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Dear Readers,
The cold winter usually follows a hot summer but politics will be enjoying the emotional equivalent of contrast bathing over the coming weeks and months: short, cold showers alternating with 40-degree heat and no air conditioning. Every country is expected to reduce its normal gas consumption by fifteen percent under the EU emergency plan. The EU is appealing for solidarity between member states during the crisis, i.e. between those that have blindly allowed themselves to become dependent on Russian gas and those that have been a little more prudent in terms of energy policy and – unlike Germany – have not opted out of everything before finding an alternative.
It remains to be seen how European solidarity will hold up. Solidarity, as a political instrument, is no substitute for strategic capability and the EU has been alarmingly short of the latter in the past. Now this solidarity is precisely what Putin is starting to play around with. Considering the amount of gas flowing through Nord Stream I, he may end up being able to turn the level of solidarity up and down at will, not only within the EU but also between the EU and Ukraine. Accusing a war criminal of this "perfidious game" is bordering on cynicism. Foreign Minister Annalena Baerbock is already talking about a popular uprising, Chancellor Scholz no less dramatically about a test for society. As much as politicians may be celebrating the EU gas agreement, when considered in the cold light of day, it is a tragedy.
The resignation of Mario Draghi, trusted by the financial markets to lead Italy in a stable manner since his “whatever-it-takes” moment as ECB president, bursts onto the stage in the middle of the summer break. Now, early elections in autumn bring the threat of a shift to the right – and possibly a new tremor for the euro. But the ECB has taken precautions: The new Transmission Protection Instrument is designed to prevent the Eurobond market from fragmenting. Who decides whether the markets are right or wrong? The ECB.
While Brussels’ brass is off on its summer break, cep will be keeping its eye on the ball for you. Our newsletter will keep you up to date as always.
I wish you an informative read
Yours Henning Vöpel
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On 26 July, the member states of the EU agreed on the gas emergency plan. If Putin turns off the gas tap completely, the EU has the right to set binding savings targets.
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Latest EU Proposals in Focus
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EU Gas Emergency Plan: Member States Agree on Gas Savings
From 1 August 2022 to 31 March 2023, EU member states will, initially voluntarily, reduce their gas consumption by at least 15% compared to the previous five years, through measures of their own choosing. The EU thus aims to prepare itself for possible interruptions in Russian gas supplies during the winter. Under the Council Regulation on the EU Gas Emergency Plan, agreed by Member States in an expedited procedure at the end of July, the gas savings target will become mandatory if, due to severe supply difficulties, the Council declares an "EU Alert" by way of a qualified majority of at least 15 Member States representing 65% of the EU population. The compromise could only be reached because it provides for numerous exemptions from the savings obligation for Member States that, for example, are not connected to the EU gas grid at all (Ireland, Malta, Cyprus) or hardly at all (Croatia, Portugal, Spain) or whose electricity supply would otherwise be at risk (Estonia, Latvia, Lithuania). With the agreement on the EU Gas Emergency Plan, the EU has indeed taken a first step towards cross-border gas supply security. However, the much-vaunted "energy solidarity" still has to prove itself in the coming winter (Deutschlandfunk interview of 26 July 2022).
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Investment and Insurance Advice: Consideration of Sustainability Preferences
New requirements for investment and insurance advice will apply from 2 August 2022. Thus, investment firms offering investment advice or portfolio management, as well as insurance companies and insurance intermediaries offering advice on insurance investment products, will in future also be obliged to obtain information regarding their clients' preferences on sustainability factors. In future, it will no longer be sufficient to simply ask clients about their willingness to take risks, their ability to bear losses and their investment experience and knowledge. Based on the expressed sustainability preferences of their clients, investment or insurance advisers are then obliged to duly take these into account when selecting the recommended financial products. Ex-post, advisers must also inform their clients about the extent to which the recommended product actually meets their sustainability preferences.
The new requirements will be introduced through adaptations of delegated acts modifying the MiFID II Directive 2014/65/EU and the Insurance Distribution Directive (EU) 2016/97 (IDD). You can find the two delegated acts here and here.
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Blood, Tissue and Other Substances of Human Origin: Legislative Procedure Begins
The Commission sees a need to amend the legislation on blood [Directive 2002/98/EC] and on tissues and cells [Directive 2004/23/EC], as it no longer reflects current scientific and technical knowledge. Addressing the emergence of infectious diseases, which may be passed on by substances of human origin, is also considered to be imperative. The Commission has therefore adopted a proposal for a Regulation on standards of quality and safety for substances of human origin intended for human application [COM(2022) 338]. It concerns, for example, blood donations, bone stem cell transplants and corneal transplants. The Commission's proposal aims above all to move away from rigid technical regulations – for example on methods of preparing blood, tissue and cells before actual use on patients – and to enable innovation particularly through general standards. The EU Parliament and the Council will discuss the proposal in the coming weeks.
