Table.Briefing: Europe

Net-Zero Industry Act + Timmermans + Energy subsidies

Dear reader,

Nothing less than major geopolitics is on the agenda when the EU trade ministers meet in Brussels this morning. They want to discuss relations with the USA, relations with China and trade agreements with other countries such as Australia. Topics that will probably also occupy the heads of state and government at the EU summit at the end of June.

According to an EU diplomat the atmosphere in contacts with Washington has “improved a lot,” but there are still a number of things to discuss: The US government has still not granted European raw materials suppliers access to the Inflation Reduction Act subsidies, and the conflict over US steel tariffs, which have only been suspended until the end of the year, is also awaiting a solution. The ministers are now expected to give the EU Commission negotiators clear signals for talks at next week’s meeting of the Trade and Technology Council (TTC).

The Europeans’ more robust approach to China is creating a positive climate for talks with Washington. The EU diplomat notes that the member states are much more united in their dealings with Beijing than they were a few years ago. However, the Commission’s economic security strategy, scheduled for June 21 and also aimed at Beijing, is giving some governments a headache. The strategy is likely to include initiatives on screening certain direct investments in third countries and on EU-wide export controls. Supporters of the market economy are worried that this will create new trade barriers.

Have a mostly worry-free day!

Your
Till Hoppe
Image of Till  Hoppe

Feature

EU Parliament: Commission’s response to IRA insufficient

Resistance against the Commission’s plans for a European reaction to the US investment package Inflation Reduction Act (IRA) is forming in the EU Parliament. The responsible rapporteur of the European Parliament, Christian Ehler, demands far-reaching changes to the planned Net-Zero Industry Act (NZIA). The latter has a significant influence on the Parliament’s position in the legislative process.

The EU Commission’s legislative proposal was designed as a response to the US Inflation Reduction Act – but “that’s not what it is”, the EVP/CDU MEP said yesterday. Ehler will present his draft report today, Thursday; it was already available to Table.Media in advance.

These are the main changes to the Commission’s proposal:

  • Ehler wants to remove the list of “Strategic Net Zero Technologies” in the NZIA Annex and instead take a broader approach based on the taxonomy.
  • Not only manufacturers of net-zero technologies should benefit from the planned subsidy, but also suppliers – down to the basic materials industry.
  • The member states are to designate dedicated regions as sites for industrial clusters – Ehler speaks of “Net-Zero Industry Valleys“.
  • In these regions, investors should also receive aid for current operating expenses (OpEx) under certain circumstances – as provided for in the IRA.
  • Ehler wants to scrap the Commission’s target of 40 percent of domestic demand for net-zero technologies in Europe – instead, the EU should aim for a 20 percent share of the global market in order to cover the important export business as well.
  • To provide more financial flexibility for subsidies at the EU level, he proposes to use 25 percent of member states’ revenues from the emissions trading system for the NZIA.

IRA a turning point

The EU has created comprehensive climate protection regulation with the Fit for 55 legislation, said the EPP spokesperson in the Industry and Energy Committee (ITRE). However, “it is becoming increasingly obvious that we do not have a business case for industrial decarbonization in Europe“. The IRA would therefore represent a turning point. In a survey by the European Round Table for Industry published on Tuesday, almost 60 percent of company leaders indicated that they would relocate investments or sites from Europe to North America in the next two years.

Ehler demanded to set the focus on implementing the climate targets and the associated business case. He said that “you can’t do everything at the same time,” so other regulatory projects such as the EU supply chain law or the nature conservation package should be put on the back burner. Belgian Prime Minister Alexander De Croo made similar comments on Tuesday: “If we overwhelm people with rules and regulations, we risk losing public support for the green agenda.”

Scope of technologies expanded

The Commission proposed to designate eight technology sectors as “strategic net-zero technologies,” including solar, wind, battery storage and heat pumps. Even more than other climate-friendly sectors, these are to benefit from preferential treatment, for example in the form of expedited approval procedures and priority treatment in judicial dispute resolution. Ehler, on the other hand, is now calling for abandoning the distinction between strategic and other net-zero technologies.

He wants to use the taxonomy to determine which technologies fall under the NZIA. Article 10 of the Taxonomy Regulation lists a number of criteria for activities that substantially contribute to climate action. This would include, for example, sustainable aviation fuel (SAF) or CO2 capture and storage (CCS).

Ehler, on the other hand, does not want to factor in natural gas and nuclear power, which are classified as transitional technologies in the taxonomy. However, this will likely lead to more heated discussions with nuclear advocates in the European Parliament and the Council. The treatment of the nuclear industry had already been the main point of contention in the Commission.

German Tesla plant as blueprint

Ehler wants to add the concept of “Net-Zero Industry Valleys” to the draft law: It would give member states the option of designating regional cluster locations for individual net-zero technologies. As part of this, the authorities are to handle the environmental impact assessments in advance, thus relieving companies in these clusters of the burden.

The authorities’ plans for the subsidized regions should also specify which public infrastructure investments are planned and which subsidies for their operating costs investors can expect. In his report, Ehler cites contracts for difference for energy costs as an example.

Ehler considers this regional approach to be more realistic than “grinding down environmental law” at the national level. The Brandenburg deputy probably had the German Tesla plant in Gruenheide in mind for this approach.

The rapporteur of the lead ITRE committee will present his draft today. The aim is to decide on the common position of the Parliament in plenary by the end of October at the latest and then start the trialogue with the member states, said Ehler. Whether the negotiations can be concluded before Christmas also depends on the Council. The Council has set itself the goal of wrapping up the Critical Raw Materials Act, which is being negotiated in parallel, by the end of the year. However, the discussions on the NZIA have not progressed as far in the Council as on the CRMA.

  • Climate & Environment
  • Energy
  • European policy
  • ITRE

Timmermans: EU could reach climate target of 58 percent

At COP28, the Global Stocktake will take stock of the Paris Agreement for the first time. Included is an updated inventory of global emissions reductions. It is already clear: Global efforts to reduce emissions are not sufficient. One of the major points of contention at the climate conference will thus be the phase-out of fossil fuels.

For Frans Timmermans, the challenge is predominantly to “be more precise in terms of mobilizing money.” At the same time, he said, we also need to be “more precise of efforts to reduce emissions.” The Green Deal chief refers specifically to the G20 countries, “especially China.”

Faster change in the financial sector

Timmermans also wants to talk to a very specific group of companies to reduce emissions globally as quickly as possible: “We will not manage the transition without the fossil energy sector.” He says companies need to be “pushed,” but also given the opportunity to decarbonize themselves to make the transition “much faster” than it is today. This includes the financial sector, the EU Commission Vice President said, because the major players have a “very limited portfolio of investments in renewable energy.”

He also looks at the renewables industry in an interview with Table.Media: Their “success” in Europe and worldwide should be the reason to formulate a global target for the energy transition. On this point, the EU’s chief climate negotiator is not alone. At the Petersberg Climate Dialogue, hosted by the German government in Berlin at the beginning of May, the principle of a global target for renewable energies was already given concrete form.

Now he is adding a target for energy efficiency. The EU has “a clear percentage target for renewable energy,” but one is also needed at the global level – and in combination with a “very clear target for reducing energy consumption,” i.e. for energy efficiency.

New climate target by COP

The EU Commissioner stresses that the various legislative texts of the Fit for 55 package will make it possible to exceed the original climate target. That called for cutting emissions 55 percent from 1990 levels by 2030. “We are currently calculating this,” he said. “Currently it’s about minus 57 percent, maybe 58 percent, by the COP, we will have a more precise figure.”

However, he said, it must be ensured that the member states can actually reach the target. His proposals on renaturation and the reduction of pesticides are intended to achieve this. However, the negotiations are proving extremely difficult: In the European Parliament, the committees for agriculture (AGRI) and fisheries (PECH) have already rejected the proposals (more on this in the news section).

