Table.Briefing: Europe

New structure for energy market + EMFA: Federal Council reprimands EU + IRA: fear of subsidy race

  • Interview with Andreas Goldthau: ‘We will not return to a fully liberalized energy market’
  • European Media Freedom Act: Federal Council issues subsidiarity complaint
  • IRA: EU states warn against subsidy race
  • ESM: Gramegna takes over chief post
  • Anti-Coercion: Negotiations begin
  • Kremlin accuses EU parliament of hatred of Russia
  • Amazon could soon settle antitrust dispute
  • Heads: Lina Furch – the voice of Brussels cities
Dear reader,

With its war of aggression against Ukraine and its attempts at blackmail, Russia has caused a severe upheaval in the global energy market. If nothing else, the crisis has highlighted the weaknesses of the previous structure. Geopolitics and energy expert Andreas Goldthau does not expect a return to a fully liberalized energy market. He also explained to Charlotte Wirth why renewables will benefit from the crisis.

Many observers also see press and media freedom in crisis as they are under increasing pressure in some EU member states. The EU wants to strengthen media freedom with the European Media Freedom Act. But this is not going down well in Germany. There is a strong media regulator that does not want to hand over any competencies to the EU. The Bundesrat has sent a subsidiarity complaint to Brussels. The problem: it sides with Hungary and Poland in their opposition to the EMFA. Today, Commissioner Věra Jourová will discuss her draft with the culture ministers of the 27 EU countries for the first time. Eric Bonse, Falk Steiner, and I report on the matter.

Even when the subject of the US Inflation Reduction Act comes up, tempers flare. The Europeans do not want to be disadvantaged and fear a subsidy race, writes Till Hoppe. France’s president and its economy and finance minister are traveling to Washington this week. Bruno Le Maire made his agenda clear in advance: “It’s time Europe favors European production.” That sounds anything but conciliatory.

Despite all this, I wish you a good start to the week,

Your
Corinna Visser
Image of Corinna  Visser

Feature

Energy expert Goldthau: ‘We will not return to a fully liberalized energy market’

Porträtfoto von Andreas Goldthau im schwarzen Anzug. Im Interview spricht er über den Stopp der Gaslieferungen durch Russland.
Andreas Goldthau heads the research group ‘Energy Transition and the Global South’ at the IASS Potsdam and is Vice Director of the Willy Brandt School of Public Policy at the University of Erfurt.

Mr. Goldthau, in our last interview, you said that we were not dealing with an energy crisis but with a price crisis. That was before the Russian attack on Ukraine. Now there has been a war for nine months. How do you assess the situation today?

We are now in a fundamentally different situation compared to only a year ago. By far the largest supplier of natural gas in Europe does not deliver. We are no longer just dealing with a structural market shortage because a player has left this market. Russia will not return either. This has led to an unprecedented shortage.

Since then, the EU has been trying to find alternatives. What are the consequences?

Everything that has been built up since the 1970s, the alignment of the European gas and energy economies, all that is gone in one fell swoop. As a result, the energy geographies are fundamentally shifting. Europeans are no longer supplying themselves with Eastern, but with Western energy, primarily from the USA. At the same time, they are trying to orient themselves south, to Africa. The Russians are no longer oriented to the West, but to the East. When energy flows change, this in turn has an impact on infrastructure, investments, financial flows, and the way contracts are concluded.

How does the European development of new markets affect emerging markets?

The costs of the crisis are distributed very unequally. Not only within Europe between the rich and the poor but also between the global North and the global South. The liquefied natural gas market, for example, has changed radically: hardly any LNG is going to Southeast Asia anymore. There is increasing demand with limited supply. So, the question is, how much money can you put on the table for a scarce commodity? In the process, the poor lose out. Emerging markets are being squeezed out of the global market.

You write in your latest article that the era of low gas prices in the EU is over. Will we have to get used to higher bills?

Russia was able to offer gas at a cheap price because it was geographically close and because the infrastructure was depreciated. But the “cheap supplier” Russia is now out of the picture. LNG is now the import energy source of choice and must ensure variable supply. But the LNG market is growing slowly while energy demand is also growing. There will thus be structurally higher prices. Therefore, the time of relatively low prices, which are very bearable for German and European industry, is indeed over.

The crisis is calling the functioning of the European energy market into question: the EU is discussing price caps and joint gas purchases. Will there be long-term changes to the energy market?

To answer that, we need to take a step back and look at the way energy is thought about. We are actually dealing with a private good: If I consume energy, meaning a molecule, you can’t consume it anymore. That’s why we have a price problem in the world market. But, at the same time, energy has characteristics of a public good: If the energy market collapses for a day, economies come to a standstill, wars break out. The consequences for public life, for production, for everything we call civilization are dramatic.

How does one deal with this tension between public and private good?

Either energy is organized publicly. Then the state has to regulate and ensure the supply. This is the model of the 1970s when we had public utilities that fulfilled the mandate of secure supply.

Or?

Or you can organize markets in such a way that they incentivize suppliers to provide security of supply under different conditions. This is exactly how the EU has organized its energy market. Three energy packages in 1998, 2003, and 2009 liberalized and privatized the energy market. The character of the public good has been taken into account by making the market large-scale integrated, well-regulated, and competitive. Under competitive conditions, companies have the incentive to provide secure energy supplies at affordable prices. This has worked quite well: prices have come down.

However, this has brought us into certain dependencies …

Yes, the market was always expected to be liquid enough to supply the EU. And the focus was clearly on the economic, not the political costs.

So the system only works in good times?

