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Another quiet week begins in Brussels. Political business in the EU capital will only resume next week with the first diplomatic meetings to prepare for the Council meeting of foreign ministers. Most of the EU Council working groups will then resume their work in the first week of September.
Not much news can be expected from Paris in the next few days either. The Elysée Palace announced at the weekend that no new prime minister would be appointed to form a government before Aug. 23. That is when President Emmanuel Macron wants to meet with the party leaders to hopefully find a candidate for prime minister who can rally a majority behind him in the National Assembly.
In Berlin, meanwhile, there seems to be no time off. The budget dispute is keeping the coalition government on tenterhooks and is also likely to have European consequences, for example if support for Ukraine becomes collateral damage of Germany’s austerity measures.
Unsurprisingly, there are no vacations in the USA either. The Democrats are holding their party convention in Chicago and are preparing for the upcoming elections. Joe Biden, Barack Obama, Hillary Clinton and other party bigwigs will throw their weight behind Kamala Harris and Tim Walz between today and Thursday.
On this side of the Atlantic, too, many fingers are being crossed for the Democrats – in the somewhat bitter knowledge that the most important elections for Europe this year did not take place on June 9, but are due on Nov. 5.
I wish you a peaceful week!
Rental prices in Europe have only been going in one direction for years: upwards. Ursula von der Leyen has made the issue of affordable housing one of the most important social projects in her political guidelines. As one of the measures for more affordable housing, von der Leyen also wants to tackle the rules on state aid. The aim: “To enable support measures for housing construction, especially for affordable, energy-efficient and social housing”, she emphasizes in her guidelines.
EU competition law currently sets limits on state intervention. This is because any state support for affordable housing construction, whether by the federal government, federal states or local authorities, constitutes state aid under competition law.
Nevertheless, state aid for affordable housing is already permitted – for example in the form of low-cost loans or grants. This is made possible above all by the EU Commission’s exemption decision for so-called services of general economic interest, or SGEI exemption decision for short. These services of general economic interest include, for example, healthcare, transport and the housing sector. Programs that fall within this framework do not have to be applied for and approved separately. The basic assumption is that these services cannot be adequately provided by the market as they are often too unprofitable.
However, not everything in the housing sector is covered by this exemption decision. “The SGEI exemption decision states that social housing can be subsidized. In practice, this is interpreted in such a way that it only concerns funding for disadvantaged citizens and people on low incomes,” says EU state aid law expert Christian Wagner from the law firm Kapellmann. He has already represented local authorities and federal states on several occasions and has published on the subject.
In Germany, the whole thing is generally handled in such a way that people with a housing entitlement certificate are entitled to affordable social housing, says Wagner. If you only look at the people who are entitled to a housing entitlement certificate, the group is quite small, says Wagner. This is because the limits are quite narrow. In Hesse, a two-person household can currently only obtain the certificate if their monthly net household income is less than 2,067 euros.
For Barbara Steenbergen from the International Union of Tenants (IUT), which represents tenant protection associations at European level, this is too restrictive: “Even people on middle incomes are now having problems finding housing“, she tells Table.Briefings. “We have therefore been calling for many years for the exemption decision to be amended so that affordable housing can also be promoted beyond the target group of people on the lowest incomes.” It’s about creating housing for tradespeople, employees, teachers and police officers, for example, says Steenbergen.
In fact, according to Eurostat, rents in the EU have risen by an average of 24% since 2010. The price increases are even more drastic in metropolitan areas and cities – causing problems even for the middle class. This can be seen in Amsterdam, for example, where rents of €1,000 and more can be demanded for a 13 m² room.
The economy is also noticing the consequences – for example in Dublin. There, two out of three companies complain to the Chamber of Commerce that they have already lost staff because they can no longer afford the rents in the Irish capital.
The Eurocities network, which brings together various European cities, is therefore also calling for a change in the rules on housing aid. It states that an “updated understanding of who social housing is intended for is required – one that also includes housing for middle-income groups“.
Legal expert Wagner points out that there is already a certain amount of leeway for deviations, some of which is also used by the public sector. “However, this in turn creates uncertainty, as it is not entirely clear what the current EU regulations still allow”, says the state aid expert.
