Josep Borrell will have to listen to some criticism when the foreign ministers and then the defense ministers meet in Brussels today and tomorrow. In March, the EU High Representative for Foreign Affairs promised Ukraine one million artillery shells by spring 2024. However, after the halfway point, the EU states have only delivered just under a third. In the same manner, the Spaniard pushed ahead in the summer with the idea of earmarking €20 billion for military aid to Ukraine over the next four years.
In addition to Ukraine, the Middle East conflict will naturally also dominate the meeting, with a focus on humanitarian aid and the situation of the civilian population in Gaza. However, following the dispute over ceasefires, pauses and humanitarian corridors, there is currently no appetite for new declarations, according to diplomats. Concerning aid for Ukraine, Josep Borrell now pays the price for the fact that he did not coordinate his attempts with the capitals in advance. Some found the pledge for one million shells very imprudent from the outset. Borrell will probably demand more speed from the ministers.
The plan to put military aid for Ukraine on a stable footing in the longer term via the Peace Facility was also well-intentioned. In practice, however, it is problematic for most member states to make commitments worth billions over several years outside of the EU budget. And even with small steps, success is not guaranteed. Hungary, for example, is still blocking the eighth tranche of €500 million, intended to compensate the member states for arms deliveries to Ukraine from the Peace Facility.
There is progress on the 12th package of sanctions against Russia, which the Commission intends to present this week. The focus: loopholes and circumvention deals. For the first time, Chinese companies could now be sanctioned and listed in Annex IV. The sanctions against the Russian diamond industry are also making good progress. On Friday in Antwerp, experts from the G7 countries want to see how Belgium’s proposal for the traceability of stones works in practice.
For Europe’s Socialists, their party meeting, the congress in Málaga, took place at the worst possible time. A few days earlier, Portugal’s Prime Minister António Costa had submitted his resignation because he was under investigation in a corruption scandal. This marks the departure of one of the candidates on whom the party had pinned its hopes. Costa should have played a leading role in the Socialists’ line-up for the European elections. Some comrades even wanted him to become their lead candidate. He had previously signaled that he wanted to finish his mandate in Portugal first and then move to Brussels as Council President in the second half of the term.
The successful Portuguese head of government would have been a top-class candidate. With his long experience in government, no one in the European Council would have denied his ability to lead the Commission. It would have been a duel of equals if he had run against incumbent Ursula von der Leyen, who is presumably seeking another term in office.
The Socialists have not given up hope that Costa will be available for the campaign. They assume that he is innocent. However, it is very unlikely that the judiciary will exonerate him by January 17, when the application deadline for the leading candidate ends.
Costa did not travel to Andalusia in the first place. As did a second socialist who would have been an ideal lead candidate not long ago: Sanna Marin, Finland’s head of government until June. The 38-year-old, who was the youngest head of government in her country, has completely retired from politics.
The party family barely has time to recover from the shock. Time is of the essence. PES party leader Stefan Löfven, the former Swedish head of government, assured that everything was going according to plan, that the party had adopted the program in Málaga and was now focusing on the personnel line-up. However, the bustle with which personnel matters were discussed in small groups in Málaga is evidence of nervousness. A member of the party presidium told Table.Media: “I think it would be better if we had a lead candidate soon. He or she must still be able to travel through the member states and make themselves known.”
There are still a good two months to go before a decision is due. Even top comrades from the member parties are questioning the top candidate principle behind closed doors. But ducking away is not an option. The Socialists have decided to put forward a candidate for the highest office the EU has to offer – to make the European elections more attractive. However, the top candidate principle has lost much of its appeal after the victorious 2019 top candidate, Manfred Weber (EPP), failed due to resistance from the heads of state and government.
The closest leadership circle of the PES met for breakfast in Málaga on Saturday morning. There was talk of nine party and government leaders; according to one participant, no preliminary agreement was reached in this circle either.
There is no official job profile. However, the criteria are likely to be:
It is known that Nicolas Schmit from Luxembourg, the Commissioner responsible for social policy, would be available. He has to live with the shortcoming that the Socialists are likely to leave the government in Luxembourg. This means that he would lack the support of his own country among the heads of state and government – even if the Social Democrats were to become the strongest party.