  • Climate & Environment
  • Climate Policy
  • Emissions
  • Frans Timmermans

Five years of the GDPR: No anniversary party

Data protection is to blame if something is not working. This argument has been put forward regularly in recent years, not always with good reason. But data protection often gets in the way. This is precisely what was intended: In principle, everyone should be able to determine the conditions under which data about him or her is stored, processed and passed on.

The USA played a decisive role in the European approach to the GDPR. For years, they relied on a different concept: data, yes please. And if someone was messing with it, the infamous class action lawsuits would be filed. But the idea of collecting and analyzing private data was not limited to business. The state also helped itself. Especially with data from abroad, as the NSA revelations showed ten years ago when the GDPR was already being discussed. The NSA was the involuntary birthmother of the GDPR.

So Europe’s path has been a political defensive battle: Can the EU set rules the world has to comply with? That not potentially every data is processed by the NSA? The answer, then as now, is a junket: anyone wanting to make money in the EU and ship personal data abroad to do so must at least come close to meeting Europe’s values in return.

Schrems: regulators not doing their job

Maximilian Schrems stands for this fight like no other. The Austrian has led the European Court of Justice twice to find that the US does currently not offer comparable protection for personal data. “We are now at the beginning of a digitization situation that will last for another 100 years. And we will certainly have even better regulations.” The law is not perfect, but okay, Schrems says. But its application is not.

Schrems accuses many data protection authorities of not doing their job. When he and the organization he founded, NOYB (“None of your Business”), conducted proceedings or made submissions, they always found reasons to refrain from acting. The supervisory authorities are not too small but too slow and analog.

Schrems criticizes this would not lead to “general prevention.” Nor does he want to accept the argument that the supervisory authorities would work particularly closely. “We see it in Ireland, for example. There, 100,000 pages thick files are produced. And that’s not necessarily accuracy, it’s often just shifting things around.”

Ireland holds back

The criticism of the European consumer protection umbrella organization BEUC is similar. Its Deputy Director General Ursula Pachl complains that the association had already objected to Google’s tracking in November 2018 – and that no decision has yet been made in Dublin.

The behavior of the Irish supervisory authority has often caused controversy. While the Spanish supervisory authority is notable for the large number of procedures it processes, the Irish are known for their extremely restrained interpretation of the GDPR. The decision on Facebook, for example, published just in time for Monday’s anniversary, would have been much weaker had the other European regulators not overruled the DPC. “This is now the time when the most complicated cases are being closed at the level of the supervisory authorities,” says Wojciech Wiewiórowski, the European Data Protection Supervisor.

Judges must clarify GDPR

“The GDPR has not delivered on its promise to ensure uniform, understandable and practicable data protection rules across Europe,” says Bitkom President Achim Berg. “Instead, the independent interpretation of the rules by each national and regional regulator is leading to legal uncertainty.”

But after the supervisory authorities follow the courts. In the end, only one can clarify what the letters of the law are supposed to mean: 50 proceedings on the GDPR alone are currently on the agenda at the European Court of Justice.

Many concern questions of interpretation that are quite complex. For example, the ECJ had to decide a few days ago on the requirements for damages. The question of what role other supervisory authorities such as antitrust offices have in the GDPR enforcement will also be decided soon. Above all, however, one question is still undecided: Can the EU help the GDPR achieve its global claim to validity in practice?

Data protection no longer sexy

In EU politics, the data protection issue is now once again to blame for Europe not playing a leading role in digitization. The NSA discussions are forgotten. And data protection hardly plays a role in debates about China either. Although the question of what data goes to Beijing and what is done with it is obvious.

But without a new Snowden moment, complicated data protection, primarily intended to protect EU residents, no longer seems politically sexy. But abolishing it is not an option either.

  • Data protection
  • Digitization
  • European policy
  • GDPR

Events

May 25, 2023; 6 – 7:30 p.m, Berlin
DGAP, Discussion After Ostpolitik: The Main Principles of a New Eastern Policy for Germany
The German Council on Foreign Relations (DGAP) deliberates on what a future-oriented German strategy toward Russia should entail – also in terms of defense investment and the integration of Ukraine to the EU. INFO & REGISTRATION

May 26-28, 2023; Brussels (Belgium)
Steconf World Conference on Materials Science and Nanotechnology
Steconf features an extensive array of topics, including photovoltaics, materials beyond silicon, biochemistry, electronics & photonics, green technologies, nanotechnology, sensor materials, spintronics, innovative alloys, energy systems and cutting-edgeCO2 capture techniques. INFO & REGISTRATION

May 26-27, 2023; Munich/online
Young Security Conference 2023: When Empires Strike Back – European Security in Post-Liberal Times
The Young Security Conference discusses what the EU can do to become a relevant and autonomous security actor. INFO & REGISTRATION

May 26, 2023; 9 a.m – 4 p.m, Hannover
SD, Conference Privacy Ring: In the EU standards jungle
The Data Protection Foundation (SD) presents field reports and insights from experts in the data protection industry. INFO & REGISTRATION

May 30 – June 1, 2023; Lisbon (Portugal)
Lisbon Energy Summit
The Lisbon Energy Summit focuses on balancing energy security and achieving net zero ambitions, the decarbonization of existing energy systems and investing in new renewable energy sources. INFO & REGISTRATION

May 30, 2023; 9 a.m – 5:50 p.m Warsaw (Poland)
ECFR, Conference Warsaw European Conversation
The European Council on Foreign Relations (ECFR) engages in a critical conversation about the risks and trends shaping the European project. INFO & REGISTRATION

May 30, 2023; 10 – 11 a.m, online
ASEW, Seminar Digital identity as a building block of the smart city
The Association for the Economical Use of Energy and Water (ASEW) provides information on the potential uses of a digital identity and how it can be used for companies and municipalities. INFO & REGISTRATION

May 30, 2023; 1 – 4 p.m, online
ASEW, Seminar Renewable district heating: Danish model
The Association for the Economical Use of Energy and Water (ASEW) provides an insight into Denmark’s heat supply. INFO & REGISTRATION

May 30, 2023; 3 – 4:30 p.m, online
GMF, Discussion Countering SLAPPs in the EU: Lessons from Hungary, Poland, and Slovenia
The German Marshall Fund (GMF) discusses the role of SLAPPs in suppressing independent media and civil society in illiberal regimes and the ways to effectively combat the abuse of law through SLAPPs in the European Union. INFO & REGISTRATION

May 30, 2023; 3 – 4 p.m online
Eurogas, Panel Discussion Are US and EU on course to tackle methane emissions?
Eurogas addresses how the US and the EU are reinforcing efforts to tackle methane emissions. INFO & REGISTRATION

May 30, 2023; 6 – 8 p.m Berlin/online
HBS, Discussion China’s Society in Transition
The Heinrich Böll Foundation (HBS) is concerned with various aspects of the social upheaval in China. INFO & REGISTRATION

June 12-30, 2023;, online
FSR, Seminar Clean Molecules for the Energy Transition
The Florence School of Regulation (FSR) offers an overview of the development of clean molecules in the EU and beyond. INFO & REGISTRATION

News

EU Commission calls for stop of energy subsidies

The Commission is calling on all member states to phase out national energy relief measures, such as the electricity and gas price brakes in Germany, by the end of the year. Commenting on the “European Semester,” Commission Vice President Valdis Dombrovskis said it was time to “focus on prudent fiscal policies.” If a renewed rise in energy prices makes support measures necessary, these should be targeted at protecting financially weaker households and companies, be sustainable for public finances and be given incentives to save energy.

Dombrovskis stressed that the European economy continues to show resilience despite a challenging global environment. He said lower energy prices, fewer supply bottlenecks, and a strong labor market contributed to moderate growth in the first quarter of 2023. “This has allayed fears of a recession.”

At the same time, however, core inflation had become solidified despite a further decline in inflation, leading to tighter financing conditions. The Commission expects EU inflation to reach 6.7 percent in 2023 and 3.1 percent in 2024, with growth reaching 1.0 percent this year and 1.7 percent the next.

