EU summits are often more a barometer of mood than a venue for productive discussions. Some prime ministers use the Brussels stage to address their domestic audience. Voters are grumbling loudly about rising power and heating costs? Look, I’m fighting for your interests at the highest level! Other heads of government, on the other hand, succumb to the temptation to push their own agenda in the slipstream, even if objectively they contribute little to solving the problem.
At yesterday’s summit, German Chancellor Olaf Scholz’s first, the mood was rather testy on the power issue. Spain’s Pedro Sánchez once again demanded new rules for the European electricity market, while Poland’s Mateusz Morawiecki called for the emissions trading scheme to be suspended. The Czech politician Andrej Babiš, Romanian politician Klaus Johannis, and several others, in turn, tried to force the EU Commission to submit the controversial taxonomy legislation on nuclear energy and gas as soon as possible.
After a long discussion, it was finally agreed only to disagree. The chapter on electricity rates was deleted from the conclusions, as Timo Landenberger reports. Scholz appeared unfazed by the dispute: “I felt comfortable,” he later said at the joint final press conference with Emmanuel Macron.
Another equally well-rehearsed behavior is to take a unilateral approach back home and then commit to a coordinated approach in Brussels. This is what happened again with the COVID measures, where the governments are again restricting the entry of EU citizens amidst the fourth wave at their own discretion and without any agreement. Read more in the analysis by my colleague Eugenie Ankowitsch.
The Council, on the other hand, made a clear decision about Russia. Military aggression against Ukraine would entail “massive consequences and severe costs”, according to the summit declaration adopted late last night. The statement is less clear on possible punitive measures. Eric Bonse analyzes the sanctions options available to the EU and why Olaf Scholz, in particular, should think twice before actually implementing them.
At their summit meeting, the European heads of state and government once again failed to find a joint response to the energy price crisis that has been going on for weeks. As at the European Council in October, the issue caused heated discussions on Thursday. Despite lengthy negotiations, the participants were unable to agree on common conclusions. Poland and the Czech Republic, in particular, were adamant in their stances.
Assessments of the situation on the energy markets differ widely in some cases. Some countries, led by Poland, are blaming the crisis on the rise in the price of CO2 under the European Emissions Trading Scheme (ETS). The price per ton of CO2 had risen sharply in recent weeks and months and has now cracked the €90 threshold. Supporters see this as a sign that the system is working. Critics, on the other hand, hold financial speculation in particular responsible for the price increase and fear social imbalances due to the additional burden.
Poland, which is largely dependent on coal for its electricity generation, has reportedly advocated a temporary suspension of emissions trading. In doing so, Polish Prime Minister Mateusz Morawiecki wants to put a stop to price-driving financial speculation in particular. This approach has also been pushed by other Eastern European countries such as Hungary and the Czech Republic. The proposal to suspend the ETS did not find broad support among the heads of government. However, German Chancellor Olaf Scholz said that it had been agreed that price developments should be closely monitored there as well as on the energy markets.
French President Emmanuel Macron, on the other hand, spoke out against an extension of the ETS to buildings and transport against the backdrop of the high CO2 price. The EU Commission presented plans to this effect as part of its Fit For 55 package in July. This caused an outcry not only in France.
Meanwhile, other countries, led by Spain, insisted on an adjustment of the European electricity and gas market design to respond to the energy crisis and reduce market volatility. As part of the EU gas package published on Wednesday, the European Commission wants to meet the demand for joint strategic gas purchases and make them possible, at least on a voluntary basis. However, this is a far cry from the Spanish idea of a central platform accessible across Europe.
However, most countries, including Germany, see the price increase as a temporary, market-based phenomenon and consider far-reaching intervention in the market to be counterproductive. Most recently, the EU energy agency ACER and the market supervisory authority ESMA investigated the development of energy prices. According to the reports, the record-high electricity prices are neither due to market manipulation nor to errors in the existing electricity market design. The two authorities are now to delve deeper into the investigation.
Rather, the price increase was primarily due to the global economic recovery and the associated increase in demand for gas. In order to protect consumers and industry from the high costs in the short term, temporary and targeted national measures would be the most suitable. The EU Commission presented a toolbox with corresponding proposals in October.
