International criticism of the €200 billion package Germany has put together to fight high energy prices was heard again yesterday at the meeting of EU finance ministers in Luxembourg. There is talk of Germany going it alone, and calls for joint instruments are growing louder. German Finance Minister Christian Lindner and Chancellor Olaf Scholz have rejected the criticism, saying they do not believe the time has come for new debt instruments, as my colleagues write in their analysis.
Prime Minister Liz Truss is facing quite different criticism in the United Kingdom. The Brexit hardliner and her party are falling further and further behind in the polls, and the Conservatives are rumbling. The question arises as to whether Truss will continue to stand firm on the issue of the Northern Ireland Protocol or approach the EU. On Friday, she will take a step toward Europe – she will travel to Prague for a first meeting of the European Political Community.
Surprise turn in the evening: After months of wrangling, Elon Musk’s takeover of Twitter could go through after all. Shortly before a court case, the Tesla boss surprisingly backs down and renews his offer – at the originally agreed purchase price of $54.20 per share. The reasons for Musk’s U-turn remained unclear for the time being.
Even as a teenager, he had already taken a liking to hydrogen. Today, the German-Greek Jorgo “Chatzi” Chatzimarkakis heads the Hydrogen Europe association in Brussels and lobbies for the energy carrier wherever he can. Markus Grabitz presents a profile of Chatzimarkakis.
The German gas price break triggers covetousness at the EU level. Several member states and parts of the EU Commission are calling for a new debt-financed aid program for all 27 member states along the lines of the Recovery Fund RRF.
It is unacceptable for Germany to spend up to €200 billion to fight high energy prices while other states are unable to keep up, they said at a meeting of EU finance ministers in Luxembourg on Tuesday. “If we want to avoid fragmentation, if we want to face this crisis, I think we need a higher level of solidarity, and we need to put in place (…) common tools”, said Economic Affairs Commissioner Paolo Gentiloni.
German Finance Minister Christian Lindner rejected the move. The EU cannot transfer the pandemic instruments “one-to-one” to today’s situation, the FDP politician said on the sidelines of the Ecofin meeting in Luxembourg. “This crisis is very different from the Covid pandemic,” he said.
Lindner rejected criticism of the German “defensive umbrella.” “Our measure is target-oriented and covers 2022, 2023, and 2024.” He said it is also proportionate to Germany’s economic power. “It is proportional if you look at the size and vulnerability of the German economy.”
From the perspective of other EU countries such as Italy, Hungary and Greece, however, Germany is going it alone, creating an imbalance in the EU. The outgoing Italian Head of Government Mario Draghi warned of “dangerous and unjustified distortions of the internal market” if EU countries overbid each other with their relief packages. The discussion is also likely to occupy the informal EU summit on Friday.
In Berlin government circles, the demands of Gentiloni and Co. are viewed as an attempt to prepare the ground for new EU financial instruments. However, there is currently little willingness to do so, especially since the upcoming change of government in Rome raises new questions: According to Berlin, the right-wing alliance around Giorgia Meloni’s Fratelli d’Italia party must first clarify its relationship with the EU.
Chancellor Olaf Scholz parried the demands yesterday by pointing out that a large part of the funds from the Covid reconstruction pot had not yet been used. He said it was fortunate that the funds were now available in the new crisis. These must now be “the focus of all activities,” Scholz said at a press conference with Dutch Prime Minister Mark Rutte. Rutte took the same line, saying that there were still plenty of funds available in the regular EU cohesion funds and that he was therefore “very restrained” to talk about new pots.
However, the SPD politician is not fundamentally opposed to new instruments financed by EU debt, but he does not think the time is right. During his speech on Europe in Prague, the chancellor hinted at being open to a new edition of the SURE short-time working allowance program. “We are open to a discussion on new financing instruments at the EU level,” said Christian Petry, European Policy Spokesman for the SPD parliamentary group. The FDP, however, refused this so far: The Liberals have always stressed that programs like RRF were the answer to an extraordinary crisis.
Scholz and Rutte are also clearly opposed to a gas price cap at the EU level, as demanded by 15 member states. He was concerned that “gas would no longer reach us,” Rutte said.
Scholz stressed that the high gas prices must drop – the relationship between supply and demand did not justify them. However, the chancellor is counting on negotiations with important supplier countries such as Norway and the US, whose companies benefit enormously. The willingness to cooperate there is “quite high,” he said. Berlin sees the threat of an EU gas price cap as leverage for talks, especially with Oslo.
In addition, the chancellor is pushing for the expansion of necessary infrastructure. From the German government’s point of view, bottlenecks at LNG terminals and transport pipelines to the EU’s interior are another price driver, especially in Germany and Central Eastern Europe. For this reason, Germany intends to commission its own terminals in the short term and is counting on the MidCat pipeline between France and Spain in the medium term, where seven LNG terminals are already in operation.
So far, the Federal Republic has not mobilized more funds for the energy crisis than other EU countries. Measured in terms of economic output, it has been around 2.8 percent of economic output since September 2021. In absolute terms, that equated to €100 billion more than any other member state, but relative to GDP, other countries have given comparable aid: Spain 2.9 percent, Italy 3.3 percent, and Croatia as much as 4.1 percent, according to an overview by Bruegel.
Given the price increase, the French government, for example, decided to extend the price cap beyond December 31. As Prime Minister Elisabeth Borne explained, an increase in gas and electricity bills will be limited to 15 percent. The gross cost to the government is estimated at €45 billion, including €11 billion for gas and €34 billion for electricity.
Looking ahead, observers believe it is far from certain that Germany will actually spend the €200 billion. In the early months of the Covid crisis, the German government also promised an immensely high credit line, only three percent of which has been used, says Daniel Gros of the Centre for European Policy Studies (CEPS). “I think, in the end, Germany will not spend more than others in the energy crisis, and I think it will be spent more wisely.”
It is reasonable to tie subsidies to conditions on energy savings, says Gros, but he calls for a distinction between households and businesses. “If Germany supports all industry and subsidizes three-quarters of the previous year’s electricity and gas needs, that will be more than other countries do.” Gros believes German industry, in particular, is sufficiently financed to absorb temporary losses: “The Commission should intervene, and the competition for state aid should be stopped, it’s money wasted.”
