Transatlantic energy policy + Election m • Table.Briefings

Dear reader,

Following massive pressure from the US calling for sanctions against the controversial Nord Stream 2 Baltic Sea pipeline and the Russian energy and financial sectors, Brussels and Washington are now preparing for a possible interruption in gas supplies from Russia together. The search for alternatives to Russian gas is in full swing. However, transatlantic cooperation on energy policy could lead to a long-term reordering of the international gas market – away from Russia and toward the US and other suppliers, as Eric Bonse points out in his analysis.

A six-day election marathon came to an end in Italy on the weekend. After no less than eight rounds of voting, the current President Sergio Mattarella was confirmed in office. The election of the octogenarian, who has actually ruled out a second term, was the only way to avoid a political crisis. The fragile stability of the Draghi government is thus preserved for the time being. Isabel Cuesta analyzes what the presidential election says about the state of Italian politics.

The DSA trilogue starts today in Brussels. The first round of negotiations will focus on defining the main points of contention to be negotiated in the coming weeks. Even though the players seem to be largely in agreement on the high level, the differences between the Council’s and the Parliament’s positions could take up several days of negotiations. Falk Steiner and Jasmin Kohl took a look at which details the proverbial devil could be hiding in.

Your
Eugenie Ankowitsch

Transatlantic turnaround on energy policy

From
Eric Bonse

The EU has initiated a radical change in its energy policy. Following massive pressure from the US calling for sanctions against the controversial Nord Stream 2 Baltic Sea pipeline and the Russian energy and financial sectors, the EU Commission in Brussels is now working with Washington to prepare for a possible interruption in gas supplies from Russia.

The goal is to “avoid supply shocks that could result not least from another Russian invasion of Ukraine”, according to a joint statement by EU Commission President Ursula von der Leyen and US President Joe Biden released in Brussels on Friday. To that end, the dependence on Russian natural gas must be reduced.

Initially, the efforts were primarily aimed at replacing Russian gas supplies with liquefied gas from the USA and other regions of the world in the event of an emergency. However, transatlantic coordination goes far beyond the current crisis. In the long term, it could lead to a reorganization of the international gas market – away from Russia and toward the USA and other suppliers.

Germany particularly impacted

The United States is already the largest liquefied natural gas (LNG) supplier to the EU, von der Leyen and Biden stressed in their statement. They are currently working “with governments and market participants to expand Europe’s supply of natural gas from various sources around the world”. According to Brussels, there are contacts with the Gulf states, Egypt, and Algeria.

To date, the EU imports around 40 percent of its gas from Russia. In Germany, the share is even higher at 55 percent. Germany, in particular, could suffer losses if the Nord Stream 2 Baltic Sea pipeline is shut down, as the USA and the EU are planning as part of their sanctions package. In this case, Russian counter-sanctions would have to be expected, according to the EU Commission.

How likely this worst case scenario is, remains unclear. One does not want to speculate, said a Commission expert. So far, Russia has proven to be a reliable supplier. Even during the Cold War, gas supplies, which provided Moscow with important foreign exchange earnings, were not interrupted. Nor have there been any signs of a Russian supply cut-off so far.

Emergency plans still vague

Regardless of this, the US is calling for a reduction in dependence on Russian gas supplies. On January 25, the White House in Washington had announced massive sanctions against Russia and had called for a reorganization of the gas market in Europe. It is not only about Nord Stream 2 but also about cutting Russia off from its revenues from gas and oil production.

So far, however, contingency plans are still vague. Von der Leyen and Biden do not give any details of a possible alternative gas supply in their joint statement. LNG terminals in the EU are already operating at 66 percent of capacity. The commission says if they were used at 100 percent, this could cover about a quarter of gas imports.

However, this would not be enough to compensate for a possible total loss of supplies from Russia. In an emergency, the EU would have to reckon with considerable economic damage, according to a study by the Brussels-based think tank Bruegel. Germany, in particular, is considered vulnerable, as it also obtains oil and hard coal from Russia in addition to gas.

Fracking gas almost as harmful as coal

Another problem is that American fracked gas is considered extremely harmful to the climate. In 2020, for example, the German government stated that fracking was almost as harmful as coal. Unconventional production methods, as are common in the US, also pose significant risks to other environmental assets, especially groundwater and soils, the Department of the Environment said.

However, the EU-US statement puts those concerns on the back burner. “Liquefied natural gas can improve security of supply in the short term, while we continue to work toward achieving the transition to net-zero emissions,” Biden and von der Leyen stress. Climate Minister Robert Habeck is also rethinking his position – he wants to promote the construction of terminals for liquefied natural gas on the German coast.

The EU Commission’s change of strategy is also remarkable. As recently as December, the Brussels authority was against state intervention in the gas market, and even the construction of European gas storage facilities was controversial. However, the cooperation with the US has brought about a change of heart. “We will also exchange views on the role of storage for security of supply,” the joint statement said. This was preceded by intensive contacts between Brussels and Washington. Last week, Ditte Juul Jorgensen, Director General for Energy of the European Commission, traveled to the US capital. Energy Commissioner Kadri Simson is also expected in Washington next weekend. Further details of the cooperation are to be discussed at the EU-US Energy Council on February 7. The turnaround in European energy policy continues.

Orbán goes against the grain

While Biden and von der Leyen are seeking greater independence from Russian gas, Hungary wants to expand gas supplies from Russia, as Hungary’s Prime Minister Viktor Orbán said ahead of a meeting with Russian President Vladimir Putin in Moscow on Tuesday.