The planned delegated act on the taxonomy, which is to assess the climate protection contribution of nuclear energy and natural gas, caused additional controversy. Led by the Czech Republic, several countries pushed for the inclusion of a formulation in the summit declaration, according to which the Commission should present the legal act as early as next week, including a green label for nuclear and gas. But opponents of nuclear power, such as Austria and Luxembourg, have fought doggedly against this.
Scholz, like Commission President Ursula von der Leyen, sought to calm the ideologically heated discussion. “The issue is completely overrated,” he said. The taxonomy is important for investors who want to invest their money according to sustainability criteria. However, it does not decide which path individual countries must take to reach the goal of climate neutrality. Scholz and Macron announced that they would continue their intensive efforts to find compromise solutions in the coming days. Till Hoppe
The European Union is venturing into new territory in terms of foreign and economic policy. At the European Council in Brussels on Thursday, the heads of state and government – including German Chancellor Olaf Scholz for the first time – threatened Russia with economic and financial sanctions even before the country launched the feared military offensive against Ukraine.
Until now, the EU had only reacted retrospectively to violations of its values and interests with punitive measures. Now it is taking a proactive approach – not least at the urging of the US and Nato. The step is intended as a deterrent measure; in parallel, Scholz and French head of state Emmanuel Macron want to seek dialogue with President Vladimir Putin again.
“Any further military aggression against Ukraine will result in massive consequences and significant costs,” the summit statement adopted by the 27 late Thursday night said. Restrictive measures “coordinated with our partners” were also planned, it said. The US had previously urged the preparation of sanctions.
However, the punitive measures are not “spelled out”. In addition to Ukraine, Poland, Lithuania, and Latvia had also called for this. The summit may decide that the Baltic Sea pipeline “Nord Stream is on the table,” said Latvian head of government, Krišjānis Kariņš. “If there is increased military activity, the project would be shut down.”
However, Kariņš was not able to assert himself with this demand. From the point of view of Scholz and Macron, who coordinated closely, two arguments spoke against a concrete naming of the sanctions: Firstly, this would play into Putin’s hands – he could adjust to the penalties and prepare countermeasures. Secondly, the possible costs would first have to be assessed.
These costs can be significant. A final abandonment of Nord Stream 2, for example, is likely to lead to even higher energy prices. The gas price had already skyrocketed on Monday after Foreign Minister Annalena Baerbock announced that quick approval of the pipeline was not to be expected. According to the Federal Network Agency, no decision will be made before summer 2022.
Russia’s exclusion from the financial services provider Swift, as being considered in Brussels, could be even more painful. Such a step would have a “dramatic impact” on the economy, said Oliver Hermes, chairman of the Committee on Eastern European Economic Relations. In Moscow, there is talk of an “atomic bomb on the financial market” that would also hit Europe.
In fact, Russia’s financial isolation is likely to lead to considerable shocks on the markets – and rebound on the German export industry. Scholz will therefore think twice before agreeing to the Swift “nuclear option”. According to EU circles in Brussels, they first want to wait for an impact assessment. This could be prepared by the EU Commission.
Despite these reservations, the threat of “massive sanctions” is more explicit than the offer of talks that the EU summit sent to Moscow. The conclusions merely say that the European Council “encourages diplomatic efforts” to achieve the full implementation of the 2015 Minsk agreement.
It also supports the so-called Normandy format, in which Germany, France, Ukraine, and Russia are seeking a peaceful solution. The only Normandy summit in the four-party format to date had taken place in Paris at the end of 2019. Since then, however, tensions have continued to escalate. Most recently, the US took the lead in the Ukraine crisis.
Whether the EU will now find its way back into the diplomatic game or be pushed further to the sidelines remains to be seen. In any case, it has ventured further than ever with its sanctions decision – Scholz made a risky bet at his first summit.
When the first pandemic wave hit Europe in the early 2020s, the European Union’s member states relied on border closures. Despite the realization that the virus does not stop at any national border and that border closures between EU member states are not effective, similar reactions have occurred time and again. During the third wave last spring, Germany imposed strict controls at its borders with the Czech Republic and Austria to slow the spread of the then-new Delta virus variant. The dispute over the right approach, first to COVID apps and later to vaccination certificates, also divided member states.
In view of the fourth wave and the new Omicron variant, more and more countries are initiating new emergency measures. At the end of November, the EU Commission was still trying to persuade the member states to take a common line. EU Justice Commissioner Didier Reynders, for example, stressed: “Our main goal is to avoid divergent measures in the EU.” EU Health Commissioner Stella Kyriakides warned in the European Parliament against a new “fragmentation” of the rules as at the beginning of the pandemic.