In the European Parliament, the debate met with a divided response. CDU financial expert Markus Ferber expressed understanding of the concerns of EU partner countries. “What the traffic light coalition is doing has caused considerable irritation among European partners.” Given the upcoming debate on the future of the Stability Pact, he said, a €200 billion shadow budget would be quite a fatal signal. “This step will also be seen as a precedent in Europe and does a disservice to the stability-oriented camp.”
Joachim Schuster, an SPD member of parliament, argues for a permanent investment mechanism with a volume of about one percent of Europe’s economic power. The Reconstruction Fund and its core RRF could serve as a model, he said. “We urgently need further coordinated and joint programs to prevent more economic drifting apart within the EU,” said Rasmus Andresen, spokesman for the German Greens. Manuel Berkel, Eric Bonse, Till Hoppe, Claire Stam
After a disastrous economic package that spooked international markets, the opposition Labour Party is now 33 points ahead of Truss’s Conservatives, according to a poll. According to pollster YouGov, it was 15 points at the beginning of the month. Parts of her own party are in turmoil.
In Brussels, observers like Fabian Zuleeg, Chief Economist and Chairman of the European Policy Center, hope this domestic weakening means a softening of her hard Brexit course. The last thing the UK needs is more problems with the EU, he tells Europe.Table.
As Foreign Minister under her former boss, Boris Johnson, Truss was an architect of the Northern Ireland Protocol bill, which would override parts of the UK-European agreement on trade rules for the territory. The EU believes this violates international law. The bill has been approved by the House of Commons but must still be approved by the House of Lords.
After the past few weeks, Zuleeg sees the first signs of mitigation. “On the one hand, we see that talks (between the EU and the UK on the protocol) are resuming,” he said. An EU proposal has long been on the table, he said. But it has been effectively ignored by the British side.
“On the other hand, the tone has changed,” he said. Zuleeg pointed to an apology from Conservative MP and Northern Ireland Secretary Steve Baker to the EU and Ireland for his behavior in the Brexit negotiations. But, of course, these signs are still far from a concrete change, he stressed.
Despite earlier assertions that she was not interested, Truss will travel to Prague this week to meet up to 44 EU and non-EU countries. The European Political Community talks, proposed by French President Emmanuel Macron this year, will focus on security, energy, and migration.
However, the Prague meeting is taking place against the backdrop of the escalation in Russia’s war against Ukraine. Russian President Vladimir Putin most recently annexed four more territories of Ukraine, and western concerns about a possible nuclear threat are growing. Cooperation in international politics is often seen as a glimmer of hope for EU-UK relations after Brexit. Coordinated sanctions against Russia, for example, show that the two partners can continue to work together constructively.
“The UK is an important political partner in the United Nations, G7, G20, OSCE as well as a loyal NATO ally,” German MEP David McAllister wrote Europe.Table in an email. “Naturally, the British Prime Minister is invited to this meeting, and it is good that she is going to Prague.”
Despite the planned joint appearances in Prague, the Northern Ireland issue remains the biggest obstacle in relations between London and Brussels. For McAllister and Zuleeg, the easiest, though not necessarily the most likely, way to improve ties remains the withdrawal of the British Northern Ireland Act.
Zuleeg said the British side could potentially quietly shelve the bill if it does not pass the House of Lords. However, a public withdrawal would be politically very difficult. But a tougher stance toward the EU would also be possible. “The bottom line is that it’s a highly political question because it’s about the extent to which Liz Truss has support in her own party,” he says. Her political weakening could make her even more dependent on Euroskeptics in her group.
For now, looking into the crystal ball is impossible. But how about a bit of schadenfreude toward London? “I wish every government in London to act for the good of the people,” wrote McAllister, an outspoken Brexit opponent. “Brexit is and remains a historic mistake.”
The Commission has approved €1 billion in aid for Salzgitter’s green steel production. “With this measure, Germany supports Salzgitter’s plans to decarbonize its steel production processes through the use and production of renewable hydrogen,” Commission Vice President Margrethe Vestager announced yesterday.
The steel group plans to replace its blast furnace with direct reduction using green hydrogen and build an electrically heated arc furnace. In addition, a new 100 megawatt (MW) electrolyzer is to produce 9,000 tons of hydrogen per year directly at the Salzgitter site. From 2026, the company aims to produce 1.9 million tons of crude steel per year with virtually no carbon emissions.
The German Federal Ministry of Economics selected the project for funding under the Hydrogen IPCEI in May 2021. In the first two rounds of funding, no award was made to German heavy industry, which is actually considered a promising candidate for conversion to hydrogen (Europe.Table reported).
However, the Commission’s notice now says that due to its “characteristics and objectives,” the project was better suited for assessment under the Climate, Environment and Energy Guidelines (KUEBLL). The chemical industry had previously complained about the strict criteria for IPCEI funding.
“In the view of the VCI, IPCEI calls for proposals have a focus that is clearly too restrictive in terms of topics, timeframe, and funding budget window to be able to implement the requirements of real laboratories for the energy transition,” a spokesperson said in response to a question in September. For example, the industry considers the necessary participation of four member states too excessive. ber
As expected, only small progress was made in the second trialogue on the introduction of a carbon cap and trade mechanism (CBAM). The crucial political issues, such as the start and speed of the CBAM introduction or which industries will be affected, were left out on Tuesday.
Progress was made on administrative issues, i.e. where imports are declared for border adjustment payments, as well as on the scope, tweeted Director General for Taxation and Customs Union Gerassimos Thomas. Parliamentary rapporteur Mohammed Chahim (S&D) told Europe.Table that “good discussions were held but no agreements reached.” They only agreed on the way forward for the negotiations, they said. The Commission should now present “some data and analysis.” Only then further progress could be made.