Repeatedly mentioned is Katarina Barley, former Federal Minister of Justice. She is one of 14 Vice-Presidents in the EU Parliament and Senior Vice-President of the PES. It is uncertain whether she, who will head the SPD’s German European list, can also become the European lead candidate. If Ursula von der Leyen runs, which is to be expected, there would be two top candidates from Germany. There are differing views on this from the party leadership. Several members of the executive committee would have no problem with two top candidates from Germany. However, in an interview with Table.Media, a prominent member of the party leadership considered another candidate from Germany to be problematic. It is, however, not ruled out that Barley will be considered if the search continues to be difficult.
Pedro Sánchez, the Spanish head of government and leader of the PSOE, exerts a great deal of influence in the PES with the Portuguese party. He also wants to have a say in personnel decisions. However, it is not expected that Sánchez will campaign for a top candidate from Spain. The leader of the Socialist Group in the European Parliament, Iratxe García Pérez, is not considered a candidate.
The initial course was also set at the weekend in terms of content: The congress adopted a 55-page resolution that will serve as the basis for the subsequent election program. This is to be adopted at the next congress in Italy at the end of February or the beginning of March. There were lengthy disputes over the passage of the war in the Middle East. Member parties from Ireland, Belgium and Spain, for example, wanted to push through wording that the German SPD saw as an affront to Israel.
The dispute was settled unusually: point 25 of the resolution was amended in line with the demands of the German comrades. At the same time, member parties were allowed to distance themselves by opting out. According to reports, parties from Belgium, Ireland and Spain intend to make use of this option. Nevertheless, Olaf Scholz said in a statement to journalists: “The German Social Democrats are by no means isolated in the party family on the Middle East issue.”
The amnesty agreement between the socialist PSOE party and the separatist parties Junts and Esquerra Republicana por Catalunya (ERC), intended to enable the inauguration of socialist Pedro Sánchez, has triggered a wave of protests. These range from the judiciary and civil society to prominent socialist politicians. The agreement reached by Junts and the PSOE last Thursday contains the term “lawfare,” a reference to the judicialization of politics and the intention to cancel Catalonia’s debt to the state. Various judicial associations see the agreement as a threat to the separation of powers and the independence of the judiciary.
This Sunday, hundreds of thousands demonstrated against the amnesty agreement called for by the People’s Party (PP). According to estimates, around 80,000 people gathered in the central square Puerta de Sol in Madrid and around 6,000 people protested in Barcelona. The number of demonstrators in Castilla-La Mancha is around 40,000, while the official figures for Andalusia are around 100,000.
Throughout last week, between 4,000 and 8,000 people demonstrated daily in front of the PSOE headquarters on Calle Ferraz in Madrid, leading to further unrest and numerous arrests. The leader of the PP, Alberto Núñez Feijóo, assured on Sunday that his party would not remain calm until it could return to the ballot box and accused the PSOE leader of “changing his mind”: During the campaign ahead of the July 23 elections, the amnesty for those involved in the 2017 separatist trial had always been a red line for Pedro Sánchez, for the PSOE and the entire socialist wing of the government. The Socialists described the amnesty as “clearly unconstitutional,” an “implantable” measure the government could not accept.
Following the announcement of the amnesty agreement last Thursday, the four main associations of judges issued a statement in which they denounced that the amnesty agreement “could in practice mean that judicial proceedings and decisions would be subject to parliamentary control, which would represent a clear encroachment on judicial independence and a breach of the separation of powers.”
The General Council of the Judiciary (Consejo General del Poder Judicial, CGPJ) sent a letter last week to EU Commission President Ursula von der Leyen, EU Vice-President Věra Jourová, EU Justice Commissioner Didier Reynders, EU Council President Charles Michel and the head of European diplomacy, Josep Borrell. In this statement, the CGPJ points out that the amnesty agreement “provides for the possibility of investigations against judges that could be carried out by political parties in parliament.” This violates the framework for the protection of judicial independence.
The CGPJ emphasizes that the amnesty agreement between Junts and PSOE ” threatens the most basic principle of equality of citizens before the law, which is enshrined in Article 14 of the Constitution.” The mandate of the CGPJ committee expired in 2018; since then, the PP has blocked reform of the justice system. The current executive committee has a conservative majority.
The senior deanery judges, the only ones elected by their colleagues by secret and direct vote, have also spoken out against the reference to the term “lawfare” contained in the amnesty agreement and also supported the text signed by all the judges’ associations on Thursday.