That’s exactly the question people are asking now. Many respond that it was a good-weather phenomenon and that the market needs to be reorganized. And that’s what’s happening right now: nationalization, the state buying back in and intervening in prices. I don’t believe we will return to the pre-war situation, i.e. to the fully liberalized gas and energy market. We will have to expect significantly more state intervention in the future as well. Perhaps this is necessary: After all, we are dealing with a market that has neither political nor ecological factors priced in. To manage the energy revolusion, the market may not be the best driver.

Keyword energy revolution. How does the war against Ukraine affect the energy transition?

Renewables will experience a huge upswing because we think about them differently. Christian Lindner (FDP), for example, recently said it was “freedom energy.” That’s significant. Renewables are no longer perceived only as a measure for the climate, which must be economical compared to fossil energies. All of a sudden, renewables are also recognized as having security policy benefits. This enables a completely new approach to renewable energies. Suddenly, it is no longer so important whether they are one hundred percent competitive. After all, they create security for the state.

So they are upgraded?

Absolutely. And this creates completely new opportunities. For example, the expansion of renewables can be supported much more strongly by means of state aid. Or when trade-offs have to be made, for example between the protection of birds in the North Sea and the security of the state, the latter is chosen. All the things that previously hindered the expansion of renewables can now happen because they serve the overriding goals of security, the economy, and the nation.

For example?

We can already observe this with RePowerEU: More than €100 billion are mobilized for renewable energies and the decarbonization of industry. A similar amount is being invested in Germany. More and more countries are focusing on offshore projects. All these investments will have a very significant impact in a few years and will give renewables and the energy transition a powerful boost.

  • Energy
  • Energy policy
  • Energy Prices
  • Natural gas
  • Renewable energies

Media Freedom Act: German states criticize Jourová sharply

The dispute over the European Media Freedom Act (EMFA) is entering a decisive phase. On Monday, the responsible EU Commissioner Věra Jourová will discuss her draft for the first time with the culture ministers of the 27 EU countries. “I guess I will hear a lot of howevers,” she said at a media conference in Brussels on Friday. Most member states agree in principle with the goals of the European Media Freedom Act, she said, but have reservations about EU-wide regulation. She expects resistance from Germany in particular, Jourová said. “The Germans tell me: we have a robust system, don’t touch it!”

To dispel concerns, the Vice President of the EU Commission paints the European media situation as pitch black. Press freedom has been threatened by high concentration and “oligarchization,” but also by large online platforms and disinformation. In Hungary and other countries, the state is trying to take control.

EU to prevent censorship attempts

She said, in recent years, almost everything has gotten worse, so the EU must intervene and protect media freedom. However, this is not about regulating the media and their production. It’s rather about the framework conditions in which media produce. The EU wants to put a stop to online platforms and prevent “possible future attempts at censorship,” she said.

This is piquant. Because Jourová is in talks with the platforms herself – and is trying to put them on a short leash with a code of conduct on hate speech and disinformation. Critics see this as an attempt at online censorship.

Spokesmen for criticism are the federal states

Jourová did not address the concerns of major German media companies or the German states. She merely emphasized that she was in discussion with all stakeholders. The federal states play an “important role” in German media supervision, admitted Věra Jourová’s personal assistant Marie Frenay. She added that this would not be changed in the future.

The federal states voice criticism. Chairwoman of the Broadcasting Commission of the federal states, Rhineland-Palatinate’s Minister President Malu Dreyer (SPD), justified the decision of the chamber of states to issue a subsidiarity complaint in the Bundesrat on Friday: “We have the most diverse and pluralistic media landscape of Europe, if not in the world.”

Dreyer wants directive instead of regulation

While the Bundesrat shares the goal of diverse and independent media in Europe, “a legitimate goal does not give the European Union the corresponding authority to govern this by means of a regulation.” Centralization is not the right solution, Dreyer said in the plenary session of the chamber of states.

In October, RFK had already voiced sharp criticism: “Concerning media regulation and supervision, there is a threat of far-reaching centralization at the European level with far too much influence by the European Commission,” reads a resolution by RFK. “This is critical from the point of view of a deliberately and for good reason decentralized broadcasting order with independent supervision, as it is structured in Germany.”

German states see high standards at risk

It is not difficult to understand Jourová’s concerns, the SPD politician said on Friday. But the proposed solution was not in Germany’s interest. She said Germany wants to maintain its high standards and not be exposed to the danger of having to adapt downwards. She said that state propaganda broadcasters such as Russia Today do not have a broadcasting license in Germany shows that the German system works.

Dreyer criticized the Commission for making insufficient use of existing instruments against maladministration in individual member states. Dreyer criticized the European Media Freedom Act and its supervisory structure, in which the EU plays an essential role, lacks independence from states.

Newspaper publishers support Federal Council

This is harsh criticism of Jourová and her proposal from the German states. The German Association of Newspaper Publishers and Digital Publishers (BDZV) supports the approach: “Responsibility for cultural issues lies within the sphere of responsibility and duty of the member states, which – with a few isolated exceptions – effectively fulfill this responsibility by the constitution and in fact,” criticizes Helmut Verdenhalven, head of media policy at the BDZV.

With the subsidiarity complaint, Germany has formally set one of two German parliamentary points against the European Media Freedom Act. Depending on how many national parliaments also issue subsidiarity complaints, the Commission must either take a stand, improve the draft or withdraw the proposal. The approach taken by the federal states is a delicate one: The Bundesrat is foreseeably playing on the side of Poland and Hungary, which reject the project for completely different reasons.