The next trialogue round at the political level is scheduled for November 8. In the meantime, the technical advisors from the Commission, Council, and Parliament will clarify detailed questions on compromises already reached. luk
It is not yet decided who the successor of Klaus Regling as Managing Director of the European Stability Mechanism ESM will be. Eurogroup President Paschal Donohoe said after the Eurogroup meeting that he called a meeting of the ESM Board of Directors for October 6 to coordinate the way forward with the ESM governors at the helm of the rescue umbrella.
In EU circles, it was said that the Deputy Managing Director of the ESM, Christophe Frankel, could be an interim solution if Donohoe did not pull a new candidate out of the hat shortly. The Frenchman has known the ESM since the beginning and brings the necessary qualifications as ESM Deputy and Chief Risk Officer. However, should an interim solution come into play, it would probably be limited to a few weeks, the circles emphasized.
Klaus Regling also referred to the option of an interim solution after the end of the Eurogroup. However, this would have to be approved by the ESM Board of Directors. He said it was “crucial to have someone at the head of the ESM who has the authority to deal with all financial transactions of the ESM. Only someone appointed by the Board of Governors can do that, even if it is for a short period.”
On behalf of its member states, he said, the ESM “has to deal with a lot of money: €300 billion in outstanding loans, €300 billion in bonds from international investors, €80 billion in paid-in capital. All of that has to be handled in a legally sound way, and that requires a managing director who has his authority from the board of governors.” Klaus Regling’s mandate ends on October 7.
The German was instrumental in shaping and setting up the crisis fund, which was established in response to the sovereign debt crisis ten years ago, to take on additional tasks.
The search for a successor to Regling has been dragging on for months. The previous candidates, former finance ministers Pierre Gramegna (Luxembourg) and João Leão (Portugal), failed to get the necessary 80 percent majority of the capital. Both candidates withdrew their candidacies in mid-September.
In the meantime, Paschal Donohoe was rumored to be a candidate to succeed Regling. At the end of the Eurogroup meeting, Donohoe denied having any interests of his own. He said that as President of the Eurogroup he was striving for a rapid solution to the succession issue, but was not available himself because he wanted to fulfill his mandate at the head of the Eurogroup and as Irish finance minister. cr
EU countries have agreed on funding to move away from fossil fuels from Russia and invest more in renewable energy. EU finance and economics ministers agreed Tuesday to reallocate funds from the Covid reconstruction fund to provide an additional €20 billion for energy investments. The plan is part of a proposal made by the EU Commission in May, which EU Commission President Ursula von der Leyen described as a “turbo” for the energy transition.
The ministers agreed that a large part of the subsidies, amounting to €20 billion, would come from the EU’s Innovation Fund. A smaller part is to come from auctioning emission allowances earlier than planned.
The EU Commission’s rejected the proposal to auction additional certificates from a reserve to raise money because it feared this could cause other emissions. In emissions trading, electricity producers, for example, have to buy certificates for the emission of climate-damaging gases such as carbon dioxide (CO2). The distribution of the money is to take into account the extent to which states are dependent on fossil fuels.
It was also stipulated that money from the Covid reconstruction fund can be reallocated for energy purposes. As stated in the communication from the states, the EU countries can change their Covid reconstruction plans for this purpose. In May, the EU Commission announced that €225 billion in loans were still available from the Covid Reconstruction Fund (RRF). According to the communication, the RRF can still be topped by transfers from other EU funds.
The EU Parliament still has to approve the plan before the states and the parliament can negotiate it so that it can enter into force. dpa
According to European Commission Vice President Valdis Dombrovskis, the European Union finance ministers agreed Tuesday to integrate the EU’s support payments to Ukraine into its 2023 budget to make disbursements more structured and predictable.
The move is likely to further tighten links between the EU-27 and EU candidate Ukraine. For almost eight months, Ukraine has been fending off the Russian invasion and struggling to keep its government administration running.
Speaking to journalists after a meeting of the ministers, Dombrovskis admitted this year’s EU payments to Ukraine were hardly regular – a point of concern for Kyiv, which needs to regularly pay the salaries of public workers and pensions.
Dombrovskis said the next tranche of €5 billion would be made by mid-October and the remaining €3 billion in two installments in November and December.
“It is important to have a more predictable flow for Ukraine next year, so our intention is to integrate it into the EU budget discussions for 2023 and in this way make it a more steady flow. There was agreement on this approach among the ministers,” Dombrovskis said. rtr
The Commission postpones the presentation of the Euro 7 proposal by two weeks. This emerges from the amended program of future Commission meetings. Now the proposal for the next stage of the regulation of pollutants is to come on October 26, the same day as the proposal for the Air Quality Directive.
The background is probably a dispute between Frans Timmermans, Vice President of the Commission responsible for the Green Deal, and Internal Market Commissioner Thierry Breton. According to reports, Timmermans stated during a meeting with a manufacturer that he would prefer to do without Euro 7 altogether. In doing so, he is essentially following the argumentation of the automakers. The industry says it has to invest large sums for the transformation to electric drive and cannot pay additional high sums for the next stage of exhaust gas purification.
Especially since this is a technology that is being phased out, as regulation targets the end of internal combustion engines in 2035. Breton advocates the rapid presentation of a moderate proposal for the final stage of emissions regulation based on existing technology so that manufacturers and suppliers can plan ahead with certainty. mgr
Yesterday, the White House Office of Science and Technology proposed an Artificial Intelligence Bill of Rights. With the proposal, which is not formally legally binding, the White House aims to protect parents, patients, and employees, among others, from harm caused by the increasing use of automation in education, healthcare, and the workplace.
The Biden administration’s proposal thus joins a host of other guidelines and frameworks issued by tech companies, trade associations, and government agencies in recent years. The White House version recommends certain duties of care for developers and users of AI, who are to comply with them voluntarily. This is primarily intended to prevent unfairly discriminatory technology applications.
“These technologies are causing real harms in the lives of Americans, harms that run counter to our core democratic values,” a senior government official told reporters. “Including the fundamental right to privacy, freedom from discrimination and our basic dignity.”
The Biden administration’s initiative arrives just as the European Union is moving closer to regulating high-risk systems. The US does not yet have any mandatory, general legislation regulating AI.
