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When Annalena Baerbock and her European counterparts meet in Brussels today, they will find themselves in a completely different world to the last Foreign Affairs Council. This time, the EU is better prepared than during Trump’s first term in office. The Ukraine policy has been made more or less “Trump-proof,” at least financially. Brussels has also prepared for possible punitive tariffs. Nevertheless, foreign policy faces new challenges.
The Council must discuss four key issues, says an EU diplomat: Will the USA withdraw its support for Ukraine? If so, Europe would have to do even more. But the coffers are already empty and the consensus is crumbling. Is Trump calling cooperation within NATO into question? That would have serious implications for European security.
Will there be punitive tariffs? That would jeopardize the economic recovery in Europe, which is already puny according to the EU Commission’s latest autumn forecast. And what about China policy? If the USA tightens the thumbscrews in Beijing even more, this would also affect Germany and the EU. Middle East policy and the multilateral order will also be challenged by Trump, according to a senior EU official.
However, it would be presumptuous to already expect answers. The foreign ministers want to discuss the new world situation over lunch – in an informal round. Decisions are only planned on the subject of Iran. The EU will impose new sanctions, but this is considered routine.
And then there are the reports about drones being produced in China for the Russian war of aggression against Ukraine. They are causing quite a stir in Brussels. However, the intelligence findings are not yet robust enough to be able to react to them. They only confirm once again how volatile and uncertain the situation has become – even before Trump took office.
Ms. Vestager, you were responsible for competition control at the EU Commission for a decade. How has your work changed in the face of rapid technological change over these years?
When I look back, the technology of ten years ago seems almost primitive. Today, technology has permeated everything, right down to agriculture. The first sector outside of tech to digitize itself was probably pornography. Technology is now everywhere. At the same time, the general population has become more skeptical, people have a more nuanced view of technology. We have naturally adapted our work.
How exactly?
We have digitized it. With forensic IT, we can now recover deleted documents. During unannounced inspections, we can take millions of documents with us and search them digitally. Paradoxically, we see very dynamic markets on the one hand and very stable market power of large players on the other. If we want to prove that a company is abusing its market power, we still apply the same standards.
Did you have the feeling that you could put a stop to tech companies given the dramatic changes?
To ensure that rules are adhered to, a community is needed. So not just us here, but authorities in member states, competitors, courts. Everyone has their specific role and contributes to ensuring that rules are adhered to.
In the current legislative period, you introduced the Digital Services Act (DSA) and the Digital Markets Act (DMA) to rein in the tech industry. Do you expect this to result in major progress?
Passing laws is difficult enough. But enforcing them is 100 to 1000 times more difficult because you have to actually change the behavior of companies. When it comes to actually enforcing rules, we face a challenge. We can hire really smart people with experience for our DSA and DMA teams. But the problem is the resources to hire enough people.
Is the implementation of DSA and DMA at risk?
We certainly have the resources available but priorities have to be set. Generally speaking, the more resources we have, the more we can achieve in terms of implementation. I know that sounds trivial. But when people ask me about problems, I don’t see them in the laws, but in their enforcement. This must be consistently financed.
A completely different problem is looming in the USA. President-elect Donald Trump has hired tech entrepreneur Elon Musk to cut red tape. He could soon be making up his own rules to push through business interests. How do you see this development?
I don’t want to comment on Trump and Musk. It’s not my place to speculate on future decisions in the USA. But the attitude towards big tech has changed in the USA. When I came into office ten years ago, technology was seen as the greatest thing since sliced bread. That has changed significantly. Many people in the US are concerned about child pornography online.
In Europe, antitrust policy could soon change. French President Emmanuel Macron, EU Commission President Ursula von der Leyen and German opposition leader Friedrich Merz would like to enforce antitrust rules less strictly and put them at the service of industrial policy. Do you expect a new direction in the future EU Commission?
I wonder whether “new” in this case means that everything will be turned upside down. We have changed our practices over the years. We are now looking at how mergers affect innovation. When the idea first came up years ago, some people shook their heads. At the same time, we have found that concentration has increased in all sectors in Europe over the past 25 years. Our research has found increased profits and price premiums everywhere. This leads to more inequality. That should worry us in Europe because some people feel that their real income is stagnating. That is why President von der Leyen has also said that market concentration should not increase.