No EMFA means no media privilege

If the EMFA were to fail, the states would have failed to address at least one other problem: Under the Digital Services Act (DSA), platform providers are required to moderate content – regardless of whether it is already subject to other regulations or – as in the case of the free press – functioning self-regulation. This would mean that Facebook or Twitter, for example, would decide whether ARD content could be on the platform. The opposite of media freedom, and this under the control of the EU Commission as the supervisory authority.

That there is no media privilege for content in the DSA is difficult to understand. “But this has now happened, it is now in the DSA. Anyone who gets upset about this is too late,” noted Tobias Schmid already at the presentation of the European Media Freedom Act. The Director of the State Media Authority in North Rhine-Westphalia also has criticisms of the EMFA, but sees it above all as an opportunity: “The EMFA tries to find a compromise, creates something similar to a media privilege. The question is: do we take this hint of a bridge and say, let’s use the parliamentary procedure now and make sure it’s an acceptable way for the free press but also broadcasters. Or do we say: we can’t do that, we can’t be subject to this regulation at all.”

German media policy with debt to pay

The DSA, however, has already entered into force. If the Commission were to withdraw the EMFA proposal completely, the problem of centralizing control in media supervision would be avoided but the supervision problem of the largest intermediaries, which will probably be more relevant in the future, has already been left to the Commission through the DSA.

And in other areas, too, the federal states must ask whether their perspective of a media landscape that is as pluralistic as possible is not somewhat exaggerated. It is not for nothing that the European Media Freedom Act contains, among other things, a provision according to which the selection of top personnel at public broadcasters such as ARD is to be subject to legally prescribed transparency criteria. This is aimed precisely at the area in which the federal states have so far done anything but shine. Six months after the RBB scandal involving Director Patricia Schlesinger became public, the state premiers have still not come up with a reform proposal. by Eric Bonse, Falk Steiner and Corinna Visser

  • Digital Services Act
  • Federal Government
  • Germany
  • Media Freedom Act

News

EU states warn against subsidy race

At the meeting of EU trade ministers, several member states warned against a subsidy race with the USA. That would be a “dangerous game,” Czech Industry Minister and current Council President Jozef Síkela said Friday. “The winner might then sit on another continent, not in Europe and not the American one.”

At the same time, many member states have expressed concern about the Inflation Reduction Act (IRA), which the US government is using to promote climate-friendly technologies, Síkela said. The EU is bothered by the fact that many of the grants and tax breaks are tied to a manufacturing base in North America and is calling for equal treatment for its own industry. France, and increasingly also Germany, are pushing to counteract an exodus of the domestic industry with their own subsidy programs (Europe.Table reported).

However, the member states are divided on this, especially since many governments see little financial leeway. The EU Commission is also heavily debating what measures the EU should take to counter the IRA. Industry Commissioner Thierry Breton wants to set up a new European Sovereignty Fund for the aid. Also under discussion is the German proposal to set up a European platform for transformation technology that would provide financial support for the mass production of solar panels, heat pumps, or electrolyzers in Europe.

Commission prepares overview of funding programs

But Vice President Valdis Dombrovskis, who is responsible for trade, warned that a subsidy race would be “expensive and inefficient.” The EU should try to become more attractive as an industrial location, he said. On the one hand, this would include measures to counter high energy prices. On the other hand, it should be examined how existing subsidies for decarbonizing the economy could be used in a more targeted manner. The Commission is working on compiling an overview of the various subsidy programs.

The issue is also likely to occupy the EU summit in mid-December. The EU states want to wait and see whether Washington can be persuaded to make the hoped-for concessions. They want to take stock after the Transatlantic Trade and Technology Council meeting on December 5, Dombrovskis said. However, regarding the geopolitical situation, he warned that the dispute over the IRA should not be allowed to strain transatlantic relations.

Le Maire: Europe should give preference to European production

This week, French President Emmanuel Macron and Finance Minister Bruno Le Maire are traveling to the US for a state visit. “France may try to negotiate some exemptions from the duties and limits imposed by the US,” Le Maire told France 3 television on Sunday. However, he said, the real question is: “what kind of globalization lies ahead?”

This is because China prefers Chinese production, he said, while America prefers American production. “It is time Europe favors European production,” the minister said. “All European states must understand that today in the face of these American decisions, we must learn to better protect and defend our economic interests,” he said. tho, rtr

  • Climate & Environment
  • Climate Policy
  • Trade

EU negotiations on Anti-Coercion Instrument begin

The European Parliament, the EU Council and the EU Commission start their negotiation talks on the planned trade instrument against economic coercion today, Monday. Great hopes are placed on the Anti-Coercion Instrument (ACI): It is designed to give the European Union the opportunity to better defend itself against coercive economic measures by third countries – above all China

Bernd Lange, chairman of the EU Parliament’s trade committee, does not expect negotiations to be easy. “I hope that all parties involved will show the sufficient degree of willingness to compromise.” There is currently discontent because of the internal EU debate over decision-making authority for the ACI (China.Table reported). “This instrument is urgently needed,” Lange told China.Table.

A prime example is China’s de facto trade embargo against Lithuania (China.Table reported) after Taiwan was allowed to open an official representative office in Vilnius under the name “Taiwan”. Whether the negotiations will be finished by the end of the year is open. Lange assured that the parliament was ready to move forward as quickly as possible. ari

  • Economy
  • European policy
  • Trade
  • Trade Policy

Gramegna takes over chief position at the ESM

Former Luxembourg Finance Minister Pierre Gramegna will be the new head of the European Stability Mechanism (ESM). The board of directors appointed Gramegna, who was the preferred candidate of German Finance Minister Christian Lindner (FDP), as Managing Director of the euro rescue fund in a special meeting on Friday with broad consensus. This was announced by the ESM. The Luxembourger will take up his mandate, which is set for five years, on December 1. Gramegna succeeds Klaus Regling, who was no longer available after ten years at the helm of the ESM.

