Table.Briefing: Europe

Macron’s new government + Billions to rebuild Ukraine + Battery recycling in Europe

  • New government in France: Macron opts for continuity
  • Ukraine: Where will the billions needed for reconstruction come from?
  • Battery recycling: Europe’s catch-up plan
  • German government plans ‘protective umbrella’ for energy companies
  • Turmoil over personnel in the EU Parliament
  • EU Court of Auditors warns of fraud with agricultural subsidies
  • ECB wants to give greater consideration to climate protection in monetary policy
  • Profile: Frank Schemmel – from huge law firm to DataGuard
Dear reader,

Yesterday, France’s President Emmanuel Macron and Prime Minister Élisabeth Borne unveiled the new cabinet after a long period of deliberation. After Macron lost his absolute majority in the parliamentary elections in June, the goal of the new government is to reflect the changed balance in the National Assembly. However, Macron is sticking with familiar faces, especially in the crucial ministries. From the perspective of France’s opposition and media, therefore, no significant new impetus is to be expected, as Tanja Kuchenbecker reports.

It will cost at least $750 billion to rebuild Ukraine, according to the head of government, Denys Shmyhal, at the first major Recovery Conference in Lugano, Switzerland, on Monday. Ukraine wants Russia to foot the bill and the EU Commission has also already considered resorting to the use of Russian assets, as the financing of EU billions in aid to Kyiv stands on shaky ground. Commission President Ursula von der Leyen and Economic Affairs Commissioner Valdis Dombrovskis were correspondingly coy in Lugano, as Eric Bonse observed.

In view of the growing importance of electromobility, the demand for batteries will increase massively. For Germany alone, the Öko-Institut (Institute for Applied Ecology) expects around 1.2 million metric tons of lithium-ion batteries to come onto the market each year from 2035 – and that’s just for passenger cars. The focus is not only on the production of the batteries, but also, with a time lag, on their recycling. China is still in the lead when it comes to battery recycling, but the market is also slowly gaining momentum in Europe, as Leonie Düngefeld analyzes.

Your
Sarah Schaefer
Image of Sarah  Schaefer

Feature

New government in France: Macron opts for continuity

The new government has 42 members, including the prime minister. It consists of 21 women and 21 men, with the men occupying most of the important posts. Many “old” ministers retain their posts, especially in the crucial ministries – including one of the most important figures in France and Europe: Economy and Finance Minister Bruno Le Maire. He is seen as a guarantor that the previous economic policy will continue constantly.

France’s media are therefore calling it “a reshuffle without much reach”, because there is a complete lack of new personnel impetus from the right or the left. Interior Minister Gérald Darmanin can expand his office. In addition to domestic policy, he will also be responsible for the French overseas territories in the future. Former Health Minister Olivier Véran, who unlike Le Maire and Darmanin belongs more to the left wing of the “La République en Marche” party, is also back. He becomes government spokesman.

Eric Dupond-Moretti remains Minister of Justice, Pap Ndiaye Minister of Education, Catherine Colonna Minister of Foreign Affairs and Europe, Oliver Dussopt Minister of Labor, and Sébastien Lecornu Minister of Defense. Europe specialist Clément Beaune is now responsible for transport.

Ex-Hollande advisor responsible for Europe

From now on, Laurence Boone will be responsible for European affairs under Colonna. The 53-year-old economist specializes in European policy. She was economic advisor to former Socialist President François Hollande – as successor to Emmanuel Macron. Later, she was Hollande’s special advisor for economic and financial affairs in Europe and worked for the OECD (Organization for Economic Cooperation and Development).

New important figures are emergency physician François Braun, henceforth health minister, and former MEP Christophe Béchu, who takes over the environment ministry.

The opposition was outraged by this large-scale reshuffling of offices without real change, calling it “musical chairs”. The far-right Marine Le Pen stressed that Macron had “once again ignored the decision of the polls”. The leader of the Rassemblement National (RN) believes that Macron has not made any real changes despite the parliamentary elections.

The left-wing alliance Nupes also criticized that there was hardly any renewal. Greenpeace France, on the other hand, regretted the election of Environment Minister Béchu, who had “no experience”. This shows that the president still does not really take the environmental issue seriously.

Macron forced to compromise

The new government started with the aim of reflecting the new balance in the National Assembly after the parliamentary elections in June. Macron’s various allies have been given posts in the process, including representatives of the centrist-liberal Mouvement démocrate and the center-right Horizons party.

However, the government does not have much leeway. In the future, it will probably always be a question of how it can secure majorities in the National Assembly. Above all, it must expect resistance from the strengthened RN and the Nupes in the future. Reforms will therefore be more difficult to implement.

Macron won the most seats in June with the Ensemble party alliance, but with 245 deputies, he is below the absolute majority of 289 seats. Thus, he cannot push through legislation without coordination with the opposition. The Nupes alliance has 131 deputies, including 72 for leftist Jean-Luc Mélenchon’s La France Insoumise (Indomitable France) party. RN came in at 89 seats after the party picked up only eight in 2017.

Macron needs Republican backing

So it will be decided on a case-by-case basis whether Macron can win over deputies from the opposition with a legislative proposal. However, it is likely that he will often be able to count on the support of the 61 members of parliament from the conservative Republicans. In this case, however, they are likely to set conditions for their approval. Therefore, Macron’s policies could lean more to the right. For this reason, too, it is not surprising that many important posts in the new government continue to be occupied by politicians who belong to the right wing in Macron’s movement and come from the Republicans.

Coalitions are not common in France, which is why a willingness to compromise will now be called for. Macron had already called on the opposition to do so shortly after the parliamentary elections. He also emphasized that the French had re-elected him in April for his political project and made it clear that he would not accept too many compromises on it.

For the new government and the re-elected president, the main focus in the coming months will be on social issues in times of inflation. A bill to increase purchasing power is expected to be passed as early as July. However, France’s debt burden is already immense. There is not much room for social gestures, and the economic situation is more likely to deteriorate further.

