too slow,” she says of Europe’s ability to act against the backdrop of Hungary’s blockade on the oil embargo.

This blockade continued yesterday: Actually, the decision-making process for the sixth sanctions package was finally supposed to get underway. But now Hungary is demanding further changes. This time it is about sanctions against the Russian Orthodox Church leader Patriarch Kirill. Read more in the news.

Hennig Vöpel, director of the Center for European Policy (cep), also sees a need for reform in the EU. Europe is experiencing a historic moment, he writes in Standpunkt. Current events call for “nothing more and nothing less than a new European constitution.

Lots of wind and sun and a “consistent industrialization policy” that inspires confidence among foreign companies and governments – Egypt is considered a good partner for the production of green hydrogen. In the future, the EU and Cairo want to cooperate closely in this area. But when it comes to large-scale projects, the Egyptian government is sometimes hesitant, writes Katja Scherer. So far, there is no national hydrogen strategy. This would determine how much of the country’s wind and solar power potential it wants to release for export.

Your
Sarah Schaefer

Anna Lührmann: “No discounts on the rule of law”

Minister of State, Hungary in particular held up the oil embargo against Russia for weeks. How capable is the EU of acting in this conflict?

The case shows that the EU is capable of finding compromises despite diverging interests among member states. Yet, we are too slow and the lowest common denominator agreements are rarely optimal. The case, therefore, shows above all that unanimity in the EU inhibits us and delays rapid action. I would like us to have a serious debate on this now. At the conference on the future of Europe, citizens clearly stated that the European Union must become more capable of acting in foreign policy and speak with one voice. It is high time we addressed this issue.

However, many governments have so far been unwilling to give up their veto power in foreign and security policy.

I see a greater openness here among many member states than before, including in Central and Eastern Europe. I am therefore cautiously optimistic that things could move forward.

How do you envisage this in concrete terms?

The crux, of course, is that you need unanimity to abolish unanimity. However, under the impression of the Russian war of aggression against Ukraine, there is some momentum in this direction. On the one hand, there is the passerelle clause, which is already laid out in the Lisbon Treaty. It would also be conceivable to take intermediate steps, for example, to ensure that not just one country can prevent a decision.

Could the issue already occupy the EU summit at the end of June?

The upcoming summit will deal with three interrelated issues: the EU accession prospects of Ukraine, Moldova, and Georgia and the overdue start of accession negotiations with Northern Macedonia and Albania; the discussion on Wider Europe, i.e. the question raised by French President Emmanuel Macron, Council President Charles Michel and others as to whether there is a need for new forms of institutional connection between our neighborhood and the EU; and the results of the Future Conference and the institutional reform of the EU. I very much hope that the conclusions will then set out how we intend to proceed with the institutional reforms.

States willing to integrate should move forward

Macron’s proposal for a Political Community for candidate countries was not received very enthusiastically by Chancellor Olaf Scholz. So the German government does not support the idea?

This is currently being discussed intensively in Germany and other EU member states. A similar impulse came from Italy, President Macron has taken it up, and Austria has recently taken a very positive position on it. For us, it is crucial that we keep our promise to the countries of the Western Balkans and begin accession negotiations with Northern Macedonia and Albania in June.

Macron is also calling for member states willing to integrate to be able to move forward in a kind of core Europe within the EU. Angela Merkel has always rejected this. What is the new German government’s position on this?

We stated in the coalition agreement that it is possible to move forward together in certain areas – as long as this is open to all member states. In my discussions with other governments, but also in the Bundestag, I see that many are concerned with these issues. It remains a balancing act that requires caution and tact. Nevertheless, member states willing to integrate should be able to move forward – as already laid out in the current treaties.

Internal centrifugal forces in the EU have increased in recent years, keyword: rule of law. Does the threat from Russia now require leniency from the governments in Poland and Hungary?

One thing is clear: there can be no discounts on the rule of law – it is the foundation of the EU. The issue is therefore a top priority for us. Russia’s attack on Ukraine is also an attack on our European foundation of values, because we stand for a different model of society based on freedom, democracy, and the rule of law. That is why we as the EU must be very clear not only externally, but also internally.

“Central to maintaining solidarity”

The EU Commission has agreed with the Polish government on a plan for the disbursement of COVID-19 aid, and the disciplinary chamber of the Supreme Court is to be abolished. Do you agree with the agreement?

I am pleased to see progress in the area of the rule of law. Whether this is sufficient must now be thoroughly examined. The law is not yet available in its final version, nor are the announced further measures. What is important is that the judges who were appointed in accordance with EU law at the time can actually continue to work.