However, this was in vain. Bit by bit, more and more countries are once again backing out and taking their own measures, for example, with regard to the period of validity of the COVID vaccination certificate or with regard to entry requirements. The EU Commission’s fear that a patchwork of different regulations would emerge in the EU is once again becoming reality.
First member states have decided to reduce the validity period of the vaccination certificates. In Italy and Austria, for example, the digital EU vaccination certificate is valid for nine months. In France and also in Denmark, it will soon be only seven months. Some other countries are already discussing or planning similar measures. In Germany, the certificate has so far been valid for twelve months. In contrast to other countries, however, Germany wants to wait for a universal European solution. And this is also to come.
The heads of state confirmed at the EU summit on Thursday that the EU Commission should issue binding regulations on the validity period of digital vaccination certificates as part of a directly effective delegated act. For German Health Minister Karl Lauterbach (SPD), this is the right step: “Certificate validity periods should be standardized, and this should be done on the basis of the latest scientific findings.” This would allow the certificates to expire more quickly than before, depending on the effectiveness of the vaccinations for the dominant virus variants throughout the EU.
In many countries, booster vaccinations are now required on a considerable scale, and correspondingly high vaccine quantities are needed. In Germany, there is even a threat of a vaccine shortage for the first quarter of 2022, Health Minister Lauterbach announced after taking stock of the situation, for which, however, he holds neither his predecessor nor the EU Commission responsible.
On Thursday, the Commission announced that vaccine manufacturer Moderna is making Messenger RNA vaccine available to Germany and other EU member states on an accelerated basis. Delivery of 10 million doses of Moderna for Germany is to be brought forward to December 2021. An additional 25 million Moderna doses will be delivered in the first quarter of 2022, and the first mRNA vaccines adapted to the Omicron variant could also be available by the end of the first quarter. Germany has also committed to purchase the majority of vaccine doses under another EU framework agreement with Biotech for 2022.
However, until boosters and adapted vaccines are effective across the board, further EU chaos looms. Countries like Portugal, Ireland, and Italy are demanding a negative COVID test for all travelers from other EU countries, regardless of their vaccination status. Italy, in particular, is causing irritation. The Italian Health Minister Roberto Speranza only signed a corresponding decree on Tuesday without complying with the agreement to inform the EU Commission 48 hours in advance.
“These individual decisions by states undermine people’s confidence that conditions are the same across the EU,” said EU Commission Vice-President Věra Jourová. She stressed that the EU’s green passport regulation provides that EU citizens can travel without restrictions throughout the EU if they are vaccinated, have a negative test, or can provide a certificate of recovery.
The timing for Italy to go it alone could hardly be worse. Because just two days later, at yesterday’s EU summit, it was supposed to be about coordinated action among the member states. Luxembourg’s Prime Minister Xavier Bettel criticized the countries’ decision to introduce mandatory tests for EU travelers immediately before the summit. He warned that such rules would reduce the willingness to be vaccinated. Belgian Prime Minister Alexander De Croo expressed similar sentiments.
The 27 heads of state – including Italy’s prime minister Mario Draghi – reiterated the importance of a coordinated approach to the pandemic in their joint statement. It was important to ensure that “any restrictions are based on objective criteria and do not undermine the functioning of the internal market or disproportionately hinder free movement between member states and entry into the EU”, the conclusions said.
Back in the summer, Luukas Ilves described the results of a study as “fascinating”: Two out of three respondents from ten different countries stated that they would use digital central bank money if it were introduced. Good news for Guardtime’s Head of Strategy – the Estonian blockchain company has been working with central banks on electronic currencies for years.
“My German is a little rusty,” the 34-year-old says, in German, without any accent. “I haven’t spoken German regularly since eighth grade.” Ilves was born in Munich in 1987. His father, later Estonian President Toomas Hendrik Ilves, worked as head of the Estonian Service at Radio Free Europe/Radio Liberty at the time. Later, the family moved to the United States, his mother’s homeland. Luukas Ilves spent the rest of his school years there, then studied international relations, philosophy, and economics at Stanford University.