14 deficit sinners

The Commission notes that 14 member states currently have excessive budget deficits, including Germany. However, the Commission had already signaled in advance it would not initiate proceedings against the states, as the provisions of the Stability and Growth Pact are currently suspended until the end of 2023. If the member states do not reduce their budget deficits for the current year below the benchmark of three percent of gross domestic product (GDP), the EU authority intends to open proceedings in spring 2024.

Two years after its launch, the Recovery and Resilience Facility – the centerpiece of the EU’s €800 billion NextGenerationEU recovery plan – continues to help accelerate environmental and digital transformation, strengthening the resilience of the EU as a whole. According to the report, all countries have now submitted their national recovery and resilience plans, 24 payment claims have been processed, and the Commission has disbursed more than €152 billion under the facility for the successful implementation of key reforms and investments.

Germany to become less dependent on fossil fuels

Germany must do more to reduce its dependence on fossil energies. That is according to the Brussels-based authority’s individual country report. According to the report, the Commission is calling on the government to boost investment in renewable energies and improve administrative capacities and approval procedures. It is also necessary to step up efforts for greater energy efficiency in industry, construction and transport.

However, Brussels sees Germany on the right track in reducing macroeconomic imbalances. It urges the government to ensure a “prudent fiscal policy, in particular by limiting the nominal increase in nationally-financed net primary expenditure in 2024 to not more than 2.5 percent.” cr

  • EU
  • European Commission

Fisheries Committee also rejects Renaturation Act

After the EU Parliament’s Agriculture Committee already rejected the Commission’s proposal for a new nature restoration act on Tuesday, the Fisheries Committee followed suit on Wednesday. EPP, ECR and ID as well as three of the four Renew MEPs voted for the rejection. Socialists, Greens and Left voted against and wanted to have amendments voted instead. However, this did not happen due to the rejection.

The background to the rejection is the EPP’s demand for a moratorium on new laws affecting agriculture. Some Renew deputies also joined this demand. However, neither the Agriculture Committee nor the Fisheries Committee has any say in the Renaturation Act. They can only submit their position in the form of a report.

Environment Committee has the lead

The lead committee is the Environment Committee, which will vote on the bill on June 15. If the report is adopted, the law is to be submitted to the plenum in July. However, the EPP will likely fight for rejection, as it fears that the new laws will place a bureaucratic and financial burden on farmers that is too high.

Green Party MEPs, in particular, expressed dismay at the rejection of the Fisheries Committee. Jutta Paulus called it a “shameless attack on food safety, health and species protection” and attacked the EPP. She said it put party politics “above the protection of our livelihoods.” luk

  • Climate & Environment
  • Climate Policy
  • Environmental policy
  • Renaturation

ENVI adopts Industrial Emissions Directive

The European Parliament’s Environment Committee (ENVI) has adopted the report on the revision of the Industrial Emissions Directive (IED). 55 MEPs voted in favor, 26 against and six abstained. The revised IED mainly affects large industrial plants and livestock farms, but also mines and battery factories. They are to:

  • Further reduce air, water and soil pollution
  • Ensure more transparency about environmentally harmful activities
  • Further reduce limits for pollutant emissions based on “best available techniques” (BAT)

The part of the IED concerning farms was particularly controversial. Here, EU environmental policymakers agreed to include pig and poultry farms with more than 200 livestock units (LU) and cattle farms with 300 LU or more. Farms with extensive livestock production are to be exempt from the new rules. The Commission had originally proposed a much lower threshold of 150 LSU for the scope of the IED for all animal husbandry.

EPP and Greens failed with their demands

After the vote, Peter Liese thus spoke of a turning point in the positive. “For the first time, the Environment Committee has significantly weakened a proposal of the EU Commission in all relevant points,” said the environmental policy spokesman of the EPP. His group and the ECR MEPs had called for even lower thresholds, while the Greens and the Left wanted a much higher level of ambition. In the end, a compromise of S&D and Renew prevailed, which lies between the other two positions.

Liese justified the lower ambition level of the Parliament compared to the Commission with conflicting goals between the reduction of carbon and the reduction of other pollutants. “These conflicting goals must be decided in favor of decarbonization,” Liese said. The ENVI decision is thus a step in the right direction, he added. The report is to be submitted to the plenum for a vote in July. luk

  • Climate & Environment
  • Climate Policy
  • Emissions
  • Environmental policy

Study: Higher EU funding for climate targets needed

According to a new study, the EU needs additional financial resources to meet its 2030 climate targets. Programs to involve private investors such as InvestEU are “no substitute for additional public spending at the EU level,” experts from the Jacques Delors Centre at Berlin’s Hertie School write in the paper, published today. The European economy “cannot be greened on the cheap.”

The EU Commission had launched InvestEU in 2018, as a successor to the EFSI, often referred to as the Juncker Fund. With the help of €26.2 billion in guarantees from the EU budget, the Commission hopes to mobilize more than €372 billion in private and public investment by 2027. The funds will be made available to investors through the European Investment Bank and 14 other development banks.

Lack of risk tolerance

However, the high leverage prevents them from taking necessary risks for truly additional green investment, write authors Francesco Findeisen and Sebastian Mack. In its current form, they say, InvestEU is an effective tool for financing projects with low-risk profiles, such as energy restructuring of real estate.

However, many investments in future technologies envisaged in the Green Deal Industrial Plan, such as hydrogen propulsion technologies, are fraught with significant technological uncertainties. For these to be realized, the public sector would have to take over a considerable part of the risks from investors – for example, through equity financing, as made possible by the EU Innovation Fund. Climate change adaptation projects, on the other hand, are not commercially viable in the longer term and thus rely on public subsidies.

The authors thus recommend increasing the funding for InvestEU. Only in this way could the program take the necessary risks to trigger additional green investments. The Commission had proposed additional funding for InvestEU in its Green Deal Industrial Plan. However, many member states are likely to resist this in the upcoming negotiations on the revision of the medium-term financial framework. tho

  • Climate & Environment
  • Climate Policy

More uniform punishment of sanctions violations

Yesterday evening, the EU member states agreed on changes to criminal sanctions. In the Permanent Representatives Committee (Coreper), the member states agreed on minimum standards with which sanction violations are to be punished in the respective national criminal law. The Commission’s proposal was made before Russia attacked Ukraine.

German Economics Minister Robert Habeck is pleased with the agreement: “We were able to agree on ambitious common standards for punishing sanctions violations across Europe within a very short time.” The aim, he said, is to tighten sanctions pressure on Russia further and curb sanctions evasion. An 11th EU sanctions package against the Russian Federation is to follow soon.

The amendments are intended to make the circumvention of sanctions or the concealment of sanctions violations, in particular, more uniformly enforced. This means, for example, violations of dual-use regulations or in the case of armaments. In addition, the member states are to cooperate more closely and, among other things, be able to confiscate revenues from violations throughout Europe. Penalties for legal entities are also to be standardized and can amount to up to 5 percent of annual sales or €40 million. fst

Brussels to give small investors a leg up

The Commission wants to improve retail investors’ access to the capital market by adjusting European legislation. EU Vice President Valdis Dombrovskis said at the presentation of the retail investor strategy that Europe has one of the world’s highest individual savings rates. Nevertheless, citizens are much more reluctant than, for example, US citizens when it comes to investing in financial products. To justify this, he pointed out that citizens “do not always get the best deals available or appropriate value for money.”

In addition, some investment products had unjustifiably high costs. Also, some of the information provided was extremely complex. This makes it difficult for retail investors “to understand and to compare financial products.”

The Vice President emphasized once again that improved retail investor access is essential “to channel private money into the economy and finance Europe’s environmental and digital transformation.”