Tenant protector Steenbergen also criticizes this: “The current subsidy rules create a lot of uncertainty. It’s not always clear what still falls under social housing and what no longer does.” This creates additional bureaucratic hurdles. “We currently have a pressing problem with affordable housing. We can’t afford such uncertainties.”
A negative example for many critics of the existing regulations is the case of the Netherlands. There, the state had provided affordable housing for large sections of the population for decades – but had to restrict this to the lowest income groups following a competition procedure by the Commission due to the current state aid rules and subsequent legal disputes.
However, according to Steenbergen from the IUT, the state aid law should not be adapted to include an additionally defined target group. Above all, this would create new bureaucracy and uncertainty. She therefore says: “In our view, the target group definition in the SGEI exemption decision should be dropped completely. Then the states can decide how they want to handle this.”
In fact, it is a special feature of the housing sector that the target group for services of general economic interest is determined on the basis of income, says lawyer Wagner.
However, the project does not only have friends. There is vociferous criticism, particularly from the independent real estate industry. Andreas Ibel, President of the European umbrella organization of project developers Build Europe and Vice President of the Federal Association of Independent Real Estate and Housing Companies (BFW), fears that independent providers will be at a particular disadvantage. While in Germany private companies can place social housing directly on the market for the target group and thus receive corresponding state subsidies, France and Belgium, for example, have a closed system in which private developers cannot do this, criticizes Ibel.
“Some of the project developers there are forced by regulations to sell some of the residential units in their projects to public providers of social housing below the production costs.” This in turn drives up prices on the private market. He fears negative consequences: “A policy that increases the burden can therefore lead to serious disruption on the housing market. We reject that”, emphasizes the Build Europe President.
In Germany, a new regulation is likely to have little effect for the time being, depending on how it is interpreted. Barbara Schönig, Professor of Urban Planning at Bauhaus-Universität Weimar, explains that although a new regulation would be welcome, there have been few problems with EU competition law in Germany in recent years. “Social housing in Germany has long focused mainly on people with low incomes.” This is also possible without any problems with the current legal situation. “In other countries, such as Ireland, this is a very big issue because the state would like to promote a wider range of housing, but the current rules don’t allow it.”
However, Schönig believes that the issue of competition law can still play an important role in Germany – namely in the existing housing stock: “This is an issue that receives far too little attention. Changes to EU state aid rules could help to ensure that middle-class tenants also benefit and that their homes remain affordable, especially when it comes to promoting energy-efficient renovations.”
However, Germany has not even been able to keep up with the creation of housing for the poorest. The coalition’s goal of creating 100,000 new social housing units per year could not be achieved. Last year, it was just half that number.
Following a report in the FAS about Finance Minister Christian Lindner‘s freeze on contracts and orders for Ukraine arms aid to the Federal Ministry of Defense, the Economics Minister has reminded us of Germany’s obligations. “We have promised Ukraine support – for as long as necessary”, Robert Habeck told Table.Briefings. This promise binds Germany. “We must therefore ensure that deliveries do not stop, that we do what can be done.”
The background to this is the decision described in the FAS report to halve aid to Ukraine from eight to four billion euros. The figures are confirmed in coalition circles. However, this decision, supported by the Chancellor, was only taken because the government firmly believes that the recent announcement by the G7 heads of state to provide Kyiv with up to €50 billion will soon be implemented. The G7 states want to take out a loan for this, which they will then repay over many years from the interest earned on the assets retained by Russia (around €250 billion). Internally, it is hoped in Berlin that this will be completed by October at the latest, as everyone – including the current US administration – wants to create facts before the US elections at the beginning of November.
