Table.Briefing: Europe

Showdown over gas price cap + Raids in EP corruption case + Éric Ciotti

  • Showdown over gas price cap
  • Second wave of raids in Kaili corruption case
  • CBAM trilogue: agreement on carbon border adjustment
  • Von der Leyen calls for ‘fresh look’ at EU budget
  • Russia: no agreement yet on new sanctions package
  • Commission revises broadband guidelines
  • EU-US data flow: draft adequacy decision to be adopted
  • Government crisis in Bulgaria: non-partisan cabinet nominated
  • Heads: Éric Ciotti – ‘Monsieur Security’ at the helm of the French Republicans
Dear reader,

Last night, the EU ambassadors met again to clear the way for a milestone: The decision on the gas price cap is to be made today in the Council. At stake are the joint purchase of gas and the rapid expansion of renewable energies, as Manuel Berkel analyzes. An agreement is needed “now” on the emergency regulation on joint gas purchases, Commission President Ursula von der Leyen said yesterday. IEA Director Fatih Birol has unpleasant news: The EU faces a massive gas shortfall next year, he said.

In the corruption case surrounding the MEP and Vice President of the EU Parliament, Eva Kaili, there were further searches yesterday evening. An NGO founded by former MEP Pier Antonio Panzeri is increasingly becoming the focus of the investigations. From the political side, there is criticism of the lack of transparency of so-called friendship groups. These are groups that exist in addition to the official delegate group in the EU Parliament for relations with parliaments on the Arabian Peninsula. Their meetings apparently also take place within the Parliament. Markus Grabitz has the details.

Éric Ciotti would have liked to become France’s president this year. As we know, that didn’t work out, but now he has been elected the new president of the French Republicans. With Ciotti, the party of Jacques Chirac and Nicolas Sarkozy is likely to head even further to the right. Tanja Kuchenbecker profiles the politician about whom, according to the newspaper Libération, a former party comrade says: “Ciotti is no longer flirting with right-wing extremism, he’s in the middle of it.”

By the way: You are reading the 333rd issue of our Briefing today. I wish you an interesting read!

Your
Sarah Schaefer
Image of Sarah  Schaefer
  • Digitization

Feature

Showdown over gas price cap

There is a lot at stake in the EU 27 dispute over the gas price cap. All the European institutions have made this clear once again in recent days. Council President Jozef Síkela drummed up support for an agreement in several interviews over the weekend. Commission President Ursula von der Leyen yesterday sought support from the head of the International Energy Agency.

Today, energy ministers are meeting for another extraordinary session to decide on the Market Correction Mechanism. “If we lose trust and respect from households and companies, it will be a threat to social peace and our support for Ukraine,” warned Czech Industry Minister Síkela in the newspaper FAZ.

France fears consequences for financial markets

The gas price cap should also ensure that EU countries do not outbid each other to fill their storage facilities, Síkela told Bloomberg. The accusation was aimed at the German government, which had driven up prices across Europe by purchasing THE last summer.

After a weekend meeting on Saturday, the EU ambassadors discussed yesterday evening to clear the way for a decision on Tuesday. Most recently, France, originally one of the main proponents of a price cap, grew concerned about the impact on financial markets. Earlier, the European Central Bank had warned that the market correction mechanism could jeopardize the financial stability of the eurozone.

Twelve states want price caps for OTC trades

“Intervention in the market could achieve the opposite of its intention and raise prices even further as market participants price in the increased uncertainties,” a senior EU diplomat from the opponents’ camp said yesterday. These states are now trying to negotiate clear rules for suspending the mechanism if the price cap has negative effects, he said.

A group of twelve countries, on the other hand, tried again in recent days to include over-the-counter transactions in the mechanism. Both camps would each have a blocking minority, it was said on Friday. It is therefore not excluded that the European Council will deal with the issue at the end of the week and that a decision could only be made at the next Council of Ministers on Dec. 19.

Von der Leyen: agreement is needed ‘now’

Yesterday, however, Commission President Ursula von der Leyen also built up pressure for a quick agreement. An agreement is needed “now” on the emergency regulation on joint gas purchases, von der Leyen told the press. “Every day of delay carries a price tag.” But agreement on emergency regulations on gas purchasing and faster permitting procedures for renewables had been linked by a group of states at the energy ministers’ meeting to an agreement on the gas price cap.

More renewable energies are to help replace gas. The consequences of a standstill were made clear yesterday by the man next to von der Leyen. IEA Director Fatih Birol elaborated on the International Energy Agency’s shock calculation from early November: The EU faces a gas gap of 27 billion cubic meters (bcm) next year, the new report underlined.

IEA wants to stop production declines in steel industry

For the next year, the energy agency expects, on the one hand, that consumption will increase from 360 to 393 bcm:

  • The IEA is lobbying to end production slumps in the industry. It says this will require 10 bcm of gas – especially for fertilizers, steel and aluminum.
  • The EU will probably have to support Ukraine and Moldova with 12 bcm of gas next year to compensate for Russian supplies there.
  • As a buffer for rising temperatures, 11 bcm would be needed.

Complicating matters is the tight supply in the coming year:

  • Russia supplied 60 bcm of gas to the EU in 2022 despite the cuts. For its calculations, the IEA assumes that deliveries will cease in January. In contrast, Birol called the controversial 5-6 bcm increase in LNG imports from Russia “peanuts.”
  • There are fewer new LNG volumes coming onto the market worldwide than ever before – this year, only 20 bcm have been supplied. According to the IEA’s expectations, China will buy up a large part of this. According to Birol, the limited supply, for the time being, is offset by 40 bcm of new LNG import capacity in the EU.

Gas consumption would have to decline further

The gas gap could even double to 60 bcm, according to the energy agency, if the EU does not implement its recent targets, such as a faster expansion of renewables and a 15 percent gas cut. The 27 bcm gap could be closed if the EU expands its measures and provides an additional €100 billion, according to the report presented yesterday.

