Warning by top EU diplomat + Criticism on IRA response + Pension reform protests France
What the German EU ambassador’s “urgent letter” says
Response to IRA: EU must also become more competitive
Why France’s pension debate is so vehement
Joint gas purchasing runs via Leipzig
EU auditors: little progress on common electricity market
Due diligence: environment committee to tighten up climate aspects
Electric waste: industry calls for harmonized rules
M23 rebellion in eastern Congo: ‘conflict-free’ supply chains do not ensure peace
Heads: Volker Löwe – representing Berlin interests in Brussels
Dear reader,
Germany is actually a significant player in the EU. But lately, Germany has been rather conspicuous because it is always late when it comes to decisions in Brussels. Too late to make its mark on the debates. Germany’s top EU diplomat, Michael Clauß, has listed all of this in great detail in a kind of urgent letter. It deals with good and bad examples of coordination, the latter, in particular, is sure to awaken associations. Christof Roche was the first to read the letter exclusively. In his analysis, he explains what it says.
Today, the EU Commission will officially present its response to theUS Inflation Reduction Act. But the debate on this already got into full swing yesterday. At the heart of the “Green Deal Industrial Plan” are financial aid and a new, temporary crisis framework for subsidies. CDU politician Andreas Schwab (CDU), for example, is critical of this. And Germany criticizes the plan in other points as well, write Manuel Berkel and Markus Grabitz.
There are again mass protests over pensions in France. President Emmanuel Macron would like to raise the retirement age. But 70 percent of the French reject this. So, why is Macron trying to reform the pension system for the second time since 2019? For Tanja Kuchenbecker, it has not only to do with austerity constraints but, above all, with Macron’s will to power.
Your Alina Leimbach
Feature
What the German EU ambassador’s ‘urgent letter’ says
The frustration in the Permanent Representation of the Federal Republic of Germany to the EU (StäV) over the lack of support and direction from the Berlin traffic light coalition must be great. The letter, sent by EU Ambassador Michael Clauß to Berlin on January 9, cannot be interpreted otherwise. Europe.Table was the first to report on the “urgent letter.” In the StäV, however, the designation “urgent letter” is strongly rejected.
Europe.Table was now allowed to read the document, which according to internal linguistic usage is a “D-correspondence.” Ambassador Clauß, supported by officials from his office, explains in great detail how successful German lobbying works in concert with the other member states and the EU institutions such as the Commission and the European Parliament in the European legislative process.
Interests must be brought in at an early stage
The letter is formulated in a diplomatically down-to-earth manner: It is about establishing contact with the Commission at an early stage, for example, to introduce German positions already in the phase in which the Brussels authority is drafting its legislative proposals. This would be advantageous for Germany but also for the Commission, which is always interested in conflict-free handling of dossiers in the Council.
As the largest EU country, Germany also has a special responsibility, as the German government’s position serves as a guide for many smaller partner states, the report continues. This also applies to an early and successful exchange with the Parliament, which is an equal partner of the Council in many legislative projects.
Even for Germany’s public appearance in Brussels with its numerous representatives of international media, the ambassador urges a clear positioning at an early stage so as not to be denounced as incapable of action. A best-practice example then describes how a member state – which is not named – coordinated its interests in an exemplary manner throughout the entire legislative process and ultimately succeeded in doing so.
Internal reconciliation takes agonizingly long
He then provides a negative example, which probably comes closer to actual practice. Again, only one member state is mentioned. It says that the government failed to swiftly adopt a coordinated position on a legislative proposal from the Commission. In this case, the legislative process in Brussels took its formalized course. And when the member state – presumably Germany – finally found its position after many months, it was clearly in the minority in the Council. By then, it was too late to exert any influence.
Because, as the ambassador also points out in his letter of frustration: Most EU legislative projects are now decided by a qualified majority. Despite its weight in the Council, Germany’s influence is often insufficient to turn a legislative project around in the last few meters, not even with force. All of this is consistent, albeit politely formulated, with the impression of many observers of EU policy: The assertiveness of German EU policy in Brussels is currently poor.
‘He who writes remains’
In many cases, Germany is without explicit instructions from Berlin and thus unable to speak in the Council. Instead of living up to its special responsibility and pulling partners along in the Council, Germany runs behind uncoordinatedly. This was particularly evident last year in the coordination difficulties between the Green Ministry for the Environment and the FDP-led finance and transport ministries in the dispute over the phasing out of internal combustion engines.
In his report to Berlin, the ambassador refers to a well-known saying: “He who writes remains.” This translates as a clear reminder to the traffic light coalition in Berlin to overcome their internal discord and coordinate early on so that the German government can regain its usual leadership on the European stage. Christof Roche
Brussels
European policy
Federal Government
Michael Clauß
urgent letter
Response to IRA: EU must also become more competitive
The EU response to the US Inflation Reduction Act (IRA) arrives today and goes under the headline “Green Deal Industrial Plan for the Net-Zero Age.” According to the draft, which was still optimized yesterday, the Commission announces it would propose a European Sovereignty Fund before the summer and as part of the revision of the Medium-term budgetary frameworks (MFF).
Germany is very critical of this plan. In an instruction from the Foreign Office to the German EU embassy dated January 25 for the preparation of the conclusions of the next European Council, available to Europe.Table, it says: “We reject current calls fornew financing instruments.”
Funding pots are reallocated
New financial aid is at the heart of the Green Deal Industrial Plan, for which existing EU funding pots will be partly redirected. In addition, the member states are to be given further freedom to grant aid. For this, the Temporary Crisis Framework (TCF) is to be extended once again. In addition, the Commission wants to launchan education offensive. The training of employees in occupational fields that are part of the Green Deal is to be intensified.
Bureaucratic procedures are to be streamlined. The Commission also wants more trade agreements. There should also be forums for deepening trade relations below the level of formal trade agreements. One example of this is the Trade and Technology Council with the USA.
First proposals at the next summit
In Berlin, Economic Commissioner Paolo Gentiloni pleaded for the political debate on the EU’s response to the IRA not to be narrowed down to financial aid. The Commission would not start the discussion from the end, Gentiloni said. He said at the beginning must be an assessment of which sectors of the economy can best address competitiveness challenges at the EU level. Gentiloni expects more in-depth proposals from the Commission on the Green Deal Industrial Plan for the next European Council in March.