The former President of the European Central Bank, Mario Draghi, has called for more European champions in his report on competitiveness. A good idea?
We have admitted European champions every year. The world’s largest beer brewer is the result of a merger, as is the world’s largest dairy company. The question is not size, but whether a company in Europe is still exposed to competition. Economic history shows us that companies are competitive when competition drives them constantly. Six years on, we have looked again at the Siemens Alstom case, which is the prime example in the debate on merger control in Europe. Today we can see that the order books of both companies are full with orders from all over the world. The Chinese competition is strong in China, but not represented on the European market – contrary to what was feared. We are having the wrong debate here.
In what way?
Competitiveness depends on many factors: qualified employees, innovation, tax systems, functioning capital markets, the domestic market. All of this requires hard work. I’m worried that merger control is therefore seen as a panacea. But we really have to do this hard work.
According to the energy company RWE, the European Hydrogen Bank auctions should be continued in the coming years. “Planning security beyond 2025 is almost more important than the exact budget,” said Sopna Sury, Chief Operating Officer Hydrogen at the power plant division RWE Generation, in an interview with Table.Briefings. The economist is also Chairwoman of the Supervisory Board of the Hydrogen Europe Association.
The second auction round of the European Hydrogen Bank is due to begin on December 3. According to Sury, the need for funding will decrease over time as the cost per ton of hydrogen decreases due to economies of scale.
Specific targets for hydrogen are also important after 2030, said the manager. The EU is currently in the process of setting a climate target for 2040. However, France and other countries want to ensure that fewer energy policy targets are set, especially for renewable energies in certain sectors and for renewable hydrogen. “If industrial consumers know what regulatory framework they are operating within, they can align their production processes and purchasing strategy accordingly,” said Sury.
For the next few years, it makes sense to be color-neutral when it comes to hydrogen in order to fully utilize the hydrogen infrastructure. However, as the EU wants to become climate-neutral by 2050, it is clear that green hydrogen is the only sustainable form of the molecule in the long term.
In order to achieve the targeted quantities of hydrogen and the climate targets, Sury spoke out in favor of relaxing the delegated acts for green and low-carbon hydrogen. The legal act for low-carbon hydrogen concerns the regulations for the use of electricity for auxiliary processes such as liquefaction, transportation or cracking.
“The question arises as to whether the electricity has to meet the same criteria as for the production of green hydrogen,” said Sury. It would be better to allow project-specific electricity CO2 values in the calculation, as could be achieved through a combination of grid electricity and long-term direct supply contracts (PPAs). According to her, this would increase flexibility for producers, reduce production costs and, as a result, increase the production of low-carbon fuels in the EU and the corresponding imports.
Sury supports changes to the legal act for green hydrogen, as recently called for by Federal Minister for Economic Affairs Robert Habeck. Sury believes that a revision of the legislation in 2028 is too late and that 2026 should be the target instead. One option for more flexibility would be to extend the Grandfathering until the mid-2030s so that electricity from existing renewable energy plants could be used to produce hydrogen for longer.
Sury says: “The same applies to the issue of temporal correlation. The moment I go from monthly to hourly correlation of renewables and hydrogen production, this is a very, very glaring cost driver.”
You have gone through Parliament’s hearings to be part of the next European Commission. Our continent’s descent from the global economic, technological and geopolitical stage requires a revolution in the way our institutions work, not small steps. You can provide the impetus to ensure that Europe remains a prosperous, forward-looking continent, a driving force for the planet and a credible champion of the democratic model.
Your actions could be guided by five principles:
Europe must not be a continent of ideology, but a stronghold of strategy and anticipation. The Green Deal is an example of a seemingly ambitious approach, but the end result is a continent lagging behind in terms of climate, fragmented in terms of energy and experiencing the disappearance of a flagship industry, the car industry, with terrible social consequences.
With a little strategy, it would have been possible to adapt to the value chains of the future – such as batteries and software – to demand real results from the Projects of Common European Interest (IPCEI), to control the metals crucial to the energy transition and to anticipate tariffs – instead of waiting for disaster.
Secondly, Europe must be a continent of implementation, not of big speeches and waste of public money. After four and a half years, only 40 percent of the €750 billion raised during the Covid crisis in May 2020 has been spent with no clear impact. The money was spent for the sake of spending.