Paschal Donohoe, the head of the Eurogroup and also Chairman of the ESM Board of Governors, said after the decision that he was confident that under Gramegna’s leadership the ESM “will continue to be the strong and reliable institution that it has grown to be.” The appointment of Gramegna to head the rescue fund had become possible after France and Italy dropped their blockade against the Luxembourger (Europe.Table reported). Gramegna was Finance Minister in Luxembourg from 2013 until early 2022. He announced his resignation in November 2021 for family reasons.

Donohoe remains president of the Euro Group

Donohoe, who moderated the Regling succession, also wants to remain active on the European stage himself. The Irishman is seeking a second term as President of the Eurogroup. Nothing should stand in the way, as Donohoe is the only contender for the presidency (Europe.Table reported). The deadline for member states to submit candidates expired on November 24. Formally, the 19 euro finance ministers plan to vote on the presidency on Dec. 5. The vote is considered a formality. The term at the head of the Eurogroup is two and a half years. Donohoe, who has been head of the Euro Group since July 13, 2020, plans to begin his second term in mid-January. cr

  • Finance
  • Monetary policy
  • Stability Pact

Kremlin accuses EU Parliament of hatred of Russia

In response to Russia’s condemnation as a state sponsor of terrorism, the Kremlin has accused the European Parliament of “unbridled Russophobia and hatred of Russia.” There is a “huge deficit of professionalism” in the EU Parliament, Kremlin spokesman Dmitry Peskov said Sunday on Russian state television, according to the Itar-Tass agency. He added that the parliamentarians were guided by emotion. In any case, he said, the resolution is not legally binding and Moscow “does not take the condemnation to heart.”

A large majority of MEPs approved a resolution on Wednesday calling Russia a “state that uses means of terrorism.”

So far, European law does not have a category or list for states that support terrorism. The EU Parliament had also called for further restrictions on diplomatic relations with Russia. In addition, the resolution calls for further punitive measures, such as an embargo on Russian diamonds. dpa

  • European policy
  • Geopolitics

Amazon could soon reach agreement in antitrust dispute

According to insiders, Amazon could reach an agreement in the antitrust dispute with the European Union by the end of the year. It is possible that an EU decision could come by the end of 2022, sources said on Friday. EU antitrust watchdogs declined to comment. Amazon said on request that the online retailer was working constructively with the authority.

According to insiders, Amazon had offered concessions to the EU in June. Data from the company’s own retailer platform Marketplace was to be shared with sellers, and the visibility of rivals’ offers on the platform was to be improved, people familiar with the matter said at the time. In this way, Amazon hopes to avoid a possible antitrust fine, which could amount to up to ten percent of sales.

The EU Commission opened the proceedings against Amazon in 2020, accusing the online group of abusing its size and market power to favor its own products and gain an advantage over competitors who are active on the Amazon platform. The investigations also revolve around whether Amazon grants preferences to retailers who use Amazon logistics when shipping. rtr

  • Antitrust law
  • Competition
  • Competition policy
  • Competition procedure

Heads

Lina Furch – the voice of Brussels cities

Lina Furch, Head of the Europe and International Affairs Department and Head of the Brussels Office at the Association of German Cities.

The new building directive and rules on energy supply or transport: many EU decisions have a direct impact on cities and municipalities. That the municipalities have a direct line to Brussels is all the more important – a job for Lina Furch. The 40-year-old heads the Brussels office and the Department for Europe and International Affairs at the Association of German Cities.

Furch was born in Aachen. She grew up in the border region of Belgium and the Netherlands. Open borders, different languages, Europe, all that was normal in her childhood, Furch says: “Only later did I realize that Europe is something unique.”

After studying law, Furch worked for the German Agency for International Cooperation (GIZ) in Albania, among other places, where she experienced how the country was preparing for EU accession. Back in Germany, Furch heads the department for international affairs in the city of Bonn, and since 2019 she has been Department Head at the Association of German Cities. Most of the time, she works from Cologne; about every two weeks, she travels to Brussels, where the office of the Association of German Cities has two other employees.

Personal conversations irreplaceable

Her department provides member cities with news from the EU institutions. In a newsletter, Furch and her team summarize the most important legislative initiatives and European developments for municipalities.

On the other hand, Furch represents the interests of cities in Brussels, she holds talks with commissioners and MEPs and meets with other municipal representatives. Furch is Deputy Secretary General of the German section of the Council of European Municipalities and Regions (CEMR). For many discussions, she tries to be in Brussels in person, Furch says: “You can’t broadcast the in-betweens online.”

Municipalities need more influence

The influence of the municipal level in Brussels is increasing, at least that is how Furch perceives it. This is important for the cities and municipalities. After all, “70 to 80 percent of the projects set by European law have an impact on the cities,” says Furch. The municipalities are the ones who ultimately implement EU law in practice.