Better comparability of costs

According to the Commission, the package includes the following measures:

  • More meaningful information about investment products and services
  • More transparency and better comparability of costs through standard format and uniform terminology. This should improve the price-performance ratio.
  • Ensure that all retail investors receive a clear overview of the investment performance of their portfolio at least once a year
  • Address potential conflicts of interest in the distribution of investment products by prohibiting incentives for sales-only without advice
  • Ensuring that financial advice is in line with the interests of retail investors
  • Protecting retail investors from misleading marketing practices: Financial intermediaries are fully responsible for marketing messages, even if they are disseminated via social media or through celebrities who receive compensation for doing so
  • Maintaining high standards with regard to the professional qualifications of financial advisors
  • Improve accessibility of products and services to sophisticated retail investors by making the criteria for recognition as a professional investor more proportionate

The European consumer protection association BEUC criticized the Commission’s move. The package of measures is “not what consumers expected,” the association said. Because of commissions paid to advisors, “financial advice is, in many cases, nothing more than a sales pitch for consumers,” it said. Only a complete commission ban will ensure “that this market finally starts to offer consumers something.”

Financial industry celebrates end to commission ban

The German banks and savings banks, on the other hand, see the removal of the complete ban on commissions as “an important signal.” A comprehensive ban would have “unforeseeable consequences for markets and consumers,” according to a statement by the German banking industry. The financial industry also calls for an “honest cost/benefit and competitive analysis” for the overall package. The draft law would not achieve the Commission’s objectives in its current form.

Financial Services Commissioner Mairead McGuinness said the Commission had weighed up very careful not to impose a total commission ban at this stage. However, the Irishwoman clarified that a complete ban was not definitively off the table. The new rules contain a review clause after three years. Then it will be assessed whether the new regulations led to more favorable costs for retail investors and improved access to the capital markets. cr

  • EU
  • European Commission

Data Act: agreement in sight

According to information from observers, the European Parliament and the Council have made “good progress” on the Data Act in the trilogue. Accordingly, the negotiating partners have reached a preliminary agreement on a large part of the obligations of companies to share data with the public sector (B2G data sharing, Chapter V).

According to the information, there was agreement on the scope of the EU institutions, the exemption for small and micro enterprises, the management of public emergencies, but not on the whole package.

Negotiators discussed the contentious issue of the inclusion or exclusion of personal data until late in the evening on Tuesday. However, they were still unable to reach an agreement and merely explored a path to a possible compromise.

Companies warn against data misuse

Even before the trilogue, the IT industry association Digitaleurope had published a joint statement co-signed by 26 other organizations expressing concern about the provisions of Chapter V: The proposed rules would mean that any public body at EU, national, regional or local level could request any type of data, including personal data, from any data controller for any reason, the signatories said.

“We believe these rules are not in line with requirements of the EU Charter of Fundamental Rights.” With such a broad scope, there is a risk of personal or sensitive data being leaked or misused, it said.

Contentious issue: protection of trade secrets

The negotiators also briefly discussed three other issues:

  • Protection of trade secrets
  • Governance model
  • IoT data sharing, rights and obligations (Chapter II)

The representatives of both sides will continue to discuss these issues at the technical level in the coming weeks. The next trilogue is scheduled for June 27. Observers said a possible overall agreement is in sight. However, it depends on the progress that can be made at the technical level in the meantime.

Companies repeatedly emphasize that the Council and Parliament have already made significant improvements compared to the Commission’s draft. The changes can be read in the four-column document available to “Contexte.” However, they said the fundamental mistake of wanting to create a “one size fits all” regulation for data exchange across all industries could not be solved even by the proposed changes. vis

  • Data Act
  • Digital policy
  • Trilog

European election projection

If European elections were held on Sunday… Greens gain ground

By Manuel Müller
Historian and political scientist Manuel Müller has been regularly producing seat projections for the European elections since 2014.

With just over a year to go until the June 6-9, 2024 European elections, the tone between European parties is gradually getting harsher. At the beginning of May, Iratxe García Pérez, the Socialist group leader in the European Parliament, said that “cooperation is no longer possible” with the Christian Democratic EPP. Frans Timmermans, Commission Vice President and Socialist frontrunner in 2019, followed suit, warning of a “new political dynamic” in which the EPP “looks more to the right.”

EPP press spokesman Pedro López de Pablo rejected Timmerman’s statement and, conversely, accused the Social Democratic S&D Group of being close to the “extreme left.” Meanwhile, Italian Foreign Minister, EPP Vice-President and former EU Parliament President Antonio Tajani aggressively promoted increased cooperation between the EPP and the right-wing ECR group.

Informal alliance between EPP and S&D

However, it is unlikely that the informal alliance of EPP and S&D, which has always been at the center of majority formation in the European Parliament, is really at an end. In fact, the S&D once proclaimed the “end of the grand coalition” back in 2016, without much of a change in practice. The EU is structurally based on consensus: Majorities in the European Parliament that exclude one of the major parties are selectively possible, but not sustainable in the long term. This is already evident in the top candidate procedure, in which the Parliament only has a chance against the European Council if it presents a united front.

However, such an announcement is a poor way to run an election campaign. A certain degree of polarization and conflict is necessary so that voters can recognize differences between parties. And so it is part of the ritual that the EPP and S&D publicly declare their mutual dislike before the European elections – only to quickly get back together to be able to act in Parliament.

Majority ratios are tighter

In addition, the polls this year are also tighter than in many previous rounds of elections. If the European elections were held now, the EPP would have 162 seats in the base scenario of the seat projection, and the S&D would have 137 (both unchanged from the last projection at the end of March). In the dynamic scenario – which takes into account possible faction entries by national parties that could win seats for the first time in the European election – the EPP’s cushion is somewhat more comfortable (172 to 137 seats). But this election is far from decided.

However, it is already becoming clear that an alliance of the EPP and S&D alone will not be sufficient. In the 2019 European elections, the grand coalition lost its majority in the European Parliament for the first time and has since been dependent on cooperation with the liberal Renew Europe (RE) group or the Greens. This is unlikely to change in the future.

In the current projection, the Liberals lose slightly and have 92 seats (-2 compared with March, dynamic scenario: 99 seats). Formally, they would still be the third-strongest parliamentary group. However, their key position in the center of the European party system means their actual influence is significantly greater, as not only the grand coalition but also almost any possible center-left or center-right alliance requires their support.

Best result in two years for the Greens

The Greens, on the other hand, are in a lot of trouble in their stronghold of Germany. In many other EU member states, however, they have made gains in recent weeks, so that they now climb to 50 seats in the projection (+8, dynamic: 54). This is their best figure in two years. The European Left has also made recent gains following poll losses in the spring and now has 49 seats (+5, dynamic: 50). This is roughly in line with its long-term average in this election period.

On the right of the political spectrum, the traditionally pro-NATO right-wing EKR continues to outpace the traditionally pro-Russia ID: EKR comes to 79 seats (+1), ID to 67 (-1). In the dynamic scenario, which takes into account the possible accession of the currently non-factional Hungarian ruling party Fidesz to the ID, the latter is still just ahead of the EKR (83 to 82 seats). The number of non-factional deputies falls to 33 (-5), in the dynamic scenario even to 28.

Aggregated national polls and election results

Since there are no pan-European election polls, the seat projection is based on aggregated national polls and election results from all member states. In the baseline scenario, all national parties are each assigned to their current parliamentary group (or to the parliamentary group of their European umbrella party); parties without a clear European assignment are shown as “other”. The dynamic scenario assigns all “other” parties in each case to a parliamentary group that they could plausibly join and also includes other possible changes in the parliamentary groups.

More details on the data basis and methodology of the projection as well as a breakdown of the results by individual national parties can be found on the blog “The (European) Federalist.”

Manuel Müller is Senior Research Fellow at the Finnish Institute of International Affairs (FIIA) in Helsinki and runs the blog “The (European) Federalist”. He publishes his projection on the European election on his blog and at Table.Media.

  • European election 2024
  • European Parliament
  • EVP

Europe.Table Editorial Office

EUROPE.TABLE EDITORS

Licenses:
    Dear reader,

    Nothing less than major geopolitics is on the agenda when the EU trade ministers meet in Brussels this morning. They want to discuss relations with the USA, relations with China and trade agreements with other countries such as Australia. Topics that will probably also occupy the heads of state and government at the EU summit at the end of June.