The oil embargo has severely tested the EU’s unity vis-à-vis Russia. The next acid test is coming – Gazprom is cutting off gas to one state after another. Will solidarity hold here?

Some arrangements have been made, for example on joint gas purchases. Solidarity within the EU is very strong, and it will continue to be so. This is a moment when we grow stronger together through solidarity. That is why it is absolutely central that we preserve it.

The German government has itself been sharply criticized, for example, for dragging its feet on arms deliveries to Ukraine. Is Germany not living up to its leadership role?

We are doing more than we are credited with, from arms deliveries to humanitarian support for Ukraine. We continue to work with our partners to make more possible in the area of arms deliveries as well. This is also recognized by our international partners and friends. The EU can only function if there is an understanding that we are moving forward together.

Energy partnership with Egypt: Why the country is an important partner for the EU

It will be six months before Egypt is fully at the center of global attention. The country is hosting the UN Climate Change Conference COP27 in November. And preparations for it are already underway. The Egyptian government is reorganizing its energy sector – in the direction of sustainability. And the EU is presenting itself as an important partner in this.

The EU and Egypt want to cooperate more closely in the future, especially in the production of green hydrogen. This was agreed by EU Climate Commissioner Frans Timmermanns and Egypt’s Foreign Minister Sameh Shoukry at a meeting in April. “Given Egypt’s significant potential to drive a just and inclusive green transition [economy],” they want to explore “further cooperation through investment, exchange of expertise and technology,” according to a joint statement.

Just like the German government, the EU hopes to achieve its climate targets by importing green hydrogen. And Egypt should and will supply this hydrogen.

Egypt is considered a good partner not only because it has a lot of wind and sun – in other words, good geographical conditions for hydrogen production. The Egyptian government has also attracted attention in recent years with its consistent industrialization policy, says Stefan Liebing, chairman of the Africa Association of German Business. “That has created confidence among foreign companies and governments.”

The Egyptian government, for example, had three new combined-cycle gas turbine power plants built by the German Siemens Group between 2015 and 2018. And the Benban solar park in the Egyptian desert – another of the country’s flagship projects – is considered one of the largest in the world.

“Regional hub for energy”

Egypt is therefore structurally capable of implementing large-scale projects in the energy sector. For the EU, this is an important prerequisite for planning and implementing hydrogen projects with the country. From Brussels’ point of view, it is also promising that Egypt is pursuing ambitious goals in the energy sector. The country is already an energy exporter because of its gas reserves. And in the future, it wants to further expand its position as a “regional hub for energy,” writes the German foreign trade promotion agency GTAI. With regard to its own supply, the government plans to generate 42 percent of its energy from renewable sources by 2035. By the end of the year, this figure is expected to reach 20 percent.

Deeds show that these are not just empty promises. According to the German-Arab Chamber of Industry and Commerce, the Egyptian government has designated a good 7600 square kilometers as potential areas for renewable energy projects. The first projects for the production of green hydrogen are already underway. A consortium of companies led by the Norwegian company Scatec ASA wants to build a hydrogen plant on the Suez Canal near Ain Sokhna. The German Thyssenkrupp Group and the Belgian DEME Group have also expressed interest in on-site production.

The Egyptian government is still hesitant to release such projects on a large scale, says Jan Noether, head of the German-Arab Chamber of Industry and Commerce. The reason: “Egypt still lacks a national hydrogen strategy embedded in the national energy strategy.” In plain language, this means that the Egyptian government is indeed very interested in establishing itself as a hydrogen exporter and partner of the EU. First, however, it must clarify for itself: How much of its wind and solar power potential does it want to use to make its own economy greener? And how much does it want to release for export?

Energy partnership with Germany

The European Development Bank is currently preparing a hydrogen market study for the country. This should be available by the UN Climate Change Conference COP27 and serve as the basis for the national hydrogen strategy. With regard to Germany, there are also further hurdles to be cleared. For example, an energy partnership between Egypt and the EU has existed since 2018. European companies that implement energy projects locally are therefore entitled to government funding. However, this does not yet apply to German companies because the energy partnership has yet to be sealed at the national level. This is due to happen in July, when Egypt’s President Al-Sisi comes to Germany.

Beyond the political framework conditions, it remains to be seen what plans companies will present for hydrogen production in Egypt. In principle, the country does offer good conditions for foreign direct investment, says Stefan Liebing of the Africa Association of German Business. “Companies usually get large projects in Egypt financed by banks, as the default risk for loans is considered comparatively low.” However, companies must first check which hydrogen projects are profitable at all.