Politically sensitive is above all the appeal for more efficiency and thriftiness. To meet all of the IEA’s assumptions, the EU would need to consume only 330 bcm next year – another eight percent less than in the current year. Added to this would be support for Ukraine and Moldova. Poland, however, is already appealing to the ECJ against the savings targets already agreed, and Spain and Belgium have also expressed reservations. with rtr

  • Digitization
  • Energy
  • Energy Prices
  • Gas storage
  • Moldova
  • Natural gas

Second wave of raids in Kaili corruption case

The European Parliament is pushing ahead with the removal of Greek MEP and Vice President of the EU Parliament Eva Kaili (S&D), who is in pre-trial detention in Belgium on charges of corruption, money laundering and gang crime. Opening the session week in Strasbourg, Parliament President Roberta Metsola announced impeachment proceedings under Article 21. On Monday, the Socialist S&D parliamentary group expelled the deputy. Meanwhile, Greek authorities have reportedly frozen the 44-year-old’s assets. The PASOK party has also already expelled the Greek socialist.

Monday evening, the Brussels police launched a second round of searches. This indicates that the scandal is widening. More and more, the role of an NGO is coming into the focus of the investigation. One of the main suspects is former MEP Pier Antonio Panzeri, who founded the NGO Fight Impunity in 2019 after leaving Parliament.

The NGO’s board includes former commissioners such as Emma Bonino and ex-Foreign Affairs Commissioner Federica Mogherini, as well as ex-Migration Commissioner Dimitris Avramopoulos. Since yesterday, the head of the European Parliament Subcommittee on Human Rights, the Belgian Socialist Maria Arena, has temporarily suspended her office. The background is that the police searched the office of her assistant, who used to work for Fight Impunity.

Metsola promises more transparency on lobbying

The detailed circumstances of the case are still not clear. Investigators “suspect a Gulf state of attempting to influence the economic and political decisions of the European Parliament” by “paying substantial sums of money or offering substantial gifts to third parties holding a strategically important position in the European Parliament.” The Gulf state is said to be the Soccer World Cup host Qatar.

Officially, however, the prosecutor’s office has not confirmed this. Four people are in custody, including Kaili’s partner. Her father, from whom large amounts of cash were seized, has since been released. Also released under conditions is former MEP Luca Visentini, who is general secretary of the International Trade Union Confederation (ITUC).

Metsola announced an internal investigation, lobbyists’ access to the European Parliament is to be reformed. Meetings with non-EU representatives are to be made more transparent. Kaili gave a speech in the plenary recently in which she called Qatar a “champion of workers’ rights.” Everyone who talked to the emirate was accused of corruption across the board, she criticized. In the LIBE Committee, Kaili also voted in favor of liberalizing visa requirements for citizens of Qatar, Kuwait and Oman, although she herself is not a member of the Committee. Meanwhile, there are signs that the European Parliament is putting visa liberalization on hold in response to the corruption scandal.

EU Parliament has stricter rules than Bundestag

The discussion about consequences is ongoing: Inge Gräßle (CDU), corruption expert in the Bundestag and former head of the Budgetary Control Committee in the European Parliament, says: “The European Parliament has much more far-reaching regulations than the Bundestag. The Bundestag, for example, does not know the obligation to disclose lobby contacts for committee chairs, rapporteurs and shadow rapporteurs.” The scandal makes it clear that the European Parliament does not have a problem with rules in the first place, but a problem with control. What Kaili is accused of is a criminal violation of the law.

Nevertheless, she believes it would make sense to tighten up the transparency rules in the European Parliament. Up to now, MEPs have only had to report contacts with lobbyists from companies and associations. Meetings with representatives of third countries or agencies commissioned by third countries to represent interests are not subject to the obligation. Gräßle: “There is no reason not to publish MEPs’ contacts with third countries.” She also calls for a closer look at the role of NGOs.

Meeting of friendship groups in the Parliament

Rasmus Andresen (Greens), head of the German group, takes a similar view: “There are repeated indications that some NGOs abuse their status to engage in shady lobbying activities.”

Gräßle and Andresen also criticize the lack of transparency in the activities of so-called friendship groups, which also exist alongside the official delegate group in the EU Parliament for relations with Parliaments on the Arabian Peninsula. The members of Qatar’s unofficial friendship group from the European Parliament are listed on the website of the Qatar Embassy: They are 14 MEPs, including five Christian Democrats, two Liberals and one Socialist.

The activities of the friendship groups are partly sponsored by third countries. It is reported that sometimes meetings of these friendship groups also take place within the Parliament. The EP’s transparency rules state that “MEPs who are members of such groups must make their status transparent and must not interfere in the activities of official groups of the Parliament.”

  • Corruption
  • EU
  • Europäische Kommission
  • European Parliament
  • Finance
  • Lobbying
  • Qatar

Events

Dec. 14, 2022; 9-10:30 a.m., online
Eurogas, Panel Discussion Emergency Measures: Are we doing enough to protect consumers this winter?
Eurogas addresses what is needed to ensure the protection of consumers at this time of high energy prices and what else could be done. INFO & REGISTRATION

Dec. 14, 2022; 5-7 p.m., online
Berlin LpB, online Let’s talk Europe: Asylum and Migration
The Berliner Landeszentrale für politische Bildung asks how the arrival of Ukrainians in the EU after the Russian attack has changed the situation of asylum and migration politics within the EU. INFO & REGISTRATION

Dec. 14, 2022; 5-6:15 p.m., online
ECFR, Panel Discussion From surviving to thriving: How Europe should support Ukraine in the long war against Russia
The European Council on Foreign Relations (ECFR) discusses the need for Europe to deliver enduring support to Ukraine. INFO & REGISTRATION

Dec. 15, 2022; 11 a.m.-12:30 p.m., online
ANEC, Seminar Standards and the AI Act: What impact can AI standards have and how to influence them?
The European consumer voice in standardisation (ANEC) discusses the future of AI regulation and the role standards will play in it. INFO & REGISTRATION

  • Digitization

News

CBAM trilogue: agreement on carbon border adjustment

At 4:50 a.m., negotiators from the EU Parliament, Council and Commission reached an agreement on the introduction of the Carbon Border Adjustment Mechanism (CBAM). The agreement in the trilogue provides:

  • scope: iron and steel, cement, aluminum, fertilizers, electricity, hydrogen, certain intermediate and derived products and indirect emissions
  • full compatibility with WTO rules
  • centralized CBAM administration, with the Commission responsible for most tasks
  • applies from Oct. 1, 2023, with transition period during which importers are limited to reporting
  • full review of CBAM rules by the Commission in 2027
  • before the end of the transition period, the Commission will consider whether to extend the scope to organic chemicals and polymers as well

‘Win-win situation’ against carbon leakage

The CBAM is intended to prevent disadvantages for European producers in international competition due to the CO2 price in the EU by having importers pay a border adjustment equal to the CO2 price. Until now, industry has not had to pay for a large proportion of its emissions but has been allocated emission rights free of charge. With the European Emissions Trading System (ETS) reform, these free allocations are to be gradually phased out. The CBAM will take their place.