    According to an EU diplomat the atmosphere in contacts with Washington has “improved a lot,” but there are still a number of things to discuss: The US government has still not granted European raw materials suppliers access to the Inflation Reduction Act subsidies, and the conflict over US steel tariffs, which have only been suspended until the end of the year, is also awaiting a solution. The ministers are now expected to give the EU Commission negotiators clear signals for talks at next week’s meeting of the Trade and Technology Council (TTC).

    The Europeans’ more robust approach to China is creating a positive climate for talks with Washington. The EU diplomat notes that the member states are much more united in their dealings with Beijing than they were a few years ago. However, the Commission’s economic security strategy, scheduled for June 21 and also aimed at Beijing, is giving some governments a headache. The strategy is likely to include initiatives on screening certain direct investments in third countries and on EU-wide export controls. Supporters of the market economy are worried that this will create new trade barriers.

    Have a mostly worry-free day!

    Your
    Till Hoppe
    Image of Till  Hoppe

    Feature

    EU Parliament: Commission’s response to IRA insufficient

    Resistance against the Commission’s plans for a European reaction to the US investment package Inflation Reduction Act (IRA) is forming in the EU Parliament. The responsible rapporteur of the European Parliament, Christian Ehler, demands far-reaching changes to the planned Net-Zero Industry Act (NZIA). The latter has a significant influence on the Parliament’s position in the legislative process.

    The EU Commission’s legislative proposal was designed as a response to the US Inflation Reduction Act – but “that’s not what it is”, the EVP/CDU MEP said yesterday. Ehler will present his draft report today, Thursday; it was already available to Table.Media in advance.

    These are the main changes to the Commission’s proposal:

    • Ehler wants to remove the list of “Strategic Net Zero Technologies” in the NZIA Annex and instead take a broader approach based on the taxonomy.
    • Not only manufacturers of net-zero technologies should benefit from the planned subsidy, but also suppliers – down to the basic materials industry.
    • The member states are to designate dedicated regions as sites for industrial clusters – Ehler speaks of “Net-Zero Industry Valleys“.
    • In these regions, investors should also receive aid for current operating expenses (OpEx) under certain circumstances – as provided for in the IRA.
    • Ehler wants to scrap the Commission’s target of 40 percent of domestic demand for net-zero technologies in Europe – instead, the EU should aim for a 20 percent share of the global market in order to cover the important export business as well.
    • To provide more financial flexibility for subsidies at the EU level, he proposes to use 25 percent of member states’ revenues from the emissions trading system for the NZIA.

    IRA a turning point

    The EU has created comprehensive climate protection regulation with the Fit for 55 legislation, said the EPP spokesperson in the Industry and Energy Committee (ITRE). However, “it is becoming increasingly obvious that we do not have a business case for industrial decarbonization in Europe“. The IRA would therefore represent a turning point. In a survey by the European Round Table for Industry published on Tuesday, almost 60 percent of company leaders indicated that they would relocate investments or sites from Europe to North America in the next two years.

    Ehler demanded to set the focus on implementing the climate targets and the associated business case. He said that “you can’t do everything at the same time,” so other regulatory projects such as the EU supply chain law or the nature conservation package should be put on the back burner. Belgian Prime Minister Alexander De Croo made similar comments on Tuesday: “If we overwhelm people with rules and regulations, we risk losing public support for the green agenda.”

    Scope of technologies expanded

    The Commission proposed to designate eight technology sectors as “strategic net-zero technologies,” including solar, wind, battery storage and heat pumps. Even more than other climate-friendly sectors, these are to benefit from preferential treatment, for example in the form of expedited approval procedures and priority treatment in judicial dispute resolution. Ehler, on the other hand, is now calling for abandoning the distinction between strategic and other net-zero technologies.

    He wants to use the taxonomy to determine which technologies fall under the NZIA. Article 10 of the Taxonomy Regulation lists a number of criteria for activities that substantially contribute to climate action. This would include, for example, sustainable aviation fuel (SAF) or CO2 capture and storage (CCS).

    Ehler, on the other hand, does not want to factor in natural gas and nuclear power, which are classified as transitional technologies in the taxonomy. However, this will likely lead to more heated discussions with nuclear advocates in the European Parliament and the Council. The treatment of the nuclear industry had already been the main point of contention in the Commission.

    German Tesla plant as blueprint

    Ehler wants to add the concept of “Net-Zero Industry Valleys” to the draft law: It would give member states the option of designating regional cluster locations for individual net-zero technologies. As part of this, the authorities are to handle the environmental impact assessments in advance, thus relieving companies in these clusters of the burden.

    The authorities’ plans for the subsidized regions should also specify which public infrastructure investments are planned and which subsidies for their operating costs investors can expect. In his report, Ehler cites contracts for difference for energy costs as an example.

    Ehler considers this regional approach to be more realistic than “grinding down environmental law” at the national level. The Brandenburg deputy probably had the German Tesla plant in Gruenheide in mind for this approach.

    The rapporteur of the lead ITRE committee will present his draft today. The aim is to decide on the common position of the Parliament in plenary by the end of October at the latest and then start the trialogue with the member states, said Ehler. Whether the negotiations can be concluded before Christmas also depends on the Council. The Council has set itself the goal of wrapping up the Critical Raw Materials Act, which is being negotiated in parallel, by the end of the year. However, the discussions on the NZIA have not progressed as far in the Council as on the CRMA.

    • Climate & Environment
    • Energy
    • European policy
    • ITRE

    Timmermans: EU could reach climate target of 58 percent

    At COP28, the Global Stocktake will take stock of the Paris Agreement for the first time. Included is an updated inventory of global emissions reductions. It is already clear: Global efforts to reduce emissions are not sufficient. One of the major points of contention at the climate conference will thus be the phase-out of fossil fuels.

    For Frans Timmermans, the challenge is predominantly to “be more precise in terms of mobilizing money.” At the same time, he said, we also need to be “more precise of efforts to reduce emissions.” The Green Deal chief refers specifically to the G20 countries, “especially China.”

    Faster change in the financial sector

    Timmermans also wants to talk to a very specific group of companies to reduce emissions globally as quickly as possible: “We will not manage the transition without the fossil energy sector.” He says companies need to be “pushed,” but also given the opportunity to decarbonize themselves to make the transition “much faster” than it is today. This includes the financial sector, the EU Commission Vice President said, because the major players have a “very limited portfolio of investments in renewable energy.”

    He also looks at the renewables industry in an interview with Table.Media: Their “success” in Europe and worldwide should be the reason to formulate a global target for the energy transition. On this point, the EU’s chief climate negotiator is not alone. At the Petersberg Climate Dialogue, hosted by the German government in Berlin at the beginning of May, the principle of a global target for renewable energies was already given concrete form.

    Now he is adding a target for energy efficiency. The EU has “a clear percentage target for renewable energy,” but one is also needed at the global level – and in combination with a “very clear target for reducing energy consumption,” i.e. for energy efficiency.

    New climate target by COP

    The EU Commissioner stresses that the various legislative texts of the Fit for 55 package will make it possible to exceed the original climate target. That called for cutting emissions 55 percent from 1990 levels by 2030. “We are currently calculating this,” he said. “Currently it’s about minus 57 percent, maybe 58 percent, by the COP, we will have a more precise figure.”

    However, he said, it must be ensured that the member states can actually reach the target. His proposals on renaturation and the reduction of pesticides are intended to achieve this. However, the negotiations are proving extremely difficult: In the European Parliament, the committees for agriculture (AGRI) and fisheries (PECH) have already rejected the proposals (more on this in the news section).

    • Climate & Environment
    • Climate Policy
    • Emissions
    • Frans Timmermans

    Five years of the GDPR: No anniversary party

    Data protection is to blame if something is not working. This argument has been put forward regularly in recent years, not always with good reason. But data protection often gets in the way. This is precisely what was intended: In principle, everyone should be able to determine the conditions under which data about him or her is stored, processed and passed on.