In addition to his work at the Africa Association, Liebing runs the Hamburg-based consulting company Conjuncta GmbH, which is currently implementing hydrogen projects in Angola and South Africa. He says: ” Good locations for green hydrogen are not so easy to find. Companies need both good solar and good wind power conditions on site. Only then can they produce hydrogen around the clock and make optimal use of their expensive plants. Otherwise, he says, green hydrogen has not been competitive in price so far. In addition, the plants must be well supplied with water, for example by a desalination plant on the coast. And they need good logistical connections so that the hydrogen can be transported away.

Cairo could become a pioneer on the continent

The requirements for good locations are therefore high – and it remains to be seen how many companies will decide to produce locally. In principle, however, closer cooperation between the EU and Egypt offers advantages for both sides. One of the Egyptian government’s most important goals is to create more jobs, says Jan Noether of the German-Arab Chamber of Industry and Commerce. The country has a well-educated, young population looking for economic prospects. “And the production of green hydrogen brings exactly such well-paying, future-oriented jobs.”

For the EU, on the other hand, Egypt is an important ally, especially with a view to the COP27. Cairo could become a pioneer both in its own energy transition and in the export of green energy, says management consultant Stefan Liebing. That would set an example for all of Africa: “If Egypt proves that you can combine economic growth and climate protection, other African countries will follow suit.” From the EU’s perspective, that would be desirable – but it means making common cause with a dictatorial regime. Katja Scherer, WirtschaftinAfrika.de

EU Commission approves plan for disbursement of COVID-19 aid to Poland

After months of dispute with the Polish government, the EU Commission has agreed on a plan for the disbursement of billions of euros in COVID-19 aid. This was announced by EU Economic Commissioner Paolo Gentiloni on Wednesday. EU Commission President Ursula von der Leyen will be in Warsaw this Thursday to present details of the agreement.

It was preceded by a bitter dispute over Polish judicial reforms, which critics say curtail the independence of Polish judges. Von der Leyen had always demanded that crucial reforms be reversed. However, it will be some time before Poland actually receives money from the €800 billion COVID-19 Fund. First, the country must achieve interim goals agreed upon in the reconstruction plan.

Poland had already submitted its COVID-19 reconstruction plan in May 2021. In order to receive money from the EU’s so-called Reconstruction and Resilience Facility (RRF), member states must submit a plan with investment and reform projects, which should actually be assessed by the Commission within two months. However, the approval of the Polish plan has been postponed. According to the EU Commission, Poland can receive €23.9 billion in grants and an additional €11.5 billion in loans. Now the Council of the 27 EU member states still has to approve the Polish plan.

However, the dispute over Polish judicial reform between Brussels and Warsaw stood in the way and was sometimes bitterly fought. As late as October, von der Leyen and Polish Prime Minister Mateusz Morawiecki had a personal confrontation in the European Parliament in Strasbourg. dpa

Hungary blocks sixth sanctions package again

Hungary on Wednesday blocked the adoption of the sixth sanctions package in the Permanent Representatives Committee (COREPER) with new demands. A lot of technical groundwork had been done to put the leaders’ agreement on the oil embargo into a legal text, an EU diplomat said. This was appreciated at the meeting of EU ambassadors.

Hungary, however, had demanded that the Russian Orthodox Patriarch Kirill be removed from the sanctions list. Other member states had opposed the move. The patriarch is said to be on the sanctions list as a close confidant of Vladimir Putin and an explicit supporter of his war course in Ukraine. Kirill is said to be very wealthy and owns several luxury properties in the EU.

Hungary’s Prime Minister Viktor Orbán has long opposed adding the church leader to the list. This is an even more important matter than the oil embargo. The French presidency is trying to find a way out in consultations with member states. The EU ambassadors want to make a new attempt today in Luxembourg on the sidelines of a ministerial meeting.

Hungary has already obtained a temporary exemption from the oil embargo and is to be able to purchase Russian oil via the Druzhba pipeline for an unlimited period of time for the time being. sti

Green light for introduction of the euro in Croatia

According to a final assessment by the EU Commission, Croatia meets the requirements for the introduction of the common currency euro. As the Brussels authority announced on Wednesday, this means that the outstanding EU decisions on the changeover could be taken. Croatia wants to replace its national currency, the kuna, with the euro starting next year.

EU Commission President Ursula von der Leyen said: “Less than a decade after joining the EU, Croatia is now ready to join the euro area on January 1.” This will strengthen the Croatian economy and bring benefits to citizens, businesses and society as a whole. Croatia’s adoption of the euro will also strengthen the euro, he added.

