Dear Readers,

The older ones among you will still remember when, in June 2008, after three years in office, Chancellor Angela Merkel proclaimed the German Republic of Education. The country’s then head of government said that the expansion of the education system should be at the centre of German policy. That sounded good – but since then virtually nothing has happened.

Merkel's announcement blew away on the wind, just like the German Chancellor's hairdo, so popular at the time, because nicely packaged announcements do not amount to policy. East Germany (GDR) found that out to its cost when its planned economy imploded spectacularly after 40 years, and now this bad habit is also paralysing reunified Germany.

400,000 new-build flats – every year remember – were promised by Merkel's successor Olaf Scholz at the beginning of his chancellorship. At some point, even he must have realised that this was just a pipe dream. They did not even manage to build half that number. Scholz now seems to be convinced that he will be re-elected chancellor despite current SPD poll ratings of less than 15 per cent. Hope springs eternal, as we know.

But let's get back to education. Since Merkel's glossy announcement, the lamentations of HR departments across Germany at the appalling level of education shown by German school leavers have not let up. On the contrary: Germany's ongoing economic downturn can only be overcome with more innovation and technological progress which can only happen if the level of education in schools is improved.

If we do not succeed in banishing Humboldt's educational ideal from classrooms after almost a century and a half and replacing it with modern curriculums, things will look bleak for Made in Germany 2.0 and for the inventive spirit needed for new technologies. This fact must be taken on board by any new federal government – and turned into effective policy before it is finally too late. China and the US are not waiting for us.

Innovation needs education – not promises.

Yours
Dr. Jörg Köpke

Quantum Technologies: Introduction of a Quantum Act to Strengthen EU Research

The Commission wants to adopt an EU Quantum Act with the aim of consolidating fragmented quantum research in the EU, as was revealed during the latest parliamentary hearings. On 12 November, the Finnish candidate for technological sovereignty, security and democracy, Henna Virkkunen, presented her plans to strengthen the EU's digital independence. In addition to the plans already set out in her written answers to Parliament, she announced the introduction of a Quantum Act aimed at bringing together the fragmented research efforts of the EU Member States. Virkkunen emphasised that quantum technologies are a European strength, but that common legislation is necessary to consolidate the individual programmes of Member States. The EU will first develop a "quantum plan" to bring researchers and resources together which could, in particular, drive the development of quantum computers. A recently published Report has warned of the fragmentation and insufficient support for quantum research in the EU Member States. A video recording of the hearing can be viewed here.

EIOPA: Demand for Capital Surcharges on "Fossil Fuel" Assets

On 5 November 2024, the Council gave its final approval (see Press Release) to revision of the Solvency II Directive, which has particular relevance for the insurance sector (see cepPolicyBrief). The revision also includes a new provision requiring the European Insurance and Occupational Pensions Authority (EIOPA) to assess whether there is potential for "dedicated prudential treatment of assets or activities" which are "associated substantially with environmental or social objectives or with harm to such objectives". It must then submit a report on its findings. The aim of such dedicated prudential treatment would be to steer investments by (re)insurance companies more towards sustainable activities without undermining the protection of policyholders or financial stability. On 7 November 2024, EIOPA published its ground breaking Report.
In the report, EIOPA most notably argues that European insurers should be subject to additional capital requirements for investments related to fossil fuels. In EIOPA’s analysis, such investments are exposed to a higher transition risk than investments in other economic activities. In order to ensure that they can cope with the potential losses associated with higher risks, EIOPA is therefore requiring insurers to set aside more capital. You can find out more about EIOPA's numerous proposals here.

Green Taxonomy: Commission Assistance with Implementation and Interpretation

On 29 November 2024, the Commission presented a comprehensive Notice on the interpretation and implementation of Regulation (EU) 2020/852 for the establishment of a framework to facilitate sustainable investment ("green taxonomy", see cepPolicyBrief). The Notice contains a number of frequently asked questions (FAQs). These are intended to help stakeholders affected by the green taxonomy to correctly implement and interpret the Regulation. The Commission's efforts are also aimed at reducing the administrative burden on companies in the area of sustainable finance.
The Notice focuses in particular on technical clarifications with regard to (a) Delegated Regulation (EU) 2021/2139 ("Climate Taxonomy"), (b) Delegated Regulation (EU) 2023/2486 ("Environmental Taxonomy"), and (c) Delegated Regulation (EU) 2021/2178 ("Disclosure"). The Notice also deals with the "Do no significant harm" (DNSH) criteria, which are intended to ensure that an economic activity contributing to one or more of the six environmental objectives of the green taxonomy, does not cause significant harm to any of these six environmental objectives.
More information about the Notice is available here.