The two powerful forces from the right and left in the National Assembly will be joined by the power of the street. It cannot be ruled out that the government will then have to back down and cave in on planned reforms.

  • European policy
  • France

Ukraine: Where will the billions needed for reconstruction come from?

Since the start of the war, the EU has already mobilized €6.2 billion in financial support for Ukraine, Commission President Ursula von der Leyen said in Lugano. “And more will come,” she announced. Economic Affairs Commissioner Valdis Dombrovskis reiterated the commitment to transfer €9 billion in liquidity assistance to Kyiv this year.

However, this money is primarily intended for day-to-day government operations. According to IMF estimates, Kyiv needs about $5 billion a month to pay wages and pensions and avert the threat of financial collapse. Another $100 billion would be needed to rebuild infrastructure destroyed by the war so far, Shmyhal said.

For financing, Ukraine is relying primarily on Western sanctions against Russia – and on the EU. Some $300 billion to $500 billion could come from frozen Russian assets, according to Schmyhal. At stake are central bank assets worth an estimated $300 billion, as well as the holdings of sanctioned Russian oligarchs.

However, it is difficult to confiscate and reallocate frozen assets. There are major, possibly insurmountable legal hurdles to this. The oligarchs would have to be proven to be directly responsible for the war or to have violated EU sanctions. The Russian Central Bank’s foreign exchange reserves are considered sacrosanct; by confiscating them, the West could set a dangerous precedent.

Key questions remained unanswered

EU funding is also on shaky ground. The coffers in Brussels are empty, so the EU Commission has already considered recourse to Russian assets as well. Von der Leyen has also brought up the idea of debt financing along the lines of the Recovery and Resilience Facility (RRF). However, this has met with massive resistance, for example, in Germany.

In Lugano, von der Leyen and Dombrovskis dodged the thorny issues. They promoted a reconstruction “platform” that could be set up at the EU Commission. In it, investments should be bundled as well as the approach coordinated and resources channeled, von der Leyen said. The platform would be open to all major donors, Dombrovskis added.

It can be deduced from this that the EU does not want to pay alone. However, it does not want to set the tone either. “At the end of the day, it is Ukraine itself which will, and must, take ownership,” Dombrovskis said. Recovery must be driven by Kyiv, he said. Shmyhal agreed but also put pressure: “We need regular and strong support,” he stressed. The sooner the financial assistance starts, the better the reconstruction will succeed.

  • European policy
  • Financial policy
  • Ukraine

Battery recycling: Europe’s catch-up plan

Now it’s certain: From 2035, no more internal combustion cars will be on the market; instead, electric vehicles will take over Europe’s roads. Mobility will then depend on lithium-ion batteries – and on their recycling – because the EU wants to achieve a circular economy and has to juggle raw material shortages. What is the state of the European recycling industry? And why are companies in China so much further ahead?

The Öko-Institut (Institute for Applied Ecology) calculated that from 2035, around 1.2 million tons of lithium-ion batteries per year will come onto the market in Germany – for passenger cars alone. Extrapolated to the EU as a whole, this figure would probably be three to four times higher. Then there are trucks and buses. Given the size of these batteries – that of a Tesla Model 3 Long Range contains 4416 cells and weighs 480 kilograms – we are talking about incredible amounts of waste. The International Energy Agency (IEA) estimates that the production of electric vehicles worldwide will generate up to 8 million tons of battery waste in 2040.

There is no alternative to recycling these batteries. Since 2006, it has been forbidden in the European Union to dispose of batteries in landfills. It has also become strategically relevant: Due to the Green Deal, the goal of a circular economy, and the race to become less dependent on raw material imports.

Companies in China had a head start

In a global comparison, China is far ahead: With 188,000 tons per year, companies there can recycle twice as many lithium-ion batteries as companies in Europe and have more than three times as much capacity as the US, researchers calculated earlier this year. They cited figures from the end of 2021.

In countries such as China and South Korea, recycled material was produced much earlier than in Europe or the USA, explains Matthias Buchert, Head of Resources & Mobility at the Öko-Institut. Since there was a market and larger production capacities for lithium-ion cells there earlier, the recycling industry was also ramped up more quickly. In a sense, companies there were already able to test and optimize recycling processes with production scrap and shortages. In addition, policies since 2012 have spurred the development of the lithium-ion battery recycling sector. In 2018, manufacturers in China were required to cooperate with recycling companies. However, many batteries there still end up in landfills or with illegal companies that recycle the batteries using outdated and polluting processes.

The European recycling market for lithium-ion batteries will grow incredibly over the next twenty years, delayed by the growth of electromobility, says Buchert. He expects it to pick up by the mid-2020s at the latest. Then there will be large-scale production scrap here, too – from the gigafactories that are now starting up in Europe. “After 2030, this will take on completely different dimensions,” says Buchert.

In the industry, the expectation is that there will be a division of labor in Europe, he says: “Probably a larger number of companies with smaller capacities will do the initial, mechanical steps of the process, and about a half-dozen larger companies will do the final refining.”

European market lacks investment

The largest currently active plant in Europe is operated by the company SungEel HiTech in Bátonyterenye, Hungary. There, 50,000 tons of lithium-ion batteries can be recycled per year. According to a study from the beginning of 2022, Germany has the highest recycling capacity in Europe: 54,000 tons of lithium-ion batteries can be recycled here. The REDUX company, with its plant in Bremerhaven, accounts for 10,000 tons of this.

In the coming years, several plants with capacities of several tens of thousands of tons per year will be added in Europe, for example, in Spain, France, Great Britain, Germany, Poland, and the Scandinavian countries. Northvolt plans to recycle 125,000 tons of lithium-ion batteries annually in Skellefteå, Sweden, starting in 2030. Belgium’s Umicore is currently planning the largest project: It will increase its recycling capacity to 150,000 tons per year, said its head of Government Affairs EU, Jan Tytgat, in Berlin last week.

