Dear Readers,

No continent stands for cultural, linguistic and economic diversity quite like Europe does. But European protagonists are finding it increasingly difficult to see this as an opportunity rather than an obstacle. Diversity is being blocked by sameness; new beginnings by stagnation; unity by conflict and funding by over-regulation. A state of affairs that is detrimental to innovation, progress and competitiveness, and is causing Europe to fall behind in the global comparison with power centres such as the USA and China.

With the economy booming and unemployment at a record low so far, optimism is the order of the day in the USA, while Europe is paralysed by despondency, austerity and pessimism. The number of patents being registered in Europe is in constant decline, world-class companies are a rarity and bureaucracy, moralism, lethargy and an ageing population are driving European investors towards young, dynamic South-East Asia and the emerging economies of Africa and South America. To avoid getting completely left behind in the medium term, Europe must reinvent itself. And quickly.

The Commission's new guidelines suggest that Brussels has seen the writing on the wall. Over the next five years, it will focus on greater competitiveness, increased digital ingenuity and a more positive investment climate, without losing sight of climate protection and sustainability. The re-elected Commission President Ursula von der Leyen cannot simply rely on eloquent speeches, good phrasing and catchy buzzwords, like she did in the last legislative period. Action has to follow. Unfortunately, she also failed to deliver in her previous roles, such as that of the German Minister of Defence. The Bundeswehr is still waiting for more personnel and better equipment despite the current upheavals and von der Leyen’s grandiose promises. This must not be allowed to happen in Europe, even though it is already becoming apparent that the Green Deal has stalled, the Chips Act is a non-starter and digital regulations are turning Europe into a technological wasteland.

Europe certainly has no lack of brilliant minds. They are its most valuable raw material. The prime movers behind artificial intelligence (AI), for example, often come from Europe, many of them from Germany, but legal hurdles and the planned regulations have in many cases driven them to the USA where conditions are more favourable. Ten years ago, Europe was also world leader in the field of renewable energy production. Since then the USA and China have been furiously determined to cut Europe down to size. Is this how things are going to continue? Is Europe to have the most efficient defence companies in the world without allowing them to produce at their full potential? Is Europe going to carry on parading its naivety and unworldliness? Or might pragmatism, speed and a lean state finally take a turn? Surely the answers are clear.

It makes you want to call out to the Commission, with no populist undertone: "Europe can do more".

Stay tuned!

Yours
Dr. Jörg Köpke

Too easily discouraged and mired in regulation: Europe risks getting left behind by the USA and China.

Support and Implement More, Regulate Less: Commission Announces Digital Policy Change

On 18 July 2024, Commission President Ursula von der Leyen announced the Political Guidelines for her second term of office 2024-2029. Among other things, it outlines how prosperity and competitiveness will be created in Europe as sustainably as possible. The plan contains the following main objectives: Firstly, the Commission President wants to reduce red tape. It wants less reporting and faster permit procedures. To ensure that new legislation also generates as little bureaucracy as possible, it wants to introduce a so-called SME and competitiveness check. Secondly, the Commission President wants to subject all EU legislation to a stress test in order to eliminate overlaps and contradictions. Thirdly, she wants to complete the Single Market. In this regard, she is primarily concerned with the areas of services, energy, defence, finance, electronic communications and digital. Fourthly, von der Leyen wants to create a clear and coherent legal framework so that companies and administrations can share data effortlessly and at scale. At the same time, she wants to maintain high data privacy and security standards. And fifthly, she wants an EU competition policy that is better aligned with EU objectives and more favourable to companies that are expanding in global markets.
In the area of trade, the aim is to create diversified and resilient supply chains and establish new partnerships for clean trade and investment.

Commission Strives for Data Union

In its next term of office 2024-2029, the Commission wants to implement a new strategy for the European Data Union. This is clear from the Political Guidelines presented on 18 July 2024. The strategy will build on existing data rules to create a clear and coherent legal framework (see above) thereby aiming to complete the digital single market and create a competitive advantage for European companies. Another priority is to focus on the enforcement of recently adopted digital legislation, in particular the Digital Services Act and the Digital Markets Act. In addition, the Commission wants to promote access to tailored supercomputing capacity for AI start-ups, develop a strategy for the widespread use of artificial intelligence and set up a European AI Research Council to pool resources for innovation, similar to CERN.