On the other hand: this is not a direct law, says Furch. She would like to see structural involvement: more municipal seats on the Committee of the Regions (ADR), perhaps even mandatory consultation of the ADR. Not on every law, Furch says. “But it’s the only way to make laws that work well in practice.” Jana Hemmersmeier

  • European policy
  • Geopolitics
  • Germany

Europe.Table Editorial Office

EUROPE.TABLE EDITORS

Licenses:
    • Interview with Andreas Goldthau: ‘We will not return to a fully liberalized energy market’
    • European Media Freedom Act: Federal Council issues subsidiarity complaint
    • IRA: EU states warn against subsidy race
    • ESM: Gramegna takes over chief post
    • Anti-Coercion: Negotiations begin
    • Kremlin accuses EU parliament of hatred of Russia
    • Amazon could soon settle antitrust dispute
    • Heads: Lina Furch – the voice of Brussels cities
    Dear reader,

    With its war of aggression against Ukraine and its attempts at blackmail, Russia has caused a severe upheaval in the global energy market. If nothing else, the crisis has highlighted the weaknesses of the previous structure. Geopolitics and energy expert Andreas Goldthau does not expect a return to a fully liberalized energy market. He also explained to Charlotte Wirth why renewables will benefit from the crisis.

    Many observers also see press and media freedom in crisis as they are under increasing pressure in some EU member states. The EU wants to strengthen media freedom with the European Media Freedom Act. But this is not going down well in Germany. There is a strong media regulator that does not want to hand over any competencies to the EU. The Bundesrat has sent a subsidiarity complaint to Brussels. The problem: it sides with Hungary and Poland in their opposition to the EMFA. Today, Commissioner Věra Jourová will discuss her draft with the culture ministers of the 27 EU countries for the first time. Eric Bonse, Falk Steiner, and I report on the matter.

    Even when the subject of the US Inflation Reduction Act comes up, tempers flare. The Europeans do not want to be disadvantaged and fear a subsidy race, writes Till Hoppe. France’s president and its economy and finance minister are traveling to Washington this week. Bruno Le Maire made his agenda clear in advance: “It’s time Europe favors European production.” That sounds anything but conciliatory.

    Despite all this, I wish you a good start to the week,

    Your
    Corinna Visser
    Image of Corinna  Visser

    Feature

    Energy expert Goldthau: ‘We will not return to a fully liberalized energy market’

    Porträtfoto von Andreas Goldthau im schwarzen Anzug. Im Interview spricht er über den Stopp der Gaslieferungen durch Russland.
    Andreas Goldthau heads the research group ‘Energy Transition and the Global South’ at the IASS Potsdam and is Vice Director of the Willy Brandt School of Public Policy at the University of Erfurt.

    Mr. Goldthau, in our last interview, you said that we were not dealing with an energy crisis but with a price crisis. That was before the Russian attack on Ukraine. Now there has been a war for nine months. How do you assess the situation today?

    We are now in a fundamentally different situation compared to only a year ago. By far the largest supplier of natural gas in Europe does not deliver. We are no longer just dealing with a structural market shortage because a player has left this market. Russia will not return either. This has led to an unprecedented shortage.

    Since then, the EU has been trying to find alternatives. What are the consequences?

    Everything that has been built up since the 1970s, the alignment of the European gas and energy economies, all that is gone in one fell swoop. As a result, the energy geographies are fundamentally shifting. Europeans are no longer supplying themselves with Eastern, but with Western energy, primarily from the USA. At the same time, they are trying to orient themselves south, to Africa. The Russians are no longer oriented to the West, but to the East. When energy flows change, this in turn has an impact on infrastructure, investments, financial flows, and the way contracts are concluded.

    How does the European development of new markets affect emerging markets?

    The costs of the crisis are distributed very unequally. Not only within Europe between the rich and the poor but also between the global North and the global South. The liquefied natural gas market, for example, has changed radically: hardly any LNG is going to Southeast Asia anymore. There is increasing demand with limited supply. So, the question is, how much money can you put on the table for a scarce commodity? In the process, the poor lose out. Emerging markets are being squeezed out of the global market.

    You write in your latest article that the era of low gas prices in the EU is over. Will we have to get used to higher bills?

    Russia was able to offer gas at a cheap price because it was geographically close and because the infrastructure was depreciated. But the “cheap supplier” Russia is now out of the picture. LNG is now the import energy source of choice and must ensure variable supply. But the LNG market is growing slowly while energy demand is also growing. There will thus be structurally higher prices. Therefore, the time of relatively low prices, which are very bearable for German and European industry, is indeed over.

    The crisis is calling the functioning of the European energy market into question: the EU is discussing price caps and joint gas purchases. Will there be long-term changes to the energy market?

    To answer that, we need to take a step back and look at the way energy is thought about. We are actually dealing with a private good: If I consume energy, meaning a molecule, you can’t consume it anymore. That’s why we have a price problem in the world market. But, at the same time, energy has characteristics of a public good: If the energy market collapses for a day, economies come to a standstill, wars break out. The consequences for public life, for production, for everything we call civilization are dramatic.

    How does one deal with this tension between public and private good?

    Either energy is organized publicly. Then the state has to regulate and ensure the supply. This is the model of the 1970s when we had public utilities that fulfilled the mandate of secure supply.

    Or?

    Or you can organize markets in such a way that they incentivize suppliers to provide security of supply under different conditions. This is exactly how the EU has organized its energy market. Three energy packages in 1998, 2003, and 2009 liberalized and privatized the energy market. The character of the public good has been taken into account by making the market large-scale integrated, well-regulated, and competitive. Under competitive conditions, companies have the incentive to provide secure energy supplies at affordable prices. This has worked quite well: prices have come down.

    However, this has brought us into certain dependencies …

    Yes, the market was always expected to be liquid enough to supply the EU. And the focus was clearly on the economic, not the political costs.

    So the system only works in good times?