It is one of the few mechanisms you have to incentivize trading partners to decarbonize their industries, said parliamentary rapporteur Mohammed Chahim (S&D) in the early hours of this morning. “Moreover, it’s an alternative to our current carbon leakage measures that allow us to apply the polluter pays principle to our own industry – a win-win situation.”

Export regulation and CBAM phase-in still pending

Despite the trilogue agreement, it is still unclear whether European exporters from the CBAM sectors should continue to receive free allocations. If the CO2 price is levied on EU producers and no compensation is paid for these costs when exporting, this may have a negative impact on the competitiveness of European exports. The start and end dates as well as the speed of the gradual introduction of CBAM are also still pending.

It is considered the most politically explosive issue, as Parliament in particular is calling for free allocations to be melted down as quickly as possible, while member countries want to give industry more time to adapt to the new rules (Europe.Table reported). These outstanding issues are expected to be resolved next weekend at the Jumbo Trilogue in Brussels, when negotiators for ETS, CBAM and the Social Climate Fund will meet for a major round of negotiations. The length of the CBAM transition period also depends on agreement on free allocations. luk

  • Climate & Environment
  • Climate Policy
  • CO2 price
  • Emissions trading
  • Fit for 55

Von der Leyen calls for ‘fresh look’ at EU budget

Germany and the other EU states should consider a far-reaching overhaul of the EU’s long-term budget, according to Commission President Ursula von der Leyen. A “fresh look” at the budget would also open the door for the creation of a sovereignty fund, von der Leyen said in Brussels on Monday. The current budget for the period from 2021 to the end of 2027 was decided at a time when there was no inkling of the impending crisis, she said.

As the largest EU net contributor, Germany has so far been strictly opposed to increasing the EU budget for 2021-2027, which was agreed upon in extremely laborious negotiations. The same applies to a new debt-financed EU program modeled on the Covid recovery fund.

Response to Inflation Reduction Act

With a so-called sovereignty fund, von der Leyen also wants to respond in particular to the multi-billion US program to promote climate-friendly technologies. This is an investment plan worth around $369 billion aimed at building a new industrial ecosystem in strategic clean energy sectors. Subsidies and tax credits are linked to companies using US products or producing in the United States.

In the EU, it is therefore seen as discriminatory and incompatible with World Trade Organization (WTO) rules. At the same time, there are calls to set up a separate investment program if necessary.

Von der Leyen said Monday that, in principle, the sovereignty fund could be financed not only from existing pots of money but also from other sources. She did not give details on the possible amount of such a financing instrument. dpa

  • European policy
  • Finance
  • Financial policy

Russia: no agreement yet on new sanctions package

The EU states have not yet agreed on a ninth sanctions package against Russia on Monday evening. According to EU diplomats, there are still differences on some technical issues, particularly in relation to the agricultural sector. The talks are to continue today in order to reach an agreement before the EU summit on Thursday, if possible.

Member states agree to add approximately another 200 Russian individuals and groups to the sanctions list. The sanctions target the military and defense sectors as well as the political leadership in the Duma and the Federation Council, EU Foreign Affairs Minister Josep Borrell said after a meeting of foreign ministers. They also target “those responsible for the looting of Ukrainian grain and for the deportation of Ukrainian people, especially children.”

EU foreign ministers also approved new sanctions against Iran for its ruthless crackdown on protests. Accordingly, 20 individuals and one entity will face penalties for human rights violations. These include freezing assets and banning entry into the EU. tho/rtr

  • Digitization
  • European policy
  • Geopolitics

Commission revises broadband guidelines

The many “white spots” on maps show that broadband expansion is not progressing as it should. This is not only the case in Germany, which ranks in the middle of the pack in a European comparison. That’s why the European Commission adopted new guidelines on state aid for broadband networks (Broadband Guidelines) on Monday. In doing so, it is updating the existing guidelines from 2013.

The Broadband Guidelines set out what the Commission considers to be compatible state aid measures by member states to promote broadband connectivity. The aim is to allow state allocations on a scale that reduces the digital divide without harming competition. Prior to the revision, the Commission had conducted an extensive consultation in 2020.

New guidelines take into account the state of the art

The main changes are:

  • Adaptation to current technology and market developments: Member states may invest in areas where the market does not offer end users a connection with a download speed of at least 1 Gbps (Gigabit per second) and an upload speed of at least 150 Mbps (Megabit per second). In doing so, government investment must provide for a multiplication of performance.
  • Re-evaluate mobile network roll-out (including 5G): Member states are allowed to support mobile networks if private operators would not otherwise have made the investment.
  • Promote broadband use to remove barriers to access to improve digital inclusion and societal resilience, for example through social and connectivity vouchers.
  • Simplification of certain rules: Member states can, under certain circumstances, prescribe to network operators which wholesale access products they provide.
  • Clarifications and guidance on, for example, mapping, public consultations, tendering procedures, wholesale pricing, and clawback mechanisms.
  • Criteria for balancing: The assessment will take into account various potential impacts on trade and competition, such as the performance of a contribution to the EU’s digital and green transformation goals.

The revision of the Broadband Guidelines complements other ongoing initiatives such as the revision of the Broadband Cost Reduction Directive. The new guidelines will enter into force the day after their publication in the Official Journal of the European Union. This will probably be the case in January 2023. vis

  • Digital policy
  • Digitization
  • Technology

EU-US data flow: draft adequacy decision to be adopted

In the coming days, the EU Commission will present its proposal for an adequacy decision within the framework of the so-called EU-US Data Privacy Framework. This is to be the prerequisite for companies to be able to transfer personal data subject to the GDPR to the USA in the future with legal certainty. The spokesperson for the EU Justice Commissioner did not want to confirm statements on Monday that this would already happen this Tuesday.

The EU Commission’s draft will be based on the assurances given by US President Joe Biden in his presidential executive orders. This is one of the things that critics have criticized: Presidential orders can be changed at any time, unlike laws passed by Congress.