Back in Estonia, Luukas Ilves’ path to becoming an expert in telecommunications began: He was initially a civil servant at the Ministry of Defence, where he dealt with cybersecurity and e-governance. Later, he worked at the Estonian Information Systems Authority and in Brussels for the European Commission, the Council of the EU, and the think tank The Lisbon Council. During Estonia’s EU Presidency in 2017, Ilves was responsible for digital policy.
About his switch to the private sector, he says, “I felt governments were too slow to come up with more complex solutions.” The Economy, he says, is faster and more aggressive at developing and expanding new ideas. But he wanted to continue working in the technology industry. The move from civil servant to the private sector is quite normal in Estonia – his colleagues in Brussels, on the other hand, were quite surprised and called the move bold, he says.
Since 2019, he has been leading the strategic direction of Guardtime in Tallinn. The company was founded in 2007 – after Russian cyberattacks on Estonia – with the aim of safely and reliably encrypting data and automating these processes. Its products include a “Smart Vaccination Certificate”, with which the World Health Organization (WHO) aims to develop forgery-proof international vaccination certificates.
Guardtime has been working on building an electronic currency system since the early 2000s. The company created “KSI Cash”, a platform through which digital payments are processed. Since 2020, the company has also been working with the Estonian Central Bank to explore the use of the platform in the euro system. Guardtime is also working on pilot projects with other central banks around the world.
“Data protection is also a question of self-confidence,” says Ilves. Excuses for the slow progress of digitization, such as those repeatedly heard in Germany, would eventually become self-fulfilling. “The lack of confidence can be very debilitating there.” He cites his home country, Estonia, as a role model: After achieving independence from the Soviet Union in 1989, the country’s political institutions were already set up digitally.
Ilves even compares the “spirit” of its public administration with Silicon Valley – innovative and efficient. Other countries and the EU could learn from this. “Governments need to keep up with developments in the private sector,” he says. According to Ilves, the 27 national agencies still operate too differently. Member states were still too reluctant to hand over sovereignty to the EU.
Meanwhile, the COVID-19 pandemic has boosted many ideas: Not only has digitization significantly advanced, but our approach to money has changed as well, Ilves says. The first central bank digital currency (CBDC) could be launched as early as within the next two years, according to Guardtimes predictions. Leonie Duengefeld
EU summits are often more a barometer of mood than a venue for productive discussions. Some prime ministers use the Brussels stage to address their domestic audience. Voters are grumbling loudly about rising power and heating costs? Look, I’m fighting for your interests at the highest level! Other heads of government, on the other hand, succumb to the temptation to push their own agenda in the slipstream, even if objectively they contribute little to solving the problem.
At yesterday’s summit, German Chancellor Olaf Scholz’s first, the mood was rather testy on the power issue. Spain’s Pedro Sánchez once again demanded new rules for the European electricity market, while Poland’s Mateusz Morawiecki called for the emissions trading scheme to be suspended. The Czech politician Andrej Babiš, Romanian politician Klaus Johannis, and several others, in turn, tried to force the EU Commission to submit the controversial taxonomy legislation on nuclear energy and gas as soon as possible.
After a long discussion, it was finally agreed only to disagree. The chapter on electricity rates was deleted from the conclusions, as Timo Landenberger reports. Scholz appeared unfazed by the dispute: “I felt comfortable,” he later said at the joint final press conference with Emmanuel Macron.
Another equally well-rehearsed behavior is to take a unilateral approach back home and then commit to a coordinated approach in Brussels. This is what happened again with the COVID measures, where the governments are again restricting the entry of EU citizens amidst the fourth wave at their own discretion and without any agreement. Read more in the analysis by my colleague Eugenie Ankowitsch.
The Council, on the other hand, made a clear decision about Russia. Military aggression against Ukraine would entail “massive consequences and severe costs”, according to the summit declaration adopted late last night. The statement is less clear on possible punitive measures. Eric Bonse analyzes the sanctions options available to the EU and why Olaf Scholz, in particular, should think twice before actually implementing them.
At their summit meeting, the European heads of state and government once again failed to find a joint response to the energy price crisis that has been going on for weeks. As at the European Council in October, the issue caused heated discussions on Thursday. Despite lengthy negotiations, the participants were unable to agree on common conclusions. Poland and the Czech Republic, in particular, were adamant in their stances.