The timid warnings of the Court of Auditors have been brushed aside. If we wanted to leave Europe to the populists, we couldn’t do any better. Let’s no longer measure the effectiveness of a policy by the billions invested but by its impact on society. No EU bullshit anymore.
Europe must be the continent of efficiency and impact: The 240 billion spent on R&D since 1984 is a good example of this – it has not led to clear technological leadership. These resources are crucial, but we must put an end to the unbridled bureaucratization of programs by the Directorate-General for R&D – which leads to fewer and fewer of the best teams participating – and not live with illusions: despite the success of instruments such as the European Research Council (ERC), the level of science is declining. The EU’s place among the top one percent of the most cited scientific papers is declining.
The European Innovation Council (EIC) – which no one seems to want to abolish because it “waters” the entire ecosystem – is a kind of ten-billion-megafund managed by bureaucrats – and we know how that always ends. No tech giant has yet emerged from these instruments: It’s time for commissioners with real courage to abolish or radically reform these instruments. The reports by Tirole, Fuest and Draghi put this in milder terms, but do not present it any differently.
Fourthly, the scientific competence of politics must be strengthened. The insignificant role of Parliament’s scientific body (STOA) and the Commission’s annual foresight document, which is full of generalities, miss the point, namely the ability to foresee the next step and think in an interdisciplinary way – as the incoherence between energy, agriculture and research policy shows.
The AI Act is revealing: it should have made Europe the forward-thinking place to test this fundamental technology, but could instead result in the latest innovations turning away from the continent and the best people moving away.
Finally, Commissioners, it is time to bring society into the administration: If the Directors-General, who are much more powerful than you because they are in control of the bureaucracy, have all been with the EU for 25 years or more, it means that none of them really understand the real world. Civil servants’ careers need to become much more diverse and there needs to be more interaction with civil society to keep up with technological, social and economic developments.
Europe needs to be strategic and focus on issues where scale matters. We need a Commission that is far-sighted, bold, agile and capable of making Europe successful. You, Commissioners, would be making history.
André Loesekrug-Pietri is President and Scientific Director of the Joint European Disruptive Initiative (JEDI), forerunner of a European Agency for Disruptive Innovation (ARPA).
When Annalena Baerbock and her European counterparts meet in Brussels today, they will find themselves in a completely different world to the last Foreign Affairs Council. This time, the EU is better prepared than during Trump’s first term in office. The Ukraine policy has been made more or less “Trump-proof,” at least financially. Brussels has also prepared for possible punitive tariffs. Nevertheless, foreign policy faces new challenges.
The Council must discuss four key issues, says an EU diplomat: Will the USA withdraw its support for Ukraine? If so, Europe would have to do even more. But the coffers are already empty and the consensus is crumbling. Is Trump calling cooperation within NATO into question? That would have serious implications for European security.
Will there be punitive tariffs? That would jeopardize the economic recovery in Europe, which is already puny according to the EU Commission’s latest autumn forecast. And what about China policy? If the USA tightens the thumbscrews in Beijing even more, this would also affect Germany and the EU. Middle East policy and the multilateral order will also be challenged by Trump, according to a senior EU official.
However, it would be presumptuous to already expect answers. The foreign ministers want to discuss the new world situation over lunch – in an informal round. Decisions are only planned on the subject of Iran. The EU will impose new sanctions, but this is considered routine.
And then there are the reports about drones being produced in China for the Russian war of aggression against Ukraine. They are causing quite a stir in Brussels. However, the intelligence findings are not yet robust enough to be able to react to them. They only confirm once again how volatile and uncertain the situation has become – even before Trump took office.
Ms. Vestager, you were responsible for competition control at the EU Commission for a decade. How has your work changed in the face of rapid technological change over these years?
When I look back, the technology of ten years ago seems almost primitive. Today, technology has permeated everything, right down to agriculture. The first sector outside of tech to digitize itself was probably pornography. Technology is now everywhere. At the same time, the general population has become more skeptical, people have a more nuanced view of technology. We have naturally adapted our work.
How exactly?
We have digitized it. With forensic IT, we can now recover deleted documents. During unannounced inspections, we can take millions of documents with us and search them digitally. Paradoxically, we see very dynamic markets on the one hand and very stable market power of large players on the other. If we want to prove that a company is abusing its market power, we still apply the same standards.