“It is a presidential order to the same extent as a law,” Justice Commissioner Didier Reynders said at an event Monday. Of course, the adequacy decision will be challenged in the European Court of Justice, he added. An adequacy decision of the Commission has been rejected by the ECJ twice so far.

While there are “no guarantees in court” that the adequacy decision will pass, he is confident because the negotiated commitments are “robust,” Reynders says. Other issues, such as the two points of contention regarding the necessity and proportionality of data processing by intelligence agencies, are also problematic in the EU, he states.

Following the Commission’s proposal, the EU data protection supervisory authorities, the member states and the European Parliament will deal with the draft. Once this part of the process is complete, companies could – according to the EU Commission’s plan – rely on the new legal basis for transatlantic data transfers. US companies are urgently waiting for this.

After a review in the coming days, NOYB wants to decide whether to appeal an adequacy decision again, says Max Schrems, chairman of the NGO’s board. He hardly believes it will stand up to scrutiny by the judges in Luxembourg: “The European Commission seems to keep issuing similar decisions that are a blatant violation of our fundamental rights.” If the new regulation were also to fail before the ECJ, it would be a bitter political defeat for Commission President von der Leyen and Justice Commissioner Reynders. fst

  • Data law
  • Data protection
  • Digital policy
  • Digitization

Government crisis in Bulgaria: non-partisan cabinet nominated

To resolve the political crisis in the EU country of Bulgaria, Nikolay Gabrovski, who has been tasked with forming a government, has proposed a non-partisan, pro-Western cabinet. Gabrowski, who does not belong to a party, was nominated as prime minister by the center-right election winner GERB, nominated mainly experts for his government on Monday. This is to replace the transitional cabinet currently in power – Bulgaria still has no regular government two and a half months after the new election.

Parliament will vote on Gabrovski’s proposal later this week; the outcome of that vote is open. Gabrowski received the mandate to form a government from Head of State Rumen Radev a week ago.

Signs of pro-Western orientation

“We have no time (to lose),” Gabrowski said, referring to the crisis situation in Bulgaria. He himself is seen as a compromise figure. With only 67 deputies in the 240-seat parliament, GERB is far from having a majority and is dependent on partners. Seven parties are represented in parliament. Gabrowski warned against another new election: “This would be a disaster for Bulgaria in many respects,” he said. If this attempt to form a government and two other attempts fail, there would have to be a fifth new election within two years in the spring.

Against the backdrop of the Ukraine war, Gabrovski sent a strong signal about the continuity of Bulgaria’s pro-Western orientation. He nominated Dragomir Sakov, the country’s former ambassador to NATO, for the post of Foreign Minister. The latter has already been Defense Minister in the liberal-socialist government of former Prime Minister Kiril Petkov, which was overthrown in June. dpa

  • bulgaria
  • Democracy
  • Digitization
  • Society

Heads

Éric Ciotti – ‘Monsieur Security’ at the helm of the French Republicans

With Éric Ciotti, the Republicans in France are heading further to the right.

Éric Ciotti would have liked to become France’s president this year. But Valérie Pécresse prevailed against him in the conservative Republicans’ primary election campaign and ran as the top candidate against Emmanuel Macron.

Now the 57-year-old Ciotti has won a belated victory: He was elected the new president of the Republicans by party supporters in a runoff election over the weekend with 53.7 percent of the vote. He was the favorite of the party, which is drifting further and further to the right. Pécresse had already accelerated the shift to the right of the former center-right party; with Ciotti, it is heading even further outward. His ideas are not too different from those of the right-wing populists.

Ciotti is a member of Parliament from Nice in the south of France. In the presidential election campaign, he focused on the classic themes of the right: Security and immigration. In France, he is also called “Monsieur Security.” He wants to save the nation, abolish social benefits for foreigners and tighten immigration laws. “France must remain France,” he proclaimed again and again.

Laurent Wauquiez as presidential candidate

“I want a strict right that will restore order to the streets,” Ciotti said after his election. He stands for a unification of the right. “Ciotti is no longer flirting with right-wing extremism, he’s in the middle of it,” the rather left-wing newspaper Libération quoted a former party comrade of Ciotti’s as saying.

Behind him is the unpopular ex-party leader Laurent Wauquiez, who has long dreamed of becoming president. Ciotti has already declared his support for the far-right politician as a candidate for the 2027 presidential election and is putting his own ambitions on hold for the time being. The two want to lead the Republicans to the presidency as a team of two. But that is still a long way off. First of all, Ciotti has to bring order to his party, which has split into several camps.

Ciotti has held numerous offices in politics, but has never been a minister. He began his political career in the 1990s after graduating from the prestigious Sciences Po School of Politics in Paris. He then accompanied Christian Estrosi, mayor of Nice, in several posts, serving as a parliamentary assistant, campaign manager and deputy mayor of Nice. Today, the two are rivals. Estrosi has joined Macron, while Ciotti has always clearly ruled out an alliance with the president. He would rather vote for the far-right Éric Zemmour than for Macron, he declared in the last presidential election.

In opposition for ten years

Shortly before the election for the party presidency, Ciotti’s campaign was still in danger. French media revealed that the financial prosecutor’s office had opened a case against his ex-wife for embezzling public funds. Ciotti is alleged to have employed her for years in his deputy’s office in Parliament and the City Hall of Nice. This is reminiscent of the scandal of ex-Prime Minister François Fillon, who wanted to become president in 2017. Ciotti won the election anyway.

He has a major challenge ahead of him. His party is fighting for survival; he must bring it out of the shadows. In recent years, there hasn’t been much room for the Republicans between Macron in the liberal center and the parties of Marine Le Pen and Éric Zemmour.