    The USA played a decisive role in the European approach to the GDPR. For years, they relied on a different concept: data, yes please. And if someone was messing with it, the infamous class action lawsuits would be filed. But the idea of collecting and analyzing private data was not limited to business. The state also helped itself. Especially with data from abroad, as the NSA revelations showed ten years ago when the GDPR was already being discussed. The NSA was the involuntary birthmother of the GDPR.

    So Europe’s path has been a political defensive battle: Can the EU set rules the world has to comply with? That not potentially every data is processed by the NSA? The answer, then as now, is a junket: anyone wanting to make money in the EU and ship personal data abroad to do so must at least come close to meeting Europe’s values in return.

    Schrems: regulators not doing their job

    Maximilian Schrems stands for this fight like no other. The Austrian has led the European Court of Justice twice to find that the US does currently not offer comparable protection for personal data. “We are now at the beginning of a digitization situation that will last for another 100 years. And we will certainly have even better regulations.” The law is not perfect, but okay, Schrems says. But its application is not.

    Schrems accuses many data protection authorities of not doing their job. When he and the organization he founded, NOYB (“None of your Business”), conducted proceedings or made submissions, they always found reasons to refrain from acting. The supervisory authorities are not too small but too slow and analog.

    Schrems criticizes this would not lead to “general prevention.” Nor does he want to accept the argument that the supervisory authorities would work particularly closely. “We see it in Ireland, for example. There, 100,000 pages thick files are produced. And that’s not necessarily accuracy, it’s often just shifting things around.”

    Ireland holds back

    The criticism of the European consumer protection umbrella organization BEUC is similar. Its Deputy Director General Ursula Pachl complains that the association had already objected to Google’s tracking in November 2018 – and that no decision has yet been made in Dublin.

    The behavior of the Irish supervisory authority has often caused controversy. While the Spanish supervisory authority is notable for the large number of procedures it processes, the Irish are known for their extremely restrained interpretation of the GDPR. The decision on Facebook, for example, published just in time for Monday’s anniversary, would have been much weaker had the other European regulators not overruled the DPC. “This is now the time when the most complicated cases are being closed at the level of the supervisory authorities,” says Wojciech Wiewiórowski, the European Data Protection Supervisor.

    Judges must clarify GDPR

    “The GDPR has not delivered on its promise to ensure uniform, understandable and practicable data protection rules across Europe,” says Bitkom President Achim Berg. “Instead, the independent interpretation of the rules by each national and regional regulator is leading to legal uncertainty.”

    But after the supervisory authorities follow the courts. In the end, only one can clarify what the letters of the law are supposed to mean: 50 proceedings on the GDPR alone are currently on the agenda at the European Court of Justice.

    Many concern questions of interpretation that are quite complex. For example, the ECJ had to decide a few days ago on the requirements for damages. The question of what role other supervisory authorities such as antitrust offices have in the GDPR enforcement will also be decided soon. Above all, however, one question is still undecided: Can the EU help the GDPR achieve its global claim to validity in practice?

    Data protection no longer sexy

    In EU politics, the data protection issue is now once again to blame for Europe not playing a leading role in digitization. The NSA discussions are forgotten. And data protection hardly plays a role in debates about China either. Although the question of what data goes to Beijing and what is done with it is obvious.

    But without a new Snowden moment, complicated data protection, primarily intended to protect EU residents, no longer seems politically sexy. But abolishing it is not an option either.

    • Data protection
    • Digitization
    • European policy
    • GDPR

    Events

    May 25, 2023; 6 – 7:30 p.m, Berlin
    DGAP, Discussion After Ostpolitik: The Main Principles of a New Eastern Policy for Germany
    The German Council on Foreign Relations (DGAP) deliberates on what a future-oriented German strategy toward Russia should entail – also in terms of defense investment and the integration of Ukraine to the EU. INFO & REGISTRATION

    May 26-28, 2023; Brussels (Belgium)
    Steconf World Conference on Materials Science and Nanotechnology
    Steconf features an extensive array of topics, including photovoltaics, materials beyond silicon, biochemistry, electronics & photonics, green technologies, nanotechnology, sensor materials, spintronics, innovative alloys, energy systems and cutting-edgeCO2 capture techniques. INFO & REGISTRATION

    May 26-27, 2023; Munich/online
    Young Security Conference 2023: When Empires Strike Back – European Security in Post-Liberal Times
    The Young Security Conference discusses what the EU can do to become a relevant and autonomous security actor. INFO & REGISTRATION

    May 26, 2023; 9 a.m – 4 p.m, Hannover
    SD, Conference Privacy Ring: In the EU standards jungle
    The Data Protection Foundation (SD) presents field reports and insights from experts in the data protection industry. INFO & REGISTRATION

    May 30 – June 1, 2023; Lisbon (Portugal)
    Lisbon Energy Summit
    The Lisbon Energy Summit focuses on balancing energy security and achieving net zero ambitions, the decarbonization of existing energy systems and investing in new renewable energy sources. INFO & REGISTRATION

    May 30, 2023; 9 a.m – 5:50 p.m Warsaw (Poland)
    ECFR, Conference Warsaw European Conversation
    The European Council on Foreign Relations (ECFR) engages in a critical conversation about the risks and trends shaping the European project. INFO & REGISTRATION

    May 30, 2023; 10 – 11 a.m, online
    ASEW, Seminar Digital identity as a building block of the smart city
    The Association for the Economical Use of Energy and Water (ASEW) provides information on the potential uses of a digital identity and how it can be used for companies and municipalities. INFO & REGISTRATION

    May 30, 2023; 1 – 4 p.m, online
    ASEW, Seminar Renewable district heating: Danish model
    The Association for the Economical Use of Energy and Water (ASEW) provides an insight into Denmark’s heat supply. INFO & REGISTRATION

    May 30, 2023; 3 – 4:30 p.m, online
    GMF, Discussion Countering SLAPPs in the EU: Lessons from Hungary, Poland, and Slovenia
    The German Marshall Fund (GMF) discusses the role of SLAPPs in suppressing independent media and civil society in illiberal regimes and the ways to effectively combat the abuse of law through SLAPPs in the European Union. INFO & REGISTRATION

    May 30, 2023; 3 – 4 p.m online
    Eurogas, Panel Discussion Are US and EU on course to tackle methane emissions?
    Eurogas addresses how the US and the EU are reinforcing efforts to tackle methane emissions. INFO & REGISTRATION

    May 30, 2023; 6 – 8 p.m Berlin/online
    HBS, Discussion China’s Society in Transition
    The Heinrich Böll Foundation (HBS) is concerned with various aspects of the social upheaval in China. INFO & REGISTRATION

    June 12-30, 2023;, online
    FSR, Seminar Clean Molecules for the Energy Transition
    The Florence School of Regulation (FSR) offers an overview of the development of clean molecules in the EU and beyond. INFO & REGISTRATION

    News

    EU Commission calls for stop of energy subsidies

    The Commission is calling on all member states to phase out national energy relief measures, such as the electricity and gas price brakes in Germany, by the end of the year. Commenting on the “European Semester,” Commission Vice President Valdis Dombrovskis said it was time to “focus on prudent fiscal policies.” If a renewed rise in energy prices makes support measures necessary, these should be targeted at protecting financially weaker households and companies, be sustainable for public finances and be given incentives to save energy.

    Dombrovskis stressed that the European economy continues to show resilience despite a challenging global environment. He said lower energy prices, fewer supply bottlenecks, and a strong labor market contributed to moderate growth in the first quarter of 2023. “This has allayed fears of a recession.”

    At the same time, however, core inflation had become solidified despite a further decline in inflation, leading to tighter financing conditions. The Commission expects EU inflation to reach 6.7 percent in 2023 and 3.1 percent in 2024, with growth reaching 1.0 percent this year and 1.7 percent the next.