The Italian described the IRA as a challenge to the EU’s competitiveness. Russia’s war against Ukraine has triggered an “asymmetric crisis,” he said. “Europe is more affected by the crisis than other developed economies. For some significant sectors, there is thus a clear need to address this challenge to our competitiveness,” Gentiloni said. He added the EU is also too dependent on China in some sectors. Europe needs to speed up and streamline state aid procedures related to the clean transition, he said.
Schwab for free trade agenda
Andreas Schwab (CDU), a member of the Internal Market Committee, considers the proposal for a new, albeit temporary, crisis framework on subsidies “critical”: “It does not solve the core problem of relocations, such as in the Tesla case: the decreased competitiveness of the EU.” It would be much more important to release pressure so that a free trade agreement with the USA can materialize.
Schwab calls for very close scrutiny offurther relaxations of the state aid framework: “Already under the current crisis framework, some member states were unable to exhaust the funding possibilities.” Of the €672 billion in state aid awarded under the framework over the past three years, 77 percentwas spentby Germany and France alone. Schwab warns: The already existing economic imbalance could be exacerbated by an extension of the exemptions and result in a distortion of the internal market.
VDMA wants debate about location
Michael Bloss (Greens), a member of the Industry Committee, said, “It would be fatal if we had to implement the energy transition in Europe but import solar panels, wind turbines, and heat pumps.” The Commission’s initiative is right, he said. However, he cautions not to spend the money with a watering can but to concentrate on the core business, namely renewable energies.
Germany’s machinery manufacturers are calling for a comprehensive industrial policy. “The debate on Europe’s attractiveness as an industrial location must not be limited to somehow mirroring the subsidies promised by the IRA in Europe,” said VDMA Executive Director Thilo Brodtmann.“It will be important that not just individual products and sectors benefit from better conditions in the short term, but that Europe becomes a good location for ecologically and economically sustainable value chains across the board.”
Solar industry worries about demand
The European solar industry does not consider financial aid alone to be sufficient. In a statement distributed yesterday, SolarPower Europe lists which financial pots could still be improved. In addition, subsidies should alsobe available forfactories that are already under construction or already exist. In the end, however, demand must also be supported.
“Investments in new solar and inverter factories will only take place on the necessary scale if investors have the prospect that these components will also be purchased,” writes SolarPower Europe. This is tantamount to an admission that European green technologies are likely to remain permanently more expensive than components from the Far East or other regions, even despite new subsidies. Manuel Berkel and Markus Grabitz
Eating oysters in Brittany or sipping rosé wine in Provence at the age of 62. That’s the stereotype of France’s pensioners. In fact, many French people have been able to retire at 62 without deductions if they completed the 41 or 42 years of contributions required, depending on their year of birth. This is because, unlike in Germany, studies are more compact and the start of working life is earlier.
But now the French are to be deprived of their early leisure time. President Emmanuel Macron is planning a pension reform that will be debated in parliament from Feb. 6. It is to be decided by the summer.
Mass protests on Tuesday
Unions, opposition parties, and student associations are on the barricades. On Tuesday, strikes were held for the second time throughout France. Railroads, metro, schools, refineries, and airports were among those affected. The government named the number of demonstrators in the evening as 1.27 million, more than the 1.12 million in the first strike on Jan. 19. Unions announced new demonstrations for Feb. 7 and 11 – Tuesday and Saturday next week.
The reform envisages a gradual increase in the number of years paid into the pension to 43. At the same time, the official retirement age is to be raised instages from 62 to 64 by 2030. Although the pension funds are still quite solid at present, President Macron fears a pension gap that is too large due to demographic change, which is also affecting France.
France: higher pensions, earlier start
According to opinion polls, around 70 percent of French citizens oppose the reform. In recent days, however, moderate trade unions in France have been increasingly calling for current pensioners to pay additional deductions if they draw high pensions. They also believe that companies should pay higher contributions.
However, those who have not completed 41 to 42 years of work in France can also only retire without deductions at 67. The basic pension amounts to 50 percent of the average annual gross income, plus additional pay-as-you-go occupational pensions, so French pensioners end up with an average replacement rate of around 66 percent, according to the OECD.
In Germany, people work a little longer, but here, too, employees can retire at 63 if they have worked for 45 years and were born before 1953. The retirement age is currently being gradually increased to 67. However, there is also a lot ofdebate in Germany: business representatives regularly call for the age limit to be raised to 70. Unions, on the other hand, criticize above all the relatively low pension level of 48 percent. They would like to stabilize the system by including pensioners and freelancers, who have so far been excluded from the statutory system – and in some cases argue for an increase in contribution rates.
Last pension reform 2010
Michaël Zemmour, an economist and social policy specialist at Paris’ Panthéon Sorbonne University, explains why the French are so opposed to Macron’s plans: “The French have just gone through a pension reform, and the new reform is coming too fast.” The retirement age was raised from 60 to 62 in 2010 under conservative President Nicolas Sarkozy.
Many also felt a great deal of psychological suffering at the end of their careers, according to the researcher. Why is this particularly extreme in France? He suspects that the 35-hour week has not reduced the amount of work, it just has to be done in a shorter amount of time. In addition, the French generally have a tendency to complain.
Rejection has historical reasons
According to official government figures, only one-third of people between 60 and 64 are still working in France. This puts France behind Italy, Spain, Great Britain, the eurozone with 46.1 percent, and, above all, Germany with 60.7 percent. This is also due to the many very advantageous pension systems, such as those of the SNCF railroad or the exemptions for heavy physical labor. In addition, “In France, it is currently difficult tofind a job after 61, and the pension reform would only extend the period of unemployment or social welfare,” says Zemmour.
Arguably, however, the most important reason for the rejection was a historic decision: “Unlike other countries, France relies entirely on the welfare state for pensions, not on a mix of private capitalization and social protection. That’s why the French rely entirely on the state pension.”
The reason for this decision is the high risk of private pension protection in financial crises. This is also why many French people believe the state should provide for them in full.
