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Dear Readers,
as a journalist, I have been concerned with the latest developments in artificial intelligence (AI) for years. And I have already experienced many an impressive application that can make our lives easier and more pleasant. But the further we dive into the world of AI, the more there is also cause for concern.
In theory, AI can help make our world safer, more efficient and more equitable. But in practice, we are repeatedly confronted with the risks and side effects of this technology.
The best example: so-called deepfakes, manipulated videos and images that are so deceptively real that they can hardly be distinguished from real recordings. The danger is that misinformation is deliberately spread and thus manipulates public opinion. Do we want that?
There are also concerns about the impact of AI in the world of work. Many jobs that were previously performed by humans could be replaced by machines and algorithms.
Another problem is the transparency of AI. Many of the algorithms used are complex. Machines make decisions that we cannot comprehend. This poses the risk of discrimination and injustice, especially when using AI in the justice system or in healthcare.
Of course, there are also positive developments in the field of AI. But we must not be naive and ignore the risks and side effects.
So is AI a blessing or a curse? The answer ultimately depends on us and how we use and shape this technology.
Warm regards,
Jörg Köpke
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Dear Readers,
Now be honest: Did you think this text was written by me, Jörg Köpke, the real person? Then you were wrong. It actually comes from ChatGPT, an AI app which was given the task of writing a text in the style of Jörg Köpke. A text expressing a critical view of AI. The job was performed effortlessly by the programme in 20 seconds - as if by magic.
Makes you think doesn’t it? And it should. AI is now capable of undertaking countless processes and operations that up to now have required journalists, copywriters, advertisers, lawyers, doctors, therapists and many other professions. Not since the invention of the steam engine has any technical advancement revolutionised our working lives like artificial intelligence is going to do in just a few years. Amazingly, this realisation has not even begun to penetrate the public consciousness but I am absolutely certain that this situation will – and must – change, very fast.
AI is not the only exciting topic in this month’s Newsletter. We are also looking at green hydrogen, 30 years of the Single Market, the so-called right to repair and the reform of EU electricity market design.
I wish you an enjoyable read. Stay with us – and when I say "us", I really do mean "us": independently minded academics who are happy to help you through the tangle of EU directives – in person.
Best wishes
Dr. Jörg Köpke
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Latest EU Proposals in Focus
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Technology and Infrastructure
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Green hydrogen: European Hydrogen Bank
In the next few weeks, the Commission will present a proposal on a new funding instrument for green hydrogen, the European Hydrogen Bank. It is intended to support the rapid development of hydrogen markets in Europe. A total of € 3 billion will be made available from the Innovation Fund for this purpose. The mechanisms by which the funds will be distributed are still unclear. In the Green Deal Industrial Plan, the Commission brings a market premium model into play, based on competitive tendering. This contrasts with the alternative model of an initially state-guaranteed fixed tariff for green hydrogen. The question is open as to whether both the demand side and the supply side should be included in the funding, and if so which sectors. Essential for the effectiveness of the funding measure will be whether it can be used to incentivise targeted investment in regions with high demand potential (see cepInput 1/2023). Cross-regional tendering procedures and the preservation of price signals are crucial design requirements.
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Anniversary: 30 Years of the Single Market
On 8 March, the Commission will publish a Communication to mark the thirtieth anniversary of the Single Market. Publication was originally planned for 22 February. The Communication will, on the one hand, outline the benefits and achievements of the Single Market, and on the other, identify existing barriers and the measures for further development. A functioning Single Market is necessary to achieve the Commission's goal of an open and at the same time strategically autonomous EU.
Company Law: More Digitalisation
On 29 March, the Commission will propose a Directive to promote the use of digital tools and processes in company law. The existing Digitalisation Directive [(EU) 2019/1151] provides, among other things, for the online formation of companies. The new Directive aims, in particular, to facilitate the cross-border use of data held in official registers of a Member State.