Business representatives criticized the proposals: The US Chamber of Commerce warned that some of the regulations included could curtail America’s competitiveness on a global scale. The AI Bill of Rights was welcomed by the Center for Democracy and Technology (CDT), which said that it was positive that federal authorities could now use the White House recommendations as a tool. It also notes that privacy protections are essential to countering data-driven harms. The announcements are useful, said CDT President Alexandra Reeve Givens. “But they would be even more effective if they were built on the foundation of a binding federal privacy law.” fst/rtr
To overcome a political stalemate after Bulgaria’s parliamentary elections, election winner Boiko Borissov proposed a governing coalition of parties with an EU and NATO orientation. The most important issue today is “who is with Putin, and who is not,” the former Prime Minister said Tuesday, alluding to Russia’s war of aggression against Ukraine. Borissov’s center-right GERB party won Sunday’s early parliamentary election with just over 25 percent of the vote, but cannot govern alone for lack of an absolute majority.
Borissov’s offer probably appealed primarily to the second-place liberal party PP (20.2 percent) of former Prime Minister Kiril Petkov and the conservative-liberal-green alliance DB (7.4 percent). However, both political forces are firmly opposed to a coalition with GERB, accusing Borissov and his party of corrupt practices during his terms in office until April 2021.
To explore possible cooperation, Borissov suggested that the party leaders should first withdraw into the background to explore common ground at the working level. The GERB leader also said that he himself did not want to become a Minister or Head of Government.
A transitional cabinet governs Bulgaria until a new government is formed. Borissov’s GERB (Citizens for a European Development Bulgaria) party is part of the European People’s Party (EPP) in the EU Parliament. Seven parties enter the newly elected parliament. dpa
If there is a common thread in the life of Jorgo Chatzimarkakis, it is hydrogen. The day Boris Becker reached the final of Wimbledon for the first time and won, he watched the TV with one eye only. Instead, he read Hoimar von Ditfurth’s “In the Beginning, there was Hydrogen” with fascination. The teenager discovered the book by chance on a rummage table in his hometown of Duisburg.
Like many young people in the 1980s, his political socialization took place under the impression of the ecological threat. He began his studies in Bonn in the year of the Chornobyl reactor catastrophe in 1986. “At university was a wallpaper from the ÖDP inscribed: Let’s make hydrogen from solar energy.”
Almost four decades later, the 56-year-old is Head of Hydrogen Europe in Brussels, the European hydrogen association, and thus the most important hydrogen lobbyist at the EU level. Before becoming a lobbyist, Chatzimarkakis – the son of a Cretan guest worker and a mother with roots in Brandenburg – had already achieved two political careers. In his first life, he was an FDP member.
From 1995 to 2011, he was a member of the federal executive committee of the Liberals. For many years, “Chatzi” was a popular interlocutor for the Berlin capital’s journal. Before the federal party conferences of the FDP, where Guido Westerwelle and Jürgen W. Möllemann fought fierce duels, Chatzimarkakis dictated many a trenchant quote and many a steep thesis into the blocks. In 2004, the now 56-year-old entered the European Parliament for the FDP, and in 2009 he was re-elected. In 2007, Chatzimarkakis made headlines with his suggestion the Greens and the FDP should merge. For many, this was a far-fetched idea. The two parties’ lifestyles and milieus seemed light years apart; from Chatzimarkakis’ perspective, the proposal was coherent.
Then came the break with his FDP in 2014. He resigned in a clinch and protest against his party’s European policy. Things were not going well for him in other respects, either. Plagiarism hunters had become aware of his doctoral thesis. He lost his title. He defended himself in court. To this day, he claims that he noted every citation in the footnotes. But he neglected to indicate this with quotation marks in the text.
Others might have looked for a job in business. Not so Chatzimarkakis. He is reinventing himself. He is trying to launch a political career from Greek soil. His father’s homeland was reeling from the sovereign debt crisis. It was in danger of being expelled from the euro. Chatzimarkakis founded the “Hellenic European Citizens” party in Greece. In 2014, he also stood for the party in the European elections but failed to make it into parliament. For a time, he was Greece’s special ambassador.
In 2015, he begins his third career in Brussels as a hydrogen lobbyist. It starts as a one-man show. In the meantime, Hydrogen Europe has grown up. 40 employees now work for his association, which is something of a hydrogen BDI in Brussels. In addition, there are ten external consultants. It currently resides in Brussels, not far from the fine boutiques of Louise. Chatzimarkakis is the CEO of an association that has 420 members across Europe. And he wants to grow even further. “They say we have a freeze on admissions. I can deny that.”
From the very beginning, Chatzimarkakis has been following attempts to build a hydrogen economy in Europe. “In 2018, it started at the EU level with the Council’s hydrogen declaration,” he recalls. He lobbies the EU institutions. That he is a lobbyist is not something he likes to hear. “I see myself more as a German shepherd.” Excuse me? The shepherds, he says, are Frans Timmermans, the Vice President of the Commission, and the other politicians who set the regulatory framework. He is the shepherd dog who shows the sheep – in his understanding, that means the industry and the member states – the right direction.
Chatzimarkakis is passionate about his subject. That was already the case when he took on the FDP party leadership 20 years ago. And it’s no different today. He fears that Europe is currently sleeping through the development of the hydrogen economy. He says things develop in the US, China, and India. “And there are people in the EU Commission who are putting on the brakes. They think there is a danger that hydrogen will cannibalize green electricity.”
He does not want to know anything about the competition between green electricity and hydrogen. The other day, he gave a speech in India. It was at the first EU-India Hydrogen Forum. In the presence of EU Energy Commissioner Kadri Simson, he repeatedly complimented the responsible minister from India: In India, they understood better than at the headquarters of the EU Commission what needed to be done to ramp up the technology. The Indian audience is enthusiastic, the Commissioner kept her composure. Chatzimarkakis has not only posted his performance on YouTube. He also likes to talk about it. Whether you’re a politician or a lobbyist, you have to be a good salesman. Markus Grabitz
International criticism of the €200 billion package Germany has put together to fight high energy prices was heard again yesterday at the meeting of EU finance ministers in Luxembourg. There is talk of Germany going it alone, and calls for joint instruments are growing louder. German Finance Minister Christian Lindner and Chancellor Olaf Scholz have rejected the criticism, saying they do not believe the time has come for new debt instruments, as my colleagues write in their analysis.