In August, the EU country signed a new long-term gas supply agreement with the Russian Gazprom group. According to the agreement, Russia plans to supply 4.5 billion cubic meters of natural gas to Hungary annually, bypassing neighboring Ukraine. “I would increase gas supplies starting from the volumes agreed in the gas contract,” Orbán told public radio.

Orbán has rejected opposition demands to cancel his visit to Moscow. The Hungarian Prime Minister said he also wants to discuss European security with Putin. Hungary is interested in a peaceful solution to the Ukraine conflict. “Of course, Hungary is a member of NATO and the EU, so I consult and coordinate with our Western allies before every meeting,” Orbán stressed, adding that he would hold further talks with Western politicians in the coming days.

Mattarella re-elected: the best and only option

Sergio Matarella had stressed several times in recent months that he did not want to extend his mandate for another seven years. He even said goodbye to the Italians in his New Year’s address. But things turned out differently. The political parties were unable to reach an agreement and find a candidate for the Italian presidency.

After six exhausting days of voting, Italy’s parliament confirmed the octogenarian in office on Saturday in the eighth round of voting with 759 votes out of 983 cast. Mattarella’s re-election means a year of political stability under Mario Draghi’s grand coalition government until the end of the legislative term. But the chaos in the elections clearly shows the divisions among the political factions.

“Given the serious emergencies we are still experiencing on the health, economic and social fronts, conditions require that we do not shirk our responsibilities and go beyond our personal perspectives,” Mattarella said Saturday evening. The current Italian leader is the second president in the republic’s history to serve a second term.

His predecessor, Giorgio Napolitano, who also did not want to run again, had to do so in 2013 due to a lack of political unity. However, Napolitano signed his resignation in 2015 and was replaced by Mattarella. However, party leaders re-elected the president this time because it was the only way to avoid a political crisis. The fragile stability of Mario Draghi’s executive branch is preserved, and the horror scenario of early elections is thus averted.

Government parties also internally divided

Last week’s elections were the longest search for a new head of state in 30 years. “The starting position for these elections was difficult. The parties in the governing coalition not only have completely different visions but also can’t stand each other,” says Paolo Flores d’Arcais, philosopher as well as editor of Italy’s influential political magazine “MicroMega,” in an interview with Europe.Table.

Although the coalition parties agreed to govern together a year ago, disagreements remain strong. The grand coalition was a way to overcome the political crisis that brought down Giuseppe Conte’s government in the midst of the pandemic. Flores D’Arcais points out that the governing parties – Forza Italia, Lega Nord, Partido Democratico, 5MS, Italia Viva, Articulo Uno-are also internally divided and have leaders with little political efficacy. “Moreover, there are personal ambitions and no recognizable values left within the political groups. It is the most chaotic parliament ever,” says Flores D’Arcais.

The best solution for lack of alternative

Some political groups abstained from voting on the fourth and fifth days of the election. Even on Friday afternoon, it was not clear which candidate had the best chance of winning the election. Until the very end, Mario Draghi tried to enter the Quirinale Palace. In the end, however, it also became clear to him that confirming Sergio Mattarella was not only the best option but perhaps even the only option.

The Five Star Movement, the Lega, the Social Democrats, Berlusconi’s Forza Italia party and Matteo Renzi’s Italia Viva all voiced support for Mattarella on Saturday. Draghi asked the president to stay on for the sake of the country’s political stability. Mattarella is “the guarantor of everything, impartial and reliable,” said Guiseppe Conte, secretary of the 5-Star Movement.

Partido Democratico leader Enrico Letta thanked Mattarella for his choice “of great generosity toward the country”. However, Letta stressed that the elections were full of tensions that “testify to blocked and stagnant politics based only on personality”. Mattarella has re-emerged in the chaos of recent days as the only candidate capable of uniting the parties.

His task will not be easy in the short and long term. The year leading up to the general elections may be a repeat of the mess that occurred in the Chamber of Deputies of Palazzo Montecitorio. The political game will only become more complex from now on. The coalitions trapped under the rubble of these elections promise future tensions and new rifts.

Ongoing political crisis in Italy

Mattarella’s past term was hectic and eventful. He had to experience five different governments – those of Matteo Renzi, Paolo Gentiloni, Giuseppe Conte, and Mario Draghi – and was on the verge of forming a technical government to prevent the national-populist drift into which Italy had dangerously fallen under Matteo Salvini.

As President of the Republic, he always kept a low profile. But his discreet character did not prevent him from using the powerful prerogatives of his office when necessary. In 2018, for example, he prevented Giuseppe Conte’s first government, formed by the far-right Lega and the Five Star Movement (M5S), from appointing eurosceptic Paolo Savona as Economy Minister. The M5S had also waged a grotesque campaign for his removal from office. In the midst of the pandemic and in view of the political crisis that cost Giuseppe Conte his office as Prime Minister, Mattarella had to appoint Mario Draghi as head of government a year ago to avoid early elections.

Next Wednesday, Mattarella will be sworn in and give his inaugural address on the very last day of his first term. Isabel Cuesta

Digital Services Act: the points of contention in the trilogue

After the European Parliament adopted its negotiating position on January 20, the trilogue with the Council and the Commission starts this afternoon. From an internal parliamentary document available to Europe.Table, it is clear that rapporteur Christel Schaldemose (S&D) wants to focus on three topics during the first trilogue session: consumer protection (dark patterns, due diligence for online marketplaces, personalized advertising, recommendation systems, right to compensation), exemptions for small and micro businesses, and special requirements for very large online platforms (VLOPs).

According to negotiating circles, the French presidency will want to discuss the enforcement mechanism and the inclusion of very large online search engines (VLOSE) in the definition of very large online platforms (VLOP) in particular.