    14 deficit sinners

    The Commission notes that 14 member states currently have excessive budget deficits, including Germany. However, the Commission had already signaled in advance it would not initiate proceedings against the states, as the provisions of the Stability and Growth Pact are currently suspended until the end of 2023. If the member states do not reduce their budget deficits for the current year below the benchmark of three percent of gross domestic product (GDP), the EU authority intends to open proceedings in spring 2024.

    Two years after its launch, the Recovery and Resilience Facility – the centerpiece of the EU’s €800 billion NextGenerationEU recovery plan – continues to help accelerate environmental and digital transformation, strengthening the resilience of the EU as a whole. According to the report, all countries have now submitted their national recovery and resilience plans, 24 payment claims have been processed, and the Commission has disbursed more than €152 billion under the facility for the successful implementation of key reforms and investments.

    Germany to become less dependent on fossil fuels

    Germany must do more to reduce its dependence on fossil energies. That is according to the Brussels-based authority’s individual country report. According to the report, the Commission is calling on the government to boost investment in renewable energies and improve administrative capacities and approval procedures. It is also necessary to step up efforts for greater energy efficiency in industry, construction and transport.

    However, Brussels sees Germany on the right track in reducing macroeconomic imbalances. It urges the government to ensure a “prudent fiscal policy, in particular by limiting the nominal increase in nationally-financed net primary expenditure in 2024 to not more than 2.5 percent.” cr

    • EU
    • European Commission

    Fisheries Committee also rejects Renaturation Act

    After the EU Parliament’s Agriculture Committee already rejected the Commission’s proposal for a new nature restoration act on Tuesday, the Fisheries Committee followed suit on Wednesday. EPP, ECR and ID as well as three of the four Renew MEPs voted for the rejection. Socialists, Greens and Left voted against and wanted to have amendments voted instead. However, this did not happen due to the rejection.

    The background to the rejection is the EPP’s demand for a moratorium on new laws affecting agriculture. Some Renew deputies also joined this demand. However, neither the Agriculture Committee nor the Fisheries Committee has any say in the Renaturation Act. They can only submit their position in the form of a report.

    Environment Committee has the lead

    The lead committee is the Environment Committee, which will vote on the bill on June 15. If the report is adopted, the law is to be submitted to the plenum in July. However, the EPP will likely fight for rejection, as it fears that the new laws will place a bureaucratic and financial burden on farmers that is too high.

    Green Party MEPs, in particular, expressed dismay at the rejection of the Fisheries Committee. Jutta Paulus called it a “shameless attack on food safety, health and species protection” and attacked the EPP. She said it put party politics “above the protection of our livelihoods.” luk

    • Climate & Environment
    • Climate Policy
    • Environmental policy
    • Renaturation

    ENVI adopts Industrial Emissions Directive

    The European Parliament’s Environment Committee (ENVI) has adopted the report on the revision of the Industrial Emissions Directive (IED). 55 MEPs voted in favor, 26 against and six abstained. The revised IED mainly affects large industrial plants and livestock farms, but also mines and battery factories. They are to:

    • Further reduce air, water and soil pollution
    • Ensure more transparency about environmentally harmful activities
    • Further reduce limits for pollutant emissions based on “best available techniques” (BAT)

    The part of the IED concerning farms was particularly controversial. Here, EU environmental policymakers agreed to include pig and poultry farms with more than 200 livestock units (LU) and cattle farms with 300 LU or more. Farms with extensive livestock production are to be exempt from the new rules. The Commission had originally proposed a much lower threshold of 150 LSU for the scope of the IED for all animal husbandry.

    EPP and Greens failed with their demands

    After the vote, Peter Liese thus spoke of a turning point in the positive. “For the first time, the Environment Committee has significantly weakened a proposal of the EU Commission in all relevant points,” said the environmental policy spokesman of the EPP. His group and the ECR MEPs had called for even lower thresholds, while the Greens and the Left wanted a much higher level of ambition. In the end, a compromise of S&D and Renew prevailed, which lies between the other two positions.

    Liese justified the lower ambition level of the Parliament compared to the Commission with conflicting goals between the reduction of carbon and the reduction of other pollutants. “These conflicting goals must be decided in favor of decarbonization,” Liese said. The ENVI decision is thus a step in the right direction, he added. The report is to be submitted to the plenum for a vote in July. luk

    • Climate & Environment
    • Climate Policy
    • Emissions
    • Environmental policy

    Study: Higher EU funding for climate targets needed

    According to a new study, the EU needs additional financial resources to meet its 2030 climate targets. Programs to involve private investors such as InvestEU are “no substitute for additional public spending at the EU level,” experts from the Jacques Delors Centre at Berlin’s Hertie School write in the paper, published today. The European economy “cannot be greened on the cheap.”

    The EU Commission had launched InvestEU in 2018, as a successor to the EFSI, often referred to as the Juncker Fund. With the help of €26.2 billion in guarantees from the EU budget, the Commission hopes to mobilize more than €372 billion in private and public investment by 2027. The funds will be made available to investors through the European Investment Bank and 14 other development banks.

    Lack of risk tolerance

    However, the high leverage prevents them from taking necessary risks for truly additional green investment, write authors Francesco Findeisen and Sebastian Mack. In its current form, they say, InvestEU is an effective tool for financing projects with low-risk profiles, such as energy restructuring of real estate.

    However, many investments in future technologies envisaged in the Green Deal Industrial Plan, such as hydrogen propulsion technologies, are fraught with significant technological uncertainties. For these to be realized, the public sector would have to take over a considerable part of the risks from investors – for example, through equity financing, as made possible by the EU Innovation Fund. Climate change adaptation projects, on the other hand, are not commercially viable in the longer term and thus rely on public subsidies.

    The authors thus recommend increasing the funding for InvestEU. Only in this way could the program take the necessary risks to trigger additional green investments. The Commission had proposed additional funding for InvestEU in its Green Deal Industrial Plan. However, many member states are likely to resist this in the upcoming negotiations on the revision of the medium-term financial framework. tho

    • Climate & Environment
    • Climate Policy

    More uniform punishment of sanctions violations

    Yesterday evening, the EU member states agreed on changes to criminal sanctions. In the Permanent Representatives Committee (Coreper), the member states agreed on minimum standards with which sanction violations are to be punished in the respective national criminal law. The Commission’s proposal was made before Russia attacked Ukraine.

    German Economics Minister Robert Habeck is pleased with the agreement: “We were able to agree on ambitious common standards for punishing sanctions violations across Europe within a very short time.” The aim, he said, is to tighten sanctions pressure on Russia further and curb sanctions evasion. An 11th EU sanctions package against the Russian Federation is to follow soon.

    The amendments are intended to make the circumvention of sanctions or the concealment of sanctions violations, in particular, more uniformly enforced. This means, for example, violations of dual-use regulations or in the case of armaments. In addition, the member states are to cooperate more closely and, among other things, be able to confiscate revenues from violations throughout Europe. Penalties for legal entities are also to be standardized and can amount to up to 5 percent of annual sales or €40 million. fst

    Brussels to give small investors a leg up

    The Commission wants to improve retail investors’ access to the capital market by adjusting European legislation. EU Vice President Valdis Dombrovskis said at the presentation of the retail investor strategy that Europe has one of the world’s highest individual savings rates. Nevertheless, citizens are much more reluctant than, for example, US citizens when it comes to investing in financial products. To justify this, he pointed out that citizens “do not always get the best deals available or appropriate value for money.”

    In addition, some investment products had unjustifiably high costs. Also, some of the information provided was extremely complex. This makes it difficult for retail investors “to understand and to compare financial products.”

    The Vice President emphasized once again that improved retail investor access is essential “to channel private money into the economy and finance Europe’s environmental and digital transformation.”