Prime Minister Liz Truss is facing quite different criticism in the United Kingdom. The Brexit hardliner and her party are falling further and further behind in the polls, and the Conservatives are rumbling. The question arises as to whether Truss will continue to stand firm on the issue of the Northern Ireland Protocol or approach the EU. On Friday, she will take a step toward Europe – she will travel to Prague for a first meeting of the European Political Community.
Surprise turn in the evening: After months of wrangling, Elon Musk’s takeover of Twitter could go through after all. Shortly before a court case, the Tesla boss surprisingly backs down and renews his offer – at the originally agreed purchase price of $54.20 per share. The reasons for Musk’s U-turn remained unclear for the time being.
Even as a teenager, he had already taken a liking to hydrogen. Today, the German-Greek Jorgo “Chatzi” Chatzimarkakis heads the Hydrogen Europe association in Brussels and lobbies for the energy carrier wherever he can. Markus Grabitz presents a profile of Chatzimarkakis.
The German gas price break triggers covetousness at the EU level. Several member states and parts of the EU Commission are calling for a new debt-financed aid program for all 27 member states along the lines of the Recovery Fund RRF.
It is unacceptable for Germany to spend up to €200 billion to fight high energy prices while other states are unable to keep up, they said at a meeting of EU finance ministers in Luxembourg on Tuesday. “If we want to avoid fragmentation, if we want to face this crisis, I think we need a higher level of solidarity, and we need to put in place (…) common tools”, said Economic Affairs Commissioner Paolo Gentiloni.
German Finance Minister Christian Lindner rejected the move. The EU cannot transfer the pandemic instruments “one-to-one” to today’s situation, the FDP politician said on the sidelines of the Ecofin meeting in Luxembourg. “This crisis is very different from the Covid pandemic,” he said.
Lindner rejected criticism of the German “defensive umbrella.” “Our measure is target-oriented and covers 2022, 2023, and 2024.” He said it is also proportionate to Germany’s economic power. “It is proportional if you look at the size and vulnerability of the German economy.”
From the perspective of other EU countries such as Italy, Hungary and Greece, however, Germany is going it alone, creating an imbalance in the EU. The outgoing Italian Head of Government Mario Draghi warned of “dangerous and unjustified distortions of the internal market” if EU countries overbid each other with their relief packages. The discussion is also likely to occupy the informal EU summit on Friday.
In Berlin government circles, the demands of Gentiloni and Co. are viewed as an attempt to prepare the ground for new EU financial instruments. However, there is currently little willingness to do so, especially since the upcoming change of government in Rome raises new questions: According to Berlin, the right-wing alliance around Giorgia Meloni’s Fratelli d’Italia party must first clarify its relationship with the EU.
Chancellor Olaf Scholz parried the demands yesterday by pointing out that a large part of the funds from the Covid reconstruction pot had not yet been used. He said it was fortunate that the funds were now available in the new crisis. These must now be “the focus of all activities,” Scholz said at a press conference with Dutch Prime Minister Mark Rutte. Rutte took the same line, saying that there were still plenty of funds available in the regular EU cohesion funds and that he was therefore “very restrained” to talk about new pots.
However, the SPD politician is not fundamentally opposed to new instruments financed by EU debt, but he does not think the time is right. During his speech on Europe in Prague, the chancellor hinted at being open to a new edition of the SURE short-time working allowance program. “We are open to a discussion on new financing instruments at the EU level,” said Christian Petry, European Policy Spokesman for the SPD parliamentary group. The FDP, however, refused this so far: The Liberals have always stressed that programs like RRF were the answer to an extraordinary crisis.
Scholz and Rutte are also clearly opposed to a gas price cap at the EU level, as demanded by 15 member states. He was concerned that “gas would no longer reach us,” Rutte said.
Scholz stressed that the high gas prices must drop – the relationship between supply and demand did not justify them. However, the chancellor is counting on negotiations with important supplier countries such as Norway and the US, whose companies benefit enormously. The willingness to cooperate there is “quite high,” he said. Berlin sees the threat of an EU gas price cap as leverage for talks, especially with Oslo.
In addition, the chancellor is pushing for the expansion of necessary infrastructure. From the German government’s point of view, bottlenecks at LNG terminals and transport pipelines to the EU’s interior are another price driver, especially in Germany and Central Eastern Europe. For this reason, Germany intends to commission its own terminals in the short term and is counting on the MidCat pipeline between France and Spain in the medium term, where seven LNG terminals are already in operation.
So far, the Federal Republic has not mobilized more funds for the energy crisis than other EU countries. Measured in terms of economic output, it has been around 2.8 percent of economic output since September 2021. In absolute terms, that equated to €100 billion more than any other member state, but relative to GDP, other countries have given comparable aid: Spain 2.9 percent, Italy 3.3 percent, and Croatia as much as 4.1 percent, according to an overview by Bruegel.
Given the price increase, the French government, for example, decided to extend the price cap beyond December 31. As Prime Minister Elisabeth Borne explained, an increase in gas and electricity bills will be limited to 15 percent. The gross cost to the government is estimated at €45 billion, including €11 billion for gas and €34 billion for electricity.
Looking ahead, observers believe it is far from certain that Germany will actually spend the €200 billion. In the early months of the Covid crisis, the German government also promised an immensely high credit line, only three percent of which has been used, says Daniel Gros of the Centre for European Policy Studies (CEPS). “I think, in the end, Germany will not spend more than others in the energy crisis, and I think it will be spent more wisely.”
It is reasonable to tie subsidies to conditions on energy savings, says Gros, but he calls for a distinction between households and businesses. “If Germany supports all industry and subsidizes three-quarters of the previous year’s electricity and gas needs, that will be more than other countries do.” Gros believes German industry, in particular, is sufficiently financed to absorb temporary losses: “The Commission should intervene, and the competition for state aid should be stopped, it’s money wasted.”