Assessments of the situation on the energy markets differ widely in some cases. Some countries, led by Poland, are blaming the crisis on the rise in the price of CO2 under the European Emissions Trading Scheme (ETS). The price per ton of CO2 had risen sharply in recent weeks and months and has now cracked the €90 threshold. Supporters see this as a sign that the system is working. Critics, on the other hand, hold financial speculation in particular responsible for the price increase and fear social imbalances due to the additional burden.
Poland, which is largely dependent on coal for its electricity generation, has reportedly advocated a temporary suspension of emissions trading. In doing so, Polish Prime Minister Mateusz Morawiecki wants to put a stop to price-driving financial speculation in particular. This approach has also been pushed by other Eastern European countries such as Hungary and the Czech Republic. The proposal to suspend the ETS did not find broad support among the heads of government. However, German Chancellor Olaf Scholz said that it had been agreed that price developments should be closely monitored there as well as on the energy markets.
French President Emmanuel Macron, on the other hand, spoke out against an extension of the ETS to buildings and transport against the backdrop of the high CO2 price. The EU Commission presented plans to this effect as part of its Fit For 55 package in July. This caused an outcry not only in France.
Meanwhile, other countries, led by Spain, insisted on an adjustment of the European electricity and gas market design to respond to the energy crisis and reduce market volatility. As part of the EU gas package published on Wednesday, the European Commission wants to meet the demand for joint strategic gas purchases and make them possible, at least on a voluntary basis. However, this is a far cry from the Spanish idea of a central platform accessible across Europe.
However, most countries, including Germany, see the price increase as a temporary, market-based phenomenon and consider far-reaching intervention in the market to be counterproductive. Most recently, the EU energy agency ACER and the market supervisory authority ESMA investigated the development of energy prices. According to the reports, the record-high electricity prices are neither due to market manipulation nor to errors in the existing electricity market design. The two authorities are now to delve deeper into the investigation.
Rather, the price increase was primarily due to the global economic recovery and the associated increase in demand for gas. In order to protect consumers and industry from the high costs in the short term, temporary and targeted national measures would be the most suitable. The EU Commission presented a toolbox with corresponding proposals in October.
The planned delegated act on the taxonomy, which is to assess the climate protection contribution of nuclear energy and natural gas, caused additional controversy. Led by the Czech Republic, several countries pushed for the inclusion of a formulation in the summit declaration, according to which the Commission should present the legal act as early as next week, including a green label for nuclear and gas. But opponents of nuclear power, such as Austria and Luxembourg, have fought doggedly against this.
Scholz, like Commission President Ursula von der Leyen, sought to calm the ideologically heated discussion. “The issue is completely overrated,” he said. The taxonomy is important for investors who want to invest their money according to sustainability criteria. However, it does not decide which path individual countries must take to reach the goal of climate neutrality. Scholz and Macron announced that they would continue their intensive efforts to find compromise solutions in the coming days. Till Hoppe
The European Union is venturing into new territory in terms of foreign and economic policy. At the European Council in Brussels on Thursday, the heads of state and government – including German Chancellor Olaf Scholz for the first time – threatened Russia with economic and financial sanctions even before the country launched the feared military offensive against Ukraine.
Until now, the EU had only reacted retrospectively to violations of its values and interests with punitive measures. Now it is taking a proactive approach – not least at the urging of the US and Nato. The step is intended as a deterrent measure; in parallel, Scholz and French head of state Emmanuel Macron want to seek dialogue with President Vladimir Putin again.
“Any further military aggression against Ukraine will result in massive consequences and significant costs,” the summit statement adopted by the 27 late Thursday night said. Restrictive measures “coordinated with our partners” were also planned, it said. The US had previously urged the preparation of sanctions.
However, the punitive measures are not “spelled out”. In addition to Ukraine, Poland, Lithuania, and Latvia had also called for this. The summit may decide that the Baltic Sea pipeline “Nord Stream is on the table,” said Latvian head of government, Krišjānis Kariņš. “If there is increased military activity, the project would be shut down.”
However, Kariņš was not able to assert himself with this demand. From the point of view of Scholz and Macron, who coordinated closely, two arguments spoke against a concrete naming of the sanctions: Firstly, this would play into Putin’s hands – he could adjust to the penalties and prepare countermeasures. Secondly, the possible costs would first have to be assessed.