The right-wing bourgeois party of Jacques Chirac and Nicolas Sarkozy has been in opposition for ten years. Many party bigwigs have left for Macron. The parliamentary group has shrunk from more than 300 deputies to 62. Pécresse did not even win five percent of the vote as a presidential candidate in May. Ciotti believes the Republicans will go under if they don’t win the presidential race in 2027. Tanja Kuchenbecker

  • Digitization
  • France
  • Marine Le Pen

Europe.Table Editorial Office

EUROPE.TABLE EDITORS

Licenses:
    • Showdown over gas price cap
    • Second wave of raids in Kaili corruption case
    • CBAM trilogue: agreement on carbon border adjustment
    • Von der Leyen calls for ‘fresh look’ at EU budget
    • Russia: no agreement yet on new sanctions package
    • Commission revises broadband guidelines
    • EU-US data flow: draft adequacy decision to be adopted
    • Government crisis in Bulgaria: non-partisan cabinet nominated
    • Heads: Éric Ciotti – ‘Monsieur Security’ at the helm of the French Republicans
    Dear reader,

    Last night, the EU ambassadors met again to clear the way for a milestone: The decision on the gas price cap is to be made today in the Council. At stake are the joint purchase of gas and the rapid expansion of renewable energies, as Manuel Berkel analyzes. An agreement is needed “now” on the emergency regulation on joint gas purchases, Commission President Ursula von der Leyen said yesterday. IEA Director Fatih Birol has unpleasant news: The EU faces a massive gas shortfall next year, he said.

    In the corruption case surrounding the MEP and Vice President of the EU Parliament, Eva Kaili, there were further searches yesterday evening. An NGO founded by former MEP Pier Antonio Panzeri is increasingly becoming the focus of the investigations. From the political side, there is criticism of the lack of transparency of so-called friendship groups. These are groups that exist in addition to the official delegate group in the EU Parliament for relations with parliaments on the Arabian Peninsula. Their meetings apparently also take place within the Parliament. Markus Grabitz has the details.

    Éric Ciotti would have liked to become France’s president this year. As we know, that didn’t work out, but now he has been elected the new president of the French Republicans. With Ciotti, the party of Jacques Chirac and Nicolas Sarkozy is likely to head even further to the right. Tanja Kuchenbecker profiles the politician about whom, according to the newspaper Libération, a former party comrade says: “Ciotti is no longer flirting with right-wing extremism, he’s in the middle of it.”

    By the way: You are reading the 333rd issue of our Briefing today. I wish you an interesting read!

    Your
    Sarah Schaefer
    Image of Sarah  Schaefer
    • Digitization

    Feature

    Showdown over gas price cap

    There is a lot at stake in the EU 27 dispute over the gas price cap. All the European institutions have made this clear once again in recent days. Council President Jozef Síkela drummed up support for an agreement in several interviews over the weekend. Commission President Ursula von der Leyen yesterday sought support from the head of the International Energy Agency.

    Today, energy ministers are meeting for another extraordinary session to decide on the Market Correction Mechanism. “If we lose trust and respect from households and companies, it will be a threat to social peace and our support for Ukraine,” warned Czech Industry Minister Síkela in the newspaper FAZ.

    France fears consequences for financial markets

    The gas price cap should also ensure that EU countries do not outbid each other to fill their storage facilities, Síkela told Bloomberg. The accusation was aimed at the German government, which had driven up prices across Europe by purchasing THE last summer.

    After a weekend meeting on Saturday, the EU ambassadors discussed yesterday evening to clear the way for a decision on Tuesday. Most recently, France, originally one of the main proponents of a price cap, grew concerned about the impact on financial markets. Earlier, the European Central Bank had warned that the market correction mechanism could jeopardize the financial stability of the eurozone.

    Twelve states want price caps for OTC trades

    “Intervention in the market could achieve the opposite of its intention and raise prices even further as market participants price in the increased uncertainties,” a senior EU diplomat from the opponents’ camp said yesterday. These states are now trying to negotiate clear rules for suspending the mechanism if the price cap has negative effects, he said.

    A group of twelve countries, on the other hand, tried again in recent days to include over-the-counter transactions in the mechanism. Both camps would each have a blocking minority, it was said on Friday. It is therefore not excluded that the European Council will deal with the issue at the end of the week and that a decision could only be made at the next Council of Ministers on Dec. 19.

    Von der Leyen: agreement is needed ‘now’

    Yesterday, however, Commission President Ursula von der Leyen also built up pressure for a quick agreement. An agreement is needed “now” on the emergency regulation on joint gas purchases, von der Leyen told the press. “Every day of delay carries a price tag.” But agreement on emergency regulations on gas purchasing and faster permitting procedures for renewables had been linked by a group of states at the energy ministers’ meeting to an agreement on the gas price cap.

    More renewable energies are to help replace gas. The consequences of a standstill were made clear yesterday by the man next to von der Leyen. IEA Director Fatih Birol elaborated on the International Energy Agency’s shock calculation from early November: The EU faces a gas gap of 27 billion cubic meters (bcm) next year, the new report underlined.

    IEA wants to stop production declines in steel industry

    For the next year, the energy agency expects, on the one hand, that consumption will increase from 360 to 393 bcm:

    • The IEA is lobbying to end production slumps in the industry. It says this will require 10 bcm of gas – especially for fertilizers, steel and aluminum.
    • The EU will probably have to support Ukraine and Moldova with 12 bcm of gas next year to compensate for Russian supplies there.
    • As a buffer for rising temperatures, 11 bcm would be needed.

    Complicating matters is the tight supply in the coming year:

    • Russia supplied 60 bcm of gas to the EU in 2022 despite the cuts. For its calculations, the IEA assumes that deliveries will cease in January. In contrast, Birol called the controversial 5-6 bcm increase in LNG imports from Russia “peanuts.”
    • There are fewer new LNG volumes coming onto the market worldwide than ever before – this year, only 20 bcm have been supplied. According to the IEA’s expectations, China will buy up a large part of this. According to Birol, the limited supply, for the time being, is offset by 40 bcm of new LNG import capacity in the EU.

    Gas consumption would have to decline further

    The gas gap could even double to 60 bcm, according to the energy agency, if the EU does not implement its recent targets, such as a faster expansion of renewables and a 15 percent gas cut. The 27 bcm gap could be closed if the EU expands its measures and provides an additional €100 billion, according to the report presented yesterday.