Torsten Brandenburg, an officer at the German Federal Ministry for Economic Affairs, sees the challenge for the European market in the lack of investment. “We need to close the loop of the value chain in Europe to catch up with Asia,” he said at an EIT Raw Materials discussion. In addition to building up cell production, for which two IPCEIs are already underway, this hinges primarily on recycling. An IPCEI is also conceivable for this.

“As in any young market, the challenge in recycling is that companies first have to invest several million euros in the facilities,” says Matthias Buchert. At the moment, this is not really worth it: The batteries of e-cars have a useful life of ten years on average, so it will take time before recyclers even get larger quantities of material. Buchert speaks of the “chicken-and-egg problem”: The larger a recycling plant, the more economically it can operate – but only if it is working to capacity. “If you have spent batteries today, you first have to find someone to take them off your hands,” he says. “In turn, the companies that can or want to do that aren’t sure they’ll even get enough material, so they may be hesitant to invest in equipment.”

Ambitious EU Battery Regulation

According to Environmental Action Germany (DUH), the problem in Germany currently also lies in the legal collection rate, which is not being met. According to the Battery Act, 50 percent of used appliance batteries must be collected, which exceeds the EU minimum requirement of 45 percent. According to DUH, the figure for lithium-ion batteries was only about 32 percent. Manufacturers must declare the quantities of batteries put on the market and take them back via their own take-back system or one of six established ones. DUH is therefore calling for cost compensation for collection systems, ambitious collection quotas, and a deposit system for lithium-ion batteries.

From when battery recycling will really be cost-covering will also be influenced by raw material prices. Minerals such as lithium are currently very expensive, and current studies also warn of bottlenecks due to high demand. If prices remain at such a high level and processes and logistics are quickly optimized, recycling could become profitable very soon, says Buchert.

An important signal to investors will soon come from Brussels: The EU will adopt a new battery regulation. This is currently in the trilogue negotiations. Among other things, the new requirements stipulate that car manufacturers are responsible for recycling old batteries from their electric vehicles, that new lithium-ion batteries must contain a certain proportion of recycled material, and that new batteries must be easier to recycle. Minimum collection rates are to be increased to 85 percent by 2030, and batteries are to be provided with a digital passport of origin. The proposal is being praised in various quarters as a milestone, as it regulates the entire life cycle of batteries.

  • Battery
  • Kreislaufwirtschaft

News

German government plans ‘protective umbrella’ for energy companies

The German government wants to create a “protective umbrella” for ailing energy companies in the gas crisis. Legal changes are to create the conditions for the federal government to take a stake in companies such as Uniper. The Ministries for Economic Affairs, Finance and the Federal Chancellery agreed in principle on a draft, according to government sources on Monday.

A draft amendment to the Energy Security Act has been made available to the Deutsche Presse-Agentur. It regulates financial aid, including the takeover of company shares, to avert the bankruptcy of a gas supplier.

The state, and thus the taxpayer, could now provide financial assistance to energy suppliers such as Uniper. This was described in coalition circles as the first option. The other option would be for gas customers to pay price jumps – but this could lead to drastic price increases for consumers.

Government sources said that the German government was continuing to prepare for an escalation of the situation on the energy markets. The toolbox is to be expanded once again as a precautionary measure. The goal is to be able to act in the event of further increases in gas prices and an escalation of the situation in the coming months. It is also planned that measures to save energy can be taken even before the crisis occurs.

Gas supply stable for now

Coalition circles said the traffic light factions were expected to approve the changes on Tuesday. The circles said that stabilization measures for companies such as Uniper, presumably worth billions, should prevent drastic price jumps for gas customers.

The draft states that to ensure security of supply, stabilization measures at “critical infrastructure companies” should be facilitated by the federal government – this is aimed at energy suppliers. Such measures would only be considered if they were requested by the company concerned.

The Federal Network Agency wrote in its situation report on Monday that gas supplies in Germany were stable at the moment. Security of supply in Germany continues to be guaranteed. Gas continues to be stored. According to the report, the current filling level of storage facilities in Germany is 61.85 percent. The German government’s top priority is to ensure that the storage facilities are almost full at the start of the heating season in the fall.

In order to be less dependent on Russian gas in view of the Russian war of aggression on Ukraine and a possible loss of supplies, gas consumption is to be reduced, especially in industry. More coal-fired power plants are also to step in to make up for this. In addition, more liquefied natural gas (LNG) is to be imported from other countries. dpa

  • Energy
  • Energy Prices
  • Germany
  • Natural gas

Turmoil over personnel in the EU Parliament

For the GUE group in the EU Parliament, the deal should have paid off: Sanna Lepola, the former secretary-general of the Left, is to lead the new Directorate-General Partnership Parliamentary Democracy, which was specially created as a political maneuvering mass.

The agreement between the political families in the EU Parliament is also expected to pay off for the Green Group. A representative of the Greens is to take over the new, upgraded Directorate of Protocol Services, until now only a department. The liberal Renew, with Anders Rasmussen, is expected to retain the Directorate-General for Scientific Services.

The allocation of posts by the Presidium of the European Parliament is being pushed forward with a lot of energy by President Roberta Metsola and EPP Group Leader Manfred Weber. The conservatives want to secure with it the support of the other parliamentary groups for the successor of Klaus Welle, EPP member and the last 13 years powerful Secretary General of the EU Parliament. After the election of the conservative Maltese Roberta Metsola as President of the Parliament, there had been speculation that Klaus Welle could be succeeded by a candidate from the S&D group. Now, however, a conservative is to be given the influential post at the head of the EU Parliament once again.

Metsola would like to elevate her current cabinet chief Alessandro Chiocchetti to the post. However, the appointment is now likely to be postponed until an extraordinary meeting of the presidency on Wednesday. The other factions criticize the Italian’s excessive closeness to a confidant of Silvio Berlusconi, who has been convicted of links to the mafia.