Industrial Plan: Carbon-Neutral Industry
On 14 March, the Commission will propose the so-called Net-Zero Industry Act, i.e. a law on a carbon-neutral industry. This will be achieved through targeted subsidies for clean production facilities as well as by simplifying and fast-tracking permit procedures for such facilities. In addition, the Commission wants to support the spread of clean technologies by way of standards.
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Revision of EU Pharmaceuticals Legislation: Commission Proposal Expected in March
On 29 March, the Commission is expected to present proposals for a comprehensive revision of pharmaceuticals legislation. This will not only include general EU legislation on pharmaceuticals but also the law on paediatric medicines and medicines to combat rare diseases. The respective Commission proposals have already been postponed several times. The Commission's aim is to ensure that access to affordable medicines and security of supply are guaranteed. The importance of this is particularly apparent in view of current supply shortages. In addition, the Commission wants to create incentives for the development and production of antibiotics. Due to antibiotic resistance, new and effective antibiotics are needed to treat infectious diseases in humans (see cepInput 2/2023, cepPolicyBrief 1/2018 and cepPolicyBrief 2/2020). The revision of the rules on paediatric medicines and medicines to combat rare diseases will also focus on incentive systems. Rare diseases, for example, affect relatively few people and are often associated with chronic or life-threatening conditions. As the market for medicines to combat rare diseases is correspondingly small, that leaves few incentives for investing in this area.
Medical Devices Regulation/MDR: EU Parliament Gives Green Light to Extend Deadline
As a result of the breast implant scandal more than ten years ago, the Medical Devices Regulation [(EU) 2017/745] introduced stricter rules on authorisation. These apply not only to new but also to previously certified medical devices which will also therefore have to undergo a reassessment or may be placed in a higher risk category. These requirements will involve considerable cost increases for manufacturers and more red tape which the competent certification bodies, in particular, currently lack the capacity to cope with. All this will result in shortages in the supply of vital medical devices. To counteract such a development, the Commission has proposed longer transition periods. cep has been pointing out this problem since the end of 2019 and has pleaded for longer transition periods (see among others cepAdhoc). The EU Parliament has now approved the Commission's proposal. This provides that medical devices in higher risk classes, such as pacemakers or hip implants, will receive a three-year extension period (to the end of 2027) and those in medium or lower risk classes, such as syringes, a four-year extension period (to the end of 2028). The formal procedure will conclude with the approval of the Council. The Health Ministers will meet again in the corresponding Council meeting on 14 March (see Dates).
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Right to Repair: Commission now to Present Proposal in March
On 22 March, the Commission is expected to present a proposal for a European "right to repair". The proposal has been repeatedly postponed. The Commission wants to make products usable for longer by repairing them or making updates and upgrades available for longer. In the Commission’s view, companies only have a limited interest in producing ecologically sustainable products. A "right to repair” will, it believes, strengthen consumer rights and increase resource efficiency - saving, for example, valuable raw materials such as rare earths, as well as the emissions responsible for climate change. cep has already presented possible design options in an Input and analysed the potential impact (see cepInput 5/2022).
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Road Safety: Roadworthiness Testing of Vehicles
On 1 March 2023, as part of its Sustainable Mobility Strategy [COM(2020) 789; s. cepPolicyBrief 9/2021] the Commission will publish proposals to update the EU requirements on roadworthiness testing. These include Directives on periodic roadworthiness testing of motor vehicles and their trailers [2014/45/EU; see cepPolicyBrief 37/2012], on roadworthiness testing of commercial vehicles [2014/47/EU; see cepPolicyBrief 42/2012] and on registration documents for vehicles [1999/37/EC]. This aims to increase road safety, improve the environmental performance of road vehicles throughout their service life and facilitate the cross-border exchange of test data.