    Politically sensitive is above all the appeal for more efficiency and thriftiness. To meet all of the IEA’s assumptions, the EU would need to consume only 330 bcm next year – another eight percent less than in the current year. Added to this would be support for Ukraine and Moldova. Poland, however, is already appealing to the ECJ against the savings targets already agreed, and Spain and Belgium have also expressed reservations. with rtr

    • Digitization
    • Energy
    • Energy Prices
    • Gas storage
    • Moldova
    • Natural gas

    Second wave of raids in Kaili corruption case

    The European Parliament is pushing ahead with the removal of Greek MEP and Vice President of the EU Parliament Eva Kaili (S&D), who is in pre-trial detention in Belgium on charges of corruption, money laundering and gang crime. Opening the session week in Strasbourg, Parliament President Roberta Metsola announced impeachment proceedings under Article 21. On Monday, the Socialist S&D parliamentary group expelled the deputy. Meanwhile, Greek authorities have reportedly frozen the 44-year-old’s assets. The PASOK party has also already expelled the Greek socialist.

    Monday evening, the Brussels police launched a second round of searches. This indicates that the scandal is widening. More and more, the role of an NGO is coming into the focus of the investigation. One of the main suspects is former MEP Pier Antonio Panzeri, who founded the NGO Fight Impunity in 2019 after leaving Parliament.

    The NGO’s board includes former commissioners such as Emma Bonino and ex-Foreign Affairs Commissioner Federica Mogherini, as well as ex-Migration Commissioner Dimitris Avramopoulos. Since yesterday, the head of the European Parliament Subcommittee on Human Rights, the Belgian Socialist Maria Arena, has temporarily suspended her office. The background is that the police searched the office of her assistant, who used to work for Fight Impunity.

    Metsola promises more transparency on lobbying

    The detailed circumstances of the case are still not clear. Investigators “suspect a Gulf state of attempting to influence the economic and political decisions of the European Parliament” by “paying substantial sums of money or offering substantial gifts to third parties holding a strategically important position in the European Parliament.” The Gulf state is said to be the Soccer World Cup host Qatar.

    Officially, however, the prosecutor’s office has not confirmed this. Four people are in custody, including Kaili’s partner. Her father, from whom large amounts of cash were seized, has since been released. Also released under conditions is former MEP Luca Visentini, who is general secretary of the International Trade Union Confederation (ITUC).

    Metsola announced an internal investigation, lobbyists’ access to the European Parliament is to be reformed. Meetings with non-EU representatives are to be made more transparent. Kaili gave a speech in the plenary recently in which she called Qatar a “champion of workers’ rights.” Everyone who talked to the emirate was accused of corruption across the board, she criticized. In the LIBE Committee, Kaili also voted in favor of liberalizing visa requirements for citizens of Qatar, Kuwait and Oman, although she herself is not a member of the Committee. Meanwhile, there are signs that the European Parliament is putting visa liberalization on hold in response to the corruption scandal.

    EU Parliament has stricter rules than Bundestag

    The discussion about consequences is ongoing: Inge Gräßle (CDU), corruption expert in the Bundestag and former head of the Budgetary Control Committee in the European Parliament, says: “The European Parliament has much more far-reaching regulations than the Bundestag. The Bundestag, for example, does not know the obligation to disclose lobby contacts for committee chairs, rapporteurs and shadow rapporteurs.” The scandal makes it clear that the European Parliament does not have a problem with rules in the first place, but a problem with control. What Kaili is accused of is a criminal violation of the law.

    Nevertheless, she believes it would make sense to tighten up the transparency rules in the European Parliament. Up to now, MEPs have only had to report contacts with lobbyists from companies and associations. Meetings with representatives of third countries or agencies commissioned by third countries to represent interests are not subject to the obligation. Gräßle: “There is no reason not to publish MEPs’ contacts with third countries.” She also calls for a closer look at the role of NGOs.

    Meeting of friendship groups in the Parliament

    Rasmus Andresen (Greens), head of the German group, takes a similar view: “There are repeated indications that some NGOs abuse their status to engage in shady lobbying activities.”

    Gräßle and Andresen also criticize the lack of transparency in the activities of so-called friendship groups, which also exist alongside the official delegate group in the EU Parliament for relations with Parliaments on the Arabian Peninsula. The members of Qatar’s unofficial friendship group from the European Parliament are listed on the website of the Qatar Embassy: They are 14 MEPs, including five Christian Democrats, two Liberals and one Socialist.

    The activities of the friendship groups are partly sponsored by third countries. It is reported that sometimes meetings of these friendship groups also take place within the Parliament. The EP’s transparency rules state that “MEPs who are members of such groups must make their status transparent and must not interfere in the activities of official groups of the Parliament.”

    • Corruption
    • EU
    • Europäische Kommission
    • European Parliament
    • Finance
    • Lobbying
    • Qatar

    Events

    Dec. 14, 2022; 9-10:30 a.m., online
    Eurogas, Panel Discussion Emergency Measures: Are we doing enough to protect consumers this winter?
    Eurogas addresses what is needed to ensure the protection of consumers at this time of high energy prices and what else could be done. INFO & REGISTRATION

    Dec. 14, 2022; 5-7 p.m., online
    Berlin LpB, online Let’s talk Europe: Asylum and Migration
    The Berliner Landeszentrale für politische Bildung asks how the arrival of Ukrainians in the EU after the Russian attack has changed the situation of asylum and migration politics within the EU. INFO & REGISTRATION

    Dec. 14, 2022; 5-6:15 p.m., online
    ECFR, Panel Discussion From surviving to thriving: How Europe should support Ukraine in the long war against Russia
    The European Council on Foreign Relations (ECFR) discusses the need for Europe to deliver enduring support to Ukraine. INFO & REGISTRATION

    Dec. 15, 2022; 11 a.m.-12:30 p.m., online
    ANEC, Seminar Standards and the AI Act: What impact can AI standards have and how to influence them?
    The European consumer voice in standardisation (ANEC) discusses the future of AI regulation and the role standards will play in it. INFO & REGISTRATION

    • Digitization

    News

    CBAM trilogue: agreement on carbon border adjustment

    At 4:50 a.m., negotiators from the EU Parliament, Council and Commission reached an agreement on the introduction of the Carbon Border Adjustment Mechanism (CBAM). The agreement in the trilogue provides:

    • scope: iron and steel, cement, aluminum, fertilizers, electricity, hydrogen, certain intermediate and derived products and indirect emissions
    • full compatibility with WTO rules
    • centralized CBAM administration, with the Commission responsible for most tasks
    • applies from Oct. 1, 2023, with transition period during which importers are limited to reporting
    • full review of CBAM rules by the Commission in 2027
    • before the end of the transition period, the Commission will consider whether to extend the scope to organic chemicals and polymers as well

    ‘Win-win situation’ against carbon leakage

    The CBAM is intended to prevent disadvantages for European producers in international competition due to the CO2 price in the EU by having importers pay a border adjustment equal to the CO2 price. Until now, industry has not had to pay for a large proportion of its emissions but has been allocated emission rights free of charge. With the European Emissions Trading System (ETS) reform, these free allocations are to be gradually phased out. The CBAM will take their place.