In the German group of the S&D Group, the appointment to the post, regardless of the name, meets with criticism. According to them, the Spanish group leader Iratxe Garcia Perez negotiated badly and did not represent the interests of the Socialists well. In fact, the S&D Group seems to have come away empty-handed in the deal that secures the Conservatives the position at the top of the EP administration for the next few years. sti

  • European policy
  • Roberta Metsola

EU Court of Auditors warns of fraud with agricultural subsidies

The EU Commission should take stronger action against fraud in the multi-billion-dollar EU agricultural policy, according to the European Court of Auditors. “The Common Agricultural Policy (CAP), the single largest component of expenditure under the EU budget, includes some spending schemes that are particularly exposed to fraud risks,” the Court of Auditors said on Monday. It recommends better monitoring of national anti-fraud measures, more concrete guidelines, and the use of new technologies to better prevent and detect fraud.

Between 2018 and 2020, the Court of Auditors said it audited nearly 700 EU agricultural payments. Errors were found in more than 100 cases, it said. “In 17 of these cases, the Court suspected that the error might be related to fraud,” it said.

In general, the more complex the rules, the more vulnerable they are to fraud. According to findings of the European Anti-Fraud Office and national authorities, areas with unclear ownership are among the most vulnerable. Sometimes land is acquired only to receive direct payments without actually farming. Particularly in the case of pastureland and mountain farming, it is difficult to verify whether animal husbandry is actually taking place. There is also deliberate falsification of documents and other deceptions to obtain subsidies.

Over the years, billions of euros in subsidies have been granted under the EU’s agricultural policy (CAP). On average, this currently amounts to more than 55 billion per year. dpa

  • European policy
  • Finance
  • Financial policy

ECB wants to give greater consideration to climate protection in monetary policy

Climate protection is to play a bigger role in the European Central Bank’s (ECB) monetary policy. “The ECB is to account for climate change in its corporate bond purchases, collateral framework, disclosure requirements and risk management, in line with its climate action plan,” the ECB announced in Frankfurt on Monday. The ECB had already published an action plan a year ago. “With these decisions, we are putting into practice our commitment to fight climate change,” ECB President Christine Lagarde said.

Probably the most important starting point for the ECB will be its balance sheet. In the past, for example, the ECB has bought corporate bonds to support the economy. Bonds worth around €30 billion a year are expiring. The proceeds are reinvested. The idea here is to take greater account of companies’ carbon footprints when making purchases. “This should encourage companies to reduce their CO2 emissions in the future and become more transparent,” said ECB Governing Council member Isabel Schnabel. The relevant decisions are expected to be applied from October.

In addition, the ECB wants to take the carbon footprint into account in its collateral framework. It only wants to accept paper in its transactions if the companies provide transparency on their carbon footprint. The central bank also wants to improve its own rating tools. After all, the standards of the rating agencies are still inadequate, despite the improvements that have been achieved, it says.

“Climate policy, however, must not be allowed to prevent the important goal of combating high inflation,” Schnabel said. Governments and parliaments have the main task of fighting climate change. However, the ECB must support eurozone policies if possible. The goal of price stability, however, always has priority for the central bank. dpa

  • Climate & Environment
  • Climate Policy
  • European policy
  • Finance
  • Monetary policy

Profile

Frank Schemmel – from huge law firm to DataGuard

Frank Schemmel is a data protection specialist at DataGuard – a service provider for Privacy, InfoSec & Compliance.

Frank Schemmel is basically the gofer at data protection service provider DataGuard. This is by no means meant in a disparaging way but it is how the doctor of law describes himself in view of his diverse field of responsibilities. Schemmel joined DataGuard at an early stage when the company was still in the start-up phase. After several management positions and a three-month sabbatical, Schemmel is now part of the product development team. In addition to data protection, DataGuard also takes care of information security and consent management.

“If someone had told me that five years ago, as a business lawyer, I would one day end up in product design, I would have believed them because I’m very curious and think out of the box, but I still would have been amazed,” Schemmel says.

His career path is anything but ordinary anyway. Before joining DataGuard, he worked at the huge law firm Allen & Overy for several years. But instead of a fancy individual office and a predefined path in the internal hierarchy, Schemmel took a different path.

Lone wolfs don’t stand a chance

What is the difference between what he does today and what he does at the big firm? “There is one very big difference: As a law firm, you are always committed to the interests of the company. When a manager hires me, we work in the client’s interest and try to find the best possible solution for the client. As data protection officers, we are the trustees of those affected.”

Schemmel has made a name for himself as a certified data protection officer and proven data protection specialist. That’s why his expertise is in demand not only within DataGuard but also as a speaker at all kinds of conferences and conventions – such as the Bitkom Privacy Conference.

According to Schemmel, the ever-increasing complexity of data protection and the overall regulation of the data economy, also and especially driven by the European Union, is one of the major challenges. “That’s why a lone wolf, i.e., a single internal or external data protection officer, can no longer shoulder this at all.”

Data protection is the new environmental protection

What Schemmel dislikes are arguments that data protection is primarily a brake on progress and innovation. “If data really is the oil of the 21st century, then data protection and information security are the environmental protection of the 21st century. Just think back: until a few years ago, environmental protection and sustainability were hardly an agenda for companies,” says Schemmel. Today, he says, environmental social governance is also high on the agenda of boards and executive committees. Schemmel, therefore, recalls corporate governance in the 2000s and general compliance and risk management in the 2010s.