    That’s exactly the question people are asking now. Many respond that it was a good-weather phenomenon and that the market needs to be reorganized. And that’s what’s happening right now: nationalization, the state buying back in and intervening in prices. I don’t believe we will return to the pre-war situation, i.e. to the fully liberalized gas and energy market. We will have to expect significantly more state intervention in the future as well. Perhaps this is necessary: After all, we are dealing with a market that has neither political nor ecological factors priced in. To manage the energy revolusion, the market may not be the best driver.

    Keyword energy revolution. How does the war against Ukraine affect the energy transition?

    Renewables will experience a huge upswing because we think about them differently. Christian Lindner (FDP), for example, recently said it was “freedom energy.” That’s significant. Renewables are no longer perceived only as a measure for the climate, which must be economical compared to fossil energies. All of a sudden, renewables are also recognized as having security policy benefits. This enables a completely new approach to renewable energies. Suddenly, it is no longer so important whether they are one hundred percent competitive. After all, they create security for the state.

    So they are upgraded?

    Absolutely. And this creates completely new opportunities. For example, the expansion of renewables can be supported much more strongly by means of state aid. Or when trade-offs have to be made, for example between the protection of birds in the North Sea and the security of the state, the latter is chosen. All the things that previously hindered the expansion of renewables can now happen because they serve the overriding goals of security, the economy, and the nation.

    For example?

    We can already observe this with RePowerEU: More than €100 billion are mobilized for renewable energies and the decarbonization of industry. A similar amount is being invested in Germany. More and more countries are focusing on offshore projects. All these investments will have a very significant impact in a few years and will give renewables and the energy transition a powerful boost.

    • Energy
    • Energy policy
    • Energy Prices
    • Natural gas
    • Renewable energies

    Media Freedom Act: German states criticize Jourová sharply

    The dispute over the European Media Freedom Act (EMFA) is entering a decisive phase. On Monday, the responsible EU Commissioner Věra Jourová will discuss her draft for the first time with the culture ministers of the 27 EU countries. “I guess I will hear a lot of howevers,” she said at a media conference in Brussels on Friday. Most member states agree in principle with the goals of the European Media Freedom Act, she said, but have reservations about EU-wide regulation. She expects resistance from Germany in particular, Jourová said. “The Germans tell me: we have a robust system, don’t touch it!”

    To dispel concerns, the Vice President of the EU Commission paints the European media situation as pitch black. Press freedom has been threatened by high concentration and “oligarchization,” but also by large online platforms and disinformation. In Hungary and other countries, the state is trying to take control.

    EU to prevent censorship attempts

    She said, in recent years, almost everything has gotten worse, so the EU must intervene and protect media freedom. However, this is not about regulating the media and their production. It’s rather about the framework conditions in which media produce. The EU wants to put a stop to online platforms and prevent “possible future attempts at censorship,” she said.

    This is piquant. Because Jourová is in talks with the platforms herself – and is trying to put them on a short leash with a code of conduct on hate speech and disinformation. Critics see this as an attempt at online censorship.

    Spokesmen for criticism are the federal states

    Jourová did not address the concerns of major German media companies or the German states. She merely emphasized that she was in discussion with all stakeholders. The federal states play an “important role” in German media supervision, admitted Věra Jourová’s personal assistant Marie Frenay. She added that this would not be changed in the future.

    The federal states voice criticism. Chairwoman of the Broadcasting Commission of the federal states, Rhineland-Palatinate’s Minister President Malu Dreyer (SPD), justified the decision of the chamber of states to issue a subsidiarity complaint in the Bundesrat on Friday: “We have the most diverse and pluralistic media landscape of Europe, if not in the world.”

    Dreyer wants directive instead of regulation

    While the Bundesrat shares the goal of diverse and independent media in Europe, “a legitimate goal does not give the European Union the corresponding authority to govern this by means of a regulation.” Centralization is not the right solution, Dreyer said in the plenary session of the chamber of states.

    In October, RFK had already voiced sharp criticism: “Concerning media regulation and supervision, there is a threat of far-reaching centralization at the European level with far too much influence by the European Commission,” reads a resolution by RFK. “This is critical from the point of view of a deliberately and for good reason decentralized broadcasting order with independent supervision, as it is structured in Germany.”

    German states see high standards at risk

    It is not difficult to understand Jourová’s concerns, the SPD politician said on Friday. But the proposed solution was not in Germany’s interest. She said Germany wants to maintain its high standards and not be exposed to the danger of having to adapt downwards. She said that state propaganda broadcasters such as Russia Today do not have a broadcasting license in Germany shows that the German system works.

    Dreyer criticized the Commission for making insufficient use of existing instruments against maladministration in individual member states. Dreyer criticized the European Media Freedom Act and its supervisory structure, in which the EU plays an essential role, lacks independence from states.

    Newspaper publishers support Federal Council

    This is harsh criticism of Jourová and her proposal from the German states. The German Association of Newspaper Publishers and Digital Publishers (BDZV) supports the approach: “Responsibility for cultural issues lies within the sphere of responsibility and duty of the member states, which – with a few isolated exceptions – effectively fulfill this responsibility by the constitution and in fact,” criticizes Helmut Verdenhalven, head of media policy at the BDZV.

    With the subsidiarity complaint, Germany has formally set one of two German parliamentary points against the European Media Freedom Act. Depending on how many national parliaments also issue subsidiarity complaints, the Commission must either take a stand, improve the draft or withdraw the proposal. The approach taken by the federal states is a delicate one: The Bundesrat is foreseeably playing on the side of Poland and Hungary, which reject the project for completely different reasons.