Due diligence obligations for online marketplaces

The Parliament has decided that online marketplaces should be subject to more far-reaching obligations to verify the identification of vendors (KYBC). Online trading platforms are to query relevant databases and “do everything in their power” to verify the information provided by the merchant. However, counterfeits identified online could still be offered again and again in this way.

Consumer advocates and some producer representatives, therefore, insist on the inclusion of the stay-down principle and the anchoring of the KYBC principle in the articles of the DSA. The latter is found in the recitals alone. The Council position here does not differ significantly from the original Commission proposal.

Personalized advertising

The Parliament has spoken out against a general ban on personalized advertising. However, MEPs want to at least exclude the use of sensitive data categories, such as sexual orientation or political opinion, for this form of advertising. In addition, it is to be banned entirely for minors.

The EU Parliament also wants online platforms not to automatically process personal data of adult users automatically for the purpose of personalized advertising. Platforms should provide users with “meaningful information”, such as information about how their data is monetized. In this way, they could give informed consent. It should not be more difficult or time-consuming to refuse the processing of their personal data.

A ban on personalized advertising for minors, on the other hand, is not included in the Council’s position. Instead, the Council wants to use Article 30 to oblige very large platforms to be more transparent. In a special online area, they are to be required to store information such as the content, name of the advertised product, the display period and the main parameters of the target group as well as the number of users actually reached in each target group in each member state for one year after the advertising has been displayed. It is envisaged that this information, without personal data, will be publicly available.

Dark Patterns

With its proposal for Article 13a, the Parliament wants to impose extensive prohibitions on interface design on all providers, especially when it comes to obtaining consent. Among other things, methods such as visually clearly highlighted buttons and hardly detectable refusals, as well as recurring prompts, are to be prohibited. In the Council position, a corresponding design requirement (Art. 24b) is only envisaged for operators of online marketplaces as well as for recommender systems of very large platforms (VLOP) and search engine providers (VLOSE ) (Art. 29(1)).

Transparency of recommender systems

Here, the Parliament has adopted a separate article for more transparency of recommender systems (Article 24a), which goes beyond the Commission’s proposal in many respects. For example, the regulations should apply not only to recommender systems on very large online platforms but to all online platforms. The Council remains much closer to the Commission proposal and provides for the regulations only for very large platforms (VLOP) and additionally for very large online search engines (VLOSE).

If the Parliament has its way, users should also be able to adapt the recommender systems so that the information displayed is shown in a different order. The platforms must also explain transparently how they recommend content and disclose the main criteria on which the recommendations of the recommender systems are based. Parliamentarians also want to require very large online platforms to offer at least one recommender system that is not based on profiling (Article 29).

Risk impact assessment

The Commission and the Council raise comparatively general requirements for the identification of systemic risks of very large online platforms, such as disinformation, freedom of expression, or effects on private life. The Council also extends these to very large online search engines (VLOSE). The Parliament has provided for a significant expansion in terms of content here. Among other things, the impact on consumer protection, equal rights, and public health is to be subject to mandatory review. Parliament is also calling for more specific rules for the large providers in carrying out these risk assessments, including the involvement of stakeholder groups and experts.

Parliament wants to base safeguards on these impact assessments, for example, in the design of algorithmic systems, user interfaces, and advertising technologies. The Parliament also wants a list of the measures taken and their reasons, to be made available to independent experts as part of audits. For these audits, the Parliament envisages a number of further, specific provisions that go beyond the Commission proposal and the Council position (Art. 28)

Exemptions for some enterprises

The Commission had proposed (Article 16) to exempt small and micro businesses from all obligations in Section 3 of the DSA, including the obligation to set up a complaint handling system, establish trusted flaggers, audit their traders, and produce additional transparency reports. The Council agrees but adds, like the Parliament, that the small and micro businesses must not be very large online platforms.

Renew and EPP have prevailed in the parliamentary position with their demand to extend the exemptions to medium and non-for-profit enterprises, too. The latter should be able to apply for the exemption to the Digital Services Coordinator at the place of establishment.

The Commission is then to examine the application together with the body of Digital Services Coordinators and make its decision in the form of a delegated act. This could exempt small and micro businesses from the obligation to verify the legality of providers and their products (KYBC principle). Consumer advocates strongly criticize this regulation because just as on very large online platforms, unsafe products can also be purchased on small platforms.

Right to damages

In contrast to the Commission and the Council, the Parliament has included an article on damages (43a) in its position. According to this article, users of online platforms will be able to claim damages from providers if they have suffered “any direct damage or loss” as a result of a breach of the obligations set out in the DSA.

DSA enforcement

One major difference in the positions of the Commission, the Council, and the Parliament is the question of responsibility: It is the member states, which otherwise often insist on subsidiarity, that want to entrust the Commission with enforcement in the case of very large providers. While the Commission and Parliament want to place procedures in the hands of EU officials in Brussels only in the case of specific regulations, the Council is in favor of the Commission being responsible for these providers in the case of suspicion of any violation of the DSA.

In their position, the member states demand sufficient financial and personnel resources for the responsible national bodies named Digital Services Coordinator (DSC). The parliamentarians want to go one step further: All member state authorities in charge of enforcement should be adequately resourced (Article 38). There are also differences on the question of when the DSCs should start their work: The Commission and Parliament consider two months after the entry into force of the DSA to be sufficient, while the member states consider 15 months to be desirable.

Further procedure

The other trilogues are currently scheduled for February 15 and March 15, as well as for the week of April 4. Whether these relatively sporty deadlines will suffice in the end is an open question and depends on the will to reach an agreement during the first substantive trilogues. However, the timing of the French presidency would be perfect: The first round of the French presidential election is on April 10, and Emmanuel Macron wants to conclude the DMA and DSA as soon as possible.