Did you have the feeling that you could put a stop to tech companies given the dramatic changes?
To ensure that rules are adhered to, a community is needed. So not just us here, but authorities in member states, competitors, courts. Everyone has their specific role and contributes to ensuring that rules are adhered to.
In the current legislative period, you introduced the Digital Services Act (DSA) and the Digital Markets Act (DMA) to rein in the tech industry. Do you expect this to result in major progress?
Passing laws is difficult enough. But enforcing them is 100 to 1000 times more difficult because you have to actually change the behavior of companies. When it comes to actually enforcing rules, we face a challenge. We can hire really smart people with experience for our DSA and DMA teams. But the problem is the resources to hire enough people.
Is the implementation of DSA and DMA at risk?
We certainly have the resources available but priorities have to be set. Generally speaking, the more resources we have, the more we can achieve in terms of implementation. I know that sounds trivial. But when people ask me about problems, I don’t see them in the laws, but in their enforcement. This must be consistently financed.
A completely different problem is looming in the USA. President-elect Donald Trump has hired tech entrepreneur Elon Musk to cut red tape. He could soon be making up his own rules to push through business interests. How do you see this development?
I don’t want to comment on Trump and Musk. It’s not my place to speculate on future decisions in the USA. But the attitude towards big tech has changed in the USA. When I came into office ten years ago, technology was seen as the greatest thing since sliced bread. That has changed significantly. Many people in the US are concerned about child pornography online.
In Europe, antitrust policy could soon change. French President Emmanuel Macron, EU Commission President Ursula von der Leyen and German opposition leader Friedrich Merz would like to enforce antitrust rules less strictly and put them at the service of industrial policy. Do you expect a new direction in the future EU Commission?
I wonder whether “new” in this case means that everything will be turned upside down. We have changed our practices over the years. We are now looking at how mergers affect innovation. When the idea first came up years ago, some people shook their heads. At the same time, we have found that concentration has increased in all sectors in Europe over the past 25 years. Our research has found increased profits and price premiums everywhere. This leads to more inequality. That should worry us in Europe because some people feel that their real income is stagnating. That is why President von der Leyen has also said that market concentration should not increase.
The former President of the European Central Bank, Mario Draghi, has called for more European champions in his report on competitiveness. A good idea?
We have admitted European champions every year. The world’s largest beer brewer is the result of a merger, as is the world’s largest dairy company. The question is not size, but whether a company in Europe is still exposed to competition. Economic history shows us that companies are competitive when competition drives them constantly. Six years on, we have looked again at the Siemens Alstom case, which is the prime example in the debate on merger control in Europe. Today we can see that the order books of both companies are full with orders from all over the world. The Chinese competition is strong in China, but not represented on the European market – contrary to what was feared. We are having the wrong debate here.
In what way?
Competitiveness depends on many factors: qualified employees, innovation, tax systems, functioning capital markets, the domestic market. All of this requires hard work. I’m worried that merger control is therefore seen as a panacea. But we really have to do this hard work.
According to the energy company RWE, the European Hydrogen Bank auctions should be continued in the coming years. “Planning security beyond 2025 is almost more important than the exact budget,” said Sopna Sury, Chief Operating Officer Hydrogen at the power plant division RWE Generation, in an interview with Table.Briefings. The economist is also Chairwoman of the Supervisory Board of the Hydrogen Europe Association.
The second auction round of the European Hydrogen Bank is due to begin on December 3. According to Sury, the need for funding will decrease over time as the cost per ton of hydrogen decreases due to economies of scale.
Specific targets for hydrogen are also important after 2030, said the manager. The EU is currently in the process of setting a climate target for 2040. However, France and other countries want to ensure that fewer energy policy targets are set, especially for renewable energies in certain sectors and for renewable hydrogen. “If industrial consumers know what regulatory framework they are operating within, they can align their production processes and purchasing strategy accordingly,” said Sury.
For the next few years, it makes sense to be color-neutral when it comes to hydrogen in order to fully utilize the hydrogen infrastructure. However, as the EU wants to become climate-neutral by 2050, it is clear that green hydrogen is the only sustainable form of the molecule in the long term.
In order to achieve the targeted quantities of hydrogen and the climate targets, Sury spoke out in favor of relaxing the delegated acts for green and low-carbon hydrogen. The legal act for low-carbon hydrogen concerns the regulations for the use of electricity for auxiliary processes such as liquefaction, transportation or cracking.