In the European Parliament, the debate met with a divided response. CDU financial expert Markus Ferber expressed understanding of the concerns of EU partner countries. “What the traffic light coalition is doing has caused considerable irritation among European partners.” Given the upcoming debate on the future of the Stability Pact, he said, a €200 billion shadow budget would be quite a fatal signal. “This step will also be seen as a precedent in Europe and does a disservice to the stability-oriented camp.”
Joachim Schuster, an SPD member of parliament, argues for a permanent investment mechanism with a volume of about one percent of Europe’s economic power. The Reconstruction Fund and its core RRF could serve as a model, he said. “We urgently need further coordinated and joint programs to prevent more economic drifting apart within the EU,” said Rasmus Andresen, spokesman for the German Greens. Manuel Berkel, Eric Bonse, Till Hoppe, Claire Stam
After a disastrous economic package that spooked international markets, the opposition Labour Party is now 33 points ahead of Truss’s Conservatives, according to a poll. According to pollster YouGov, it was 15 points at the beginning of the month. Parts of her own party are in turmoil.
In Brussels, observers like Fabian Zuleeg, Chief Economist and Chairman of the European Policy Center, hope this domestic weakening means a softening of her hard Brexit course. The last thing the UK needs is more problems with the EU, he tells Europe.Table.
As Foreign Minister under her former boss, Boris Johnson, Truss was an architect of the Northern Ireland Protocol bill, which would override parts of the UK-European agreement on trade rules for the territory. The EU believes this violates international law. The bill has been approved by the House of Commons but must still be approved by the House of Lords.
After the past few weeks, Zuleeg sees the first signs of mitigation. “On the one hand, we see that talks (between the EU and the UK on the protocol) are resuming,” he said. An EU proposal has long been on the table, he said. But it has been effectively ignored by the British side.
“On the other hand, the tone has changed,” he said. Zuleeg pointed to an apology from Conservative MP and Northern Ireland Secretary Steve Baker to the EU and Ireland for his behavior in the Brexit negotiations. But, of course, these signs are still far from a concrete change, he stressed.
Despite earlier assertions that she was not interested, Truss will travel to Prague this week to meet up to 44 EU and non-EU countries. The European Political Community talks, proposed by French President Emmanuel Macron this year, will focus on security, energy, and migration.
However, the Prague meeting is taking place against the backdrop of the escalation in Russia’s war against Ukraine. Russian President Vladimir Putin most recently annexed four more territories of Ukraine, and western concerns about a possible nuclear threat are growing. Cooperation in international politics is often seen as a glimmer of hope for EU-UK relations after Brexit. Coordinated sanctions against Russia, for example, show that the two partners can continue to work together constructively.
“The UK is an important political partner in the United Nations, G7, G20, OSCE as well as a loyal NATO ally,” German MEP David McAllister wrote Europe.Table in an email. “Naturally, the British Prime Minister is invited to this meeting, and it is good that she is going to Prague.”
Despite the planned joint appearances in Prague, the Northern Ireland issue remains the biggest obstacle in relations between London and Brussels. For McAllister and Zuleeg, the easiest, though not necessarily the most likely, way to improve ties remains the withdrawal of the British Northern Ireland Act.
Zuleeg said the British side could potentially quietly shelve the bill if it does not pass the House of Lords. However, a public withdrawal would be politically very difficult. But a tougher stance toward the EU would also be possible. “The bottom line is that it’s a highly political question because it’s about the extent to which Liz Truss has support in her own party,” he says. Her political weakening could make her even more dependent on Euroskeptics in her group.
For now, looking into the crystal ball is impossible. But how about a bit of schadenfreude toward London? “I wish every government in London to act for the good of the people,” wrote McAllister, an outspoken Brexit opponent. “Brexit is and remains a historic mistake.”
The Commission has approved €1 billion in aid for Salzgitter’s green steel production. “With this measure, Germany supports Salzgitter’s plans to decarbonize its steel production processes through the use and production of renewable hydrogen,” Commission Vice President Margrethe Vestager announced yesterday.
The steel group plans to replace its blast furnace with direct reduction using green hydrogen and build an electrically heated arc furnace. In addition, a new 100 megawatt (MW) electrolyzer is to produce 9,000 tons of hydrogen per year directly at the Salzgitter site. From 2026, the company aims to produce 1.9 million tons of crude steel per year with virtually no carbon emissions.
The German Federal Ministry of Economics selected the project for funding under the Hydrogen IPCEI in May 2021. In the first two rounds of funding, no award was made to German heavy industry, which is actually considered a promising candidate for conversion to hydrogen (Europe.Table reported).
However, the Commission’s notice now says that due to its “characteristics and objectives,” the project was better suited for assessment under the Climate, Environment and Energy Guidelines (KUEBLL). The chemical industry had previously complained about the strict criteria for IPCEI funding.
“In the view of the VCI, IPCEI calls for proposals have a focus that is clearly too restrictive in terms of topics, timeframe, and funding budget window to be able to implement the requirements of real laboratories for the energy transition,” a spokesperson said in response to a question in September. For example, the industry considers the necessary participation of four member states too excessive. ber
As expected, only small progress was made in the second trialogue on the introduction of a carbon cap and trade mechanism (CBAM). The crucial political issues, such as the start and speed of the CBAM introduction or which industries will be affected, were left out on Tuesday.
Progress was made on administrative issues, i.e. where imports are declared for border adjustment payments, as well as on the scope, tweeted Director General for Taxation and Customs Union Gerassimos Thomas. Parliamentary rapporteur Mohammed Chahim (S&D) told Europe.Table that “good discussions were held but no agreements reached.” They only agreed on the way forward for the negotiations, they said. The Commission should now present “some data and analysis.” Only then further progress could be made.