    It is one of the few mechanisms you have to incentivize trading partners to decarbonize their industries, said parliamentary rapporteur Mohammed Chahim (S&D) in the early hours of this morning. “Moreover, it’s an alternative to our current carbon leakage measures that allow us to apply the polluter pays principle to our own industry – a win-win situation.”

    Export regulation and CBAM phase-in still pending

    Despite the trilogue agreement, it is still unclear whether European exporters from the CBAM sectors should continue to receive free allocations. If the CO2 price is levied on EU producers and no compensation is paid for these costs when exporting, this may have a negative impact on the competitiveness of European exports. The start and end dates as well as the speed of the gradual introduction of CBAM are also still pending.

    It is considered the most politically explosive issue, as Parliament in particular is calling for free allocations to be melted down as quickly as possible, while member countries want to give industry more time to adapt to the new rules (Europe.Table reported). These outstanding issues are expected to be resolved next weekend at the Jumbo Trilogue in Brussels, when negotiators for ETS, CBAM and the Social Climate Fund will meet for a major round of negotiations. The length of the CBAM transition period also depends on agreement on free allocations. luk

    • Climate & Environment
    • Climate Policy
    • CO2 price
    • Emissions trading
    • Fit for 55

    Von der Leyen calls for ‘fresh look’ at EU budget

    Germany and the other EU states should consider a far-reaching overhaul of the EU’s long-term budget, according to Commission President Ursula von der Leyen. A “fresh look” at the budget would also open the door for the creation of a sovereignty fund, von der Leyen said in Brussels on Monday. The current budget for the period from 2021 to the end of 2027 was decided at a time when there was no inkling of the impending crisis, she said.

    As the largest EU net contributor, Germany has so far been strictly opposed to increasing the EU budget for 2021-2027, which was agreed upon in extremely laborious negotiations. The same applies to a new debt-financed EU program modeled on the Covid recovery fund.

    Response to Inflation Reduction Act

    With a so-called sovereignty fund, von der Leyen also wants to respond in particular to the multi-billion US program to promote climate-friendly technologies. This is an investment plan worth around $369 billion aimed at building a new industrial ecosystem in strategic clean energy sectors. Subsidies and tax credits are linked to companies using US products or producing in the United States.

    In the EU, it is therefore seen as discriminatory and incompatible with World Trade Organization (WTO) rules. At the same time, there are calls to set up a separate investment program if necessary.

    Von der Leyen said Monday that, in principle, the sovereignty fund could be financed not only from existing pots of money but also from other sources. She did not give details on the possible amount of such a financing instrument. dpa

    • European policy
    • Finance
    • Financial policy

    Russia: no agreement yet on new sanctions package

    The EU states have not yet agreed on a ninth sanctions package against Russia on Monday evening. According to EU diplomats, there are still differences on some technical issues, particularly in relation to the agricultural sector. The talks are to continue today in order to reach an agreement before the EU summit on Thursday, if possible.

    Member states agree to add approximately another 200 Russian individuals and groups to the sanctions list. The sanctions target the military and defense sectors as well as the political leadership in the Duma and the Federation Council, EU Foreign Affairs Minister Josep Borrell said after a meeting of foreign ministers. They also target “those responsible for the looting of Ukrainian grain and for the deportation of Ukrainian people, especially children.”

    EU foreign ministers also approved new sanctions against Iran for its ruthless crackdown on protests. Accordingly, 20 individuals and one entity will face penalties for human rights violations. These include freezing assets and banning entry into the EU. tho/rtr

    • Digitization
    • European policy
    • Geopolitics

    Commission revises broadband guidelines

    The many “white spots” on maps show that broadband expansion is not progressing as it should. This is not only the case in Germany, which ranks in the middle of the pack in a European comparison. That’s why the European Commission adopted new guidelines on state aid for broadband networks (Broadband Guidelines) on Monday. In doing so, it is updating the existing guidelines from 2013.

    The Broadband Guidelines set out what the Commission considers to be compatible state aid measures by member states to promote broadband connectivity. The aim is to allow state allocations on a scale that reduces the digital divide without harming competition. Prior to the revision, the Commission had conducted an extensive consultation in 2020.

    New guidelines take into account the state of the art

    The main changes are:

    • Adaptation to current technology and market developments: Member states may invest in areas where the market does not offer end users a connection with a download speed of at least 1 Gbps (Gigabit per second) and an upload speed of at least 150 Mbps (Megabit per second). In doing so, government investment must provide for a multiplication of performance.
    • Re-evaluate mobile network roll-out (including 5G): Member states are allowed to support mobile networks if private operators would not otherwise have made the investment.
    • Promote broadband use to remove barriers to access to improve digital inclusion and societal resilience, for example through social and connectivity vouchers.
    • Simplification of certain rules: Member states can, under certain circumstances, prescribe to network operators which wholesale access products they provide.
    • Clarifications and guidance on, for example, mapping, public consultations, tendering procedures, wholesale pricing, and clawback mechanisms.
    • Criteria for balancing: The assessment will take into account various potential impacts on trade and competition, such as the performance of a contribution to the EU’s digital and green transformation goals.

    The revision of the Broadband Guidelines complements other ongoing initiatives such as the revision of the Broadband Cost Reduction Directive. The new guidelines will enter into force the day after their publication in the Official Journal of the European Union. This will probably be the case in January 2023. vis

    • Digital policy
    • Digitization
    • Technology

    EU-US data flow: draft adequacy decision to be adopted

    In the coming days, the EU Commission will present its proposal for an adequacy decision within the framework of the so-called EU-US Data Privacy Framework. This is to be the prerequisite for companies to be able to transfer personal data subject to the GDPR to the USA in the future with legal certainty. The spokesperson for the EU Justice Commissioner did not want to confirm statements on Monday that this would already happen this Tuesday.