Those who invest in data protection today will have a significant advantage and head start in the future with increasing digitization. Schemmel himself personally focused on data protection early on. As early as 15 years ago, as an intern at a major automotive supplier, he got to know the topic and sometimes minefield of data protection. He pursued his interest in data protection from then on, beyond the large law firm to DataGuard today. The investment seems to have paid off. Constantin Eckner

  • Data Policy
  • Data protection
  • Digital policy
  • Digitalpolitik
  • Digitization

Europe.Table Editorial Office

EUROPE.TABLE EDITORS

Licenses:
    • New government in France: Macron opts for continuity
    • Ukraine: Where will the billions needed for reconstruction come from?
    • Battery recycling: Europe’s catch-up plan
    • German government plans ‘protective umbrella’ for energy companies
    • Turmoil over personnel in the EU Parliament
    • EU Court of Auditors warns of fraud with agricultural subsidies
    • ECB wants to give greater consideration to climate protection in monetary policy
    • Profile: Frank Schemmel – from huge law firm to DataGuard
    Dear reader,

    Yesterday, France’s President Emmanuel Macron and Prime Minister Élisabeth Borne unveiled the new cabinet after a long period of deliberation. After Macron lost his absolute majority in the parliamentary elections in June, the goal of the new government is to reflect the changed balance in the National Assembly. However, Macron is sticking with familiar faces, especially in the crucial ministries. From the perspective of France’s opposition and media, therefore, no significant new impetus is to be expected, as Tanja Kuchenbecker reports.

    It will cost at least $750 billion to rebuild Ukraine, according to the head of government, Denys Shmyhal, at the first major Recovery Conference in Lugano, Switzerland, on Monday. Ukraine wants Russia to foot the bill and the EU Commission has also already considered resorting to the use of Russian assets, as the financing of EU billions in aid to Kyiv stands on shaky ground. Commission President Ursula von der Leyen and Economic Affairs Commissioner Valdis Dombrovskis were correspondingly coy in Lugano, as Eric Bonse observed.

    In view of the growing importance of electromobility, the demand for batteries will increase massively. For Germany alone, the Öko-Institut (Institute for Applied Ecology) expects around 1.2 million metric tons of lithium-ion batteries to come onto the market each year from 2035 – and that’s just for passenger cars. The focus is not only on the production of the batteries, but also, with a time lag, on their recycling. China is still in the lead when it comes to battery recycling, but the market is also slowly gaining momentum in Europe, as Leonie Düngefeld analyzes.

    Your
    Sarah Schaefer
    Image of Sarah  Schaefer

    Feature

    New government in France: Macron opts for continuity

    The new government has 42 members, including the prime minister. It consists of 21 women and 21 men, with the men occupying most of the important posts. Many “old” ministers retain their posts, especially in the crucial ministries – including one of the most important figures in France and Europe: Economy and Finance Minister Bruno Le Maire. He is seen as a guarantor that the previous economic policy will continue constantly.

    France’s media are therefore calling it “a reshuffle without much reach”, because there is a complete lack of new personnel impetus from the right or the left. Interior Minister Gérald Darmanin can expand his office. In addition to domestic policy, he will also be responsible for the French overseas territories in the future. Former Health Minister Olivier Véran, who unlike Le Maire and Darmanin belongs more to the left wing of the “La République en Marche” party, is also back. He becomes government spokesman.

    Eric Dupond-Moretti remains Minister of Justice, Pap Ndiaye Minister of Education, Catherine Colonna Minister of Foreign Affairs and Europe, Oliver Dussopt Minister of Labor, and Sébastien Lecornu Minister of Defense. Europe specialist Clément Beaune is now responsible for transport.

    Ex-Hollande advisor responsible for Europe

    From now on, Laurence Boone will be responsible for European affairs under Colonna. The 53-year-old economist specializes in European policy. She was economic advisor to former Socialist President François Hollande – as successor to Emmanuel Macron. Later, she was Hollande’s special advisor for economic and financial affairs in Europe and worked for the OECD (Organization for Economic Cooperation and Development).

    New important figures are emergency physician François Braun, henceforth health minister, and former MEP Christophe Béchu, who takes over the environment ministry.

    The opposition was outraged by this large-scale reshuffling of offices without real change, calling it “musical chairs”. The far-right Marine Le Pen stressed that Macron had “once again ignored the decision of the polls”. The leader of the Rassemblement National (RN) believes that Macron has not made any real changes despite the parliamentary elections.

    The left-wing alliance Nupes also criticized that there was hardly any renewal. Greenpeace France, on the other hand, regretted the election of Environment Minister Béchu, who had “no experience”. This shows that the president still does not really take the environmental issue seriously.

    Macron forced to compromise

    The new government started with the aim of reflecting the new balance in the National Assembly after the parliamentary elections in June. Macron’s various allies have been given posts in the process, including representatives of the centrist-liberal Mouvement démocrate and the center-right Horizons party.

    However, the government does not have much leeway. In the future, it will probably always be a question of how it can secure majorities in the National Assembly. Above all, it must expect resistance from the strengthened RN and the Nupes in the future. Reforms will therefore be more difficult to implement.

    Macron won the most seats in June with the Ensemble party alliance, but with 245 deputies, he is below the absolute majority of 289 seats. Thus, he cannot push through legislation without coordination with the opposition. The Nupes alliance has 131 deputies, including 72 for leftist Jean-Luc Mélenchon’s La France Insoumise (Indomitable France) party. RN came in at 89 seats after the party picked up only eight in 2017.

    Macron needs Republican backing

    So it will be decided on a case-by-case basis whether Macron can win over deputies from the opposition with a legislative proposal. However, it is likely that he will often be able to count on the support of the 61 members of parliament from the conservative Republicans. In this case, however, they are likely to set conditions for their approval. Therefore, Macron’s policies could lean more to the right. For this reason, too, it is not surprising that many important posts in the new government continue to be occupied by politicians who belong to the right wing in Macron’s movement and come from the Republicans.

    Coalitions are not common in France, which is why a willingness to compromise will now be called for. Macron had already called on the opposition to do so shortly after the parliamentary elections. He also emphasized that the French had re-elected him in April for his political project and made it clear that he would not accept too many compromises on it.

    For the new government and the re-elected president, the main focus in the coming months will be on social issues in times of inflation. A bill to increase purchasing power is expected to be passed as early as July. However, France’s debt burden is already immense. There is not much room for social gestures, and the economic situation is more likely to deteriorate further.