    Better comparability of costs

    According to the Commission, the package includes the following measures:

    • More meaningful information about investment products and services
    • More transparency and better comparability of costs through standard format and uniform terminology. This should improve the price-performance ratio.
    • Ensure that all retail investors receive a clear overview of the investment performance of their portfolio at least once a year
    • Address potential conflicts of interest in the distribution of investment products by prohibiting incentives for sales-only without advice
    • Ensuring that financial advice is in line with the interests of retail investors
    • Protecting retail investors from misleading marketing practices: Financial intermediaries are fully responsible for marketing messages, even if they are disseminated via social media or through celebrities who receive compensation for doing so
    • Maintaining high standards with regard to the professional qualifications of financial advisors
    • Improve accessibility of products and services to sophisticated retail investors by making the criteria for recognition as a professional investor more proportionate

    The European consumer protection association BEUC criticized the Commission’s move. The package of measures is “not what consumers expected,” the association said. Because of commissions paid to advisors, “financial advice is, in many cases, nothing more than a sales pitch for consumers,” it said. Only a complete commission ban will ensure “that this market finally starts to offer consumers something.”

    Financial industry celebrates end to commission ban

    The German banks and savings banks, on the other hand, see the removal of the complete ban on commissions as “an important signal.” A comprehensive ban would have “unforeseeable consequences for markets and consumers,” according to a statement by the German banking industry. The financial industry also calls for an “honest cost/benefit and competitive analysis” for the overall package. The draft law would not achieve the Commission’s objectives in its current form.

    Financial Services Commissioner Mairead McGuinness said the Commission had weighed up very careful not to impose a total commission ban at this stage. However, the Irishwoman clarified that a complete ban was not definitively off the table. The new rules contain a review clause after three years. Then it will be assessed whether the new regulations led to more favorable costs for retail investors and improved access to the capital markets. cr

    • EU
    • European Commission

    Data Act: agreement in sight

    According to information from observers, the European Parliament and the Council have made “good progress” on the Data Act in the trilogue. Accordingly, the negotiating partners have reached a preliminary agreement on a large part of the obligations of companies to share data with the public sector (B2G data sharing, Chapter V).

    According to the information, there was agreement on the scope of the EU institutions, the exemption for small and micro enterprises, the management of public emergencies, but not on the whole package.

    Negotiators discussed the contentious issue of the inclusion or exclusion of personal data until late in the evening on Tuesday. However, they were still unable to reach an agreement and merely explored a path to a possible compromise.

    Companies warn against data misuse

    Even before the trilogue, the IT industry association Digitaleurope had published a joint statement co-signed by 26 other organizations expressing concern about the provisions of Chapter V: The proposed rules would mean that any public body at EU, national, regional or local level could request any type of data, including personal data, from any data controller for any reason, the signatories said.

    “We believe these rules are not in line with requirements of the EU Charter of Fundamental Rights.” With such a broad scope, there is a risk of personal or sensitive data being leaked or misused, it said.

    Contentious issue: protection of trade secrets

    The negotiators also briefly discussed three other issues:

    • Protection of trade secrets
    • Governance model
    • IoT data sharing, rights and obligations (Chapter II)

    The representatives of both sides will continue to discuss these issues at the technical level in the coming weeks. The next trilogue is scheduled for June 27. Observers said a possible overall agreement is in sight. However, it depends on the progress that can be made at the technical level in the meantime.

    Companies repeatedly emphasize that the Council and Parliament have already made significant improvements compared to the Commission’s draft. The changes can be read in the four-column document available to “Contexte.” However, they said the fundamental mistake of wanting to create a “one size fits all” regulation for data exchange across all industries could not be solved even by the proposed changes. vis

    • Data Act
    • Digital policy
    • Trilog

    European election projection

    If European elections were held on Sunday… Greens gain ground

    By Manuel Müller
    Historian and political scientist Manuel Müller has been regularly producing seat projections for the European elections since 2014.

    With just over a year to go until the June 6-9, 2024 European elections, the tone between European parties is gradually getting harsher. At the beginning of May, Iratxe García Pérez, the Socialist group leader in the European Parliament, said that “cooperation is no longer possible” with the Christian Democratic EPP. Frans Timmermans, Commission Vice President and Socialist frontrunner in 2019, followed suit, warning of a “new political dynamic” in which the EPP “looks more to the right.”

    EPP press spokesman Pedro López de Pablo rejected Timmerman’s statement and, conversely, accused the Social Democratic S&D Group of being close to the “extreme left.” Meanwhile, Italian Foreign Minister, EPP Vice-President and former EU Parliament President Antonio Tajani aggressively promoted increased cooperation between the EPP and the right-wing ECR group.

    Informal alliance between EPP and S&D

    However, it is unlikely that the informal alliance of EPP and S&D, which has always been at the center of majority formation in the European Parliament, is really at an end. In fact, the S&D once proclaimed the “end of the grand coalition” back in 2016, without much of a change in practice. The EU is structurally based on consensus: Majorities in the European Parliament that exclude one of the major parties are selectively possible, but not sustainable in the long term. This is already evident in the top candidate procedure, in which the Parliament only has a chance against the European Council if it presents a united front.

    However, such an announcement is a poor way to run an election campaign. A certain degree of polarization and conflict is necessary so that voters can recognize differences between parties. And so it is part of the ritual that the EPP and S&D publicly declare their mutual dislike before the European elections – only to quickly get back together to be able to act in Parliament.

    Majority ratios are tighter

    In addition, the polls this year are also tighter than in many previous rounds of elections. If the European elections were held now, the EPP would have 162 seats in the base scenario of the seat projection, and the S&D would have 137 (both unchanged from the last projection at the end of March). In the dynamic scenario – which takes into account possible faction entries by national parties that could win seats for the first time in the European election – the EPP’s cushion is somewhat more comfortable (172 to 137 seats). But this election is far from decided.

    However, it is already becoming clear that an alliance of the EPP and S&D alone will not be sufficient. In the 2019 European elections, the grand coalition lost its majority in the European Parliament for the first time and has since been dependent on cooperation with the liberal Renew Europe (RE) group or the Greens. This is unlikely to change in the future.

    In the current projection, the Liberals lose slightly and have 92 seats (-2 compared with March, dynamic scenario: 99 seats). Formally, they would still be the third-strongest parliamentary group. However, their key position in the center of the European party system means their actual influence is significantly greater, as not only the grand coalition but also almost any possible center-left or center-right alliance requires their support.

    Best result in two years for the Greens

    The Greens, on the other hand, are in a lot of trouble in their stronghold of Germany. In many other EU member states, however, they have made gains in recent weeks, so that they now climb to 50 seats in the projection (+8, dynamic: 54). This is their best figure in two years. The European Left has also made recent gains following poll losses in the spring and now has 49 seats (+5, dynamic: 50). This is roughly in line with its long-term average in this election period.

    On the right of the political spectrum, the traditionally pro-NATO right-wing EKR continues to outpace the traditionally pro-Russia ID: EKR comes to 79 seats (+1), ID to 67 (-1). In the dynamic scenario, which takes into account the possible accession of the currently non-factional Hungarian ruling party Fidesz to the ID, the latter is still just ahead of the EKR (83 to 82 seats). The number of non-factional deputies falls to 33 (-5), in the dynamic scenario even to 28.

    Aggregated national polls and election results

    Since there are no pan-European election polls, the seat projection is based on aggregated national polls and election results from all member states. In the baseline scenario, all national parties are each assigned to their current parliamentary group (or to the parliamentary group of their European umbrella party); parties without a clear European assignment are shown as “other”. The dynamic scenario assigns all “other” parties in each case to a parliamentary group that they could plausibly join and also includes other possible changes in the parliamentary groups.

    More details on the data basis and methodology of the projection as well as a breakdown of the results by individual national parties can be found on the blog “The (European) Federalist.”

    Manuel Müller is Senior Research Fellow at the Finnish Institute of International Affairs (FIIA) in Helsinki and runs the blog “The (European) Federalist”. He publishes his projection on the European election on his blog and at Table.Media.

    • European election 2024
    • European Parliament
    • EVP

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