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POLITICO’s must-read briefing on what's driving the day in Brussels, by Suzanne Lynch and Jakob Hanke Vela.
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By SUZANNE LYNCH and JAKOB HANKE VELA
with ZOYA SHEFTALOVICH
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FIRST UP THIS MORNING: Last night, we unveiled our annual POLITICO 28 ranking — the doers, dreamers and disruptors who are set to shape Europe in the coming years, with Italian Prime Minister Mario Draghi named the most powerful European. You can read why POLITICO picked Draghi here … The full list here … A by-the-numbers breakdown here … And the methodology here.
TALKING TURKEY ON EU’S CARBON TAX PLANS: European Commission Executive Vice President Frans Timmermans sat down with Playbook’s own Suzanne Lynch last night, as part of the POLITICO 28 “Class of ’22” launch event. Here are some key takeaways from the interview …
US carbon tax deal? With Timmermans set to meet U.S. Climate Envoy John Kerry in Brussels today, among the topics of discussion will be Europe’s proposed carbon border adjustment mechanism — essentially a levy on imports that don’t reach the EU’s standards on carbon emissions. Kerry himself has previously said he opposes the proposal.
But in his interview with POLITICO, Timmermans suggested a compromise could be in the offing for the U.S. — echoing what Playbook has been hearing from Council sources. Timmermans conceded the U.S. was unlikely to set a federal carbon price, “but they will find other ways of putting a price on carbon — regulation or taxation — then we have to make sure we can compare it. Does it have the same effect on their industry as our ETS has on our industry? If that’s comparable … there would be no need of having a CBAM between us.”
**A message from Goldman Sachs: Goldman Sachs Research provides a deeper look at the cost of reaching net-zero carbon and the themes that are shaping progress. Browse their latest reports.**
Green Deal vs. realpolitik: With European consumers feeling the pinch from rising energy prices, now may not be the most opportune time for the EU to push through its ambitious Fit for 55 climate change package. But Timmermans insisted Europeans still put climate change at the top of their priority lists, and suggested there was greater buy-in from member nations about extending the Emissions Trading Scheme to buildings and transport than has been suggested.
Taxonomy by Christmas: The Commission’s long-awaited proposal on taxonomy will be presented before Christmas, Timmermans confirmed (most likely December 22). Further, the controversial decision to classify nuclear and gas as green now seems inevitable. “I think we need to find a way of recognizing that these two energy sources play a role in the energy transition, that does not make them green, but it does acknowledge the fact that nuclear being zero emissions is very important to reduce emissions, and that natural gas will be very important in transiting away from coal into renewable energy,” Timmermans told Suzanne.
Rule of law concerns: The Dutch commissioner — who himself pointed out last night that he was a strong defender of the rule of law in the previous Commission — suggested the debate on that matter may spill over into the one over the new climate fund.
The fund is designed to mitigate some of the financial costs of the new climate plan, and will be financed by the ETS. Asked whether adherence to EU rule-of-law standards would be a precondition to access the new fund, Timmermans mentioned the ongoing debate over the pandemic recovery package: “One of the demands that has always been clear, for Poland is respect for the rule of law.” He added: “Sometimes we just have to say ‘to here and not one step further,’ to make them understand that the EU cannot function if we don’t respect the rule of law.” Read more from Timmermans here.
WASHINGTON MOOTS DIALOGUE WITH MOSCOW: A day after the leaders of the United States and Russia spoke in a rare two-hour video call, U.S. President Joe Biden threw another curveball at Europe, hinting he’s open to further discussing Moscow’s concerns about NATO’s intentions in the East.
Details: Biden said he would be in a position to announce by Friday plans for high-level talks “to discuss the future of Russia’s concerns” about NATO. The talks would explore “whether or not we can work out any accommodation as it relates to bringing down the temperature along the eastern front.” The subtext? Addressing Russia’s concerns about possible NATO membership for Ukraine.
Dialing down the rhetoric: Biden also ruled out putting boots on the ground in Ukraine. “The idea that the United States is going to unilaterally use force to confront Russia invading Ukraine is not in the cards right now,” he said, though he reiterated the threat of severe economic sanctions (which would most likely fall to Europe to implement). In case Moscow missed the message, he added pointedly that the “obligation to our NATO allies if they were to attack under Article 5, it’s a sacred obligation. That obligation does not extend … to Ukraine.” Write-up here.