These costs can be significant. A final abandonment of Nord Stream 2, for example, is likely to lead to even higher energy prices. The gas price had already skyrocketed on Monday after Foreign Minister Annalena Baerbock announced that quick approval of the pipeline was not to be expected. According to the Federal Network Agency, no decision will be made before summer 2022.
Russia’s exclusion from the financial services provider Swift, as being considered in Brussels, could be even more painful. Such a step would have a “dramatic impact” on the economy, said Oliver Hermes, chairman of the Committee on Eastern European Economic Relations. In Moscow, there is talk of an “atomic bomb on the financial market” that would also hit Europe.
In fact, Russia’s financial isolation is likely to lead to considerable shocks on the markets – and rebound on the German export industry. Scholz will therefore think twice before agreeing to the Swift “nuclear option”. According to EU circles in Brussels, they first want to wait for an impact assessment. This could be prepared by the EU Commission.
Despite these reservations, the threat of “massive sanctions” is more explicit than the offer of talks that the EU summit sent to Moscow. The conclusions merely say that the European Council “encourages diplomatic efforts” to achieve the full implementation of the 2015 Minsk agreement.
It also supports the so-called Normandy format, in which Germany, France, Ukraine, and Russia are seeking a peaceful solution. The only Normandy summit in the four-party format to date had taken place in Paris at the end of 2019. Since then, however, tensions have continued to escalate. Most recently, the US took the lead in the Ukraine crisis.
Whether the EU will now find its way back into the diplomatic game or be pushed further to the sidelines remains to be seen. In any case, it has ventured further than ever with its sanctions decision – Scholz made a risky bet at his first summit.
When the first pandemic wave hit Europe in the early 2020s, the European Union’s member states relied on border closures. Despite the realization that the virus does not stop at any national border and that border closures between EU member states are not effective, similar reactions have occurred time and again. During the third wave last spring, Germany imposed strict controls at its borders with the Czech Republic and Austria to slow the spread of the then-new Delta virus variant. The dispute over the right approach, first to COVID apps and later to vaccination certificates, also divided member states.
In view of the fourth wave and the new Omicron variant, more and more countries are initiating new emergency measures. At the end of November, the EU Commission was still trying to persuade the member states to take a common line. EU Justice Commissioner Didier Reynders, for example, stressed: “Our main goal is to avoid divergent measures in the EU.” EU Health Commissioner Stella Kyriakides warned in the European Parliament against a new “fragmentation” of the rules as at the beginning of the pandemic.
However, this was in vain. Bit by bit, more and more countries are once again backing out and taking their own measures, for example, with regard to the period of validity of the COVID vaccination certificate or with regard to entry requirements. The EU Commission’s fear that a patchwork of different regulations would emerge in the EU is once again becoming reality.
First member states have decided to reduce the validity period of the vaccination certificates. In Italy and Austria, for example, the digital EU vaccination certificate is valid for nine months. In France and also in Denmark, it will soon be only seven months. Some other countries are already discussing or planning similar measures. In Germany, the certificate has so far been valid for twelve months. In contrast to other countries, however, Germany wants to wait for a universal European solution. And this is also to come.
The heads of state confirmed at the EU summit on Thursday that the EU Commission should issue binding regulations on the validity period of digital vaccination certificates as part of a directly effective delegated act. For German Health Minister Karl Lauterbach (SPD), this is the right step: “Certificate validity periods should be standardized, and this should be done on the basis of the latest scientific findings.” This would allow the certificates to expire more quickly than before, depending on the effectiveness of the vaccinations for the dominant virus variants throughout the EU.
In many countries, booster vaccinations are now required on a considerable scale, and correspondingly high vaccine quantities are needed. In Germany, there is even a threat of a vaccine shortage for the first quarter of 2022, Health Minister Lauterbach announced after taking stock of the situation, for which, however, he holds neither his predecessor nor the EU Commission responsible.
On Thursday, the Commission announced that vaccine manufacturer Moderna is making Messenger RNA vaccine available to Germany and other EU member states on an accelerated basis. Delivery of 10 million doses of Moderna for Germany is to be brought forward to December 2021. An additional 25 million Moderna doses will be delivered in the first quarter of 2022, and the first mRNA vaccines adapted to the Omicron variant could also be available by the end of the first quarter. Germany has also committed to purchase the majority of vaccine doses under another EU framework agreement with Biotech for 2022.