Falk Steiner / Jasmin Kohl

This article has been updated on 31.01.22 at 16:30.

Taxonomy: Nicolas Schmit against nuclear energy and gas

As a rule, the Commission adopts delegated acts in writing through the so-called written procedure. With the legal act on taxonomy, the Commission may deviate from this rule. At least that’s what the Commissioner for Jobs and Social Rights, Nicolas Schmit, says. “This is probably being discussed in the Collège.” In that case, the only option for him would be a resounding “no”. “It’s an absurdity to label nuclear power as green. You can’t accept that,” Schmit says.

He sees the integration of gas into the taxonomy in exactly the same way. The member states could decide on their own energy mix. But that does not mean that the EU should give its blessing to a sustainability label for gas and nuclear. In the Council, decisions are made by simple majority. Schmit doubts that there will be one against the legal act: “I know how it will turn out – unfortunately.” In any case, the mood in the Board of Commissioners seems tense: “There would be a lot to say about the way things work, but I’m not saying anything right now.”

Breton: EU to invest billions in chip funding

The European Union apparently wants to invest tens of billions of euros in its own chip industry and double its share of global production to 20 percent. EU Industry, Internal Market and Services Commissioner Thierry Breton told reporters Friday that the global chip shortage had highlighted the risks of dependence on Asian and US suppliers. “I want the EU to be a net exporter in semiconductors, as we are in vaccines,” he said. In geostrategic industries like batteries or pharmaceuticals, we do the same thing – we don’t do everything ourselves, but we have the capacity,” Breton said.

The EU’s ambitious plan follows the announcement last year by the US of a $52 billion government subsidy program, “CHIPS for America”, to better compete with Chinese technologies. Breton said the level of EU investment should be in a similar range. However, he would not give a firm figure: “We’re working with the various funders, especially national, European and regional.” The EU Commission plans to present the Chips Act on February 8. rtr

Baerbock: Russia prepares for CO2 border adjustment tax

Foreign Minister Annalena Baerbock (Greens) expects that the EU’s planned CO2 border adjustment tax will also lead to a switch to renewable energy in Russia. “The EU’s plans for a CO2 border adjustment tax are being taken very seriously there – and the energy and steel sectors, in particular, know that they have to adapt to this to remain competitive,” Baerbock told the newspapers of the Funke Mediengruppe and the French newspaper Ouest France, according to an advance report.

Therefore, many large companies in Russia are already accelerating the conversion to renewable energy and hydrogen on their own. Given its sheer size, Russia has immense potential for new business models in green hydrogen and forest reforestation. “What a blessing it would be to be able to cooperate in this regard on the basis of international law,” Baerbock said.

According to the plans known so far, the EU Commission wants to prevent a shift of CO2 pollution from the EU to other regions. The Brussels-based authority is therefore proposing a CO2 limit levy from 2026, which importers of steel, for example, will have to pay for each ton of CO2. This is intended to ensure that European emission reductions also contribute to a global decrease in emissions – and that CO2-intensive production capacities do not move outside of Europe. rtr

Nico Muzi – a fighter against global deforestation

Nico Muzi is the Europe Director of Mighty Earth.

Nico Muzi grew up in Bahía Blanca, near Buenos Aires. His parents, of Italian descent, had a farm with several cattle. Even as a child, Muzi was influenced by the importance of preserving natural ecosystems. Over the years, the fight against deforestation became the focus of his work. As European director of the non-governmental organization Mighty Earth, Muzi works to ensure that meat consumption in Europe does not lead to deforestation in South America.

Mighty Earth recently lobbied the EU Commission to draft a new law against deforestation. The law, unveiled in November, aims to ban the import of products into the EU that contribute to the depletion of tropical forests. “One of the main goals of the Green Deal is to minimize Europe’s impact on global deforestation,” Muzi tells Europe.Table. In parts of the world that are the lungs of the earth, forests are being cleared by agriculture and livestock.

Muzi points to the study published last year by WWF with alarming data: The EU is the second biggest importer of deforestation after China. In 2017, the EU was responsible for 16 percent of deforestation associated with international trade, totaling 203,000 hectares and 116 million tons of CO2. The EU was surpassed by China (24 percent) but outranked India (9 percent) and the United States (7 percent).

Europe’s responsibility for global deforestation

“The responsibility that Europe has is to import agricultural products and raw materials that destroy rainforests in the countries where they are grown,” says Muzi. A sociologist with a master’s degree in International Political Economy from the University of Kent, Muzi is also a member of the EU Commission’s Expert Group on the Protecting and Restoring the World’s Forests. Mighty Earth has been fighting deforestation worldwide for five years and has been working with other NGOs in Brussels to get the Commission to table this bill.

Between 2005-2017, soy, palm oil, and beef were the commodities with the largest embedded tropical deforestation imported into the EU, followed by wood products, cocoa, and coffee. Since Europe has a responsibility through the consumption of these products, Europe should mandate sustainability standards for the import of these products, Muzi elaborates. “In the Amazon basin, cattle ranching is the worst enemy, especially in the larger areas in Colombia and Brazil,” says the 41-year-old environmentalist.