Macron wants reform at all cost
That is why the president is facing a strong front. It is a test of strength for Macron, who wants to prove his assertiveness. He described the pension reform as “inevitable.” Macron’s first pension reform in 2019 had already failed in the face of bitter resistance from citizens. At that time, he had sought standardization and a points system.
“The opposition is strong, all the unions are against it this time. It’s never been done before. It’s a trial of strength,” Zemmour says. But the president’s position of power is not really in danger, he says. Macron does not doubt that he can push through the reform without support. Either with the conservatives, which is already a realistic possibility, or in an emergency with Section 49.3 of the constitution – without a vote. A deal with Republicans would actually strengthen him, Zemmour believes. By contrast, the path via Section 49.3, which allows laws to be pushed through parliament without a vote, is causing criticism in France.
In the discussion with the union, Macron presents himself as tough. It’s about “power and strategy,” Zemmour emphasizes. “Macron wants to impose his political-economic strategy. Taxes for companies will be reduced, but the structure must be changedto reduce public spending. Reform is necessary to balance the system.” Weakening it would not put enough money in the coffers, Zemmour says.
Already second reform attempt
Just a few years ago, Macron had ruled out raising the retirement age because there are not many workers over 60 in France. However, he had a different pension reform in mind when he made his first attempt in 2019. Months of strikes followed, then Macron put the project on hold due to Covid.
The pandemic and the Ukraine war, in which the state supported the population with billions, have caused the mountain of debt to rise sharply. Macron is under pressure to save somewhere, says Zemmour. And also to send a signal to the EU that France is willing to reform and save.
Debt
Emmanuel Macron
France
pension reform
News
Joint gas purchasing runs via Leipzig
The platform for joint gas purchasing and demand bundling will be operated by Leipzig-based Prisma. “We are pleased and proud that we were able to offer the European Union a convincing solution in such a short time,” said Götz Lincke, Managing Director of Prisma, according to a statement on Monday.
Gas suppliers are expected to buy enough gas through the energy platform to meet 15 percent of member states’ storage obligations under a 2022 regulation. According to Commission plans, hydrogen could also be procured through the platform in the long term.
Prisma is a joint venture of more than 20 European transmission system operators that have been marketing transport capacity through the platform since 2013. The Commission’s non-public tender for the operation of the new EU-wide purchasing platform is challenged by Enmacc, a competitor based in Munich, Germany. “The court’s decision is still pending. In the meantime, the EU Commission is creating facts by awarding the tender to Prisma,” said CEO Jens Hartmann. ber
Gas prices
Hydrogen
Natural gas
EU auditors: little progress on common electricity market
According to the European Court of Auditors, the EU has recently made little progress in creating a common electricity market. “Despite some significant achievements over the past decade, there has been slow progress in integrating electricity markets,” says a report by the EU’s top auditors published Tuesday.
Completion of the common markethas actually beenhampered by the regulatory instruments chosen by the EU Commission, it said. It said this has led to a complex legal structure of cross-border trade rules and delays in implementation. The Court concludes that the main risk in the EU electricity market was ultimately passed on to end consumers.
‘Inadequate monitoring’ by Acer
Since 1996, the EU has been working to interconnect the various electricity markets of the member states to ensure favorable prices and secure supply, as well as drive environmental change. This was supposed to be completed in 2014. Instead, the current energy crisis has shown that there is a significant gap in wholesale prices between EU countries, the auditors wrote. In addition, retail prices still depended heavily on national tax rates and network charges, rather than being determined by competition.
According to the auditors, the reason for the lack of progress is, among other things, inadequate monitoring of the applicable requirements by the EU energy agency Acer – “mainly because the agency did not have enough data, suffered from a lack of staff and had poor coordination with the European Commission.” The EU Commission’s approach to regulation had also “significantly and unnecessarily increased the administrative burden, resource requirements and costs for Acer and national regulators, as well as for network and market operators.”
As a result of the energy crisis, the EU Commission plans to propose a reform of electricity markets in the spring. This would be an opportunity to address weaknesses, the Court wrote. However, the project is considered highly complex. dpa
Acer
Electricity market
Energy crisis
Energy policy
EU auditors
Due diligence: Environment committee to tighten climate aspects
On February 9, the Committee on Environment (ENVI) will vote on its opinion on the Due Diligence Act. The MEPs, led by ENVI rapporteur Tiemo Wölken (SPD), want to agree, among other things, that far more companies than the Commission proposes are covered by the law. This emerges from the preliminary compromises, which Europe.Table was able to see.
According to them, companies with 250 employees or more and annual sales of €40 million are to fall under the law. The committee also wants to propose expanding the risk sectors around the energy sector, in particular. In addition, the compromises provide for a risk-based approach. The committee is thus taking up the demands of lead rapporteur Lara Wolters, a member of the S&D Group like Tiemo Wölken.
Compromises are oriented to CSRD
All in all, the compromises are strongly based on the EU directive on corporate sustainability reporting (CRSD). This can be seen in the definition of adverse environmental impacts. The following categories are to be covered:
Climate protection and climate adaptation
Sustainable use of soil, water, and marine resources
Transition to a circular economy
Pollution prevention and control
Protection and restoration of biodiversity and ecosystems
Other changes include making the climate an implicit part of the due diligence process. Companies are also to develop climate transition plans modeled on the CRSD requirements. For companies with around 1,000 employees, directors’ pay is to be based on how they implement climate transition plans.
In addition to ENVI, three other committees must issue their opinions. In March, the lead JURI committee will vote, and in May, the text goes to the plenary. cw
Climate & Environment
Climate Policy
Committee on Environment
Due Diligence
European policy
Electrical waste: industry calls for harmonized rules
The electrical and recycling industry says harmonization of rules in the EU’s internal market is needed to strengthen a circular economy for electrical equipment. Differing ambitious targets, standards, and product requirements would place an unnecessary burden on the industry, it said yesterday at an event organized by the recycling industry association EuRIC.
“In recent years, we have seen many different national regulations and mandatory requirements for products that are not aligned with EU requirements,” said Benedict Storer of Samsung Electronics. It is imperative that technical product requirements be harmonized at the EU level, he said. In the area of eco-design, the planned transition from a directive to a regulation could ensure that obligations are implemented more uniformly across member states, Storer said.