Important socialist politicians have also categorically rejected the PSOE’s concessions to separatism. Emiliano García-Page, President of the Junta de Castilla-La Mancha, protested not just against the amnesty but, above all, against the debt relief promised by Sánchez to Catalonia. “We will not have the Spanish constitution re-read,” emphasized García-Page. The regional president warned that “under no circumstances will Castilla-La Mancha tolerate anyone taking advantage of Spain’s uniqueness and plurality to obtain tax or financial privileges.”
Sánchez announced last Friday at the meeting of European socialists that his inauguration was imminent: “Next week, we will probably have a new progressive government.” This is exactly what the majority of the Spanish people voted for on July 23. “This triumph is not only a triumph for Spanish socialism but also for all our comrades-in-arms in Europe,” he added. Sánchez emphasized that the PP could only reach agreements with the right-wing populist Vox, while the PSOE could reach agreements with all forces except Vox.
It became clear early on that enforcing the Digital Services Act would not be a piece of cake. However, the way companies deal with Brussels legislation has changed: Unlike with the General Data Protection Regulation, “Big Tech” did not even try to pretend that everything was fine. Instead, many companies tried to comply with the letter of the law and thus their obligations as early as possible, according to senior EU officials. Despite all the letters from Commissioner Thierry Breton and various requests for information – Meta and Snap recently received two more such formal requests on Friday: Not a bad start, according to the Biggest Tech supervisors in Brussels.
This is because the transparency reports provide data on many issues for the first time, giving an insight into the engine room of companies. One point in particular stands out: how companies deal with potentially illegal content or content that violates their terms and conditions.
For most providers, this consists of a two-part process: Algorithm-based detection and decision mechanisms designed to clear away the majority, such as spam. And humans who recheck these decision templates in cases of doubt. How high the error rate for automated checks is was unknown until now. And certainly not comparable across multiple platforms. False positives and false negatives are a big part of the problem.
An interesting picture emerges here: the providers that have indicated figures on automated systems report enormously different rates. Pinterest, Booking and AliExpress, for example, are included in the statistics with an accuracy rate of at least 99%, Amazon believes in 97% accuracy, TikTok 95% and Google 90% for Play Store and Maps. Microsoft’s LinkedIn comes in at 88.8% and Google’s search at 86.4%.
This may not sound like a lot, but it should always be measured in terms of the amount of content and the resulting difficulties for affected users. If more than one in ten automated decisions on LinkedIn is wrong and one in 20 on TikTok, this means that millions of pieces of content and users within the EU could be affected. We explained when the first transparency reports were published that even the often sparse number of human moderators who speak the respective EU languages can hardly compensate for this.
By contrast, figures on state orders under Article 9 DSA – such as court orders – are less meaningful. The respective providers appear to have applied very different standards here. There is no other explanation for the fact that Google, for example, received 0 such orders, while the hotel booking platform Booking received 14 and Snapchat 707. In the case of online marketplaces, Zalando reported 0, AliExpress a full 14 and Amazon over 1,000 requests. This could be because these providers are already regularly requested to intervene by the relevant supervisory authorities.
However, it remains to be seen whether these are the orders referred to in Article 9 in all cases and how meaningful this is at all. There are also significant differences in the average processing time – in some cases, platforms with a small number of orders are significantly longer on average than those with many. On the one hand, this could be due to tardiness – on the other hand, it could be related to the scope or complexity of the individual case submitted to the companies. The Commission will therefore have to request many more explanations from the companies to gain more clarity.
The transparency reports are thus already outlining the way for the Implementing Act, which is to standardize the requirements for these reports next year: A whole host of delimitation and definition issues will pave the way. What exactly is meant by what, what is to be reported and how – all points that have already been the subject of much discussion surrounding the DSA. But now is the time. Because these definitions of technical details may have legal consequences: Deliberately incorrect transparency reports are in themselves a violation of the DSA.
However, the EU officials want to continue to focus on three areas in particular in the coming weeks:
This has already been part of the discussions, formal correspondence and requests for information to the parties involved in recent weeks.
At the same time, a complicated calculation task awaits the responsible bodies within the Commission: the first few months of DSA enforcement at the EU level were financed from the general budget. However, from January 2024, supervisory fees will be due for the companies. The Council and Parliament are now to be informed of the scope and amount by March 2024, writes Thierry Breton in a response to a question in writing.