Before joining Mighty Earth in 2020, Muzi worked for eight years as campaigns and communications director for the European transport and environment umbrella organization Transport and Environment (T&E). Along with Nicolas Richat, Muzi directed the 2015 documentary Frontera Invisible (Invisible Border). The award-winning film shows the reality of Colombian communities affected by armed conflict, displacement, and the rush by large landowners to produce palm oil for Europe. Isabel Cuesta Camacho

EUROPE.TABLE EDITORS

Till
Hoppe

Charlotte
Wirth

Falk
Steiner

Timo
Landenberger

Corinna
Visser

Lukas
Knigge

Eric
Bonse

Sarah
Schaefer

Manuel
Berkel

Lisa-Martina
Klein

Markus
Grabitz

Stephan
Israel

Claire
Stam

Dear reader,

Following massive pressure from the US calling for sanctions against the controversial Nord Stream 2 Baltic Sea pipeline and the Russian energy and financial sectors, Brussels and Washington are now preparing for a possible interruption in gas supplies from Russia together. The search for alternatives to Russian gas is in full swing. However, transatlantic cooperation on energy policy could lead to a long-term reordering of the international gas market – away from Russia and toward the US and other suppliers, as Eric Bonse points out in his analysis.

A six-day election marathon came to an end in Italy on the weekend. After no less than eight rounds of voting, the current President Sergio Mattarella was confirmed in office. The election of the octogenarian, who has actually ruled out a second term, was the only way to avoid a political crisis. The fragile stability of the Draghi government is thus preserved for the time being. Isabel Cuesta analyzes what the presidential election says about the state of Italian politics.

The DSA trilogue starts today in Brussels. The first round of negotiations will focus on defining the main points of contention to be negotiated in the coming weeks. Even though the players seem to be largely in agreement on the high level, the differences between the Council’s and the Parliament’s positions could take up several days of negotiations. Falk Steiner and Jasmin Kohl took a look at which details the proverbial devil could be hiding in.

Your
Eugenie Ankowitsch

Transatlantic turnaround on energy policy

From
Eric Bonse

The EU has initiated a radical change in its energy policy. Following massive pressure from the US calling for sanctions against the controversial Nord Stream 2 Baltic Sea pipeline and the Russian energy and financial sectors, the EU Commission in Brussels is now working with Washington to prepare for a possible interruption in gas supplies from Russia.

The goal is to “avoid supply shocks that could result not least from another Russian invasion of Ukraine”, according to a joint statement by EU Commission President Ursula von der Leyen and US President Joe Biden released in Brussels on Friday. To that end, the dependence on Russian natural gas must be reduced.

Initially, the efforts were primarily aimed at replacing Russian gas supplies with liquefied gas from the USA and other regions of the world in the event of an emergency. However, transatlantic coordination goes far beyond the current crisis. In the long term, it could lead to a reorganization of the international gas market – away from Russia and toward the USA and other suppliers.

Germany particularly impacted

The United States is already the largest liquefied natural gas (LNG) supplier to the EU, von der Leyen and Biden stressed in their statement. They are currently working “with governments and market participants to expand Europe’s supply of natural gas from various sources around the world”. According to Brussels, there are contacts with the Gulf states, Egypt, and Algeria.

To date, the EU imports around 40 percent of its gas from Russia. In Germany, the share is even higher at 55 percent. Germany, in particular, could suffer losses if the Nord Stream 2 Baltic Sea pipeline is shut down, as the USA and the EU are planning as part of their sanctions package. In this case, Russian counter-sanctions would have to be expected, according to the EU Commission.

How likely this worst case scenario is, remains unclear. One does not want to speculate, said a Commission expert. So far, Russia has proven to be a reliable supplier. Even during the Cold War, gas supplies, which provided Moscow with important foreign exchange earnings, were not interrupted. Nor have there been any signs of a Russian supply cut-off so far.

Emergency plans still vague

Regardless of this, the US is calling for a reduction in dependence on Russian gas supplies. On January 25, the White House in Washington had announced massive sanctions against Russia and had called for a reorganization of the gas market in Europe. It is not only about Nord Stream 2 but also about cutting Russia off from its revenues from gas and oil production.

So far, however, contingency plans are still vague. Von der Leyen and Biden do not give any details of a possible alternative gas supply in their joint statement. LNG terminals in the EU are already operating at 66 percent of capacity. The commission says if they were used at 100 percent, this could cover about a quarter of gas imports.

However, this would not be enough to compensate for a possible total loss of supplies from Russia. In an emergency, the EU would have to reckon with considerable economic damage, according to a study by the Brussels-based think tank Bruegel. Germany, in particular, is considered vulnerable, as it also obtains oil and hard coal from Russia in addition to gas.

Fracking gas almost as harmful as coal

Another problem is that American fracked gas is considered extremely harmful to the climate. In 2020, for example, the German government stated that fracking was almost as harmful as coal. Unconventional production methods, as are common in the US, also pose significant risks to other environmental assets, especially groundwater and soils, the Department of the Environment said.

However, the EU-US statement puts those concerns on the back burner. “Liquefied natural gas can improve security of supply in the short term, while we continue to work toward achieving the transition to net-zero emissions,” Biden and von der Leyen stress. Climate Minister Robert Habeck is also rethinking his position – he wants to promote the construction of terminals for liquefied natural gas on the German coast.

The EU Commission’s change of strategy is also remarkable. As recently as December, the Brussels authority was against state intervention in the gas market, and even the construction of European gas storage facilities was controversial. However, the cooperation with the US has brought about a change of heart. “We will also exchange views on the role of storage for security of supply,” the joint statement said. This was preceded by intensive contacts between Brussels and Washington. Last week, Ditte Juul Jorgensen, Director General for Energy of the European Commission, traveled to the US capital. Energy Commissioner Kadri Simson is also expected in Washington next weekend. Further details of the cooperation are to be discussed at the EU-US Energy Council on February 7. The turnaround in European energy policy continues.

Orbán goes against the grain

While Biden and von der Leyen are seeking greater independence from Russian gas, Hungary wants to expand gas supplies from Russia, as Hungary’s Prime Minister Viktor Orbán said ahead of a meeting with Russian President Vladimir Putin in Moscow on Tuesday.