The Commission, the Council and the European Parliament regularly negotiate in the so-called trilogue on EU legislative proposals in order to find a common position. We have put together a summary of the most important trilogue decisions since the last Newsletter.

Artificial Intelligence: Prohibitions and Definitions for AI Systems

The EU Commission has launched a Consultation on the planned guidelines for the definition of an AI system and for the AI practices that constitute unacceptable risks under the new AI Act. The guidelines are intended to assist the competent national authorities as well as the providers and operators of AI systems in complying with the provisions of the AI Act before the corresponding provisions come into force on 2 February 2025. The two-part survey aims to collect concrete examples and applications from various stakeholders in order to clarify firstly the definition of an AI system and secondly the prohibited AI practices under Art. 5 AI Act. This additional information should help the European AI Office to provide more clarity on the practical aspects of implementing the AI Act.
 
The submission period for opinions ends on 11 December 2024.
Go to Consultation

ENISA: Guidelines on Measures to Manage Cybersecurity Risks

At the end of 2022, the revised so-called NIS 2 Directive (EU) 2022/2555 on measures for a high common level of cybersecurity across the Union entered into force. Member States had until 17 October 2024 to transpose the provisions of the Directive into national law (Germany is behind schedule on this). Under the Directive, numerous institutions in the EU - especially companies from critical sectors - will have to take "appropriate and proportionate technical, operational and organisational measures" to manage cybersecurity risks. On 17 October 2024, the Commission adopted an Implementing Regulation (EU) 2024/2690 specifying the risk management measures to be implemented by certain organisations in the digital infrastructure, digital providers and ICT service management sectors. These include cloud service providers, providers of data centre services, providers of online market places, online search engines and platforms for social network services. The European Union Agency for Cybersecurity (ENISA) is aiming to develop technical guidelines to support EU Member States and affected organisations with implementation of the "technical and methodological requirements" for risk management set out in the Implementing Regulation. On 7 November 2024, ENISA therefore launched a Consultation on a current draft of the guidelines and is asking for feedback.

The submission period for opinions ends on 9 December 2024.
Go to Consultation

Central Counterparties: ESMA Wants to Clarify Requirements for "Active Accounts"

On 19 November 2024, the Council adopted the revised version of the so-called EU Market Infrastructure Regulation [European Market Infrastructure Regulation (EMIR), see cepStudy]. An important and controversial element of the revised Regulation is the new requirement that, for specific categories of derivative contracts, certain financial and non-financial counterparties must in future maintain at least one active account with an EU-authorised central counterparty (CCP) and clear at least a representative number of transactions on this account. This provision aims, in particular, to make the European clearing markets more attractive, strengthen the EU's open strategic autonomy and preserve the EU's financial stability. Under the revised Regulation, the European Securities and Markets Authority (ESMA) still has to specify, in a regulatory technical standard (RTS), the conditions for the requirement to maintain an active account. ESMA has six months in which to do this after the amending Regulation comes into force - which will probably be before the end of 2024. On 20 November 2024, ESMA published an 85-page Document on the conditions surrounding the requirement to maintain an active account and launched a Consultation. ESMA will also hold a public hearing on 20 January 2025.
 
The submission period for opinions ends on 27 January 2025.
Go to Consultation

4 December 2024
Brussels
Meeting of the Committee on Economic and Monetary Affairs (ECON-Committee) This will include the "Monetary Dialogue" with Christine Lagarde, President of the European Central Bank (ECB), a public hearing with Christine Lagarde, Chair of the European Systemic Risk Board, and a public hearing with Dominique Laboureix, Chair of the Single Resolution Board (SRB). The Committee also wants to vote on whether the European Parliament should enter into negotiations with the Council on the proposal for a Regulation on access to financial data ("Financial Data Access Regulation", FIDA, see cepPolicyBrief).
 
6 December 2024
Brussels
Meeting of the Telecommunications Council. This will involve the adoption of conclusions on the European Union Agency for Cybersecurity (ENISA) and on the Commission's White Paper "How to address Europe's digital infrastructure needs” regarding the preparation of a Digital Network Act. There will also be a debate on the Digital Decade 2030 objectives and targets in light of the latest technological changes.
 
9 December 2024
Brussels
Meeting of the Eurogroup. This will involve the economic policy priorities of the next Commission.
 
10 December 2024
Brussels
Meeting of the Economic and Financial Affairs Council (Ecofin). This will include the presentation of a progress report on the reform package for the Customs Union and a political debate on the revision of the Energy Taxation Directive.
 