    No EMFA means no media privilege

    If the EMFA were to fail, the states would have failed to address at least one other problem: Under the Digital Services Act (DSA), platform providers are required to moderate content – regardless of whether it is already subject to other regulations or – as in the case of the free press – functioning self-regulation. This would mean that Facebook or Twitter, for example, would decide whether ARD content could be on the platform. The opposite of media freedom, and this under the control of the EU Commission as the supervisory authority.

    That there is no media privilege for content in the DSA is difficult to understand. “But this has now happened, it is now in the DSA. Anyone who gets upset about this is too late,” noted Tobias Schmid already at the presentation of the European Media Freedom Act. The Director of the State Media Authority in North Rhine-Westphalia also has criticisms of the EMFA, but sees it above all as an opportunity: “The EMFA tries to find a compromise, creates something similar to a media privilege. The question is: do we take this hint of a bridge and say, let’s use the parliamentary procedure now and make sure it’s an acceptable way for the free press but also broadcasters. Or do we say: we can’t do that, we can’t be subject to this regulation at all.”

    German media policy with debt to pay

    The DSA, however, has already entered into force. If the Commission were to withdraw the EMFA proposal completely, the problem of centralizing control in media supervision would be avoided but the supervision problem of the largest intermediaries, which will probably be more relevant in the future, has already been left to the Commission through the DSA.

    And in other areas, too, the federal states must ask whether their perspective of a media landscape that is as pluralistic as possible is not somewhat exaggerated. It is not for nothing that the European Media Freedom Act contains, among other things, a provision according to which the selection of top personnel at public broadcasters such as ARD is to be subject to legally prescribed transparency criteria. This is aimed precisely at the area in which the federal states have so far done anything but shine. Six months after the RBB scandal involving Director Patricia Schlesinger became public, the state premiers have still not come up with a reform proposal. by Eric Bonse, Falk Steiner and Corinna Visser

    • Digital Services Act
    • Federal Government
    • Germany
    • Media Freedom Act

    News

    EU states warn against subsidy race

    At the meeting of EU trade ministers, several member states warned against a subsidy race with the USA. That would be a “dangerous game,” Czech Industry Minister and current Council President Jozef Síkela said Friday. “The winner might then sit on another continent, not in Europe and not the American one.”

    At the same time, many member states have expressed concern about the Inflation Reduction Act (IRA), which the US government is using to promote climate-friendly technologies, Síkela said. The EU is bothered by the fact that many of the grants and tax breaks are tied to a manufacturing base in North America and is calling for equal treatment for its own industry. France, and increasingly also Germany, are pushing to counteract an exodus of the domestic industry with their own subsidy programs (Europe.Table reported).

    However, the member states are divided on this, especially since many governments see little financial leeway. The EU Commission is also heavily debating what measures the EU should take to counter the IRA. Industry Commissioner Thierry Breton wants to set up a new European Sovereignty Fund for the aid. Also under discussion is the German proposal to set up a European platform for transformation technology that would provide financial support for the mass production of solar panels, heat pumps, or electrolyzers in Europe.

    Commission prepares overview of funding programs

    But Vice President Valdis Dombrovskis, who is responsible for trade, warned that a subsidy race would be “expensive and inefficient.” The EU should try to become more attractive as an industrial location, he said. On the one hand, this would include measures to counter high energy prices. On the other hand, it should be examined how existing subsidies for decarbonizing the economy could be used in a more targeted manner. The Commission is working on compiling an overview of the various subsidy programs.

    The issue is also likely to occupy the EU summit in mid-December. The EU states want to wait and see whether Washington can be persuaded to make the hoped-for concessions. They want to take stock after the Transatlantic Trade and Technology Council meeting on December 5, Dombrovskis said. However, regarding the geopolitical situation, he warned that the dispute over the IRA should not be allowed to strain transatlantic relations.

    Le Maire: Europe should give preference to European production

    This week, French President Emmanuel Macron and Finance Minister Bruno Le Maire are traveling to the US for a state visit. “France may try to negotiate some exemptions from the duties and limits imposed by the US,” Le Maire told France 3 television on Sunday. However, he said, the real question is: “what kind of globalization lies ahead?”

    This is because China prefers Chinese production, he said, while America prefers American production. “It is time Europe favors European production,” the minister said. “All European states must understand that today in the face of these American decisions, we must learn to better protect and defend our economic interests,” he said. tho, rtr

    • Climate & Environment
    • Climate Policy
    • Trade

    EU negotiations on Anti-Coercion Instrument begin

    The European Parliament, the EU Council and the EU Commission start their negotiation talks on the planned trade instrument against economic coercion today, Monday. Great hopes are placed on the Anti-Coercion Instrument (ACI): It is designed to give the European Union the opportunity to better defend itself against coercive economic measures by third countries – above all China

    Bernd Lange, chairman of the EU Parliament’s trade committee, does not expect negotiations to be easy. “I hope that all parties involved will show the sufficient degree of willingness to compromise.” There is currently discontent because of the internal EU debate over decision-making authority for the ACI (China.Table reported). “This instrument is urgently needed,” Lange told China.Table.

    A prime example is China’s de facto trade embargo against Lithuania (China.Table reported) after Taiwan was allowed to open an official representative office in Vilnius under the name “Taiwan”. Whether the negotiations will be finished by the end of the year is open. Lange assured that the parliament was ready to move forward as quickly as possible. ari

    • Economy
    • European policy
    • Trade
    • Trade Policy

    Gramegna takes over chief position at the ESM

    Former Luxembourg Finance Minister Pierre Gramegna will be the new head of the European Stability Mechanism (ESM). The board of directors appointed Gramegna, who was the preferred candidate of German Finance Minister Christian Lindner (FDP), as Managing Director of the euro rescue fund in a special meeting on Friday with broad consensus. This was announced by the ESM. The Luxembourger will take up his mandate, which is set for five years, on December 1. Gramegna succeeds Klaus Regling, who was no longer available after ten years at the helm of the ESM.