In August, the EU country signed a new long-term gas supply agreement with the Russian Gazprom group. According to the agreement, Russia plans to supply 4.5 billion cubic meters of natural gas to Hungary annually, bypassing neighboring Ukraine. “I would increase gas supplies starting from the volumes agreed in the gas contract,” Orbán told public radio.

Orbán has rejected opposition demands to cancel his visit to Moscow. The Hungarian Prime Minister said he also wants to discuss European security with Putin. Hungary is interested in a peaceful solution to the Ukraine conflict. “Of course, Hungary is a member of NATO and the EU, so I consult and coordinate with our Western allies before every meeting,” Orbán stressed, adding that he would hold further talks with Western politicians in the coming days.

Mattarella re-elected: the best and only option

Sergio Matarella had stressed several times in recent months that he did not want to extend his mandate for another seven years. He even said goodbye to the Italians in his New Year’s address. But things turned out differently. The political parties were unable to reach an agreement and find a candidate for the Italian presidency.

After six exhausting days of voting, Italy’s parliament confirmed the octogenarian in office on Saturday in the eighth round of voting with 759 votes out of 983 cast. Mattarella’s re-election means a year of political stability under Mario Draghi’s grand coalition government until the end of the legislative term. But the chaos in the elections clearly shows the divisions among the political factions.

“Given the serious emergencies we are still experiencing on the health, economic and social fronts, conditions require that we do not shirk our responsibilities and go beyond our personal perspectives,” Mattarella said Saturday evening. The current Italian leader is the second president in the republic’s history to serve a second term.

His predecessor, Giorgio Napolitano, who also did not want to run again, had to do so in 2013 due to a lack of political unity. However, Napolitano signed his resignation in 2015 and was replaced by Mattarella. However, party leaders re-elected the president this time because it was the only way to avoid a political crisis. The fragile stability of Mario Draghi’s executive branch is preserved, and the horror scenario of early elections is thus averted.

Government parties also internally divided

Last week’s elections were the longest search for a new head of state in 30 years. “The starting position for these elections was difficult. The parties in the governing coalition not only have completely different visions but also can’t stand each other,” says Paolo Flores d’Arcais, philosopher as well as editor of Italy’s influential political magazine “MicroMega,” in an interview with Europe.Table.

Although the coalition parties agreed to govern together a year ago, disagreements remain strong. The grand coalition was a way to overcome the political crisis that brought down Giuseppe Conte’s government in the midst of the pandemic. Flores D’Arcais points out that the governing parties – Forza Italia, Lega Nord, Partido Democratico, 5MS, Italia Viva, Articulo Uno-are also internally divided and have leaders with little political efficacy. “Moreover, there are personal ambitions and no recognizable values left within the political groups. It is the most chaotic parliament ever,” says Flores D’Arcais.

The best solution for lack of alternative

Some political groups abstained from voting on the fourth and fifth days of the election. Even on Friday afternoon, it was not clear which candidate had the best chance of winning the election. Until the very end, Mario Draghi tried to enter the Quirinale Palace. In the end, however, it also became clear to him that confirming Sergio Mattarella was not only the best option but perhaps even the only option.

The Five Star Movement, the Lega, the Social Democrats, Berlusconi’s Forza Italia party and Matteo Renzi’s Italia Viva all voiced support for Mattarella on Saturday. Draghi asked the president to stay on for the sake of the country’s political stability. Mattarella is “the guarantor of everything, impartial and reliable,” said Guiseppe Conte, secretary of the 5-Star Movement.

Partido Democratico leader Enrico Letta thanked Mattarella for his choice “of great generosity toward the country”. However, Letta stressed that the elections were full of tensions that “testify to blocked and stagnant politics based only on personality”. Mattarella has re-emerged in the chaos of recent days as the only candidate capable of uniting the parties.

His task will not be easy in the short and long term. The year leading up to the general elections may be a repeat of the mess that occurred in the Chamber of Deputies of Palazzo Montecitorio. The political game will only become more complex from now on. The coalitions trapped under the rubble of these elections promise future tensions and new rifts.

Ongoing political crisis in Italy

Mattarella’s past term was hectic and eventful. He had to experience five different governments – those of Matteo Renzi, Paolo Gentiloni, Giuseppe Conte, and Mario Draghi – and was on the verge of forming a technical government to prevent the national-populist drift into which Italy had dangerously fallen under Matteo Salvini.

As President of the Republic, he always kept a low profile. But his discreet character did not prevent him from using the powerful prerogatives of his office when necessary. In 2018, for example, he prevented Giuseppe Conte’s first government, formed by the far-right Lega and the Five Star Movement (M5S), from appointing eurosceptic Paolo Savona as Economy Minister. The M5S had also waged a grotesque campaign for his removal from office. In the midst of the pandemic and in view of the political crisis that cost Giuseppe Conte his office as Prime Minister, Mattarella had to appoint Mario Draghi as head of government a year ago to avoid early elections.

Next Wednesday, Mattarella will be sworn in and give his inaugural address on the very last day of his first term. Isabel Cuesta

Digital Services Act: the points of contention in the trilogue

After the European Parliament adopted its negotiating position on January 20, the trilogue with the Council and the Commission starts this afternoon. From an internal parliamentary document available to Europe.Table, it is clear that rapporteur Christel Schaldemose (S&D) wants to focus on three topics during the first trilogue session: consumer protection (dark patterns, due diligence for online marketplaces, personalized advertising, recommendation systems, right to compensation), exemptions for small and micro businesses, and special requirements for very large online platforms (VLOPs).