    The two powerful forces from the right and left in the National Assembly will be joined by the power of the street. It cannot be ruled out that the government will then have to back down and cave in on planned reforms.

    • European policy
    • France

    Ukraine: Where will the billions needed for reconstruction come from?

    Since the start of the war, the EU has already mobilized €6.2 billion in financial support for Ukraine, Commission President Ursula von der Leyen said in Lugano. “And more will come,” she announced. Economic Affairs Commissioner Valdis Dombrovskis reiterated the commitment to transfer €9 billion in liquidity assistance to Kyiv this year.

    However, this money is primarily intended for day-to-day government operations. According to IMF estimates, Kyiv needs about $5 billion a month to pay wages and pensions and avert the threat of financial collapse. Another $100 billion would be needed to rebuild infrastructure destroyed by the war so far, Shmyhal said.

    For financing, Ukraine is relying primarily on Western sanctions against Russia – and on the EU. Some $300 billion to $500 billion could come from frozen Russian assets, according to Schmyhal. At stake are central bank assets worth an estimated $300 billion, as well as the holdings of sanctioned Russian oligarchs.

    However, it is difficult to confiscate and reallocate frozen assets. There are major, possibly insurmountable legal hurdles to this. The oligarchs would have to be proven to be directly responsible for the war or to have violated EU sanctions. The Russian Central Bank’s foreign exchange reserves are considered sacrosanct; by confiscating them, the West could set a dangerous precedent.

    Key questions remained unanswered

    EU funding is also on shaky ground. The coffers in Brussels are empty, so the EU Commission has already considered recourse to Russian assets as well. Von der Leyen has also brought up the idea of debt financing along the lines of the Recovery and Resilience Facility (RRF). However, this has met with massive resistance, for example, in Germany.

    In Lugano, von der Leyen and Dombrovskis dodged the thorny issues. They promoted a reconstruction “platform” that could be set up at the EU Commission. In it, investments should be bundled as well as the approach coordinated and resources channeled, von der Leyen said. The platform would be open to all major donors, Dombrovskis added.

    It can be deduced from this that the EU does not want to pay alone. However, it does not want to set the tone either. “At the end of the day, it is Ukraine itself which will, and must, take ownership,” Dombrovskis said. Recovery must be driven by Kyiv, he said. Shmyhal agreed but also put pressure: “We need regular and strong support,” he stressed. The sooner the financial assistance starts, the better the reconstruction will succeed.

    • European policy
    • Financial policy
    • Ukraine

    Battery recycling: Europe’s catch-up plan

    Now it’s certain: From 2035, no more internal combustion cars will be on the market; instead, electric vehicles will take over Europe’s roads. Mobility will then depend on lithium-ion batteries – and on their recycling – because the EU wants to achieve a circular economy and has to juggle raw material shortages. What is the state of the European recycling industry? And why are companies in China so much further ahead?

    The Öko-Institut (Institute for Applied Ecology) calculated that from 2035, around 1.2 million tons of lithium-ion batteries per year will come onto the market in Germany – for passenger cars alone. Extrapolated to the EU as a whole, this figure would probably be three to four times higher. Then there are trucks and buses. Given the size of these batteries – that of a Tesla Model 3 Long Range contains 4416 cells and weighs 480 kilograms – we are talking about incredible amounts of waste. The International Energy Agency (IEA) estimates that the production of electric vehicles worldwide will generate up to 8 million tons of battery waste in 2040.

    There is no alternative to recycling these batteries. Since 2006, it has been forbidden in the European Union to dispose of batteries in landfills. It has also become strategically relevant: Due to the Green Deal, the goal of a circular economy, and the race to become less dependent on raw material imports.

    Companies in China had a head start

    In a global comparison, China is far ahead: With 188,000 tons per year, companies there can recycle twice as many lithium-ion batteries as companies in Europe and have more than three times as much capacity as the US, researchers calculated earlier this year. They cited figures from the end of 2021.

    In countries such as China and South Korea, recycled material was produced much earlier than in Europe or the USA, explains Matthias Buchert, Head of Resources & Mobility at the Öko-Institut. Since there was a market and larger production capacities for lithium-ion cells there earlier, the recycling industry was also ramped up more quickly. In a sense, companies there were already able to test and optimize recycling processes with production scrap and shortages. In addition, policies since 2012 have spurred the development of the lithium-ion battery recycling sector. In 2018, manufacturers in China were required to cooperate with recycling companies. However, many batteries there still end up in landfills or with illegal companies that recycle the batteries using outdated and polluting processes.

    The European recycling market for lithium-ion batteries will grow incredibly over the next twenty years, delayed by the growth of electromobility, says Buchert. He expects it to pick up by the mid-2020s at the latest. Then there will be large-scale production scrap here, too – from the gigafactories that are now starting up in Europe. “After 2030, this will take on completely different dimensions,” says Buchert.

    In the industry, the expectation is that there will be a division of labor in Europe, he says: “Probably a larger number of companies with smaller capacities will do the initial, mechanical steps of the process, and about a half-dozen larger companies will do the final refining.”

    European market lacks investment

    The largest currently active plant in Europe is operated by the company SungEel HiTech in Bátonyterenye, Hungary. There, 50,000 tons of lithium-ion batteries can be recycled per year. According to a study from the beginning of 2022, Germany has the highest recycling capacity in Europe: 54,000 tons of lithium-ion batteries can be recycled here. The REDUX company, with its plant in Bremerhaven, accounts for 10,000 tons of this.

    In the coming years, several plants with capacities of several tens of thousands of tons per year will be added in Europe, for example, in Spain, France, Great Britain, Germany, Poland, and the Scandinavian countries. Northvolt plans to recycle 125,000 tons of lithium-ion batteries annually in Skellefteå, Sweden, starting in 2030. Belgium’s Umicore is currently planning the largest project: It will increase its recycling capacity to 150,000 tons per year, said its head of Government Affairs EU, Jan Tytgat, in Berlin last week.