The next trialogue round at the political level is scheduled for November 8. In the meantime, the technical advisors from the Commission, Council, and Parliament will clarify detailed questions on compromises already reached. luk
It is not yet decided who the successor of Klaus Regling as Managing Director of the European Stability Mechanism ESM will be. Eurogroup President Paschal Donohoe said after the Eurogroup meeting that he called a meeting of the ESM Board of Directors for October 6 to coordinate the way forward with the ESM governors at the helm of the rescue umbrella.
In EU circles, it was said that the Deputy Managing Director of the ESM, Christophe Frankel, could be an interim solution if Donohoe did not pull a new candidate out of the hat shortly. The Frenchman has known the ESM since the beginning and brings the necessary qualifications as ESM Deputy and Chief Risk Officer. However, should an interim solution come into play, it would probably be limited to a few weeks, the circles emphasized.
Klaus Regling also referred to the option of an interim solution after the end of the Eurogroup. However, this would have to be approved by the ESM Board of Directors. He said it was “crucial to have someone at the head of the ESM who has the authority to deal with all financial transactions of the ESM. Only someone appointed by the Board of Governors can do that, even if it is for a short period.”
On behalf of its member states, he said, the ESM “has to deal with a lot of money: €300 billion in outstanding loans, €300 billion in bonds from international investors, €80 billion in paid-in capital. All of that has to be handled in a legally sound way, and that requires a managing director who has his authority from the board of governors.” Klaus Regling’s mandate ends on October 7.
The German was instrumental in shaping and setting up the crisis fund, which was established in response to the sovereign debt crisis ten years ago, to take on additional tasks.
The search for a successor to Regling has been dragging on for months. The previous candidates, former finance ministers Pierre Gramegna (Luxembourg) and João Leão (Portugal), failed to get the necessary 80 percent majority of the capital. Both candidates withdrew their candidacies in mid-September.
In the meantime, Paschal Donohoe was rumored to be a candidate to succeed Regling. At the end of the Eurogroup meeting, Donohoe denied having any interests of his own. He said that as President of the Eurogroup he was striving for a rapid solution to the succession issue, but was not available himself because he wanted to fulfill his mandate at the head of the Eurogroup and as Irish finance minister. cr
EU countries have agreed on funding to move away from fossil fuels from Russia and invest more in renewable energy. EU finance and economics ministers agreed Tuesday to reallocate funds from the Covid reconstruction fund to provide an additional €20 billion for energy investments. The plan is part of a proposal made by the EU Commission in May, which EU Commission President Ursula von der Leyen described as a “turbo” for the energy transition.
The ministers agreed that a large part of the subsidies, amounting to €20 billion, would come from the EU’s Innovation Fund. A smaller part is to come from auctioning emission allowances earlier than planned.
The EU Commission’s rejected the proposal to auction additional certificates from a reserve to raise money because it feared this could cause other emissions. In emissions trading, electricity producers, for example, have to buy certificates for the emission of climate-damaging gases such as carbon dioxide (CO2). The distribution of the money is to take into account the extent to which states are dependent on fossil fuels.
It was also stipulated that money from the Covid reconstruction fund can be reallocated for energy purposes. As stated in the communication from the states, the EU countries can change their Covid reconstruction plans for this purpose. In May, the EU Commission announced that €225 billion in loans were still available from the Covid Reconstruction Fund (RRF). According to the communication, the RRF can still be topped by transfers from other EU funds.
The EU Parliament still has to approve the plan before the states and the parliament can negotiate it so that it can enter into force. dpa
According to European Commission Vice President Valdis Dombrovskis, the European Union finance ministers agreed Tuesday to integrate the EU’s support payments to Ukraine into its 2023 budget to make disbursements more structured and predictable.
The move is likely to further tighten links between the EU-27 and EU candidate Ukraine. For almost eight months, Ukraine has been fending off the Russian invasion and struggling to keep its government administration running.
Speaking to journalists after a meeting of the ministers, Dombrovskis admitted this year’s EU payments to Ukraine were hardly regular – a point of concern for Kyiv, which needs to regularly pay the salaries of public workers and pensions.
Dombrovskis said the next tranche of €5 billion would be made by mid-October and the remaining €3 billion in two installments in November and December.
“It is important to have a more predictable flow for Ukraine next year, so our intention is to integrate it into the EU budget discussions for 2023 and in this way make it a more steady flow. There was agreement on this approach among the ministers,” Dombrovskis said. rtr
The Commission postpones the presentation of the Euro 7 proposal by two weeks. This emerges from the amended program of future Commission meetings. Now the proposal for the next stage of the regulation of pollutants is to come on October 26, the same day as the proposal for the Air Quality Directive.
The background is probably a dispute between Frans Timmermans, Vice President of the Commission responsible for the Green Deal, and Internal Market Commissioner Thierry Breton. According to reports, Timmermans stated during a meeting with a manufacturer that he would prefer to do without Euro 7 altogether. In doing so, he is essentially following the argumentation of the automakers. The industry says it has to invest large sums for the transformation to electric drive and cannot pay additional high sums for the next stage of exhaust gas purification.
Especially since this is a technology that is being phased out, as regulation targets the end of internal combustion engines in 2035. Breton advocates the rapid presentation of a moderate proposal for the final stage of emissions regulation based on existing technology so that manufacturers and suppliers can plan ahead with certainty. mgr
Yesterday, the White House Office of Science and Technology proposed an Artificial Intelligence Bill of Rights. With the proposal, which is not formally legally binding, the White House aims to protect parents, patients, and employees, among others, from harm caused by the increasing use of automation in education, healthcare, and the workplace.
The Biden administration’s proposal thus joins a host of other guidelines and frameworks issued by tech companies, trade associations, and government agencies in recent years. The White House version recommends certain duties of care for developers and users of AI, who are to comply with them voluntarily. This is primarily intended to prevent unfairly discriminatory technology applications.
“These technologies are causing real harms in the lives of Americans, harms that run counter to our core democratic values,” a senior government official told reporters. “Including the fundamental right to privacy, freedom from discrimination and our basic dignity.”
The Biden administration’s initiative arrives just as the European Union is moving closer to regulating high-risk systems. The US does not yet have any mandatory, general legislation regulating AI.