According to negotiating circles, the French presidency will want to discuss the enforcement mechanism and the inclusion of very large online search engines (VLOSE) in the definition of very large online platforms (VLOP) in particular.

Due diligence obligations for online marketplaces

The Parliament has decided that online marketplaces should be subject to more far-reaching obligations to verify the identification of vendors (KYBC). Online trading platforms are to query relevant databases and “do everything in their power” to verify the information provided by the merchant. However, counterfeits identified online could still be offered again and again in this way.

Consumer advocates and some producer representatives, therefore, insist on the inclusion of the stay-down principle and the anchoring of the KYBC principle in the articles of the DSA. The latter is found in the recitals alone. The Council position here does not differ significantly from the original Commission proposal.

Personalized advertising

The Parliament has spoken out against a general ban on personalized advertising. However, MEPs want to at least exclude the use of sensitive data categories, such as sexual orientation or political opinion, for this form of advertising. In addition, it is to be banned entirely for minors.

The EU Parliament also wants online platforms not to automatically process personal data of adult users automatically for the purpose of personalized advertising. Platforms should provide users with “meaningful information”, such as information about how their data is monetized. In this way, they could give informed consent. It should not be more difficult or time-consuming to refuse the processing of their personal data.

A ban on personalized advertising for minors, on the other hand, is not included in the Council’s position. Instead, the Council wants to use Article 30 to oblige very large platforms to be more transparent. In a special online area, they are to be required to store information such as the content, name of the advertised product, the display period and the main parameters of the target group as well as the number of users actually reached in each target group in each member state for one year after the advertising has been displayed. It is envisaged that this information, without personal data, will be publicly available.

Dark Patterns

With its proposal for Article 13a, the Parliament wants to impose extensive prohibitions on interface design on all providers, especially when it comes to obtaining consent. Among other things, methods such as visually clearly highlighted buttons and hardly detectable refusals, as well as recurring prompts, are to be prohibited. In the Council position, a corresponding design requirement (Art. 24b) is only envisaged for operators of online marketplaces as well as for recommender systems of very large platforms (VLOP) and search engine providers (VLOSE ) (Art. 29(1)).

Transparency of recommender systems

Here, the Parliament has adopted a separate article for more transparency of recommender systems (Article 24a), which goes beyond the Commission’s proposal in many respects. For example, the regulations should apply not only to recommender systems on very large online platforms but to all online platforms. The Council remains much closer to the Commission proposal and provides for the regulations only for very large platforms (VLOP) and additionally for very large online search engines (VLOSE).

If the Parliament has its way, users should also be able to adapt the recommender systems so that the information displayed is shown in a different order. The platforms must also explain transparently how they recommend content and disclose the main criteria on which the recommendations of the recommender systems are based. Parliamentarians also want to require very large online platforms to offer at least one recommender system that is not based on profiling (Article 29).

Risk impact assessment

The Commission and the Council raise comparatively general requirements for the identification of systemic risks of very large online platforms, such as disinformation, freedom of expression, or effects on private life. The Council also extends these to very large online search engines (VLOSE). The Parliament has provided for a significant expansion in terms of content here. Among other things, the impact on consumer protection, equal rights, and public health is to be subject to mandatory review. Parliament is also calling for more specific rules for the large providers in carrying out these risk assessments, including the involvement of stakeholder groups and experts.

Parliament wants to base safeguards on these impact assessments, for example, in the design of algorithmic systems, user interfaces, and advertising technologies. The Parliament also wants a list of the measures taken and their reasons, to be made available to independent experts as part of audits. For these audits, the Parliament envisages a number of further, specific provisions that go beyond the Commission proposal and the Council position (Art. 28)

Exemptions for some enterprises

The Commission had proposed (Article 16) to exempt small and micro businesses from all obligations in Section 3 of the DSA, including the obligation to set up a complaint handling system, establish trusted flaggers, audit their traders, and produce additional transparency reports. The Council agrees but adds, like the Parliament, that the small and micro businesses must not be very large online platforms.

Renew and EPP have prevailed in the parliamentary position with their demand to extend the exemptions to medium and non-for-profit enterprises, too. The latter should be able to apply for the exemption to the Digital Services Coordinator at the place of establishment.

The Commission is then to examine the application together with the body of Digital Services Coordinators and make its decision in the form of a delegated act. This could exempt small and micro businesses from the obligation to verify the legality of providers and their products (KYBC principle). Consumer advocates strongly criticize this regulation because just as on very large online platforms, unsafe products can also be purchased on small platforms.

Right to damages

In contrast to the Commission and the Council, the Parliament has included an article on damages (43a) in its position. According to this article, users of online platforms will be able to claim damages from providers if they have suffered “any direct damage or loss” as a result of a breach of the obligations set out in the DSA.

DSA enforcement

One major difference in the positions of the Commission, the Council, and the Parliament is the question of responsibility: It is the member states, which otherwise often insist on subsidiarity, that want to entrust the Commission with enforcement in the case of very large providers. While the Commission and Parliament want to place procedures in the hands of EU officials in Brussels only in the case of specific regulations, the Council is in favor of the Commission being responsible for these providers in the case of suspicion of any violation of the DSA.

In their position, the member states demand sufficient financial and personnel resources for the responsible national bodies named Digital Services Coordinator (DSC). The parliamentarians want to go one step further: All member state authorities in charge of enforcement should be adequately resourced (Article 38). There are also differences on the question of when the DSCs should start their work: The Commission and Parliament consider two months after the entry into force of the DSA to be sufficient, while the member states consider 15 months to be desirable.