    The EU Commission’s draft will be based on the assurances given by US President Joe Biden in his presidential executive orders. This is one of the things that critics have criticized: Presidential orders can be changed at any time, unlike laws passed by Congress.

    “It is a presidential order to the same extent as a law,” Justice Commissioner Didier Reynders said at an event Monday. Of course, the adequacy decision will be challenged in the European Court of Justice, he added. An adequacy decision of the Commission has been rejected by the ECJ twice so far.

    While there are “no guarantees in court” that the adequacy decision will pass, he is confident because the negotiated commitments are “robust,” Reynders says. Other issues, such as the two points of contention regarding the necessity and proportionality of data processing by intelligence agencies, are also problematic in the EU, he states.

    Following the Commission’s proposal, the EU data protection supervisory authorities, the member states and the European Parliament will deal with the draft. Once this part of the process is complete, companies could – according to the EU Commission’s plan – rely on the new legal basis for transatlantic data transfers. US companies are urgently waiting for this.

    After a review in the coming days, NOYB wants to decide whether to appeal an adequacy decision again, says Max Schrems, chairman of the NGO’s board. He hardly believes it will stand up to scrutiny by the judges in Luxembourg: “The European Commission seems to keep issuing similar decisions that are a blatant violation of our fundamental rights.” If the new regulation were also to fail before the ECJ, it would be a bitter political defeat for Commission President von der Leyen and Justice Commissioner Reynders. fst

    • Data law
    • Data protection
    • Digital policy
    • Digitization

    Government crisis in Bulgaria: non-partisan cabinet nominated

    To resolve the political crisis in the EU country of Bulgaria, Nikolay Gabrovski, who has been tasked with forming a government, has proposed a non-partisan, pro-Western cabinet. Gabrowski, who does not belong to a party, was nominated as prime minister by the center-right election winner GERB, nominated mainly experts for his government on Monday. This is to replace the transitional cabinet currently in power – Bulgaria still has no regular government two and a half months after the new election.

    Parliament will vote on Gabrovski’s proposal later this week; the outcome of that vote is open. Gabrowski received the mandate to form a government from Head of State Rumen Radev a week ago.

    Signs of pro-Western orientation

    “We have no time (to lose),” Gabrowski said, referring to the crisis situation in Bulgaria. He himself is seen as a compromise figure. With only 67 deputies in the 240-seat parliament, GERB is far from having a majority and is dependent on partners. Seven parties are represented in parliament. Gabrowski warned against another new election: “This would be a disaster for Bulgaria in many respects,” he said. If this attempt to form a government and two other attempts fail, there would have to be a fifth new election within two years in the spring.

    Against the backdrop of the Ukraine war, Gabrovski sent a strong signal about the continuity of Bulgaria’s pro-Western orientation. He nominated Dragomir Sakov, the country’s former ambassador to NATO, for the post of Foreign Minister. The latter has already been Defense Minister in the liberal-socialist government of former Prime Minister Kiril Petkov, which was overthrown in June. dpa

    • bulgaria
    • Democracy
    • Digitization
    • Society

    Heads

    Éric Ciotti – ‘Monsieur Security’ at the helm of the French Republicans

    With Éric Ciotti, the Republicans in France are heading further to the right.

    Éric Ciotti would have liked to become France’s president this year. But Valérie Pécresse prevailed against him in the conservative Republicans’ primary election campaign and ran as the top candidate against Emmanuel Macron.

    Now the 57-year-old Ciotti has won a belated victory: He was elected the new president of the Republicans by party supporters in a runoff election over the weekend with 53.7 percent of the vote. He was the favorite of the party, which is drifting further and further to the right. Pécresse had already accelerated the shift to the right of the former center-right party; with Ciotti, it is heading even further outward. His ideas are not too different from those of the right-wing populists.

    Ciotti is a member of Parliament from Nice in the south of France. In the presidential election campaign, he focused on the classic themes of the right: Security and immigration. In France, he is also called “Monsieur Security.” He wants to save the nation, abolish social benefits for foreigners and tighten immigration laws. “France must remain France,” he proclaimed again and again.

    Laurent Wauquiez as presidential candidate

    “I want a strict right that will restore order to the streets,” Ciotti said after his election. He stands for a unification of the right. “Ciotti is no longer flirting with right-wing extremism, he’s in the middle of it,” the rather left-wing newspaper Libération quoted a former party comrade of Ciotti’s as saying.

    Behind him is the unpopular ex-party leader Laurent Wauquiez, who has long dreamed of becoming president. Ciotti has already declared his support for the far-right politician as a candidate for the 2027 presidential election and is putting his own ambitions on hold for the time being. The two want to lead the Republicans to the presidency as a team of two. But that is still a long way off. First of all, Ciotti has to bring order to his party, which has split into several camps.

    Ciotti has held numerous offices in politics, but has never been a minister. He began his political career in the 1990s after graduating from the prestigious Sciences Po School of Politics in Paris. He then accompanied Christian Estrosi, mayor of Nice, in several posts, serving as a parliamentary assistant, campaign manager and deputy mayor of Nice. Today, the two are rivals. Estrosi has joined Macron, while Ciotti has always clearly ruled out an alliance with the president. He would rather vote for the far-right Éric Zemmour than for Macron, he declared in the last presidential election.

    In opposition for ten years

    Shortly before the election for the party presidency, Ciotti’s campaign was still in danger. French media revealed that the financial prosecutor’s office had opened a case against his ex-wife for embezzling public funds. Ciotti is alleged to have employed her for years in his deputy’s office in Parliament and the City Hall of Nice. This is reminiscent of the scandal of ex-Prime Minister François Fillon, who wanted to become president in 2017. Ciotti won the election anyway.

    He has a major challenge ahead of him. His party is fighting for survival; he must bring it out of the shadows. In recent years, there hasn’t been much room for the Republicans between Macron in the liberal center and the parties of Marine Le Pen and Éric Zemmour.

    The right-wing bourgeois party of Jacques Chirac and Nicolas Sarkozy has been in opposition for ten years. Many party bigwigs have left for Macron. The parliamentary group has shrunk from more than 300 deputies to 62. Pécresse did not even win five percent of the vote as a presidential candidate in May. Ciotti believes the Republicans will go under if they don’t win the presidential race in 2027. Tanja Kuchenbecker

    • Digitization
    • France
    • Marine Le Pen

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