Nevertheless, the procedure has caused frowns and displeasure. In his letter to the Ministry of Defense, Lindner prohibited the BMVg from placing any further arms orders for Ukraine with immediate effect. Formally, the minister is allowed to do this if the budget is very tight. But it has consequences for the belligerent Ukraine. From their point of view, there is now a threatening gap of two to three months in procurement. Up to now, it has always been the BMVg, in consultation with Ukraine, that orders weapons or ammunition for Kyiv, pays for them and then delivers them. This is set to change with the €50 billion. Ukraine will then be able to make its own purchases. That is why it would have been possible not to prohibit the BMVg from doing anything, but to allow further orders – in the certain belief that Ukraine would then pay the bills itself from October, with the help of the €50 billion. Habeck also refers to this money, which he believes will certainly come. “Precisely because this is the case, there must be no unwanted pause in support, no time must be lost for Ukraine.”
Meanwhile, the AA is fighting against irritations abroad. Annalena Baerbock‘s spokesperson has taken to social media in an attempt to dispel doubts about German support for Kyiv. Sebastian Fischer wrote: “Rumors that Germany is stopping its support for Ukraine are false.” Germany is standing by and helping Ukraine “as long as it takes”. This was preceded by public fears, particularly in Eastern Europe, that Berlin was backing away from Ukraine or succumbing to pressure from Putin.
The SPD parliamentary group is planning ahead in case things go wrong. Its foreign policy spokesperson Niels Schmid told Table.Briefings: “We stand behind Ukraine, nothing will change.” If the funds from the €50 billion pot are delayed, which is unfortunately quite possible until November, then “we as a parliament will have to take action”. Then the federal government – “even if the Liberals are still blocking it” – would presumably have to declare a budget emergency. CDU parliamentary group leader Thorsten Frei warned that decisions such as capping aid could also cause NATO partners to start worrying. The budget plan was “irresponsible” because “the fight against Russian aggression also serves our security above all”.
As Maltese Foreign Minister Ian Borg and Prime Minister Robert Abela announced on Facebook on Sunday, the head of the EU representation in Malta, Lorenzo Vella, has died after a short illness. The 43-year-old leaves behind two children.
Vella had been in office since March 2023. According to the Times of Malta, he had previously served as Malta’s Deputy Permanent Representative to the EU. X also received condolences from Commission President Ursula von der Leyen and the President of the European Parliament Roberta Metsola. jaa
Another quiet week begins in Brussels. Political business in the EU capital will only resume next week with the first diplomatic meetings to prepare for the Council meeting of foreign ministers. Most of the EU Council working groups will then resume their work in the first week of September.
Not much news can be expected from Paris in the next few days either. The Elysée Palace announced at the weekend that no new prime minister would be appointed to form a government before Aug. 23. That is when President Emmanuel Macron wants to meet with the party leaders to hopefully find a candidate for prime minister who can rally a majority behind him in the National Assembly.
In Berlin, meanwhile, there seems to be no time off. The budget dispute is keeping the coalition government on tenterhooks and is also likely to have European consequences, for example if support for Ukraine becomes collateral damage of Germany’s austerity measures.
Unsurprisingly, there are no vacations in the USA either. The Democrats are holding their party convention in Chicago and are preparing for the upcoming elections. Joe Biden, Barack Obama, Hillary Clinton and other party bigwigs will throw their weight behind Kamala Harris and Tim Walz between today and Thursday.
On this side of the Atlantic, too, many fingers are being crossed for the Democrats – in the somewhat bitter knowledge that the most important elections for Europe this year did not take place on June 9, but are due on Nov. 5.
I wish you a peaceful week!
Rental prices in Europe have only been going in one direction for years: upwards. Ursula von der Leyen has made the issue of affordable housing one of the most important social projects in her political guidelines. As one of the measures for more affordable housing, von der Leyen also wants to tackle the rules on state aid. The aim: “To enable support measures for housing construction, especially for affordable, energy-efficient and social housing”, she emphasizes in her guidelines.
EU competition law currently sets limits on state intervention. This is because any state support for affordable housing construction, whether by the federal government, federal states or local authorities, constitutes state aid under competition law.
Nevertheless, state aid for affordable housing is already permitted – for example in the form of low-cost loans or grants. This is made possible above all by the EU Commission’s exemption decision for so-called services of general economic interest, or SGEI exemption decision for short. These services of general economic interest include, for example, healthcare, transport and the housing sector. Programs that fall within this framework do not have to be applied for and approved separately. The basic assumption is that these services cannot be adequately provided by the market as they are often too unprofitable.