Further procedure

The other trilogues are currently scheduled for February 15 and March 15, as well as for the week of April 4. Whether these relatively sporty deadlines will suffice in the end is an open question and depends on the will to reach an agreement during the first substantive trilogues. However, the timing of the French presidency would be perfect: The first round of the French presidential election is on April 10, and Emmanuel Macron wants to conclude the DMA and DSA as soon as possible.

Falk Steiner / Jasmin Kohl

This article has been updated on 31.01.22 at 16:30.

Taxonomy: Nicolas Schmit against nuclear energy and gas

As a rule, the Commission adopts delegated acts in writing through the so-called written procedure. With the legal act on taxonomy, the Commission may deviate from this rule. At least that’s what the Commissioner for Jobs and Social Rights, Nicolas Schmit, says. “This is probably being discussed in the Collège.” In that case, the only option for him would be a resounding “no”. “It’s an absurdity to label nuclear power as green. You can’t accept that,” Schmit says.

He sees the integration of gas into the taxonomy in exactly the same way. The member states could decide on their own energy mix. But that does not mean that the EU should give its blessing to a sustainability label for gas and nuclear. In the Council, decisions are made by simple majority. Schmit doubts that there will be one against the legal act: “I know how it will turn out – unfortunately.” In any case, the mood in the Board of Commissioners seems tense: “There would be a lot to say about the way things work, but I’m not saying anything right now.”

Breton: EU to invest billions in chip funding

The European Union apparently wants to invest tens of billions of euros in its own chip industry and double its share of global production to 20 percent. EU Industry, Internal Market and Services Commissioner Thierry Breton told reporters Friday that the global chip shortage had highlighted the risks of dependence on Asian and US suppliers. “I want the EU to be a net exporter in semiconductors, as we are in vaccines,” he said. In geostrategic industries like batteries or pharmaceuticals, we do the same thing – we don’t do everything ourselves, but we have the capacity,” Breton said.

The EU’s ambitious plan follows the announcement last year by the US of a $52 billion government subsidy program, “CHIPS for America”, to better compete with Chinese technologies. Breton said the level of EU investment should be in a similar range. However, he would not give a firm figure: “We’re working with the various funders, especially national, European and regional.” The EU Commission plans to present the Chips Act on February 8. rtr

Baerbock: Russia prepares for CO2 border adjustment tax

Foreign Minister Annalena Baerbock (Greens) expects that the EU’s planned CO2 border adjustment tax will also lead to a switch to renewable energy in Russia. “The EU’s plans for a CO2 border adjustment tax are being taken very seriously there – and the energy and steel sectors, in particular, know that they have to adapt to this to remain competitive,” Baerbock told the newspapers of the Funke Mediengruppe and the French newspaper Ouest France, according to an advance report.

Therefore, many large companies in Russia are already accelerating the conversion to renewable energy and hydrogen on their own. Given its sheer size, Russia has immense potential for new business models in green hydrogen and forest reforestation. “What a blessing it would be to be able to cooperate in this regard on the basis of international law,” Baerbock said.

According to the plans known so far, the EU Commission wants to prevent a shift of CO2 pollution from the EU to other regions. The Brussels-based authority is therefore proposing a CO2 limit levy from 2026, which importers of steel, for example, will have to pay for each ton of CO2. This is intended to ensure that European emission reductions also contribute to a global decrease in emissions – and that CO2-intensive production capacities do not move outside of Europe. rtr

Nico Muzi – a fighter against global deforestation

Nico Muzi grew up in Bahía Blanca, near Buenos Aires. His parents, of Italian descent, had a farm with several cattle. Even as a child, Muzi was influenced by the importance of preserving natural ecosystems. Over the years, the fight against deforestation became the focus of his work. As European director of the non-governmental organization Mighty Earth, Muzi works to ensure that meat consumption in Europe does not lead to deforestation in South America.

Mighty Earth recently lobbied the EU Commission to draft a new law against deforestation. The law, unveiled in November, aims to ban the import of products into the EU that contribute to the depletion of tropical forests. “One of the main goals of the Green Deal is to minimize Europe’s impact on global deforestation,” Muzi tells Europe.Table. In parts of the world that are the lungs of the earth, forests are being cleared by agriculture and livestock.

Muzi points to the study published last year by WWF with alarming data: The EU is the second biggest importer of deforestation after China. In 2017, the EU was responsible for 16 percent of deforestation associated with international trade, totaling 203,000 hectares and 116 million tons of CO2. The EU was surpassed by China (24 percent) but outranked India (9 percent) and the United States (7 percent).

Europe’s responsibility for global deforestation

“The responsibility that Europe has is to import agricultural products and raw materials that destroy rainforests in the countries where they are grown,” says Muzi. A sociologist with a master’s degree in International Political Economy from the University of Kent, Muzi is also a member of the EU Commission’s Expert Group on the Protecting and Restoring the World’s Forests. Mighty Earth has been fighting deforestation worldwide for five years and has been working with other NGOs in Brussels to get the Commission to table this bill.

Between 2005-2017, soy, palm oil, and beef were the commodities with the largest embedded tropical deforestation imported into the EU, followed by wood products, cocoa, and coffee. Since Europe has a responsibility through the consumption of these products, Europe should mandate sustainability standards for the import of these products, Muzi elaborates. “In the Amazon basin, cattle ranching is the worst enemy, especially in the larger areas in Colombia and Brazil,” says the 41-year-old environmentalist.

Before joining Mighty Earth in 2020, Muzi worked for eight years as campaigns and communications director for the European transport and environment umbrella organization Transport and Environment (T&E). Along with Nicolas Richat, Muzi directed the 2015 documentary Frontera Invisible (Invisible Border). The award-winning film shows the reality of Colombian communities affected by armed conflict, displacement, and the rush by large landowners to produce palm oil for Europe. Isabel Cuesta Camacho