Ursula von der Leyen Wants to Turn the Green Deal into the Clean Industrial Deal

The re-elected President of the European Commission, Ursula von der Leyen, has set out her Political Guidelines for the 2024-2029 term of office and announced several new EU legislative initiatives on the environment, energy, climate and transport policy. Firstly, it wants to adhere to the objectives of the European Green Deal and ensure that the EU legal framework, adopted in recent years in this regard, is implemented by 2030 in the "simplest, fairest and most cost-effective" way. Secondly, the Green Deal will be further developed into a so-called Clean Industrial Deal "for competitive industries and high-quality jobs" and create the "right conditions" for companies to achieve the EU targets.
Specifically, Ursula von der Leyen wants to ensure that the EU climate target of reducing greenhouse gas emissions by 90% by 2040 compared to 1990 levels is enshrined in the European Climate Law. A new legal act, to accelerate the decarbonisation of industry, aims to support companies through the necessary transition. Von der Leyen also emphasises that the CO2 fleet targets for passenger cars, which stipulate a de facto ban on cars with combustion engines from 2035 and have cause some controversy especially in Germany, offer investors and manufacturers planning security. On the other hand, getting there will require a "technology-neutral approach in which e-fuels will have a role to play". To this end, she will in any case propose "targeted amendments" as part of the review of EU requirements planned for 2026. In order to promote sustainable mobility in the form of cross-border rail travel, Ursula von der Leyen wants to propose a new Regulation on standardised digital booking and ticketing services. This aims to ensure that rail travellers can buy one ticket on one platform and assert their passenger rights for the whole trip.
Ursula von der Leyen's central energy policy goal is to bring down energy costs for companies and private households. To this end, she wants to make the EU less dependent on fossil fuels by expanding renewable and low-CO2 energies and intensifying joint energy procurement by the EU Member States. In terms of environmental policy, Ursula von der Leyen wants to accelerate the transition to more sustainable production and consumption patterns in order to "retain the value of resources in the economy for longer". To this end, she is planning a new Circular Economy Act, which is intended to boost market demand for secondary raw materials, notably in relation to critical raw materials, and create an EU single market for waste. Finally, the President of the Commission intends to propose the chemicals industry legislative package that was already announced for the last EU legislative period. This aims to simplify the EU chemicals regulation REACH and provide clarity on the discussed ban on so-called forever chemicals (PFAS).

Turbo Charging Investment: EIB to Provide More Private Capital for Investments

In the new legislative period, the Commission wants to increase investment in the green, digital and social transition. As these investments cannot be covered by the public sector alone, the Commission wants to attract more private capital and is relying on the European Investment Bank (EIB) in this regard. With the EIB’s help, it wants to achieve a leverage effect and minimise the risk for private capital. “Risk-absorbing measures" are intended to make it easier for commercial banks, investors and venture capitalists to realise financing for fast-growing companies.

European Savings and Investment Union: Letta Report Serves as a Basis

In the new legislative period, the Commission wants to establish a European Savings and Investment Union based on the ideas set out by Enrico Letta in his Report of April 2024. In particular, the report proposes the introduction of an EU-wide voluntary long-term savings product for the period up to 2025. The regulatory framework for insurance groups is also to be harmonised and adapted in order to free up additional capital. Letta also proposes a revision of the EU legislation on securitisation in order to make it easier for banks to offer more loans. A single point of access to the public capital markets is also to be created specifically for small and medium-sized enterprises (SMEs). For the period up to 2026, the fund category of the European Long-Term Investment Fund (ELTIF) is to be strengthened with tax incentives at national level in order to generate more savings from EU citizens to finance the real economy. In addition, the European Securities and Markets Authority (ESMA) is to be given additional powers, most notably with regard to large financial market players. The report also proposes the establishment of a common European safe asset. In his report, Letta also argues in favour of strengthening public-private partnerships (PPPs) in the medium term. This is intended to attract capital from pension funds and insurance companies for the financing of so-called green infrastructure. And the introduction of the digital euro, which cep takes a critical view of (see cepPolicyBrief 15/2023), is to be pushed forward.