Commission evaluates WEEE Directive
Member states so far had different recycling treatment standards and collection and recycling rates, said Tess Pozzi of recycling company Derichebourg. She said to create a level playing field, a structural reform of the legal framework is needed. The EU Commission is currently evaluating the Waste from Electrical and Electronic Equipment (WEEE) Directive. “The transition from directive to regulation would ensure better harmonization between member states,” Pozzi said.
MEP Sara Matthieu (Greens/EFA) stressed that higher collection and recycling rates are needed, especially for electronic equipment containing critical raw materials. The Commission’s Circular Economy Action Plan calls for “improving the collection and treatment of WEEE, including by exploring the possibilities for an EU-wide take-back system to return or sell old cell phones, tablets, and chargers.” “Unless I missed something, there is no legislative proposal on this issue yet,” Matthieu criticized.
Consultations to start in April
The WEEE Directive has been around for twenty years, and its revision has been in force for more than ten. Not unsuccessfully: in 2005, 300,000 tons of e-waste were collected, and in 2019 already about 4.5 million tons. However, the target was to collect ten million tons in 2020, reported Maria Banti from the Commission’s Directorate-General for the Environment (DG ENV). Only three member states (Bulgaria, Croatia, and Poland) reached the target of collecting 65 percent of the electrical and electronic equipment put on the market in 2019, she said.
The Commission is currently reviewing the WEEE Directive for effectiveness, problems, impact, and suitability. The relevant study has been underway since November 2022 and will continue until the end of January 2024. The public consultation is expected to start in April. The Commission’s working document is expected to be adopted in the spring of 2024. leo
Abfall
Circular Economy
electrical waste
Raw materials
WEEE Directive
M23 rebellion in eastern Congo: ‘Conflict-free’ supply chains do not ensure peace
According to researchers, the current spread of the M23 rebel group in eastern Congo is only partially related to raw materials and raises doubts about the goals of regulating raw material supply chains. Experts say the expectation that violent conflicts can be prevented by means of the EU Conflict Minerals Regulation is unreasonable.
The rebels are spreading in areas from which the army and UN troops ousted them ten years ago. More than half a million people have already fled. Once again, neighboring Rwanda is supporting the rebels.
The EU had been drafting the Conflict Minerals Regulation since the past M23 rebellion. It imposes due diligence obligations on companies that import coltan, tungsten, tin, and gold from Congo and other regions “where the revenues from them trigger or keep violent conflicts going,” according to the explanatory memorandum. It went into full effect in January 2021. Back in 2010, the US passed the Dodd-Frank Act, which requires US companies to disclose conflict commodities in their supply chains.
Analysis outdated
Onesphore Sematumba, an analyst with the International Crisis Group, doubts that raw materials are the main reason for the fights. He worked for the Pole Institute in Goma for a long time, which at the turn of the millennium researched how Rwandan-backed rebel groups controlled significant coltan mines in North Kivu province. “There was coltan fever,” he says. Media reports and NGO campaigns followed, solidifying the narrative of “blood raw materials,” but then prices fell on the world market. The rebels retreated. “There was a failure to update the analysis,” Sematumba says.
He is not saying that raw materials do not play a role. Occasionally, rebels control mines today, especially in gold mining. “But there are conflicts where there are raw materials and where there are none,” the analyst says. Observers count more than 120 armed groups in the region. They have all kinds of sources of income: Looting, customs duties, or the charcoal business. Rarely, however, are they driven by greed alone.
Bernd Lange (S&D) also dampens expectations of the EU regulation: “I think you can dry up the funding of individual groups with it. But that alone will not overcome the conflicts.” As Chairman of the International Trade Committee, he was instrumental in pushing for the legislation, talking at the time with representatives of Congolese civil society as well as European consumer groups and industry. “We wanted to get transparency into the market,” he says. The idea was to prevent European central banks, for example, from buying gold used to finance civil wars.
For Lange, the EU regulation contains important lessons: “It’s a bit of a precursor to the Supply Chain Act.” This year, an initial assessment is to be made. “Then we will think again about what could strengthenthe material situation on the ground,” says Lange. Jonas Gerding
Congo
M23
Raw materials
rebellion
Supply Chain Act
Supply chains
Heads
Volker Löwe – Representative of Berlin interests in Brussels
Volker Löwe is Head of the Berlin State Office at the EU in Brussels.
Volker Löwe has been following Berlin state politics for more than 20 years. For some time now, he has been representing its interests at the European level. He is head of the Berlin state office at the EU in Brussels. Among his tasks is the Europeanization of the administration. Here, he says, it is important to “hear early when the European grass grows” to have a say in decision-making processes at an early stage.
Focus on research
The political scientist strives to bring Berlin’s expertise and experience to bear in Brussels. His work also focuses on European regional policy and structural funds such as ERDF and ESF plus, which play an important role in the city. Especially for strengthening social cohesion and for science and research. “Berlin has a very dense network of research institutions, such as the colleges and universities,” says the 57-year-old. He is particularly concerned about urban policy, which the EU has long neglected. The topic of energy and climate protection are major challenges in the coming years, especially with regard to the renovation of the public building stock.
He and his team are eagerly awaiting the results of the repeated Berlin parliamentary elections. Volker Löwe estimates that it will take a while before the coalition agreement is finalized if there are any changes in the composition. He does not want to commit himself to whether he finds Berlin or Brussels more beautiful. It is no wonder, he says, that both cities have a well-cultivated partnership.
Self-confident Europe
He wrote his doctoral thesis in the early 1990s on the involvement of the German armed forces in out-of-area missions, the so-called blue helmet operations. After that, the political scientist started working at the German Federal Ministry for Economic Cooperation and Development. Followed by two years as a freelancer in the Chancellor’s Office and a move to the Berlin Representation in Bonn. His motto for challenges is “to take the bull by the horns.” You have to call a spade a spade and look for possible solutions. At the European level, above all, in harmony with other players.