    Torsten Brandenburg, an officer at the German Federal Ministry for Economic Affairs, sees the challenge for the European market in the lack of investment. “We need to close the loop of the value chain in Europe to catch up with Asia,” he said at an EIT Raw Materials discussion. In addition to building up cell production, for which two IPCEIs are already underway, this hinges primarily on recycling. An IPCEI is also conceivable for this.

    “As in any young market, the challenge in recycling is that companies first have to invest several million euros in the facilities,” says Matthias Buchert. At the moment, this is not really worth it: The batteries of e-cars have a useful life of ten years on average, so it will take time before recyclers even get larger quantities of material. Buchert speaks of the “chicken-and-egg problem”: The larger a recycling plant, the more economically it can operate – but only if it is working to capacity. “If you have spent batteries today, you first have to find someone to take them off your hands,” he says. “In turn, the companies that can or want to do that aren’t sure they’ll even get enough material, so they may be hesitant to invest in equipment.”

    Ambitious EU Battery Regulation

    According to Environmental Action Germany (DUH), the problem in Germany currently also lies in the legal collection rate, which is not being met. According to the Battery Act, 50 percent of used appliance batteries must be collected, which exceeds the EU minimum requirement of 45 percent. According to DUH, the figure for lithium-ion batteries was only about 32 percent. Manufacturers must declare the quantities of batteries put on the market and take them back via their own take-back system or one of six established ones. DUH is therefore calling for cost compensation for collection systems, ambitious collection quotas, and a deposit system for lithium-ion batteries.

    From when battery recycling will really be cost-covering will also be influenced by raw material prices. Minerals such as lithium are currently very expensive, and current studies also warn of bottlenecks due to high demand. If prices remain at such a high level and processes and logistics are quickly optimized, recycling could become profitable very soon, says Buchert.

    An important signal to investors will soon come from Brussels: The EU will adopt a new battery regulation. This is currently in the trilogue negotiations. Among other things, the new requirements stipulate that car manufacturers are responsible for recycling old batteries from their electric vehicles, that new lithium-ion batteries must contain a certain proportion of recycled material, and that new batteries must be easier to recycle. Minimum collection rates are to be increased to 85 percent by 2030, and batteries are to be provided with a digital passport of origin. The proposal is being praised in various quarters as a milestone, as it regulates the entire life cycle of batteries.

    • Battery
    • Kreislaufwirtschaft

    News

    German government plans ‘protective umbrella’ for energy companies

    The German government wants to create a “protective umbrella” for ailing energy companies in the gas crisis. Legal changes are to create the conditions for the federal government to take a stake in companies such as Uniper. The Ministries for Economic Affairs, Finance and the Federal Chancellery agreed in principle on a draft, according to government sources on Monday.

    A draft amendment to the Energy Security Act has been made available to the Deutsche Presse-Agentur. It regulates financial aid, including the takeover of company shares, to avert the bankruptcy of a gas supplier.

    The state, and thus the taxpayer, could now provide financial assistance to energy suppliers such as Uniper. This was described in coalition circles as the first option. The other option would be for gas customers to pay price jumps – but this could lead to drastic price increases for consumers.

    Government sources said that the German government was continuing to prepare for an escalation of the situation on the energy markets. The toolbox is to be expanded once again as a precautionary measure. The goal is to be able to act in the event of further increases in gas prices and an escalation of the situation in the coming months. It is also planned that measures to save energy can be taken even before the crisis occurs.

    Gas supply stable for now

    Coalition circles said the traffic light factions were expected to approve the changes on Tuesday. The circles said that stabilization measures for companies such as Uniper, presumably worth billions, should prevent drastic price jumps for gas customers.

    The draft states that to ensure security of supply, stabilization measures at “critical infrastructure companies” should be facilitated by the federal government – this is aimed at energy suppliers. Such measures would only be considered if they were requested by the company concerned.

    The Federal Network Agency wrote in its situation report on Monday that gas supplies in Germany were stable at the moment. Security of supply in Germany continues to be guaranteed. Gas continues to be stored. According to the report, the current filling level of storage facilities in Germany is 61.85 percent. The German government’s top priority is to ensure that the storage facilities are almost full at the start of the heating season in the fall.

    In order to be less dependent on Russian gas in view of the Russian war of aggression on Ukraine and a possible loss of supplies, gas consumption is to be reduced, especially in industry. More coal-fired power plants are also to step in to make up for this. In addition, more liquefied natural gas (LNG) is to be imported from other countries. dpa

    • Energy
    • Energy Prices
    • Germany
    • Natural gas

    Turmoil over personnel in the EU Parliament

    For the GUE group in the EU Parliament, the deal should have paid off: Sanna Lepola, the former secretary-general of the Left, is to lead the new Directorate-General Partnership Parliamentary Democracy, which was specially created as a political maneuvering mass.

    The agreement between the political families in the EU Parliament is also expected to pay off for the Green Group. A representative of the Greens is to take over the new, upgraded Directorate of Protocol Services, until now only a department. The liberal Renew, with Anders Rasmussen, is expected to retain the Directorate-General for Scientific Services.

    The allocation of posts by the Presidium of the European Parliament is being pushed forward with a lot of energy by President Roberta Metsola and EPP Group Leader Manfred Weber. The conservatives want to secure with it the support of the other parliamentary groups for the successor of Klaus Welle, EPP member and the last 13 years powerful Secretary General of the EU Parliament. After the election of the conservative Maltese Roberta Metsola as President of the Parliament, there had been speculation that Klaus Welle could be succeeded by a candidate from the S&D group. Now, however, a conservative is to be given the influential post at the head of the EU Parliament once again.

    Metsola would like to elevate her current cabinet chief Alessandro Chiocchetti to the post. However, the appointment is now likely to be postponed until an extraordinary meeting of the presidency on Wednesday. The other factions criticize the Italian’s excessive closeness to a confidant of Silvio Berlusconi, who has been convicted of links to the mafia.