However, not everything in the housing sector is covered by this exemption decision. “The SGEI exemption decision states that social housing can be subsidized. In practice, this is interpreted in such a way that it only concerns funding for disadvantaged citizens and people on low incomes,” says EU state aid law expert Christian Wagner from the law firm Kapellmann. He has already represented local authorities and federal states on several occasions and has published on the subject.
In Germany, the whole thing is generally handled in such a way that people with a housing entitlement certificate are entitled to affordable social housing, says Wagner. If you only look at the people who are entitled to a housing entitlement certificate, the group is quite small, says Wagner. This is because the limits are quite narrow. In Hesse, a two-person household can currently only obtain the certificate if their monthly net household income is less than 2,067 euros.
For Barbara Steenbergen from the International Union of Tenants (IUT), which represents tenant protection associations at European level, this is too restrictive: “Even people on middle incomes are now having problems finding housing“, she tells Table.Briefings. “We have therefore been calling for many years for the exemption decision to be amended so that affordable housing can also be promoted beyond the target group of people on the lowest incomes.” It’s about creating housing for tradespeople, employees, teachers and police officers, for example, says Steenbergen.
In fact, according to Eurostat, rents in the EU have risen by an average of 24% since 2010. The price increases are even more drastic in metropolitan areas and cities – causing problems even for the middle class. This can be seen in Amsterdam, for example, where rents of €1,000 and more can be demanded for a 13 m² room.
The economy is also noticing the consequences – for example in Dublin. There, two out of three companies complain to the Chamber of Commerce that they have already lost staff because they can no longer afford the rents in the Irish capital.
The Eurocities network, which brings together various European cities, is therefore also calling for a change in the rules on housing aid. It states that an “updated understanding of who social housing is intended for is required – one that also includes housing for middle-income groups“.
Legal expert Wagner points out that there is already a certain amount of leeway for deviations, some of which is also used by the public sector. “However, this in turn creates uncertainty, as it is not entirely clear what the current EU regulations still allow”, says the state aid expert.
Tenant protector Steenbergen also criticizes this: “The current subsidy rules create a lot of uncertainty. It’s not always clear what still falls under social housing and what no longer does.” This creates additional bureaucratic hurdles. “We currently have a pressing problem with affordable housing. We can’t afford such uncertainties.”
A negative example for many critics of the existing regulations is the case of the Netherlands. There, the state had provided affordable housing for large sections of the population for decades – but had to restrict this to the lowest income groups following a competition procedure by the Commission due to the current state aid rules and subsequent legal disputes.
However, according to Steenbergen from the IUT, the state aid law should not be adapted to include an additionally defined target group. Above all, this would create new bureaucracy and uncertainty. She therefore says: “In our view, the target group definition in the SGEI exemption decision should be dropped completely. Then the states can decide how they want to handle this.”
In fact, it is a special feature of the housing sector that the target group for services of general economic interest is determined on the basis of income, says lawyer Wagner.
However, the project does not only have friends. There is vociferous criticism, particularly from the independent real estate industry. Andreas Ibel, President of the European umbrella organization of project developers Build Europe and Vice President of the Federal Association of Independent Real Estate and Housing Companies (BFW), fears that independent providers will be at a particular disadvantage. While in Germany private companies can place social housing directly on the market for the target group and thus receive corresponding state subsidies, France and Belgium, for example, have a closed system in which private developers cannot do this, criticizes Ibel.
“Some of the project developers there are forced by regulations to sell some of the residential units in their projects to public providers of social housing below the production costs.” This in turn drives up prices on the private market. He fears negative consequences: “A policy that increases the burden can therefore lead to serious disruption on the housing market. We reject that”, emphasizes the Build Europe President.
In Germany, a new regulation is likely to have little effect for the time being, depending on how it is interpreted. Barbara Schönig, Professor of Urban Planning at Bauhaus-Universität Weimar, explains that although a new regulation would be welcome, there have been few problems with EU competition law in Germany in recent years. “Social housing in Germany has long focused mainly on people with low incomes.” This is also possible without any problems with the current legal situation. “In other countries, such as Ireland, this is a very big issue because the state would like to promote a wider range of housing, but the current rules don’t allow it.”