For Löwe, the EU’s trump card is its balance of freedom and solidarity. This is what makes the European model so attractive, and it must be preserved both internally and externally. “We need to strengthen our strategic autonomy to be less susceptible to blackmail.” Volker Löwe would like to see an outwardly directed self-confident European policy and for the EU not to lose credibility from within. He says the EU will have to find a clear language toward member states that abandon the rule of law. Kim Fischer
What the German EU ambassador’s “urgent letter” says
Response to IRA: EU must also become more competitive
Why France’s pension debate is so vehement
Joint gas purchasing runs via Leipzig
EU auditors: little progress on common electricity market
Due diligence: environment committee to tighten up climate aspects
Electric waste: industry calls for harmonized rules
M23 rebellion in eastern Congo: ‘conflict-free’ supply chains do not ensure peace
Heads: Volker Löwe – representing Berlin interests in Brussels
Dear reader,
Germany is actually a significant player in the EU. But lately, Germany has been rather conspicuous because it is always late when it comes to decisions in Brussels. Too late to make its mark on the debates. Germany’s top EU diplomat, Michael Clauß, has listed all of this in great detail in a kind of urgent letter. It deals with good and bad examples of coordination, the latter, in particular, is sure to awaken associations. Christof Roche was the first to read the letter exclusively. In his analysis, he explains what it says.
Today, the EU Commission will officially present its response to theUS Inflation Reduction Act. But the debate on this already got into full swing yesterday. At the heart of the “Green Deal Industrial Plan” are financial aid and a new, temporary crisis framework for subsidies. CDU politician Andreas Schwab (CDU), for example, is critical of this. And Germany criticizes the plan in other points as well, write Manuel Berkel and Markus Grabitz.
There are again mass protests over pensions in France. President Emmanuel Macron would like to raise the retirement age. But 70 percent of the French reject this. So, why is Macron trying to reform the pension system for the second time since 2019? For Tanja Kuchenbecker, it has not only to do with austerity constraints but, above all, with Macron’s will to power.
Your Alina Leimbach
Feature
What the German EU ambassador’s ‘urgent letter’ says
The frustration in the Permanent Representation of the Federal Republic of Germany to the EU (StäV) over the lack of support and direction from the Berlin traffic light coalition must be great. The letter, sent by EU Ambassador Michael Clauß to Berlin on January 9, cannot be interpreted otherwise. Europe.Table was the first to report on the “urgent letter.” In the StäV, however, the designation “urgent letter” is strongly rejected.
Europe.Table was now allowed to read the document, which according to internal linguistic usage is a “D-correspondence.” Ambassador Clauß, supported by officials from his office, explains in great detail how successful German lobbying works in concert with the other member states and the EU institutions such as the Commission and the European Parliament in the European legislative process.
Interests must be brought in at an early stage
The letter is formulated in a diplomatically down-to-earth manner: It is about establishing contact with the Commission at an early stage, for example, to introduce German positions already in the phase in which the Brussels authority is drafting its legislative proposals. This would be advantageous for Germany but also for the Commission, which is always interested in conflict-free handling of dossiers in the Council.
As the largest EU country, Germany also has a special responsibility, as the German government’s position serves as a guide for many smaller partner states, the report continues. This also applies to an early and successful exchange with the Parliament, which is an equal partner of the Council in many legislative projects.
Even for Germany’s public appearance in Brussels with its numerous representatives of international media, the ambassador urges a clear positioning at an early stage so as not to be denounced as incapable of action. A best-practice example then describes how a member state – which is not named – coordinated its interests in an exemplary manner throughout the entire legislative process and ultimately succeeded in doing so.
Internal reconciliation takes agonizingly long
He then provides a negative example, which probably comes closer to actual practice. Again, only one member state is mentioned. It says that the government failed to swiftly adopt a coordinated position on a legislative proposal from the Commission. In this case, the legislative process in Brussels took its formalized course. And when the member state – presumably Germany – finally found its position after many months, it was clearly in the minority in the Council. By then, it was too late to exert any influence.
Because, as the ambassador also points out in his letter of frustration: Most EU legislative projects are now decided by a qualified majority. Despite its weight in the Council, Germany’s influence is often insufficient to turn a legislative project around in the last few meters, not even with force. All of this is consistent, albeit politely formulated, with the impression of many observers of EU policy: The assertiveness of German EU policy in Brussels is currently poor.
‘He who writes remains’
In many cases, Germany is without explicit instructions from Berlin and thus unable to speak in the Council. Instead of living up to its special responsibility and pulling partners along in the Council, Germany runs behind uncoordinatedly. This was particularly evident last year in the coordination difficulties between the Green Ministry for the Environment and the FDP-led finance and transport ministries in the dispute over the phasing out of internal combustion engines.
In his report to Berlin, the ambassador refers to a well-known saying: “He who writes remains.” This translates as a clear reminder to the traffic light coalition in Berlin to overcome their internal discord and coordinate early on so that the German government can regain its usual leadership on the European stage. Christof Roche
Brussels
European policy
Federal Government
Michael Clauß
urgent letter
Response to IRA: EU must also become more competitive
The EU response to the US Inflation Reduction Act (IRA) arrives today and goes under the headline “Green Deal Industrial Plan for the Net-Zero Age.” According to the draft, which was still optimized yesterday, the Commission announces it would propose a European Sovereignty Fund before the summer and as part of the revision of the Medium-term budgetary frameworks (MFF).
Germany is very critical of this plan. In an instruction from the Foreign Office to the German EU embassy dated January 25 for the preparation of the conclusions of the next European Council, available to Europe.Table, it says: “We reject current calls fornew financing instruments.”
Funding pots are reallocated
New financial aid is at the heart of the Green Deal Industrial Plan, for which existing EU funding pots will be partly redirected. In addition, the member states are to be given further freedom to grant aid. For this, the Temporary Crisis Framework (TCF) is to be extended once again. In addition, the Commission wants to launchan education offensive. The training of employees in occupational fields that are part of the Green Deal is to be intensified.
Bureaucratic procedures are to be streamlined. The Commission also wants more trade agreements. There should also be forums for deepening trade relations below the level of formal trade agreements. One example of this is the Trade and Technology Council with the USA.
First proposals at the next summit
In Berlin, Economic Commissioner Paolo Gentiloni pleaded for the political debate on the EU’s response to the IRA not to be narrowed down to financial aid. The Commission would not start the discussion from the end, Gentiloni said. He said at the beginning must be an assessment of which sectors of the economy can best address competitiveness challenges at the EU level. Gentiloni expects more in-depth proposals from the Commission on the Green Deal Industrial Plan for the next European Council in March.