Moscow view: Putin, on the other hand, did not rule out military action in Ukraine. “Russia has a peaceful foreign policy, but has the right to defend its security,” Putin said when asked on Wednesday if Moscow planned to invade Ukraine. He also reiterated his concerns about NATO. “We cannot but be concerned about the prospect of Ukraine’s possible admission to NATO, because this will undoubtedly be followed by the deployment of appropriate military contingents, bases and weapons that threaten us.”
Worries in the east: Though some officials Playbook spoke to overnight played down suggestions that Biden’s comments suggested a more conciliatory stance, Eastern European NATO members are watching nervously, alarmed by any sense that Washington’s commitment to Europe’s security could be undermined. Biden will speak with Ukrainian President Volodymyr Zelenskiy today, along with the Bucharest Nine countries that make up NATO’s eastern edge, the White House announced.
Diplomacy: Contact continued overnight, with U.S. Secretary of State Antony Blinken speaking to European Council President Charles Michel and NATO Secretary-General Jens Stoltenberg (the latter of whom is due in Paris Friday).
SUMMIT TIME: The current disquiet over Russia comes as the Biden administration hosts its Summit for Democracy today and Friday. The summit is meant to strengthen the world’s free democracies and help defend them against increasingly aggressive authoritarian regimes, such as Russia and China.
Elephants in the room: The summit comes at a moment when democracy and its values are under threat in countries that used to be its most fervent supporters: 1) There have been serious questions about America’s democratic credentials in recent years … 2) The inconvenient truth is that the same could be said about Europe — not all of the EU’s members remain democratic. Chief among the EU’s autocrats: Viktor Orbán, who has undermined Hungary’s democratic institutions and stands accused of rampant corruption, including through the use of EU funds.
If an alliance is only as strong as its weakest member, the EU has a problem. According to Freedom House, Hungary is no longer a democracy, Poland is about to go down the same path, and democracy in the Balkans is eroding because of Chinese and Russian influence. What’s worse, the NGO has repeatedly pointed out that the EU is not doing enough to stop the “stunning democratic breakdown.”
CASE IN POINT: Biden didn’t invite Orbán to the summit; in retaliation, Hungary vetoed the entire EU’s participation. As a result, the Council’s legal service warned ambassadors there could be no common EU presence at the summit due to the unanimity requirement on all things foreign policy. It’s another example, in the view of many diplomats, of how the EU’s unanimity requirements leave countries hostage to the temper tantrums of the bloc’s least-democratic members. POLITICO’s Lili Bayer has more.
But VDL and Michel will speak: Still, a senior official told Playbook the legal service was clear that Commission President Ursula von der Leyen and Council chief Charles Michel “can speak along already agreed positions.” They pointed to Article 21 of the Treaty on European Union, which vows to “advance in the wider world: democracy, the rule of law, the universality and indivisibility of human rights.” The treaty reads: “The Union shall seek to develop relations and build partnerships with third countries, and international, regional or global organisations which share [those] principles.”
OPINION — IS THERE REALLY SUMMIT TO TALK ABOUT? Democracy is in trouble, and Biden’s summit is not going to fix it, argue author Aleksandar Hemon, professor of international relations Aida A. Hozic and professor of public and international affairs Srdjan Vucetic in this opinion piece for POLITICO.
NOW READ THIS — ON THE GROUND IN THE POLISH FOREST: POLITICO’s Zosia Wanat has this moving feature from Poland’s border with Belarus, where migrants have been trapped in freezing conditions. Zosia speaks with several Syrians, who tell her of terrible treatment at the hands of Belarus border guards: “Sometimes they were beating people,” Ali, a 32-year-old teacher, tells her, adding that the guards forced the migrants to strip, searched through their things for items to steal, and then set their clothes on fire.
MEET BERLIN’S NEW CROP OF ADVISERS AND SPIN DOCTORS: With the new government now sworn in, here are some of the key people who will shape German policy in the shadows of the chancellor and ministers …
Head of the chancellery: Wolfgang Schmidt — a close ally of Chancellor Olaf Scholz (who is the top “Doer” in this year’s POLITICO 28) — will lead the chancellery, meaning he will be in charge of spin-doctoring and making sure the three-party governing coalition runs smoothly. Fun fact: Schmidt is a fluent Spanish speaker.
Kukies becomes key adviser and sherpa: Jörg Kukies will take on a triple role as Scholz’s adviser for EU affairs, financial and economic policy and sherpa (for EU summits, the G7 and G20). A former Goldman Sachs banker, Kukies played a key role in the negotiations on Europe’s first budget financed by joint EU debt in his previous role as financial market and Europe adviser when Scholz was finance minister.