“Industrial policy” has moved to the center of economic and even national-security debates, from the United States to the European Union. But the term can be misleading, not only because its meaning is rather vague, but also because it fails to capture the true imperative facing policymakers.
Industrial policy refers to the use of a wide range of tools, from regulations to subsidies and tax incentives, to support overall economic growth or foster dynamism in specific sectors. It is as old as the state. Go back 2,000 years to China’s Han dynasty, and you will find that iron-making was a state monopoly.
Europe has its own long history of pursuing industrial policy. European governments spent centuries supporting vital industries and technologies – especially those most relevant to war – in order to stay ahead of their enemies, who were often also their neighbors. More recently, they have pursued joint industrial policies to integrate, not fight, with one another.
The fundamental shift began in 1950, with the creation of the European Coal and Steel Community. Far from improving countries’ chances in war, this Europe-wide industrial policy to pool the production of coal and steel discouraged fighting on the continent. Putting coal and steel – both essential to the production of tanks and guns – under the control of a joint High Authority meant that no country could arm itself against the others. At the same time, the policy supported the post-World War II economic recovery.
Other crucial steps toward European integration can also be described as industrial policy. The EU as we know it today began with a program to abolish intra-European tariffs by creating a Customs Union in 1958. This was later followed by a major effort to reduce red tape at European borders by harmonizing hundreds of regulations, culminating in the Single Market Act of 1992.
European member states also pursue individual industrial policies, though strict EU controls on state aid – intended to prevent country-specific subsidies from giving firms an unfair competitive advantage – limit their room for maneuver. But national governments still invest in research and development, support technical education, and build needed infrastructure.
Most economists agree that such interventions can enhance growth and dynamism. Where the debate about industrial policy heats up is over the question of whether governments should directly intervene in the economy by supporting specific sectors. A recent study by Réka Juhász, Nathan J. Lane, and Dani Rodrik, which showed that government action can have very long-lasting implications for the location of certain industries, has added fuel to the fire.
But industrial policy is not high on government agendas nowadays because economic research says it should be. Governments are motivated primarily by geopolitical tensions: both the US and China have introduced official industrial strategies that stress the need to provide support for sectors deemed critical for national security. In this sense, today’s industrial great-power competition looks a lot like the old, war-ravaged Europe.
But what about a Europe-wide industrial policy? The European Commission did recently publish a list of critical technologies. But, in implementing a US- or China-style industrial policy, Europe faces a paradox: the EU’s effort to end the use of industrial policy as a geopolitical tool among European countries significantly limited its member states’ room to respond to geopolitically motivated industrial policies by others.
To be sure, the EU has dealt with sectors in decline. In 1978, when the steel industry was struggling, the European Economic Community implemented the so-called Davignon Plan, which capped production across European countries in a roughly proportional manner. But the EU has never had an active industrial policy for the simple reason that, unlike China and the US, it does not have a federal budget with which to provide large subsidies to specific sectors.
It is thus understandable that EU Commission President Ursula von der Leyen has called for a new European Sovereignty Fund. But it also makes sense that national leaders, who would have to finance this fund, are reluctant to hand their taxpayers’ money over to the EU to foster industrial development somewhere else.
In the absence of EU-level financing for a common industrial policy, the European Commission is loosening the rules for state aid. For example, under the European Chips Act, the Commission can approve targeted national support for large semiconductor factories. But whether you believe that member states’ newfound ability to support specific industries will have the desired effect depends on which side of the industrial-policy debate you land.
Those who believe that governments can identify sectors with potential for positive growth will welcome the EU’s approach, especially because the Commission reserves the right to assess whether any proposed national state aid would be proportional and efficiency-enhancing. The skeptics, on the other hand, believe that national governments are likely to finance “national champions” or politically convenient projects, and that EU bureaucrats are not well-suited to disentangle complex supply chains and pinpoint the sectors with the most potential.
Past experience, which highlights the hold national champions have on politicians, suggests that the skeptics’ view might be the more realistic. On the other hand, industrial policy can and should be about much more than providing large enterprises with billions of euros with which to construct high-tech factories at home. Increasing R&D spending would provide a stronger base for high-tech industry in general.
This indirect support could still be targeted. For example, the microchip industry would benefit from the creation of specialist technical schools and support for local expertise on key elements of the chip-making process. Such an approach is more strategy than policy – and it is likely to do far more good for Europe than would pouring public money into a few mega-factories.