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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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Agreement on the Policy Programme for the Digital Decade
On 14 July, a provisional political agreement was reached on the 2030 policy programme "Path to the Digital Decade". This policy programme aims to strengthen the EU's digital leadership by promoting an inclusive and sustainable digital policy that serves citizens and businesses. To this end, it sets digital targets, e.g. regarding the digital skills of EU citizens and the digital transformation of public services. For these digital targets, the Commission will develop EU-level trajectories together with the Member States. Based on these, Member States will develop national trajectories and strategic roadmaps for implementation.
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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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Greenhouse Gases: Counting Traffic-Related Emissions
The EU Commission wants to establish uniform EU-wide rules for counting transport-related greenhouse gases (GHG) in order to promote the recording and comparison of GHG emissions in passenger and freight transport ("CountEmissionsEU"). This should allow providers and users to "easily get an accurate overview of the GHG emissions of the different transport services".
The submission period for opinions ends on 17 October 2022.
Go to consultation
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Vehicle Safety: Updating the Inspection Rules
The EU Commission wants to revise EU regulations on roadworthiness tests for motor vehicles and trailers in order to improve their road safety and environmental sustainability. To this end, the Directive on registration documents for vehicles [1999/37/EC], the Directive on periodic roadworthiness tests for motor vehicles and trailers [2014/45/EU; see cepPolicyBrief 37/2012] and the Directive on the technical roadside inspection of the roadworthiness of commercial vehicles [2014/47/EU; see cepPolicyBrief 42/2012] will be adapted to meet increasing vehicle complexity.
The submission period for opinions ends on 28 September 2022.
Go to Consultation
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European Statistics: Making Them Fit for the Digital Age
Regulation (EC) No 223/2009 established a legal framework at EU level for the development, production and dissemination of European statistics. The Commission intends to revise the Regulation, last amended in 2015, as soon as possible. The revision aims to make the Regulation fit for the digital age and able to meet the increased expectations regarding EU statistics (e.g. more detail, faster production, higher frequency). This is to be achieved, for example, by modernising the way that statistics are produced and making better use of the potential offered by new data sources. The background to the initiative is the fact that the Commission has identified various issues that are increasingly affecting the production, quality and relevance of European statistics and hindering evidence-based policy making. The Commission is using the Consultation to gather input on the planned revision of the Regulation.
The submission period for opinions ends on 25 October 2022.
Go to Consultation
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Global Health: EU to Develop New Strategy
The Commission wants to develop a new EU strategy for global health. This is intended to help make global health systems more resilient, generate new medicines and drive global digital transformation in the health sector. At the same time, the Commission also wants to ensure adequate funding for this. The first – and last – such EU strategy dates back to 2010. A realignment is thought to be necessary, particularly in view of current challenges, e.g. the COVID 19 pandemic and the increasing effects of climate change, and also against the backdrop of an increasingly apparent link between health and security. The Commission also considers that health has become a geopolitical issue. The EU wants to strengthen global health systems, and show global leadership by taking a "Team Europe" approach. Through such an approach, the EU aims to contribute to more effective multilateral institutions and enter into strategic partnerships with other regions of the world.
The submission period for opinions ends on 19 September 2022.
Go to Consultation
Compulsory Licensing of Patents: New Legislation Planned
The Commission wants to revise the legislation on compulsory licensing of patents. A compulsory licence allows third parties to use a patented technology or manufacture a patented product without the consent of the patent holder. Although the Regulation on compulsory licensing of patents, relating to the manufacture of pharmaceutical products for export to countries with public health problems [(EC) No 816/2006], provides for a sector-specific EU procedure that has not yet been used, various compulsory licensing systems also exist in the member states. The Commission sees considerable legal uncertainty in this, especially if member states order national compulsory licensing in the event of EU-wide or even global crises (e.g. health, environmental, nuclear or industrial crises). This would hinder an efficient and coordinated EU-wide crisis response and therefore new legislation is considered necessary.
The submission period for opinions ends on 29 September 2022.
Go to Consultation
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The EU is on summer break from 25 July till 19 August. Due to this there are no cep relevant dates for the month of August.
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cepInput: Central Bank Digital Currencies and the Digital Euro
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Central banks around the world are increasingly focusing on the introduction of digital currencies, so-called Central Bank Digital Currencies (CBDC), as innovative means of payment. These are intended to serve both retail payments and trade between financial market players. The Centre de Politique Européenne | Paris (cep) has investigated this development. According to the study, Europe is not ready yet for the digital euro.
Go to cepInput
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cepPolicyBrief: Chips Act
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The European Union wants to massively expand the production of cutting edge computer chips in the EU. The aim is to reduce dependence on countries such as the USA, Taiwan and South Korea by undertaking its own research and production. The Centrum für Europäische Politik doubts that the law will have this effect and fears there will be a subsidy race running into billions. cep already warned against this misguided approach to industrial policy last March.
Go to cepPolicyBrief
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The schizophrenia of politics: It warns that society is facing hard times whilst promising that no one will notice. Politics arrives too late to every crisis. In summer, autumn is still far off, but in winter the truth will come out..
Best wishes
Henning Vöpel
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