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Electricity Prices: Reform of the EU’s Electricity Market Design
On 14 March 2023, the Commission will propose a reform of EU electricity market design [see cepInput 4/2019] by amendments to the Internal Electricity Market Regulation [(EU) 2019/943; see cepPolicyBrief 14/2017], the Internal Electricity Market Directive [(EU) 2019/944; see cepPolicyBrief 9/2017] and the REMIT Regulation [(EU) 1227/2011; see cepPolicyBrief]. In view of the energy crisis, the reform aims to make electricity prices less dependent on the cost of fossil fuels such as natural gas, accelerate the expansion of renewable energy and improve the transparency, surveillance and integrity of the electricity market. While many EU Member States are calling for fundamental changes as well as the partial continuation of the EU emergency measures adopted in 2022 [Regulation (EU) 2022/1854; see cepAdhoc 10/2022], the Commission first wants to focus on quickly relieving private households and businesses of high energy costs.
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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.
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Green Bonds: EU Agrees on European Standard
On 28 February 2023, a preliminary agreement was reached on the introduction of an EU standard for green bonds (European Green Bond Standard, see cepPolicyBrief 26/2021). The establishment of the standard is part of the EU's sustainable finance agenda (see cepInput 14/2021). The standard is voluntary for issuers of green bonds. However, if they use it, they must ensure that the bond proceeds are used to finance economic activities that meet the requirements of the green taxonomy [see cepPolicyBrief 08/2019]. This applies provided that technical screening criteria have already been established for the sectors by way of delegated acts under the Taxonomy Regulation [see also cepInput 02/2022]. Up to 15% of the bond proceeds may also flow into taxonomy-compliant economic activities for which no technical screening criteria are yet available. All companies issuing green bonds on the basis of the new standard are obliged to be transparent about the use of the bond proceeds. They must also report on the extent to which the investments made feed into the company's plans towards carbon neutrality. External auditors, for whom a registration and oversight system will be established, will be required to investigate the extent to which bonds under the standard are actually "green" and meet the requirements of the regulation. The European Parliament and the Council still have to approve the preliminary agreement. The regulation should then enter into force one year later.
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The EU Commission asks decision-makers and interested parties from civil society for their opinion on European policy proposals. Here is our short-list of the most important consultations:
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Future of the Telecommunications Sector: Will Tech Companies Have to Bear Grid Expansion Costs?
On 23 February 2023, the Commission launched a Consultation on the future of the telecommunications sector. The Commission is using this to find out which telecommunications infrastructures will be needed in the future as a result of advancing technological developments, and how the latter are to be financed. One focus of the consultation is the extent to which tech companies, such as Netflix and Youtube, that are responsible for a large proportion of internet traffic, should contribute to the costs of infrastructure development, in terms of a "fair share". The consultation also includes questions on how to ensure that financially weak or socially vulnerable consumers can continue to have access to basic broadband services at affordable prices. Other issues include whether there are barriers to cross-border consolidation of the telecoms sector, the benefits of a (more) integrated radio spectrum market in the EU, and whether the influence of third countries on EU decisions to harmonise the radio spectrum poses risks to EU sovereignty.
The submission period for opinions ends on 19 May 2023.
Go to Consultation
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Tobacco Use: Commission Wants to Create the "Tobacco-Free Generation"
The Commission considers tobacco use to be the greatest avoidable health risk. Per year, in the EU, more than a quarter of all cancers and almost 700,000 deaths are attributable to tobacco consumption. With changes in tobacco markets, new products - such as heated tobacco products or nicotine-free e-cigarettes - becoming more widespread, and with the emergence of new advertising and marketing opportunities, the Commission now sees a need to review the existing rules. The evaluation aims to show whether the current product-specific provisions, as well as those on advertising, promotion and sponsorship, are still adequate for achieving the objectives of the EU’s Beating Cancer Plan. In this context, the main goal is to reduce the proportion of smokers in the population from 25% today to 5% by 2040, thereby creating a “Tobacco-Free Generation”.
The submission period for opinions ends on 16 May 2023.
Go to Consultation
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6 - 7 March 2023
Stockholm
High-level meeting. This concerns the ways in which the problem of antimicrobial resistance (see cepInput 2/2023, cepPolicyBrief 1/2018 and cepPolicyBrief 2/2020) can be tackled effectively together. In addition, the focus will be on sustainable access to and the development of new antibiotics in Europe.