12 December 2024
Luxembourg
EU Advocate General Szpunar will deliver his opinion in the proceedings against Russmedia Digital SRL and Inform Media Press (C-492/23). The proceedings, referred by a Romanian court, concern the liability of a host service provider for an advert that contained disparaging and offensive content about the claimant. The advert indicated that the claimant offered sexual services and showed photos and the claimant's telephone number. The advert had been published by a third party on the Russmedia platform without authorisation and was subsequently picked up and distributed by other advertising websites. The claimant is demanding compensation for non-pecuniary damage from Russmedia, because Russmedia, as the owner of the platform, is responsible for the placement of the blatantly unlawful advert. In legal terms, the proceedings concern, among other things, the grey area between responsibility under data protection law and the fundamental prohibition of a general monitoring obligation on the Internet. One of the issues at stake is whether Russmedia can invoke provisions  exempting it from liability under the E-Commerce Directive, now regulated under the Digital Services Act. This could be problematic because Russmedia is not simply a passive hosting service provider but also reserves rights of use to the content published on its platform. In addition, the Romanian court wants to know to what extent hosting service providers, as data protection controllers, must check the content of adverts before they are published to determine whether they violate fundamental rights and to what extent they must take protective measures to prevent or restrict the copying and dissemination of the content of adverts published via their platform.

19 December 2024
Luxembourg: CJEU on the Relationship between GDPR and Employee Data Protection
In the K-GmbH case, referred to the CJEU by the German Federal Labour Court (C-65/23), the European Court of Justice is expected to rule on the extent to which the other requirements of the EU General Data Protection Regulation (GDPR) must always be complied with when applying national employee data protection regulations. Due to a flexibility clause in the GDPR, Member States can regulate employee data protection largely autonomously; employers and works councils may also regulate the processing of employees' personal data in works agreements (Art. 88 (1)). It is not yet clear how far the autonomy of Member States extends in this respect. In particular, it is questionable whether the general data processing principles of the GDPR must always be complied with when concluding works agreements and whether a legal basis within the meaning of  Art. 6 (1) and Art. 9 (1) must be present - and if so, whether the parties to the works agreement then have at least some leeway in assessing the necessity for the data processing, which can only be reviewed by the courts to a limited extent. In terms of content, the claimant is contesting the fact that his employer processed his personal data, in the cloud-based personnel information management system "Workday”, in breach of data protection rules. Feeding the data into this additional system, which was only included in a company agreement after the event, was not necessary because the company was already using an SAP system for data management in parallel. There is some evidence to support a ruling by the CJEU that the parties to collective agreements must also always comply with the other requirements of the GDPR, not least the fact that, in April, the CJEU declared Section 26 (1) of the German Data Protection Act (BDSG) to be invalid and made reference to the general GDPR provisions. The judgement affects all employers and works councils wanting to include data-protection-related provisions in works agreements. Nevertheless, it remains to be seen whether the CJEU will actually provide further clarification of the relationship between national employee data protection and the GDPR because, ultimately, the question here is whether the claimant is entitled to claim compensation for non-pecuniary loss and it is disputed whether the claimant has sufficiently proven non-pecuniary loss in line with the latest CJEU case law. However, if the CJEU does consider this to be possible and does not merely leave it to the national court to examine whether the claimant's fear of misuse of his data is justified, the CJEU’s judgement could provide further clarification of the criteria required to show non-pecuniary loss.
 
19-20 December 2024
Brussels
Informal meeting of the Heads of State and Government (European Council).

First Bilateral Cooperation Forum Between Italy and Germany

One year after the signing of the bilateral German-Italian Action Plan of 22 November 2023 by Prime Minister Giorgia Meloni and Federal Chancellor Olaf Scholz, the first German-Italian Ministerial Forum took place in Berlin on 25 November. The aim of the meeting was to strengthen the already positive bilateral economic relations between the two countries and, in view of the current geostrategic challenges, to lay the foundations for even closer cooperation in three key areas in the future: Digitalisation and Industry 4.0, space, industrial policy and energy.
During the meeting, chaired by the Vice-Chancellor and Federal Minister for Economic Affairs and Climate Protection, Robert Habeck, and the Minister for Enterprise and Made in Italy, Adolfo Urso, the ministers discussed the measures needed to strengthen the EU's competitiveness based on the Draghi report, with a focus on the automotive sector and energy-intensive industries.
Business associations such as Bdi and Confindustria as well as the chambers of commerce Dihk, Ahk, Itkam and Italcam also took part in the meeting and exchanged views on the challenges and opportunities facing businesses.

The international website "Common Ground of Europe" is an initiative of the Centres for European Policy Network (cep). On the commongroundeurope.eu website, cep collects mainly English-language contributions, articles and interviews from decision-makers and experts in politics, business and science. We cordially invite you to take a look through our window on Europe. Here are some examples from the past month.

Dear Readers,

It was Aristotle who recognised that: "Educated people are as superior to uneducated people as the living are to the dead."

Stay tuned!

Yours
Dr. Jörg Köpke