Business representatives criticized the proposals: The US Chamber of Commerce warned that some of the regulations included could curtail America’s competitiveness on a global scale. The AI Bill of Rights was welcomed by the Center for Democracy and Technology (CDT), which said that it was positive that federal authorities could now use the White House recommendations as a tool. It also notes that privacy protections are essential to countering data-driven harms. The announcements are useful, said CDT President Alexandra Reeve Givens. “But they would be even more effective if they were built on the foundation of a binding federal privacy law.” fst/rtr
To overcome a political stalemate after Bulgaria’s parliamentary elections, election winner Boiko Borissov proposed a governing coalition of parties with an EU and NATO orientation. The most important issue today is “who is with Putin, and who is not,” the former Prime Minister said Tuesday, alluding to Russia’s war of aggression against Ukraine. Borissov’s center-right GERB party won Sunday’s early parliamentary election with just over 25 percent of the vote, but cannot govern alone for lack of an absolute majority.
Borissov’s offer probably appealed primarily to the second-place liberal party PP (20.2 percent) of former Prime Minister Kiril Petkov and the conservative-liberal-green alliance DB (7.4 percent). However, both political forces are firmly opposed to a coalition with GERB, accusing Borissov and his party of corrupt practices during his terms in office until April 2021.
To explore possible cooperation, Borissov suggested that the party leaders should first withdraw into the background to explore common ground at the working level. The GERB leader also said that he himself did not want to become a Minister or Head of Government.
A transitional cabinet governs Bulgaria until a new government is formed. Borissov’s GERB (Citizens for a European Development Bulgaria) party is part of the European People’s Party (EPP) in the EU Parliament. Seven parties enter the newly elected parliament. dpa
If there is a common thread in the life of Jorgo Chatzimarkakis, it is hydrogen. The day Boris Becker reached the final of Wimbledon for the first time and won, he watched the TV with one eye only. Instead, he read Hoimar von Ditfurth’s “In the Beginning, there was Hydrogen” with fascination. The teenager discovered the book by chance on a rummage table in his hometown of Duisburg.
Like many young people in the 1980s, his political socialization took place under the impression of the ecological threat. He began his studies in Bonn in the year of the Chornobyl reactor catastrophe in 1986. “At university was a wallpaper from the ÖDP inscribed: Let’s make hydrogen from solar energy.”
Almost four decades later, the 56-year-old is Head of Hydrogen Europe in Brussels, the European hydrogen association, and thus the most important hydrogen lobbyist at the EU level. Before becoming a lobbyist, Chatzimarkakis – the son of a Cretan guest worker and a mother with roots in Brandenburg – had already achieved two political careers. In his first life, he was an FDP member.
From 1995 to 2011, he was a member of the federal executive committee of the Liberals. For many years, “Chatzi” was a popular interlocutor for the Berlin capital’s journal. Before the federal party conferences of the FDP, where Guido Westerwelle and Jürgen W. Möllemann fought fierce duels, Chatzimarkakis dictated many a trenchant quote and many a steep thesis into the blocks. In 2004, the now 56-year-old entered the European Parliament for the FDP, and in 2009 he was re-elected. In 2007, Chatzimarkakis made headlines with his suggestion the Greens and the FDP should merge. For many, this was a far-fetched idea. The two parties’ lifestyles and milieus seemed light years apart; from Chatzimarkakis’ perspective, the proposal was coherent.
Then came the break with his FDP in 2014. He resigned in a clinch and protest against his party’s European policy. Things were not going well for him in other respects, either. Plagiarism hunters had become aware of his doctoral thesis. He lost his title. He defended himself in court. To this day, he claims that he noted every citation in the footnotes. But he neglected to indicate this with quotation marks in the text.
Others might have looked for a job in business. Not so Chatzimarkakis. He is reinventing himself. He is trying to launch a political career from Greek soil. His father’s homeland was reeling from the sovereign debt crisis. It was in danger of being expelled from the euro. Chatzimarkakis founded the “Hellenic European Citizens” party in Greece. In 2014, he also stood for the party in the European elections but failed to make it into parliament. For a time, he was Greece’s special ambassador.
In 2015, he begins his third career in Brussels as a hydrogen lobbyist. It starts as a one-man show. In the meantime, Hydrogen Europe has grown up. 40 employees now work for his association, which is something of a hydrogen BDI in Brussels. In addition, there are ten external consultants. It currently resides in Brussels, not far from the fine boutiques of Louise. Chatzimarkakis is the CEO of an association that has 420 members across Europe. And he wants to grow even further. “They say we have a freeze on admissions. I can deny that.”
From the very beginning, Chatzimarkakis has been following attempts to build a hydrogen economy in Europe. “In 2018, it started at the EU level with the Council’s hydrogen declaration,” he recalls. He lobbies the EU institutions. That he is a lobbyist is not something he likes to hear. “I see myself more as a German shepherd.” Excuse me? The shepherds, he says, are Frans Timmermans, the Vice President of the Commission, and the other politicians who set the regulatory framework. He is the shepherd dog who shows the sheep – in his understanding, that means the industry and the member states – the right direction.
Chatzimarkakis is passionate about his subject. That was already the case when he took on the FDP party leadership 20 years ago. And it’s no different today. He fears that Europe is currently sleeping through the development of the hydrogen economy. He says things develop in the US, China, and India. “And there are people in the EU Commission who are putting on the brakes. They think there is a danger that hydrogen will cannibalize green electricity.”
He does not want to know anything about the competition between green electricity and hydrogen. The other day, he gave a speech in India. It was at the first EU-India Hydrogen Forum. In the presence of EU Energy Commissioner Kadri Simson, he repeatedly complimented the responsible minister from India: In India, they understood better than at the headquarters of the EU Commission what needed to be done to ramp up the technology. The Indian audience is enthusiastic, the Commissioner kept her composure. Chatzimarkakis has not only posted his performance on YouTube. He also likes to talk about it. Whether you’re a politician or a lobbyist, you have to be a good salesman. Markus Grabitz