9 - 10 March 2023
Stockholm
Informal meeting of trade ministers. This concerns among other things the EU-U.S.-relations and the EU trade relations’ contribution to competitiveness.
13 - 16 March 2023
Strasbourg
Session of the European Parliament. This will concern among other things the Data Act (see cepPolicyBrief 11/2022) and "Fit for 55" (see cepPolicyBrief 9/2022).
13 March 2023
Brussels
Meeting of the Eurogroup. This will concern among other things fiscal developments in the euro area, e.g. inflation and exchange rate developments, and policy objectives of the digital euro.
14 March 2023
Brussels
Meeting of the Health Council. This will concern among other things the fees and charges to be paid to the European Medicines Agency, the EU's strategy for global health and the Medical Devices Regulation.
14 March 2023
Brussels
Meeting of the Economic and Financial Affairs Council (Ecofin). This will concern among other things the economic recovery in Europe and a Follow-up to the G20 Finance Ministers and Central Bank Governors meeting.
23 - 24 March
Brussels
Meeting of the European Council. This will concern among other things Ukraine, energy, competitiveness, the internal market and the economy.
29 - 30 March 2023
Brussels
Session of the European Parliament.*
*The precise agenda was not yet available at the time of going to press.
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cepPolicyBrief: Product liability
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More rights in the event of damage: The Commission has submitted a recast of the Product Liability Directive. The focus is on adapting the Directive, which dates back to 1985, to digitalisation and the circular economy. In future, software will be regarded as a “product” throughout the EU. The Centrum für Europäische Politik (cep) considers that the rights of injured parties will be strengthened but warns of legal uncertainty and lack of clarity when it comes to the details.
Go to cepPolicyBrief 2/2023
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Study with cep involvement: Regulatory and financial burdens of EU legislation in four Member States - a comparative study
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Employment contracts, proof of earnings, certificates: German family businesses are groaning under the weight of a bureaucratic system that creates inefficiencies - on the one hand due to the requirements of the European Union itself, on the other, due to Germany’s impractical implementation and handling, but also due to the varying rules in individual Member States. This is particularly apparent when it comes to posting workers across national borders.
Go to the study by the Foundation for Family Businesses
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cepInput: How AI contributes to a more resilient supply of raw materials
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Secure supplies of rare metals such as lithium and cobalt are essential for Europe's transformation into a digital and sustainable economy. Up to now, information on raw material deposits has been patchy and dependent on random chance. On average, there is at most one hit for every hundred searches. cep therefore recommends the use of artificial intelligence (AI). According to initial real-world tests, this would increase the hit rate by a factor of 25 and make Europe less dependent on third countries.
Go to cepInput 3/2023
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The newly established website “Common Ground of Europe” is an initiative of the Centres for European Policy Network. On commongroundeurope.eu the cep collects contributions, articles and interviews from decision makers and experts of politics, business and science. We cordially invite you to take a look through our window on Europe. Here you can find samples of recent months:
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Pier Virgilio Dastoli: The Battle of Europe
Europe is facing troubling times. The upcoming European Elections will take place on 9th of May 2024. For the first time, an alliance of conservatives and right-wing populists is imminent. Pier Virgilio Dastoli, president of the European Movement in Italy, outlines possible solutions.
Go to article
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Nathalja Nolen: Why Europe Needs New Antibiotics
Europe is lacking in the development of new antibiotics for the treatment of sometimes deadly infections. Support via grants from the EU and Member States have not had the desired effect. An incentives system for continuous innovation should be created.
Go to article
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Sebastian Hartmann (MdB): Think European: Germany’s Digital Sovereignty and its National Security
Cyberthreats everywhere: Globally, over 30,000 websites are hacked every day. European governments should think from a European perspective when trying to shield themselves from those attacks. Sebastian Hartmann, member of the German Bundestag, warns of national solo efforts.
Go to article
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Dear Readers,
There is a German proverb that says: Lies and deceit are the world's fields and plough. Let's share in the benefits of Artificial Intelligence (AI) without ignoring its disadvantages.
Best wishes
Dr. Jörg Köpke
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