Commission Promises New Plan to Strengthen Industrial Competitiveness

In her Political Guidelines re-elected Commission President Ursula von der Leyen has set out a Clean Industrial Deal for the first 100 days of the new legislature. Its main objective is to strengthen the competitiveness of European industry during the transition phase to climate-neutral production. To this end, the Commission intends to present legislation to accelerate the decarbonisation of industry. It aims to support the development of a European lead market for clean technologies and speed up administrative permit procedures related to investment in these technologies. The Commission also wants to bring down energy prices and dependence on fossil fuels will be further reduced. To reduce prices, the Commission is also relying on joint procurement programmes for fuels (including hydrogen) and the development of an EU-wide system of governance for the energy supply. As further core elements of the Clean Industrial Deal, Von der Leyen has defined the prioritisation of investments in energy and CO2 grid infrastructure and the strengthening of strategic resource partnerships with third countries.

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:

Code of Practice for General-purpose AI Models

The EU Commission has launched a stakeholder consultation on trustworthy universal AI models as part of the AI Act. The consultation covers topics such as transparency and copyright rules, risk taxonomy and mitigation, and monitoring the codes of practice for universal AI models. The consultation is aimed at universities, independent experts, industry representatives, civil society organisations, rights-holders and authorities. The aim is to collect comments on the rules for providers of general AI models. Participants also have the option of uploading a document in order to provide additional information.
 
The submission period for opinions ends on 10 September 2024.
Go to Consultation

Digital Services Act (DSA): Guidelines for the Protection of Minors Online

The Digital Services Act (DSA) came into force in February 2024 (see cepPolicyBriefs). The law also provides for measures to protect minors online. Providers of online platforms are obliged to ensure a high level of privacy, security and protection for minors if their services are accessible to under-age users. To this end, they must take appropriate and proportionate measures. In order to support providers in implementing these obligations, the Commission intends to issue guidelines, above all to ensure a coherent and standardised implementation of the requirements. As part of a Call for Evidence the Commission wants to obtain opinions on the design of the guidelines. It then intends to present a draft of the guidelines on which it will carry out a separate consultation. The Commission wants to adopt the final guidelines before the summer of 2025.
 
The submission period for opinions ends on 30 September 2024.
Go to Call for Evidence

Cross-border Car Rentals

The Commission wants to draw up a new Regulation on cross-border car rentals. It criticises the fact that national regulations make the use of hire cars expensive and inefficient for the EU population. In addition, inefficient rules on returning hire cars may lead to unnecessary greenhouse gas emissions. The aim of the planned Regulation is to make it easier for private individuals to travel by hire car to other EU countries, by setting minimum EU requirements for the registration, cross-border use and return of hire cars.

The submission period for opinions ends on 23 September 2024.
Go to Consultation

28 August 2024
Budapest or Brussels
Informal meeting of foreign affairs ministers. The conference is traditionally organised by the country holding the EU Council Presidency. However, it is chaired by the EU High Representative for Foreign Affairs and Security Policy (currently Josep Borrell). On 22 July, Borrell announced that the meeting would be moved from Budapest to Brussels in view of the uncoordinated trips by the new EU Council President Victor Orbán to Moscow, Kyiv and Beijing as part of his self-proclaimed so-called peace mission. This is intended to send a "signal to Hungary" and is a symbolic reaction to Orbán's solo diplomatic efforts. Some Member States including Spain, Italy, Luxembourg, France, the Netherlands and Germany are against a relocation of the meeting. In view of the disagreement between the EU Member States, it is currently unclear whether the meetings in August will take place in Budapest or Brussels or whether there will be meetings in both places.
 
Mid-August 2024
Brussels
Commission President Ursula von der Leyen commences interviews with the numerous candidates from the EU Member States for a post as EU Commissioner.
 
2 September 2024
Brussels
Meeting of the Economic and Monetary Affairs Council (ECON) A public hearing with Claudia Buch, Chair of the Supervisory Board of the European Central Bank, will take place at the meeting. There will also be a discussion with the Chairs of the International Accounting Standards Board (IASB) and the International Sustainability Standards Board (ISSB).

Dear Readers,

It was already clear to Friedrich Schiller: "True optimists are not convinced that everything will go well. But they are convinced that not everything will go wrong."

Stay tuned!

Yours
Dr. Jörg Köpke