The Italian described the IRA as a challenge to the EU’s competitiveness. Russia’s war against Ukraine has triggered an “asymmetric crisis,” he said. “Europe is more affected by the crisis than other developed economies. For some significant sectors, there is thus a clear need to address this challenge to our competitiveness,” Gentiloni said. He added the EU is also too dependent on China in some sectors. Europe needs to speed up and streamline state aid procedures related to the clean transition, he said.
Schwab for free trade agenda
Andreas Schwab (CDU), a member of the Internal Market Committee, considers the proposal for a new, albeit temporary, crisis framework on subsidies “critical”: “It does not solve the core problem of relocations, such as in the Tesla case: the decreased competitiveness of the EU.” It would be much more important to release pressure so that a free trade agreement with the USA can materialize.
Schwab calls for very close scrutiny offurther relaxations of the state aid framework: “Already under the current crisis framework, some member states were unable to exhaust the funding possibilities.” Of the €672 billion in state aid awarded under the framework over the past three years, 77 percentwas spentby Germany and France alone. Schwab warns: The already existing economic imbalance could be exacerbated by an extension of the exemptions and result in a distortion of the internal market.
VDMA wants debate about location
Michael Bloss (Greens), a member of the Industry Committee, said, “It would be fatal if we had to implement the energy transition in Europe but import solar panels, wind turbines, and heat pumps.” The Commission’s initiative is right, he said. However, he cautions not to spend the money with a watering can but to concentrate on the core business, namely renewable energies.
Germany’s machinery manufacturers are calling for a comprehensive industrial policy. “The debate on Europe’s attractiveness as an industrial location must not be limited to somehow mirroring the subsidies promised by the IRA in Europe,” said VDMA Executive Director Thilo Brodtmann.“It will be important that not just individual products and sectors benefit from better conditions in the short term, but that Europe becomes a good location for ecologically and economically sustainable value chains across the board.”
Solar industry worries about demand
The European solar industry does not consider financial aid alone to be sufficient. In a statement distributed yesterday, SolarPower Europe lists which financial pots could still be improved. In addition, subsidies should alsobe available forfactories that are already under construction or already exist. In the end, however, demand must also be supported.
“Investments in new solar and inverter factories will only take place on the necessary scale if investors have the prospect that these components will also be purchased,” writes SolarPower Europe. This is tantamount to an admission that European green technologies are likely to remain permanently more expensive than components from the Far East or other regions, even despite new subsidies. Manuel Berkel and Markus Grabitz
Eating oysters in Brittany or sipping rosé wine in Provence at the age of 62. That’s the stereotype of France’s pensioners. In fact, many French people have been able to retire at 62 without deductions if they completed the 41 or 42 years of contributions required, depending on their year of birth. This is because, unlike in Germany, studies are more compact and the start of working life is earlier.
But now the French are to be deprived of their early leisure time. President Emmanuel Macron is planning a pension reform that will be debated in parliament from Feb. 6. It is to be decided by the summer.
Mass protests on Tuesday
Unions, opposition parties, and student associations are on the barricades. On Tuesday, strikes were held for the second time throughout France. Railroads, metro, schools, refineries, and airports were among those affected. The government named the number of demonstrators in the evening as 1.27 million, more than the 1.12 million in the first strike on Jan. 19. Unions announced new demonstrations for Feb. 7 and 11 – Tuesday and Saturday next week.
The reform envisages a gradual increase in the number of years paid into the pension to 43. At the same time, the official retirement age is to be raised instages from 62 to 64 by 2030. Although the pension funds are still quite solid at present, President Macron fears a pension gap that is too large due to demographic change, which is also affecting France.
France: higher pensions, earlier start
According to opinion polls, around 70 percent of French citizens oppose the reform. In recent days, however, moderate trade unions in France have been increasingly calling for current pensioners to pay additional deductions if they draw high pensions. They also believe that companies should pay higher contributions.
However, those who have not completed 41 to 42 years of work in France can also only retire without deductions at 67. The basic pension amounts to 50 percent of the average annual gross income, plus additional pay-as-you-go occupational pensions, so French pensioners end up with an average replacement rate of around 66 percent, according to the OECD.
In Germany, people work a little longer, but here, too, employees can retire at 63 if they have worked for 45 years and were born before 1953. The retirement age is currently being gradually increased to 67. However, there is also a lot ofdebate in Germany: business representatives regularly call for the age limit to be raised to 70. Unions, on the other hand, criticize above all the relatively low pension level of 48 percent. They would like to stabilize the system by including pensioners and freelancers, who have so far been excluded from the statutory system – and in some cases argue for an increase in contribution rates.
Last pension reform 2010
Michaël Zemmour, an economist and social policy specialist at Paris’ Panthéon Sorbonne University, explains why the French are so opposed to Macron’s plans: “The French have just gone through a pension reform, and the new reform is coming too fast.” The retirement age was raised from 60 to 62 in 2010 under conservative President Nicolas Sarkozy.
Many also felt a great deal of psychological suffering at the end of their careers, according to the researcher. Why is this particularly extreme in France? He suspects that the 35-hour week has not reduced the amount of work, it just has to be done in a shorter amount of time. In addition, the French generally have a tendency to complain.
Rejection has historical reasons
According to official government figures, only one-third of people between 60 and 64 are still working in France. This puts France behind Italy, Spain, Great Britain, the eurozone with 46.1 percent, and, above all, Germany with 60.7 percent. This is also due to the many very advantageous pension systems, such as those of the SNCF railroad or the exemptions for heavy physical labor. In addition, “In France, it is currently difficult tofind a job after 61, and the pension reform would only extend the period of unemployment or social welfare,” says Zemmour.
Arguably, however, the most important reason for the rejection was a historic decision: “Unlike other countries, France relies entirely on the welfare state for pensions, not on a mix of private capitalization and social protection. That’s why the French rely entirely on the state pension.”
The reason for this decision is the high risk of private pension protection in financial crises. This is also why many French people believe the state should provide for them in full.
Macron wants reform at all cost
That is why the president is facing a strong front. It is a test of strength for Macron, who wants to prove his assertiveness. He described the pension reform as “inevitable.” Macron’s first pension reform in 2019 had already failed in the face of bitter resistance from citizens. At that time, he had sought standardization and a points system.