Croatia has been trying for years to meet the criteria for admission to the euro club. As of January 1, 2015, Lithuania was the last country to join the group of countries with the common currency, becoming the 19th member. Under the EU treaties, all member states except Denmark are obliged to join the single currency as soon as they meet the requirements. However, several states are not pursuing this vigorously – they include Sweden and Hungary, for example.

The formal decision on the introduction of the euro in Croatia is to be taken by the Council of the 27 EU member states in the first half of July. However, difficulties are not expected after the clear assessment of the EU Commission. dpa

ETS and CBAM: Two new compromises before final vote

Ahead of the vote in the plenary of the EU Parliament on a large part of the Fit for 55 package next week, negotiators from the various political groups have found new compromises. There are new proposals both on the ambition level of the existing Emissions Trading Scheme (ETS) and on the introduction of a Carbon Boundary Adjustment Mechanism (CBAM). In both cases, however, these proposals have not yet gained a majority in Parliament, as they lack the support of another major parliamentary group.

At the CBAM, Renew and S&D agreed that the mechanism should replace the free allocation of CO2 allowances for the industry as early as the end of 2032. In the ENVI committee, a majority for 2030 was reached just two weeks ago with the support of the Greens but without the EPP.

Discount for sustainable exports

In addition, the new compromise of the Liberals and Social Democrats provides for the continued issuance of free certificates for sustainably produced products of European producers in the CBAM sectors that are intended for export. This is intended to ensure that European export companies are not at a disadvantage on the international market due to the CO2 pricing in the ETS and still have protection against carbon leakage. The lack of regulation for exports is a key point of criticism of the CBAM, which the German government has also consistently cited (Europe.Table reported).

The second new compromise before the final vote was reached by Renew and the EPP without the Greens and S&D. It provides for only 70 million CO2 certificates to be withdrawn from the market in 2024, instead of the approximately 110 million proposed by the Commission. Nevertheless, in order not to lower the ambitions of the climate package, another 50 million CO2 allowances are to be canceled in 2026. The argument here: You don’t shock the market in one fell swoop and “overcompensate” for the previously lowered ambitions at a later date, explained rapporteur Peter Liese on Wednesday.

The ENVI compromise had even provided for the cancellation of 205 million allowances – with Renew support. The word from parliamentary circles is that the Greens and S&D are currently working on another proposal that would see the cancellation of 110 million allowances (i.e. a return to the Commission proposal). This is intended to get the Renew Group back on board. A minimum price of €60 per ton of CO2 is also still under discussion, according to Green shadow rapporteur Michael Bloss.

The vote in the plenary of the EU Parliament is scheduled for next week Tuesday (June 7). luk

Nitrate dispute: EU Commission accepts BMEL proposal

In the dispute between Germany and the EU Commission over the implementation of the Nitrates Directive, which has been going on for years, the parties have come closer to an agreement. The Brussels authority has apparently agreed to a proposal by the Ministry of Agriculture (BMEL) to significantly expand the so-called red areas, according to the BMEL. These are agricultural areas where nitrate pollution in the groundwater is particularly high and where 20 percent less fertilizer may therefore be applied.

According to the new proposal, the size of these areas is to increase from the current two to almost three million hectares. After intensive discussions, the Commission agreed to the draft and urged a speedy adoption, according to the BMEL’s statement. The aim is now for the planned expansion of the area to be passed in the Bundesrat before the summer break.

Fines in the billions

Agriculture Minister Cem Özdemir (Greens) appeals to his state colleagues to support the proposal. They do not want to “overstretch the Commission’s patience on the last few meters”. He also said that agriculture, which had “for too long been the victim of unfortunate delaying tactics,” must finally be given a reliable framework.

The EU Commission has repeatedly denounced the inadequate implementation of the Nitrates Directive in Germany in recent years and has already won several cases before the European Court of Justice (ECJ). If the directive is still not complied with and further proceedings are instituted, there is a threat of fines amounting to billions of euros.

Increased nitrate pollution is caused in particular by the excessive use of nitrogen fertilizers. Without this, however, yields on today’s scale would be unthinkable. Farmers therefore fear crop losses and complain about additional bureaucracy and necessary investments due to the new proposal. The EU Nitrate Directive serves to protect health and nature and dates back to 1991. Apart from Germany, only Belgium and Italy still violate the limits. til

The “European Moment”: tipping Point for the future of the EU

By Henning Vöpel

There are moments in life, as in history, when decisions set the course, as it were. Decisions that significantly change directions and processes. Such moments usually define a time window of conscious shaping – or of irreversible procrastination and omission. When it closes, it may not be possible to reopen it for many years.