Sven Giegold becomes state secretary in economy ministry: As Playbook previously reported, MEP Sven Giegold will become state secretary in the German economy and climate ministry, where he will help new Climate Minister Robert Habeck navigate the complexities of EU policy.
More brain drain from Brussels: Another Brussels figure, Carsten Pillath, will become state secretary in the finance ministry, in charge of EU affairs. Finance Minister Christian Lindner (a POLITICO 28 “disruptor”) snatched Pillath from the Secretariat of the Council, where he was the director-general for economic affairs and competitiveness.
How you know the Greens are in power: Watch Cem Özdemir, Germany’s new agriculture minister, ride off on his bike after being sworn in, with his official certificate of appointment clipped into the luggage carrier.
ICYMI: Read up on the new ministers here … Catch up on the blow-by-blow via our live blog … And POLITICO’s Florian Eder reads the early signals from Scholz.
WHILE YOU WERE SLEEPING — ROAMING DEAL: The EU’s roam like at home scheme will be extended until 2032, after the Council and European Parliament reached a provisional agreement overnight. Backstory.
FRENCH PRESIDENCY PREVIEW: Emmanuel Macron will today unveil his priorities for the French presidency of the Council of the EU, which starts January 1, in a speech followed by questions at 4 p.m. at the Elysée. Playbook has had a preview: Expect a focus on a “Europe that protects” (or a protectionist Europe, as some liberal countries fear).
Concrete policy goals: A carbon border tax, to level the playing field with big carbon emitters such as China and Russia … Digital sovereignty, aka strict regulation on digital giants to protect EU consumers — and help EU companies … Common EU defense … A social Europe, for example with plans on a minimum wage. Read more on the French priorities from our previous interview with Secretary of State for Europe Clément Beaune.
Coucou: Macron’s address comes as German Foreign Minister Annalena Baerbock visits Brussels and Paris today, along with Council President Charles Michel. Scholz will visit Macron for lunch on Friday.
MACRON IN VICHY: Meanwhile, Macron on Wednesday became the first French president to honor in Vichy the memory of the Jews deported by the Pétain regime and the 80 French MPs who refused to give full powers to the marshal in July 1940, POLITICO’s Rym Momtaz reports.
Rebuking Zemmour: Far-right candidate Eric Zemmour has repeatedly spurred controversy by attempting to whitewash the extent of Pétain’s collaboration — with the factually wrong claims appealing to ultra-nationalists who refuse to admit that not all of France’s history is glorious. “I think we are better off respecting, studying history and allowing historians to build a historiographic truth based on evidence and documents, and let’s avoid manipulating it, agitating it, revising it,” Macron said.
Beyond party politics: “When French people hit the polls in April 2022, the stakes will go beyond simply choosing between candidates with different economic, fiscal or social policies,” Rym writes. “They will be choosing between two radically different visions of their country, their history and their values, and Vichy is the ground zero of that battle.”
DONOHOE WOOS FINANCE MINISTERS: As our colleague Bjarke Smith-Meyer reports for POLITICO Financial Serves Pros, Eurogroup President Paschal Donohoe organized a three-course soirée complete with an Irish whiskey digestif on Monday night in Brussels to revitalize the deadlocked European deposit insurance scheme — the outstanding pillar of the eurozone’s banking union. Officials told Bjarke the event gave Donohoe enough confidence to push on with the initiative, though the proposal will be less ambitious than initially hoped, due to concerns from Germany.
Commission eyes tax revenue: And in more finance-related news, POLITICO’s Paola Tamma reports the Commission wants to take a portion of the revenue due to come onstream from the new OECD-backed global tax deal to help repay the debt the bloc raised to finance its pandemic recovery fund. The draft proposal doesn’t say how much of a share the EU would claim for itself. More here for POLITICO Financial Services, Tech and Competition and Industrial Policy Pros.
MISTAKEN IDENTITY: French police released Khaled Alotaibi, who was detained in connection with the murder of Saudi journalist Jamal Khashoggi in Charles de Gaulle Airport on Tuesday. The real suspect — Khalid Alotaibi — has been charged in absentia.
— Summit for Democracy, U.S. State Department. Begins 2 p.m. Brussels time with opening remarks by President Joe Biden. Watch.
— European Commission President Ursula von der Leyen, Vice President Maroš Šefčovič and Energy Commissioner Kadri Simson participate in Day 2 of the European Economic and Social Committee (EESC) plenary. Watch.