“The opposition is strong, all the unions are against it this time. It’s never been done before. It’s a trial of strength,” Zemmour says. But the president’s position of power is not really in danger, he says. Macron does not doubt that he can push through the reform without support. Either with the conservatives, which is already a realistic possibility, or in an emergency with Section 49.3 of the constitution – without a vote. A deal with Republicans would actually strengthen him, Zemmour believes. By contrast, the path via Section 49.3, which allows laws to be pushed through parliament without a vote, is causing criticism in France.
In the discussion with the union, Macron presents himself as tough. It’s about “power and strategy,” Zemmour emphasizes. “Macron wants to impose his political-economic strategy. Taxes for companies will be reduced, but the structure must be changedto reduce public spending. Reform is necessary to balance the system.” Weakening it would not put enough money in the coffers, Zemmour says.
Already second reform attempt
Just a few years ago, Macron had ruled out raising the retirement age because there are not many workers over 60 in France. However, he had a different pension reform in mind when he made his first attempt in 2019. Months of strikes followed, then Macron put the project on hold due to Covid.
The pandemic and the Ukraine war, in which the state supported the population with billions, have caused the mountain of debt to rise sharply. Macron is under pressure to save somewhere, says Zemmour. And also to send a signal to the EU that France is willing to reform and save.
Debt
Emmanuel Macron
France
pension reform
News
Joint gas purchasing runs via Leipzig
The platform for joint gas purchasing and demand bundling will be operated by Leipzig-based Prisma. “We are pleased and proud that we were able to offer the European Union a convincing solution in such a short time,” said Götz Lincke, Managing Director of Prisma, according to a statement on Monday.
Gas suppliers are expected to buy enough gas through the energy platform to meet 15 percent of member states’ storage obligations under a 2022 regulation. According to Commission plans, hydrogen could also be procured through the platform in the long term.
Prisma is a joint venture of more than 20 European transmission system operators that have been marketing transport capacity through the platform since 2013. The Commission’s non-public tender for the operation of the new EU-wide purchasing platform is challenged by Enmacc, a competitor based in Munich, Germany. “The court’s decision is still pending. In the meantime, the EU Commission is creating facts by awarding the tender to Prisma,” said CEO Jens Hartmann. ber
Gas prices
Hydrogen
Natural gas
EU auditors: little progress on common electricity market
According to the European Court of Auditors, the EU has recently made little progress in creating a common electricity market. “Despite some significant achievements over the past decade, there has been slow progress in integrating electricity markets,” says a report by the EU’s top auditors published Tuesday.
Completion of the common markethas actually beenhampered by the regulatory instruments chosen by the EU Commission, it said. It said this has led to a complex legal structure of cross-border trade rules and delays in implementation. The Court concludes that the main risk in the EU electricity market was ultimately passed on to end consumers.
‘Inadequate monitoring’ by Acer
Since 1996, the EU has been working to interconnect the various electricity markets of the member states to ensure favorable prices and secure supply, as well as drive environmental change. This was supposed to be completed in 2014. Instead, the current energy crisis has shown that there is a significant gap in wholesale prices between EU countries, the auditors wrote. In addition, retail prices still depended heavily on national tax rates and network charges, rather than being determined by competition.
According to the auditors, the reason for the lack of progress is, among other things, inadequate monitoring of the applicable requirements by the EU energy agency Acer – “mainly because the agency did not have enough data, suffered from a lack of staff and had poor coordination with the European Commission.” The EU Commission’s approach to regulation had also “significantly and unnecessarily increased the administrative burden, resource requirements and costs for Acer and national regulators, as well as for network and market operators.”
As a result of the energy crisis, the EU Commission plans to propose a reform of electricity markets in the spring. This would be an opportunity to address weaknesses, the Court wrote. However, the project is considered highly complex. dpa
Acer
Electricity market
Energy crisis
Energy policy
EU auditors
Due diligence: Environment committee to tighten climate aspects
On February 9, the Committee on Environment (ENVI) will vote on its opinion on the Due Diligence Act. The MEPs, led by ENVI rapporteur Tiemo Wölken (SPD), want to agree, among other things, that far more companies than the Commission proposes are covered by the law. This emerges from the preliminary compromises, which Europe.Table was able to see.
According to them, companies with 250 employees or more and annual sales of €40 million are to fall under the law. The committee also wants to propose expanding the risk sectors around the energy sector, in particular. In addition, the compromises provide for a risk-based approach. The committee is thus taking up the demands of lead rapporteur Lara Wolters, a member of the S&D Group like Tiemo Wölken.
Compromises are oriented to CSRD
All in all, the compromises are strongly based on the EU directive on corporate sustainability reporting (CRSD). This can be seen in the definition of adverse environmental impacts. The following categories are to be covered:
Climate protection and climate adaptation
Sustainable use of soil, water, and marine resources
Transition to a circular economy
Pollution prevention and control
Protection and restoration of biodiversity and ecosystems
Other changes include making the climate an implicit part of the due diligence process. Companies are also to develop climate transition plans modeled on the CRSD requirements. For companies with around 1,000 employees, directors’ pay is to be based on how they implement climate transition plans.
In addition to ENVI, three other committees must issue their opinions. In March, the lead JURI committee will vote, and in May, the text goes to the plenary. cw
Climate & Environment
Climate Policy
Committee on Environment
Due Diligence
European policy
Electrical waste: industry calls for harmonized rules
The electrical and recycling industry says harmonization of rules in the EU’s internal market is needed to strengthen a circular economy for electrical equipment. Differing ambitious targets, standards, and product requirements would place an unnecessary burden on the industry, it said yesterday at an event organized by the recycling industry association EuRIC.
“In recent years, we have seen many different national regulations and mandatory requirements for products that are not aligned with EU requirements,” said Benedict Storer of Samsung Electronics. It is imperative that technical product requirements be harmonized at the EU level, he said. In the area of eco-design, the planned transition from a directive to a regulation could ensure that obligations are implemented more uniformly across member states, Storer said.