Europe is currently experiencing such a moment. The pandemic, which has still not been fully overcome, and above all Russia’s war of aggression against Ukraine, which is contrary to international law, require short-term responses that cannot be prepared for years as is usually the case. Lengthy coordination processes are converging into a moment when courage, vision and wisdom are needed to quickly chart the right course and overcome obstacles. In the history of Europe, it has almost always been moments like these when an emulsion of historical possibility and political vision lifted Europe to the next level.

It is in the nature of such moments that they contain as great opportunities as they do risks. A decision that is both courageous and wise therefore requires being clear about what answers the present requires and what paths into the future manifest themselves as a result.

The current events, which in their totality and in their historical context define a “European moment,” in a sense force an adjustment of the previous integration process and thus no more and no less than a new European constitution. The scope must therefore not be underestimated, either politically or institutionally.

In such moments, there is not only the danger of missing a historical window of opportunity, as described above, but at the same time the danger of tipping points, i.e., dynamics that become irreversible after a certain point. Politically necessary and perhaps opportune responses in the present can lead to institutionally problematic developments in the future.

Three examples illustrate the EU’s dilemmas:

EU membership of Ukraine

Politically, there is probably no alternative to paving the way for Ukraine to join the EU. There is no other way to assert Europe’s sphere of influence against that of Russia or China. Full membership at a premature point in time, however, would further increase the already high heterogeneity of the EU, because as right as it is to bind Ukraine more closely to the EU, it is also undisputed that Ukraine is still far from fulfilling the requirements for membership today.

France’s President Emmanuel Macron has introduced as a “solution” the idea of a political community, which describes something akin to a European sphere of influence, or a renewed political idea of the former “West,” which at the time offered a vague but nevertheless attractive narrative for Eastern European countries to orient themselves toward the West.

Oil embargo

The EU’s (partial) oil embargo against Russia, which had just been decided, faced the problem that it would only be effective if it was supported by all EU countries. Anything else would have been a defeat for the EU and would only have strengthened Vladimir Putin’s intention to divide the EU over this issue. But if the energy policy dependencies and interests among the EU member states are very heterogeneous, unanimity can only be achieved through a “balance”. Or else, a common European energy policy can be defined, but this would mean further centralization. Even more: In the confrontation with Putin, the EU would have to be capable of ever-sharper levels of escalation.

In fact, however, with each additional step, agreement becomes more and more expensive or the effect less and less. Conversely, this institutional dysfunction increases the negotiating power of individual member states in asserting national interests, as shown, for example, by Hungary, which uses the EU’s unanimity rule to block decisions and extort its own benefits.

Pandemic Aids

Politically, the pandemic has required great European solidarity to overcome its health and economic consequences. In the course of this, the EU was granted to borrow over €750 billion collectively to finance the NextGenerationEU stimulus package. Here, too, a historically enforced political decision could significantly change the institutional development of the EU, namely if this temporary financing instrument were to establish itself as a permanent facility.

The crises and events of recent months have left the EU struggling for more stability internally and more sovereignty externally. The dilemma is that the EU would have to act faster to be more sovereign externally and at the same time more cohesive to be more stable internally. The tension between sovereignty and stability is largely determined by the institutional balance of the following trade-offs:

Unity and heterogeneity: The unity of the EU depends essentially on the heterogeneity of the interests of its member states. If unanimity does not exist, it must be established politically through negotiation. In this sense, heterogeneity is expensive and requires central means of compensation.

Power and subsidiarity: Heterogeneity can be “solved” with subsidiarity, in that decentrally differentiated solutions can be found. In important fields, however, especially those that determine defense and strategic capability, more central power is needed for the EU to be perceived as a geopolitical actor.

Responsibility and solidarity: The pandemic has shown that there are events that can only be overcome together. However, greater solidarity to increase resilience to crises and disasters must not lead to false incentives for less individual responsibility.

The model of different speeds is not new. And as plausible as it may seem politically, it is difficult to implement institutionally. This is because it must strengthen and speed up the core of the EU as a “club of the willing,” while at the same time tying the periphery with states such as Ukraine, northern Macedonia or Bosnia-Herzegovina more closely to the EU.

Europe must now, as it is historically challenged, provide far-sighted answers. There is no alternative to this at a time when the priority is not to harmonize small-scale policies to complete the Union, but to strengthen a common idea of Europe in the incipient geopolitical system competition.