— European Council President Charles Michel visit Paris. Meets OECD Secretary-General Mathias Cormann at 9 a.m., French President Emmanuel Macron at noon.
— European Parliament President David Sassoli visits Paris. Meets French Prime Minister Jean Castex; press conference at noon. Watch.
— Emmanuel Macron presents priorities of the French presidency of the Council of the European Union, 4 p.m. Watch.
— EEAS chief Josep Borrell meets Germa Foreign Affairs Minister Annalena Baerbock at 1:15 p.m., followed by press conference. Borrell also receives Australian Foreign Minister Marise Payne.
— European Parliament’s Conference of Presidents meets with the incoming French presidency of the Council at 5 p.m.
— EMA press briefing on COVID-19 at 2 p.m.
— Justice and Home Affairs Council, 10 a.m. Commissioners Margaritis Schinas and Ylva Johansson participating. Watch.
— Transport and Trade Council. Watch.
— Parliament’s LIBE committee holds hearing on the rule of law at 9 a.m.
— European Council on Foreign Relations annual council; noon in Berlin. Among the speakers: Commissioners Jutta Urpilainen and Věra Jourová, DG Trade boss Sabine Weyand and EEAS Secretary-General Stefano Sannino.
— Commissioner Didier Reynders opens the International Conference on Rule of Law organized by MEDEL; participates in Transparency International Hungary event.
— Commissioner Mairead McGuinness meets with ESMA chief Verena Ross.
— Commissioner Margrethe Vestager continues visit to Washington; delivers speech at the American Chamber of Commerce’s 3rd Transatlantic Business Works Summit.
MEDIA UPROAR OVER NEW PCR TEST REQUIREMENTS: With days to go until next week’s Eastern Partnership and EU summits, the Council had yet to clarify the media accreditation process for the leaders’ in-person meetings. Finally, last night it confirmed that reporters will face new requirements: either a negative PCR test, or a doctor’s certificate stating they’ve recovered from COVID-19 within six months. That even applies to double-vaccinated hacks who hold a COVID pass.
Testing times: As irate reporters pointed out, the policy isn’t in line with Belgian requirements, which only demand a Covid Safe Ticket for events of more than 100 people. The Council said it’s taking its lead from similar events like COP26, claiming the fact that there is an Eastern Partnership as well as the usual European Council “implies higher than usual levels of participation.” The long and the short of it is, Brussels’ indefatigable press pack will now have to fork out extra euros to get a PCR test.
AWARDS: The EESC will award its Civil Society Prize today to: Belgium’s Grandparents for the Climate … Engineers Without Borders Catalonia … Romania’s Workshop without Borders … Slovenia’s urban planning studio Prostorož … and Estonian NGOs Estonian Green Movement, Estonian Fund for Nature and the Estonian Environmental Law Centre. The final ranking will be revealed here at 12:15 pm.
NEW ENVOYS: Joe Biden overnight nominated Constance Milstein as his ambassador to Malta, along with a host of other posts.
BIRTHDAYS: Former Commission President Jean-Claude Juncker turns 67; MEP Sunčana Glavak; Former MEPs Barbara Matera and Boris Zala; Chairman of Hungarian Europe Society István Hegedűs; Vulcan Consulting’s Marykate Collins; Kovrr’s Tom Boltman; MINES ParisTech’s Alexandre Heully; Gabriel Bernardino, chairman of the European Insurance and Occupational Pensions Authority.
MANY THANKS: Hans von der Burchard, Rym Momtaz, Laurenz Gehrke, David Herszenhorn and our producer Grace Stranger.
**A message from Goldman Sachs: Five themes will shape the path towards net-zero, according to Goldman Sachs Research. 1. National commitments and further cuts to emissions by 2030 are critical to reaching net-zero by 2050. 2. Carbon pricing and offset schemes are a key instrument for high-cost de-carbonization, but require tighter standards, stronger supervision and better global liquidity. 3. Carbon labelling could empower consumers to choose low carbon goods and manage their carbon budgets. 4. The rise of ESG is driving capital towards de-carbonization, but regulatory uncertainty and a lack of global coordination are generating structural underinvestment in key materials, energy and heavy transport sectors, raising price inflation and affordability concerns. 5. A complex ecosystem of low carbon technologies will be needed to reach net-zero. To keep global warming below 1.5°C and reach net-zero by 2050, we expect a cumulative US $56 tn of green infrastructure investments. Learn more.**
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