    Paschal Donohoe, the head of the Eurogroup and also Chairman of the ESM Board of Governors, said after the decision that he was confident that under Gramegna’s leadership the ESM “will continue to be the strong and reliable institution that it has grown to be.” The appointment of Gramegna to head the rescue fund had become possible after France and Italy dropped their blockade against the Luxembourger (Europe.Table reported). Gramegna was Finance Minister in Luxembourg from 2013 until early 2022. He announced his resignation in November 2021 for family reasons.

    Donohoe remains president of the Euro Group

    Donohoe, who moderated the Regling succession, also wants to remain active on the European stage himself. The Irishman is seeking a second term as President of the Eurogroup. Nothing should stand in the way, as Donohoe is the only contender for the presidency (Europe.Table reported). The deadline for member states to submit candidates expired on November 24. Formally, the 19 euro finance ministers plan to vote on the presidency on Dec. 5. The vote is considered a formality. The term at the head of the Eurogroup is two and a half years. Donohoe, who has been head of the Euro Group since July 13, 2020, plans to begin his second term in mid-January. cr

    • Finance
    • Monetary policy
    • Stability Pact

    Kremlin accuses EU Parliament of hatred of Russia

    In response to Russia’s condemnation as a state sponsor of terrorism, the Kremlin has accused the European Parliament of “unbridled Russophobia and hatred of Russia.” There is a “huge deficit of professionalism” in the EU Parliament, Kremlin spokesman Dmitry Peskov said Sunday on Russian state television, according to the Itar-Tass agency. He added that the parliamentarians were guided by emotion. In any case, he said, the resolution is not legally binding and Moscow “does not take the condemnation to heart.”

    A large majority of MEPs approved a resolution on Wednesday calling Russia a “state that uses means of terrorism.”

    So far, European law does not have a category or list for states that support terrorism. The EU Parliament had also called for further restrictions on diplomatic relations with Russia. In addition, the resolution calls for further punitive measures, such as an embargo on Russian diamonds. dpa

    • European policy
    • Geopolitics

    Amazon could soon reach agreement in antitrust dispute

    According to insiders, Amazon could reach an agreement in the antitrust dispute with the European Union by the end of the year. It is possible that an EU decision could come by the end of 2022, sources said on Friday. EU antitrust watchdogs declined to comment. Amazon said on request that the online retailer was working constructively with the authority.

    According to insiders, Amazon had offered concessions to the EU in June. Data from the company’s own retailer platform Marketplace was to be shared with sellers, and the visibility of rivals’ offers on the platform was to be improved, people familiar with the matter said at the time. In this way, Amazon hopes to avoid a possible antitrust fine, which could amount to up to ten percent of sales.

    The EU Commission opened the proceedings against Amazon in 2020, accusing the online group of abusing its size and market power to favor its own products and gain an advantage over competitors who are active on the Amazon platform. The investigations also revolve around whether Amazon grants preferences to retailers who use Amazon logistics when shipping. rtr

    • Antitrust law
    • Competition
    • Competition policy
    • Competition procedure

    Heads

    Lina Furch – the voice of Brussels cities

    Lina Furch, Head of the Europe and International Affairs Department and Head of the Brussels Office at the Association of German Cities.

    The new building directive and rules on energy supply or transport: many EU decisions have a direct impact on cities and municipalities. That the municipalities have a direct line to Brussels is all the more important – a job for Lina Furch. The 40-year-old heads the Brussels office and the Department for Europe and International Affairs at the Association of German Cities.

    Furch was born in Aachen. She grew up in the border region of Belgium and the Netherlands. Open borders, different languages, Europe, all that was normal in her childhood, Furch says: “Only later did I realize that Europe is something unique.”

    After studying law, Furch worked for the German Agency for International Cooperation (GIZ) in Albania, among other places, where she experienced how the country was preparing for EU accession. Back in Germany, Furch heads the department for international affairs in the city of Bonn, and since 2019 she has been Department Head at the Association of German Cities. Most of the time, she works from Cologne; about every two weeks, she travels to Brussels, where the office of the Association of German Cities has two other employees.

    Personal conversations irreplaceable

    Her department provides member cities with news from the EU institutions. In a newsletter, Furch and her team summarize the most important legislative initiatives and European developments for municipalities.

    On the other hand, Furch represents the interests of cities in Brussels, she holds talks with commissioners and MEPs and meets with other municipal representatives. Furch is Deputy Secretary General of the German section of the Council of European Municipalities and Regions (CEMR). For many discussions, she tries to be in Brussels in person, Furch says: “You can’t broadcast the in-betweens online.”

    Municipalities need more influence

    The influence of the municipal level in Brussels is increasing, at least that is how Furch perceives it. This is important for the cities and municipalities. After all, “70 to 80 percent of the projects set by European law have an impact on the cities,” says Furch. The municipalities are the ones who ultimately implement EU law in practice.

    On the other hand: this is not a direct law, says Furch. She would like to see structural involvement: more municipal seats on the Committee of the Regions (ADR), perhaps even mandatory consultation of the ADR. Not on every law, Furch says. “But it’s the only way to make laws that work well in practice.” Jana Hemmersmeier

    • European policy
    • Geopolitics
    • Germany

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