Commission evaluates WEEE Directive
Member states so far had different recycling treatment standards and collection and recycling rates, said Tess Pozzi of recycling company Derichebourg. She said to create a level playing field, a structural reform of the legal framework is needed. The EU Commission is currently evaluating the Waste from Electrical and Electronic Equipment (WEEE) Directive. “The transition from directive to regulation would ensure better harmonization between member states,” Pozzi said.
MEP Sara Matthieu (Greens/EFA) stressed that higher collection and recycling rates are needed, especially for electronic equipment containing critical raw materials. The Commission’s Circular Economy Action Plan calls for “improving the collection and treatment of WEEE, including by exploring the possibilities for an EU-wide take-back system to return or sell old cell phones, tablets, and chargers.” “Unless I missed something, there is no legislative proposal on this issue yet,” Matthieu criticized.
Consultations to start in April
The WEEE Directive has been around for twenty years, and its revision has been in force for more than ten. Not unsuccessfully: in 2005, 300,000 tons of e-waste were collected, and in 2019 already about 4.5 million tons. However, the target was to collect ten million tons in 2020, reported Maria Banti from the Commission’s Directorate-General for the Environment (DG ENV). Only three member states (Bulgaria, Croatia, and Poland) reached the target of collecting 65 percent of the electrical and electronic equipment put on the market in 2019, she said.
The Commission is currently reviewing the WEEE Directive for effectiveness, problems, impact, and suitability. The relevant study has been underway since November 2022 and will continue until the end of January 2024. The public consultation is expected to start in April. The Commission’s working document is expected to be adopted in the spring of 2024. leo
Abfall
Circular Economy
electrical waste
Raw materials
WEEE Directive
M23 rebellion in eastern Congo: ‘Conflict-free’ supply chains do not ensure peace
According to researchers, the current spread of the M23 rebel group in eastern Congo is only partially related to raw materials and raises doubts about the goals of regulating raw material supply chains. Experts say the expectation that violent conflicts can be prevented by means of the EU Conflict Minerals Regulation is unreasonable.
The rebels are spreading in areas from which the army and UN troops ousted them ten years ago. More than half a million people have already fled. Once again, neighboring Rwanda is supporting the rebels.
The EU had been drafting the Conflict Minerals Regulation since the past M23 rebellion. It imposes due diligence obligations on companies that import coltan, tungsten, tin, and gold from Congo and other regions “where the revenues from them trigger or keep violent conflicts going,” according to the explanatory memorandum. It went into full effect in January 2021. Back in 2010, the US passed the Dodd-Frank Act, which requires US companies to disclose conflict commodities in their supply chains.
Analysis outdated
Onesphore Sematumba, an analyst with the International Crisis Group, doubts that raw materials are the main reason for the fights. He worked for the Pole Institute in Goma for a long time, which at the turn of the millennium researched how Rwandan-backed rebel groups controlled significant coltan mines in North Kivu province. “There was coltan fever,” he says. Media reports and NGO campaigns followed, solidifying the narrative of “blood raw materials,” but then prices fell on the world market. The rebels retreated. “There was a failure to update the analysis,” Sematumba says.
He is not saying that raw materials do not play a role. Occasionally, rebels control mines today, especially in gold mining. “But there are conflicts where there are raw materials and where there are none,” the analyst says. Observers count more than 120 armed groups in the region. They have all kinds of sources of income: Looting, customs duties, or the charcoal business. Rarely, however, are they driven by greed alone.
Bernd Lange (S&D) also dampens expectations of the EU regulation: “I think you can dry up the funding of individual groups with it. But that alone will not overcome the conflicts.” As Chairman of the International Trade Committee, he was instrumental in pushing for the legislation, talking at the time with representatives of Congolese civil society as well as European consumer groups and industry. “We wanted to get transparency into the market,” he says. The idea was to prevent European central banks, for example, from buying gold used to finance civil wars.
For Lange, the EU regulation contains important lessons: “It’s a bit of a precursor to the Supply Chain Act.” This year, an initial assessment is to be made. “Then we will think again about what could strengthenthe material situation on the ground,” says Lange. Jonas Gerding
Congo
M23
Raw materials
rebellion
Supply Chain Act
Supply chains
Heads
Volker Löwe – Representative of Berlin interests in Brussels
Volker Löwe is Head of the Berlin State Office at the EU in Brussels.
Volker Löwe has been following Berlin state politics for more than 20 years. For some time now, he has been representing its interests at the European level. He is head of the Berlin state office at the EU in Brussels. Among his tasks is the Europeanization of the administration. Here, he says, it is important to “hear early when the European grass grows” to have a say in decision-making processes at an early stage.
Focus on research
The political scientist strives to bring Berlin’s expertise and experience to bear in Brussels. His work also focuses on European regional policy and structural funds such as ERDF and ESF plus, which play an important role in the city. Especially for strengthening social cohesion and for science and research. “Berlin has a very dense network of research institutions, such as the colleges and universities,” says the 57-year-old. He is particularly concerned about urban policy, which the EU has long neglected. The topic of energy and climate protection are major challenges in the coming years, especially with regard to the renovation of the public building stock.
He and his team are eagerly awaiting the results of the repeated Berlin parliamentary elections. Volker Löwe estimates that it will take a while before the coalition agreement is finalized if there are any changes in the composition. He does not want to commit himself to whether he finds Berlin or Brussels more beautiful. It is no wonder, he says, that both cities have a well-cultivated partnership.
Self-confident Europe
He wrote his doctoral thesis in the early 1990s on the involvement of the German armed forces in out-of-area missions, the so-called blue helmet operations. After that, the political scientist started working at the German Federal Ministry for Economic Cooperation and Development. Followed by two years as a freelancer in the Chancellor’s Office and a move to the Berlin Representation in Bonn. His motto for challenges is “to take the bull by the horns.” You have to call a spade a spade and look for possible solutions. At the European level, above all, in harmony with other players.
For Löwe, the EU’s trump card is its balance of freedom and solidarity. This is what makes the European model so attractive, and it must be preserved both internally and externally. “We need to strengthen our strategic autonomy to be less susceptible to blackmail.” Volker Löwe would like to see an outwardly directed self-confident European policy and for the EU not to lose credibility from within. He says the EU will have to find a clear language toward member states that abandon the rule of law. Kim Fischer