    In the German group of the S&D Group, the appointment to the post, regardless of the name, meets with criticism. According to them, the Spanish group leader Iratxe Garcia Perez negotiated badly and did not represent the interests of the Socialists well. In fact, the S&D Group seems to have come away empty-handed in the deal that secures the Conservatives the position at the top of the EP administration for the next few years. sti

    • European policy
    • Roberta Metsola

    EU Court of Auditors warns of fraud with agricultural subsidies

    The EU Commission should take stronger action against fraud in the multi-billion-dollar EU agricultural policy, according to the European Court of Auditors. “The Common Agricultural Policy (CAP), the single largest component of expenditure under the EU budget, includes some spending schemes that are particularly exposed to fraud risks,” the Court of Auditors said on Monday. It recommends better monitoring of national anti-fraud measures, more concrete guidelines, and the use of new technologies to better prevent and detect fraud.

    Between 2018 and 2020, the Court of Auditors said it audited nearly 700 EU agricultural payments. Errors were found in more than 100 cases, it said. “In 17 of these cases, the Court suspected that the error might be related to fraud,” it said.

    In general, the more complex the rules, the more vulnerable they are to fraud. According to findings of the European Anti-Fraud Office and national authorities, areas with unclear ownership are among the most vulnerable. Sometimes land is acquired only to receive direct payments without actually farming. Particularly in the case of pastureland and mountain farming, it is difficult to verify whether animal husbandry is actually taking place. There is also deliberate falsification of documents and other deceptions to obtain subsidies.

    Over the years, billions of euros in subsidies have been granted under the EU’s agricultural policy (CAP). On average, this currently amounts to more than 55 billion per year. dpa

    • European policy
    • Finance
    • Financial policy

    ECB wants to give greater consideration to climate protection in monetary policy

    Climate protection is to play a bigger role in the European Central Bank’s (ECB) monetary policy. “The ECB is to account for climate change in its corporate bond purchases, collateral framework, disclosure requirements and risk management, in line with its climate action plan,” the ECB announced in Frankfurt on Monday. The ECB had already published an action plan a year ago. “With these decisions, we are putting into practice our commitment to fight climate change,” ECB President Christine Lagarde said.

    Probably the most important starting point for the ECB will be its balance sheet. In the past, for example, the ECB has bought corporate bonds to support the economy. Bonds worth around €30 billion a year are expiring. The proceeds are reinvested. The idea here is to take greater account of companies’ carbon footprints when making purchases. “This should encourage companies to reduce their CO2 emissions in the future and become more transparent,” said ECB Governing Council member Isabel Schnabel. The relevant decisions are expected to be applied from October.

    In addition, the ECB wants to take the carbon footprint into account in its collateral framework. It only wants to accept paper in its transactions if the companies provide transparency on their carbon footprint. The central bank also wants to improve its own rating tools. After all, the standards of the rating agencies are still inadequate, despite the improvements that have been achieved, it says.

    “Climate policy, however, must not be allowed to prevent the important goal of combating high inflation,” Schnabel said. Governments and parliaments have the main task of fighting climate change. However, the ECB must support eurozone policies if possible. The goal of price stability, however, always has priority for the central bank. dpa

    • Climate & Environment
    • Climate Policy
    • European policy
    • Finance
    • Monetary policy

    Profile

    Frank Schemmel – from huge law firm to DataGuard

    Frank Schemmel is a data protection specialist at DataGuard – a service provider for Privacy, InfoSec & Compliance.

    Frank Schemmel is basically the gofer at data protection service provider DataGuard. This is by no means meant in a disparaging way but it is how the doctor of law describes himself in view of his diverse field of responsibilities. Schemmel joined DataGuard at an early stage when the company was still in the start-up phase. After several management positions and a three-month sabbatical, Schemmel is now part of the product development team. In addition to data protection, DataGuard also takes care of information security and consent management.

    “If someone had told me that five years ago, as a business lawyer, I would one day end up in product design, I would have believed them because I’m very curious and think out of the box, but I still would have been amazed,” Schemmel says.

    His career path is anything but ordinary anyway. Before joining DataGuard, he worked at the huge law firm Allen & Overy for several years. But instead of a fancy individual office and a predefined path in the internal hierarchy, Schemmel took a different path.

    Lone wolfs don’t stand a chance

    What is the difference between what he does today and what he does at the big firm? “There is one very big difference: As a law firm, you are always committed to the interests of the company. When a manager hires me, we work in the client’s interest and try to find the best possible solution for the client. As data protection officers, we are the trustees of those affected.”

    Schemmel has made a name for himself as a certified data protection officer and proven data protection specialist. That’s why his expertise is in demand not only within DataGuard but also as a speaker at all kinds of conferences and conventions – such as the Bitkom Privacy Conference.

    According to Schemmel, the ever-increasing complexity of data protection and the overall regulation of the data economy, also and especially driven by the European Union, is one of the major challenges. “That’s why a lone wolf, i.e., a single internal or external data protection officer, can no longer shoulder this at all.”

    Data protection is the new environmental protection

    What Schemmel dislikes are arguments that data protection is primarily a brake on progress and innovation. “If data really is the oil of the 21st century, then data protection and information security are the environmental protection of the 21st century. Just think back: until a few years ago, environmental protection and sustainability were hardly an agenda for companies,” says Schemmel. Today, he says, environmental social governance is also high on the agenda of boards and executive committees. Schemmel, therefore, recalls corporate governance in the 2000s and general compliance and risk management in the 2010s.

    Those who invest in data protection today will have a significant advantage and head start in the future with increasing digitization. Schemmel himself personally focused on data protection early on. As early as 15 years ago, as an intern at a major automotive supplier, he got to know the topic and sometimes minefield of data protection. He pursued his interest in data protection from then on, beyond the large law firm to DataGuard today. The investment seems to have paid off. Constantin Eckner

    • Data Policy
    • Data protection
    • Digital policy
    • Digitalpolitik
    • Digitization

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