“The question arises as to whether the electricity has to meet the same criteria as for the production of green hydrogen,” said Sury. It would be better to allow project-specific electricity CO2 values in the calculation, as could be achieved through a combination of grid electricity and long-term direct supply contracts (PPAs). According to her, this would increase flexibility for producers, reduce production costs and, as a result, increase the production of low-carbon fuels in the EU and the corresponding imports.
Sury supports changes to the legal act for green hydrogen, as recently called for by Federal Minister for Economic Affairs Robert Habeck. Sury believes that a revision of the legislation in 2028 is too late and that 2026 should be the target instead. One option for more flexibility would be to extend the Grandfathering until the mid-2030s so that electricity from existing renewable energy plants could be used to produce hydrogen for longer.
Sury says: “The same applies to the issue of temporal correlation. The moment I go from monthly to hourly correlation of renewables and hydrogen production, this is a very, very glaring cost driver.”
You have gone through Parliament’s hearings to be part of the next European Commission. Our continent’s descent from the global economic, technological and geopolitical stage requires a revolution in the way our institutions work, not small steps. You can provide the impetus to ensure that Europe remains a prosperous, forward-looking continent, a driving force for the planet and a credible champion of the democratic model.
Your actions could be guided by five principles:
Europe must not be a continent of ideology, but a stronghold of strategy and anticipation. The Green Deal is an example of a seemingly ambitious approach, but the end result is a continent lagging behind in terms of climate, fragmented in terms of energy and experiencing the disappearance of a flagship industry, the car industry, with terrible social consequences.
With a little strategy, it would have been possible to adapt to the value chains of the future – such as batteries and software – to demand real results from the Projects of Common European Interest (IPCEI), to control the metals crucial to the energy transition and to anticipate tariffs – instead of waiting for disaster.
Secondly, Europe must be a continent of implementation, not of big speeches and waste of public money. After four and a half years, only 40 percent of the €750 billion raised during the Covid crisis in May 2020 has been spent with no clear impact. The money was spent for the sake of spending.
The timid warnings of the Court of Auditors have been brushed aside. If we wanted to leave Europe to the populists, we couldn’t do any better. Let’s no longer measure the effectiveness of a policy by the billions invested but by its impact on society. No EU bullshit anymore.
Europe must be the continent of efficiency and impact: The 240 billion spent on R&D since 1984 is a good example of this – it has not led to clear technological leadership. These resources are crucial, but we must put an end to the unbridled bureaucratization of programs by the Directorate-General for R&D – which leads to fewer and fewer of the best teams participating – and not live with illusions: despite the success of instruments such as the European Research Council (ERC), the level of science is declining. The EU’s place among the top one percent of the most cited scientific papers is declining.
The European Innovation Council (EIC) – which no one seems to want to abolish because it “waters” the entire ecosystem – is a kind of ten-billion-megafund managed by bureaucrats – and we know how that always ends. No tech giant has yet emerged from these instruments: It’s time for commissioners with real courage to abolish or radically reform these instruments. The reports by Tirole, Fuest and Draghi put this in milder terms, but do not present it any differently.
Fourthly, the scientific competence of politics must be strengthened. The insignificant role of Parliament’s scientific body (STOA) and the Commission’s annual foresight document, which is full of generalities, miss the point, namely the ability to foresee the next step and think in an interdisciplinary way – as the incoherence between energy, agriculture and research policy shows.
The AI Act is revealing: it should have made Europe the forward-thinking place to test this fundamental technology, but could instead result in the latest innovations turning away from the continent and the best people moving away.
Finally, Commissioners, it is time to bring society into the administration: If the Directors-General, who are much more powerful than you because they are in control of the bureaucracy, have all been with the EU for 25 years or more, it means that none of them really understand the real world. Civil servants’ careers need to become much more diverse and there needs to be more interaction with civil society to keep up with technological, social and economic developments.
Europe needs to be strategic and focus on issues where scale matters. We need a Commission that is far-sighted, bold, agile and capable of making Europe successful. You, Commissioners, would be making history.
André Loesekrug-Pietri is President and Scientific Director of the Joint European Disruptive Initiative (JEDI), forerunner of a European Agency for Disruptive Innovation (ARPA).