Copyright: Project Syndicate, 2023.
www.project-syndicate.orf
Josep Borrell will have to listen to some criticism when the foreign ministers and then the defense ministers meet in Brussels today and tomorrow. In March, the EU High Representative for Foreign Affairs promised Ukraine one million artillery shells by spring 2024. However, after the halfway point, the EU states have only delivered just under a third. In the same manner, the Spaniard pushed ahead in the summer with the idea of earmarking €20 billion for military aid to Ukraine over the next four years.
In addition to Ukraine, the Middle East conflict will naturally also dominate the meeting, with a focus on humanitarian aid and the situation of the civilian population in Gaza. However, following the dispute over ceasefires, pauses and humanitarian corridors, there is currently no appetite for new declarations, according to diplomats. Concerning aid for Ukraine, Josep Borrell now pays the price for the fact that he did not coordinate his attempts with the capitals in advance. Some found the pledge for one million shells very imprudent from the outset. Borrell will probably demand more speed from the ministers.
The plan to put military aid for Ukraine on a stable footing in the longer term via the Peace Facility was also well-intentioned. In practice, however, it is problematic for most member states to make commitments worth billions over several years outside of the EU budget. And even with small steps, success is not guaranteed. Hungary, for example, is still blocking the eighth tranche of €500 million, intended to compensate the member states for arms deliveries to Ukraine from the Peace Facility.
There is progress on the 12th package of sanctions against Russia, which the Commission intends to present this week. The focus: loopholes and circumvention deals. For the first time, Chinese companies could now be sanctioned and listed in Annex IV. The sanctions against the Russian diamond industry are also making good progress. On Friday in Antwerp, experts from the G7 countries want to see how Belgium’s proposal for the traceability of stones works in practice.
For Europe’s Socialists, their party meeting, the congress in Málaga, took place at the worst possible time. A few days earlier, Portugal’s Prime Minister António Costa had submitted his resignation because he was under investigation in a corruption scandal. This marks the departure of one of the candidates on whom the party had pinned its hopes. Costa should have played a leading role in the Socialists’ line-up for the European elections. Some comrades even wanted him to become their lead candidate. He had previously signaled that he wanted to finish his mandate in Portugal first and then move to Brussels as Council President in the second half of the term.
The successful Portuguese head of government would have been a top-class candidate. With his long experience in government, no one in the European Council would have denied his ability to lead the Commission. It would have been a duel of equals if he had run against incumbent Ursula von der Leyen, who is presumably seeking another term in office.
The Socialists have not given up hope that Costa will be available for the campaign. They assume that he is innocent. However, it is very unlikely that the judiciary will exonerate him by January 17, when the application deadline for the leading candidate ends.
Costa did not travel to Andalusia in the first place. As did a second socialist who would have been an ideal lead candidate not long ago: Sanna Marin, Finland’s head of government until June. The 38-year-old, who was the youngest head of government in her country, has completely retired from politics.
The party family barely has time to recover from the shock. Time is of the essence. PES party leader Stefan Löfven, the former Swedish head of government, assured that everything was going according to plan, that the party had adopted the program in Málaga and was now focusing on the personnel line-up. However, the bustle with which personnel matters were discussed in small groups in Málaga is evidence of nervousness. A member of the party presidium told Table.Media: “I think it would be better if we had a lead candidate soon. He or she must still be able to travel through the member states and make themselves known.”
There are still a good two months to go before a decision is due. Even top comrades from the member parties are questioning the top candidate principle behind closed doors. But ducking away is not an option. The Socialists have decided to put forward a candidate for the highest office the EU has to offer – to make the European elections more attractive. However, the top candidate principle has lost much of its appeal after the victorious 2019 top candidate, Manfred Weber (EPP), failed due to resistance from the heads of state and government.
The closest leadership circle of the PES met for breakfast in Málaga on Saturday morning. There was talk of nine party and government leaders; according to one participant, no preliminary agreement was reached in this circle either.
There is no official job profile. However, the criteria are likely to be:
It is known that Nicolas Schmit from Luxembourg, the Commissioner responsible for social policy, would be available. He has to live with the shortcoming that the Socialists are likely to leave the government in Luxembourg. This means that he would lack the support of his own country among the heads of state and government – even if the Social Democrats were to become the strongest party.