However, Schönig believes that the issue of competition law can still play an important role in Germany – namely in the existing housing stock: “This is an issue that receives far too little attention. Changes to EU state aid rules could help to ensure that middle-class tenants also benefit and that their homes remain affordable, especially when it comes to promoting energy-efficient renovations.”
However, Germany has not even been able to keep up with the creation of housing for the poorest. The coalition’s goal of creating 100,000 new social housing units per year could not be achieved. Last year, it was just half that number.
Following a report in the FAS about Finance Minister Christian Lindner‘s freeze on contracts and orders for Ukraine arms aid to the Federal Ministry of Defense, the Economics Minister has reminded us of Germany’s obligations. “We have promised Ukraine support – for as long as necessary”, Robert Habeck told Table.Briefings. This promise binds Germany. “We must therefore ensure that deliveries do not stop, that we do what can be done.”
The background to this is the decision described in the FAS report to halve aid to Ukraine from eight to four billion euros. The figures are confirmed in coalition circles. However, this decision, supported by the Chancellor, was only taken because the government firmly believes that the recent announcement by the G7 heads of state to provide Kyiv with up to €50 billion will soon be implemented. The G7 states want to take out a loan for this, which they will then repay over many years from the interest earned on the assets retained by Russia (around €250 billion). Internally, it is hoped in Berlin that this will be completed by October at the latest, as everyone – including the current US administration – wants to create facts before the US elections at the beginning of November.
Nevertheless, the procedure has caused frowns and displeasure. In his letter to the Ministry of Defense, Lindner prohibited the BMVg from placing any further arms orders for Ukraine with immediate effect. Formally, the minister is allowed to do this if the budget is very tight. But it has consequences for the belligerent Ukraine. From their point of view, there is now a threatening gap of two to three months in procurement. Up to now, it has always been the BMVg, in consultation with Ukraine, that orders weapons or ammunition for Kyiv, pays for them and then delivers them. This is set to change with the €50 billion. Ukraine will then be able to make its own purchases. That is why it would have been possible not to prohibit the BMVg from doing anything, but to allow further orders – in the certain belief that Ukraine would then pay the bills itself from October, with the help of the €50 billion. Habeck also refers to this money, which he believes will certainly come. “Precisely because this is the case, there must be no unwanted pause in support, no time must be lost for Ukraine.”
Meanwhile, the AA is fighting against irritations abroad. Annalena Baerbock‘s spokesperson has taken to social media in an attempt to dispel doubts about German support for Kyiv. Sebastian Fischer wrote: “Rumors that Germany is stopping its support for Ukraine are false.” Germany is standing by and helping Ukraine “as long as it takes”. This was preceded by public fears, particularly in Eastern Europe, that Berlin was backing away from Ukraine or succumbing to pressure from Putin.
The SPD parliamentary group is planning ahead in case things go wrong. Its foreign policy spokesperson Niels Schmid told Table.Briefings: “We stand behind Ukraine, nothing will change.” If the funds from the €50 billion pot are delayed, which is unfortunately quite possible until November, then “we as a parliament will have to take action”. Then the federal government – “even if the Liberals are still blocking it” – would presumably have to declare a budget emergency. CDU parliamentary group leader Thorsten Frei warned that decisions such as capping aid could also cause NATO partners to start worrying. The budget plan was “irresponsible” because “the fight against Russian aggression also serves our security above all”.
As Maltese Foreign Minister Ian Borg and Prime Minister Robert Abela announced on Facebook on Sunday, the head of the EU representation in Malta, Lorenzo Vella, has died after a short illness. The 43-year-old leaves behind two children.
Vella had been in office since March 2023. According to the Times of Malta, he had previously served as Malta’s Deputy Permanent Representative to the EU. X also received condolences from Commission President Ursula von der Leyen and the President of the European Parliament Roberta Metsola. jaa