However, until boosters and adapted vaccines are effective across the board, further EU chaos looms. Countries like Portugal, Ireland, and Italy are demanding a negative COVID test for all travelers from other EU countries, regardless of their vaccination status. Italy, in particular, is causing irritation. The Italian Health Minister Roberto Speranza only signed a corresponding decree on Tuesday without complying with the agreement to inform the EU Commission 48 hours in advance.
“These individual decisions by states undermine people’s confidence that conditions are the same across the EU,” said EU Commission Vice-President Věra Jourová. She stressed that the EU’s green passport regulation provides that EU citizens can travel without restrictions throughout the EU if they are vaccinated, have a negative test, or can provide a certificate of recovery.
The timing for Italy to go it alone could hardly be worse. Because just two days later, at yesterday’s EU summit, it was supposed to be about coordinated action among the member states. Luxembourg’s Prime Minister Xavier Bettel criticized the countries’ decision to introduce mandatory tests for EU travelers immediately before the summit. He warned that such rules would reduce the willingness to be vaccinated. Belgian Prime Minister Alexander De Croo expressed similar sentiments.
The 27 heads of state – including Italy’s prime minister Mario Draghi – reiterated the importance of a coordinated approach to the pandemic in their joint statement. It was important to ensure that “any restrictions are based on objective criteria and do not undermine the functioning of the internal market or disproportionately hinder free movement between member states and entry into the EU”, the conclusions said.
Back in the summer, Luukas Ilves described the results of a study as “fascinating”: Two out of three respondents from ten different countries stated that they would use digital central bank money if it were introduced. Good news for Guardtime’s Head of Strategy – the Estonian blockchain company has been working with central banks on electronic currencies for years.
“My German is a little rusty,” the 34-year-old says, in German, without any accent. “I haven’t spoken German regularly since eighth grade.” Ilves was born in Munich in 1987. His father, later Estonian President Toomas Hendrik Ilves, worked as head of the Estonian Service at Radio Free Europe/Radio Liberty at the time. Later, the family moved to the United States, his mother’s homeland. Luukas Ilves spent the rest of his school years there, then studied international relations, philosophy, and economics at Stanford University.
Back in Estonia, Luukas Ilves’ path to becoming an expert in telecommunications began: He was initially a civil servant at the Ministry of Defence, where he dealt with cybersecurity and e-governance. Later, he worked at the Estonian Information Systems Authority and in Brussels for the European Commission, the Council of the EU, and the think tank The Lisbon Council. During Estonia’s EU Presidency in 2017, Ilves was responsible for digital policy.
About his switch to the private sector, he says, “I felt governments were too slow to come up with more complex solutions.” The Economy, he says, is faster and more aggressive at developing and expanding new ideas. But he wanted to continue working in the technology industry. The move from civil servant to the private sector is quite normal in Estonia – his colleagues in Brussels, on the other hand, were quite surprised and called the move bold, he says.
Since 2019, he has been leading the strategic direction of Guardtime in Tallinn. The company was founded in 2007 – after Russian cyberattacks on Estonia – with the aim of safely and reliably encrypting data and automating these processes. Its products include a “Smart Vaccination Certificate”, with which the World Health Organization (WHO) aims to develop forgery-proof international vaccination certificates.
Guardtime has been working on building an electronic currency system since the early 2000s. The company created “KSI Cash”, a platform through which digital payments are processed. Since 2020, the company has also been working with the Estonian Central Bank to explore the use of the platform in the euro system. Guardtime is also working on pilot projects with other central banks around the world.
“Data protection is also a question of self-confidence,” says Ilves. Excuses for the slow progress of digitization, such as those repeatedly heard in Germany, would eventually become self-fulfilling. “The lack of confidence can be very debilitating there.” He cites his home country, Estonia, as a role model: After achieving independence from the Soviet Union in 1989, the country’s political institutions were already set up digitally.
Ilves even compares the “spirit” of its public administration with Silicon Valley – innovative and efficient. Other countries and the EU could learn from this. “Governments need to keep up with developments in the private sector,” he says. According to Ilves, the 27 national agencies still operate too differently. Member states were still too reluctant to hand over sovereignty to the EU.
Meanwhile, the COVID-19 pandemic has boosted many ideas: Not only has digitization significantly advanced, but our approach to money has changed as well, Ilves says. The first central bank digital currency (CBDC) could be launched as early as within the next two years, according to Guardtimes predictions. Leonie Duengefeld