Repeatedly mentioned is Katarina Barley, former Federal Minister of Justice. She is one of 14 Vice-Presidents in the EU Parliament and Senior Vice-President of the PES. It is uncertain whether she, who will head the SPD’s German European list, can also become the European lead candidate. If Ursula von der Leyen runs, which is to be expected, there would be two top candidates from Germany. There are differing views on this from the party leadership. Several members of the executive committee would have no problem with two top candidates from Germany. However, in an interview with Table.Media, a prominent member of the party leadership considered another candidate from Germany to be problematic. It is, however, not ruled out that Barley will be considered if the search continues to be difficult.
Pedro Sánchez, the Spanish head of government and leader of the PSOE, exerts a great deal of influence in the PES with the Portuguese party. He also wants to have a say in personnel decisions. However, it is not expected that Sánchez will campaign for a top candidate from Spain. The leader of the Socialist Group in the European Parliament, Iratxe García Pérez, is not considered a candidate.
The initial course was also set at the weekend in terms of content: The congress adopted a 55-page resolution that will serve as the basis for the subsequent election program. This is to be adopted at the next congress in Italy at the end of February or the beginning of March. There were lengthy disputes over the passage of the war in the Middle East. Member parties from Ireland, Belgium and Spain, for example, wanted to push through wording that the German SPD saw as an affront to Israel.
The dispute was settled unusually: point 25 of the resolution was amended in line with the demands of the German comrades. At the same time, member parties were allowed to distance themselves by opting out. According to reports, parties from Belgium, Ireland and Spain intend to make use of this option. Nevertheless, Olaf Scholz said in a statement to journalists: “The German Social Democrats are by no means isolated in the party family on the Middle East issue.”
The amnesty agreement between the socialist PSOE party and the separatist parties Junts and Esquerra Republicana por Catalunya (ERC), intended to enable the inauguration of socialist Pedro Sánchez, has triggered a wave of protests. These range from the judiciary and civil society to prominent socialist politicians. The agreement reached by Junts and the PSOE last Thursday contains the term “lawfare,” a reference to the judicialization of politics and the intention to cancel Catalonia’s debt to the state. Various judicial associations see the agreement as a threat to the separation of powers and the independence of the judiciary.
This Sunday, hundreds of thousands demonstrated against the amnesty agreement called for by the People’s Party (PP). According to estimates, around 80,000 people gathered in the central square Puerta de Sol in Madrid and around 6,000 people protested in Barcelona. The number of demonstrators in Castilla-La Mancha is around 40,000, while the official figures for Andalusia are around 100,000.
Throughout last week, between 4,000 and 8,000 people demonstrated daily in front of the PSOE headquarters on Calle Ferraz in Madrid, leading to further unrest and numerous arrests. The leader of the PP, Alberto Núñez Feijóo, assured on Sunday that his party would not remain calm until it could return to the ballot box and accused the PSOE leader of “changing his mind”: During the campaign ahead of the July 23 elections, the amnesty for those involved in the 2017 separatist trial had always been a red line for Pedro Sánchez, for the PSOE and the entire socialist wing of the government. The Socialists described the amnesty as “clearly unconstitutional,” an “implantable” measure the government could not accept.
Following the announcement of the amnesty agreement last Thursday, the four main associations of judges issued a statement in which they denounced that the amnesty agreement “could in practice mean that judicial proceedings and decisions would be subject to parliamentary control, which would represent a clear encroachment on judicial independence and a breach of the separation of powers.”
The General Council of the Judiciary (Consejo General del Poder Judicial, CGPJ) sent a letter last week to EU Commission President Ursula von der Leyen, EU Vice-President Věra Jourová, EU Justice Commissioner Didier Reynders, EU Council President Charles Michel and the head of European diplomacy, Josep Borrell. In this statement, the CGPJ points out that the amnesty agreement “provides for the possibility of investigations against judges that could be carried out by political parties in parliament.” This violates the framework for the protection of judicial independence.
The CGPJ emphasizes that the amnesty agreement between Junts and PSOE ” threatens the most basic principle of equality of citizens before the law, which is enshrined in Article 14 of the Constitution.” The mandate of the CGPJ committee expired in 2018; since then, the PP has blocked reform of the justice system. The current executive committee has a conservative majority.
The senior deanery judges, the only ones elected by their colleagues by secret and direct vote, have also spoken out against the reference to the term “lawfare” contained in the amnesty agreement and also supported the text signed by all the judges’ associations on Thursday.
Important socialist politicians have also categorically rejected the PSOE’s concessions to separatism. Emiliano García-Page, President of the Junta de Castilla-La Mancha, protested not just against the amnesty but, above all, against the debt relief promised by Sánchez to Catalonia. “We will not have the Spanish constitution re-read,” emphasized García-Page. The regional president warned that “under no circumstances will Castilla-La Mancha tolerate anyone taking advantage of Spain’s uniqueness and plurality to obtain tax or financial privileges.”
Sánchez announced last Friday at the meeting of European socialists that his inauguration was imminent: “Next week, we will probably have a new progressive government.” This is exactly what the majority of the Spanish people voted for on July 23. “This triumph is not only a triumph for Spanish socialism but also for all our comrades-in-arms in Europe,” he added. Sánchez emphasized that the PP could only reach agreements with the right-wing populist Vox, while the PSOE could reach agreements with all forces except Vox.
It became clear early on that enforcing the Digital Services Act would not be a piece of cake. However, the way companies deal with Brussels legislation has changed: Unlike with the General Data Protection Regulation, “Big Tech” did not even try to pretend that everything was fine. Instead, many companies tried to comply with the letter of the law and thus their obligations as early as possible, according to senior EU officials. Despite all the letters from Commissioner Thierry Breton and various requests for information – Meta and Snap recently received two more such formal requests on Friday: Not a bad start, according to the Biggest Tech supervisors in Brussels.
This is because the transparency reports provide data on many issues for the first time, giving an insight into the engine room of companies. One point in particular stands out: how companies deal with potentially illegal content or content that violates their terms and conditions.
For most providers, this consists of a two-part process: Algorithm-based detection and decision mechanisms designed to clear away the majority, such as spam. And humans who recheck these decision templates in cases of doubt. How high the error rate for automated checks is was unknown until now. And certainly not comparable across multiple platforms. False positives and false negatives are a big part of the problem.
An interesting picture emerges here: the providers that have indicated figures on automated systems report enormously different rates. Pinterest, Booking and AliExpress, for example, are included in the statistics with an accuracy rate of at least 99%, Amazon believes in 97% accuracy, TikTok 95% and Google 90% for Play Store and Maps. Microsoft’s LinkedIn comes in at 88.8% and Google’s search at 86.4%.
This may not sound like a lot, but it should always be measured in terms of the amount of content and the resulting difficulties for affected users. If more than one in ten automated decisions on LinkedIn is wrong and one in 20 on TikTok, this means that millions of pieces of content and users within the EU could be affected. We explained when the first transparency reports were published that even the often sparse number of human moderators who speak the respective EU languages can hardly compensate for this.
By contrast, figures on state orders under Article 9 DSA – such as court orders – are less meaningful. The respective providers appear to have applied very different standards here. There is no other explanation for the fact that Google, for example, received 0 such orders, while the hotel booking platform Booking received 14 and Snapchat 707. In the case of online marketplaces, Zalando reported 0, AliExpress a full 14 and Amazon over 1,000 requests. This could be because these providers are already regularly requested to intervene by the relevant supervisory authorities.
However, it remains to be seen whether these are the orders referred to in Article 9 in all cases and how meaningful this is at all. There are also significant differences in the average processing time – in some cases, platforms with a small number of orders are significantly longer on average than those with many. On the one hand, this could be due to tardiness – on the other hand, it could be related to the scope or complexity of the individual case submitted to the companies. The Commission will therefore have to request many more explanations from the companies to gain more clarity.
The transparency reports are thus already outlining the way for the Implementing Act, which is to standardize the requirements for these reports next year: A whole host of delimitation and definition issues will pave the way. What exactly is meant by what, what is to be reported and how – all points that have already been the subject of much discussion surrounding the DSA. But now is the time. Because these definitions of technical details may have legal consequences: Deliberately incorrect transparency reports are in themselves a violation of the DSA.
However, the EU officials want to continue to focus on three areas in particular in the coming weeks:
This has already been part of the discussions, formal correspondence and requests for information to the parties involved in recent weeks.
At the same time, a complicated calculation task awaits the responsible bodies within the Commission: the first few months of DSA enforcement at the EU level were financed from the general budget. However, from January 2024, supervisory fees will be due for the companies. The Council and Parliament are now to be informed of the scope and amount by March 2024, writes Thierry Breton in a response to a question in writing.
“Industrial policy” has moved to the center of economic and even national-security debates, from the United States to the European Union. But the term can be misleading, not only because its meaning is rather vague, but also because it fails to capture the true imperative facing policymakers.
Industrial policy refers to the use of a wide range of tools, from regulations to subsidies and tax incentives, to support overall economic growth or foster dynamism in specific sectors. It is as old as the state. Go back 2,000 years to China’s Han dynasty, and you will find that iron-making was a state monopoly.
Europe has its own long history of pursuing industrial policy. European governments spent centuries supporting vital industries and technologies – especially those most relevant to war – in order to stay ahead of their enemies, who were often also their neighbors. More recently, they have pursued joint industrial policies to integrate, not fight, with one another.
The fundamental shift began in 1950, with the creation of the European Coal and Steel Community. Far from improving countries’ chances in war, this Europe-wide industrial policy to pool the production of coal and steel discouraged fighting on the continent. Putting coal and steel – both essential to the production of tanks and guns – under the control of a joint High Authority meant that no country could arm itself against the others. At the same time, the policy supported the post-World War II economic recovery.
Other crucial steps toward European integration can also be described as industrial policy. The EU as we know it today began with a program to abolish intra-European tariffs by creating a Customs Union in 1958. This was later followed by a major effort to reduce red tape at European borders by harmonizing hundreds of regulations, culminating in the Single Market Act of 1992.
European member states also pursue individual industrial policies, though strict EU controls on state aid – intended to prevent country-specific subsidies from giving firms an unfair competitive advantage – limit their room for maneuver. But national governments still invest in research and development, support technical education, and build needed infrastructure.
Most economists agree that such interventions can enhance growth and dynamism. Where the debate about industrial policy heats up is over the question of whether governments should directly intervene in the economy by supporting specific sectors. A recent study by Réka Juhász, Nathan J. Lane, and Dani Rodrik, which showed that government action can have very long-lasting implications for the location of certain industries, has added fuel to the fire.
But industrial policy is not high on government agendas nowadays because economic research says it should be. Governments are motivated primarily by geopolitical tensions: both the US and China have introduced official industrial strategies that stress the need to provide support for sectors deemed critical for national security. In this sense, today’s industrial great-power competition looks a lot like the old, war-ravaged Europe.
But what about a Europe-wide industrial policy? The European Commission did recently publish a list of critical technologies. But, in implementing a US- or China-style industrial policy, Europe faces a paradox: the EU’s effort to end the use of industrial policy as a geopolitical tool among European countries significantly limited its member states’ room to respond to geopolitically motivated industrial policies by others.
To be sure, the EU has dealt with sectors in decline. In 1978, when the steel industry was struggling, the European Economic Community implemented the so-called Davignon Plan, which capped production across European countries in a roughly proportional manner. But the EU has never had an active industrial policy for the simple reason that, unlike China and the US, it does not have a federal budget with which to provide large subsidies to specific sectors.
It is thus understandable that EU Commission President Ursula von der Leyen has called for a new European Sovereignty Fund. But it also makes sense that national leaders, who would have to finance this fund, are reluctant to hand their taxpayers’ money over to the EU to foster industrial development somewhere else.
In the absence of EU-level financing for a common industrial policy, the European Commission is loosening the rules for state aid. For example, under the European Chips Act, the Commission can approve targeted national support for large semiconductor factories. But whether you believe that member states’ newfound ability to support specific industries will have the desired effect depends on which side of the industrial-policy debate you land.
Those who believe that governments can identify sectors with potential for positive growth will welcome the EU’s approach, especially because the Commission reserves the right to assess whether any proposed national state aid would be proportional and efficiency-enhancing. The skeptics, on the other hand, believe that national governments are likely to finance “national champions” or politically convenient projects, and that EU bureaucrats are not well-suited to disentangle complex supply chains and pinpoint the sectors with the most potential.
Past experience, which highlights the hold national champions have on politicians, suggests that the skeptics’ view might be the more realistic. On the other hand, industrial policy can and should be about much more than providing large enterprises with billions of euros with which to construct high-tech factories at home. Increasing R&D spending would provide a stronger base for high-tech industry in general.
This indirect support could still be targeted. For example, the microchip industry would benefit from the creation of specialist technical schools and support for local expertise on key elements of the chip-making process. Such an approach is more strategy than policy – and it is likely to do far more good for Europe than would pouring public money into a few mega-factories.
Copyright: Project Syndicate, 2023.
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