Policy Positions
Implementing the EU Green Deal requires annual investments of about €620 billion, most of which will have to be shouldered by the private sector. However, businesses and households are not investing enough as of now. An important lever for greater green investment is reducing uncertainty around such investment. At the start of the next institutional cycle, the EU should hence improve regulatory certainty for green investments, which should be palatable to most parties likely to form a majority in the Parliament. In addition, the EU should adopt concrete tools that reduce cost uncertainty for companies and households in a pragmatic manner. To this end, this policy position recommends using green lead markets and proposes moves to explore two novel mechanisms that cost taxpayers little to nothing but should boost green investments.
The Net Zero Industry Act (NZIA) was touted as the EU‘s big response to the US Inflation Reduction Act. After a year of negotiations, it will finally hit the legislative books. In his policy position, Nils Redeker analyses what has become of the EU‘s green industrial policy ambitions, what the NZIA teaches us about Europe‘s role in the clean tech race, and what the next Commission needs to do to formulate a constructive answer to the global return of industrial policy.
The EU is discussing better regulation. The issue is urgent. Nothing less than the competitiveness of European companies and the acceptance of the EU are at stake. But beware – neither symbolic politics nor broad deregulation will help. Instead: here are four concrete measures that could substantially improve the quality of EU regulation.
A European Green Deal that can withstand external shocks and navigate the twists and turns of geo-politics rests on diversified sources of critical imports. However, diversification is a matter for corporate decisions on where to find supplies and place investment and European firms, grappling with cost-push inflation, are reluctant to bear the costs these entail. In this policy position, Francesco Findeisen makes three suggestions about how the EU can help its firms achieve economic resilience through conditional industrial policy support and public procurement.
Current security guarantees for Ukraine range from unavailable to ineffective, writes Sascha Ostanina. She proposes a middle-ground solution to provide collective security for Ukraine through a binding self-defence agreement between the EU and Ukraine. Such an agreement would provide Ukraine with access to weapons and ammunition in the event of Russian aggression.
Die Europäische Union muss sich erweitern, möchte sie ihre unmittelbare Nachbarschaft stabilisieren und dem Einfluss Russlands in der Region vorbeugen. In dieser Policy Position argumentiert Thu Nguyen, dass jedoch sowohl künftige Mitgliedstaaten als auch die EU für die Erweiterung bereit sein müssen. Dazu braucht es Reformen, vor allem in drei Bereichen: Rechtsstaatlichkeit, Handlungsfähigkeit und EU-Haushalt.
The EU struggles to remain internationally competitive, with pressures intensifying since the Russian war in Ukraine. Many factors, most of them long-standing, determine EU competitiveness, such as lack of skilled labour, digitalisation, or quality of infrastructure. A vast literature exists on how to address these issues. This paper takes a narrower approach by focusing on three more recent levers for the EU to ensure its future competitiveness: devising an EU industrial policy, adapting to the changing energy landscape, and positioning the EU in a geopolitically tense environment.
Green growth requires strategy and coordination. The green transition entails important costs and will fail politically if we do not address socio-economic inequalities. In this Policy Position, Cornelia Woll proposes three pathways to a net-zero economy by 2050 that ideally should be combined: (i) correcting market signals through taxonomies and taxation; (ii) developing a European industrial policy that supports green innovation but also rewards successful transition plans; (iii) facilitating the funding for companies and financial institutions lending to those invested in green technology.
Germany Needs a Europe Pact
(2023)
German Chancellor Olaf Scholz recently presented a new “Germany-Pact” to advance the country, following media reporting that has portrayed Germany as the “sick man of Europe” due to its waning economy. However, as Johannes Lindner and Nils Redeker observe, Europe does not play a big role in this pact. In this op-ed, originally published in Handelsblatt, they explain why Germany should refocus on the EU single market and develop an overall strategy for modernising the country and Europe.
On 1 July 2024, Hungary is set to take over the Presidency of the Council of Ministers. Given the ongoing rule of law violations in Hungary, concrete proposals have been put forward to prevent it from exercising the Presidency. In this Policy Position, Martijn van den Brink analyzes the legal feasibility of these proposals and argues that the proposed EU measures violate the EU’s very own rule of law.
Hungary is set to take over the EU Council presidency in the second half of 2024. Given the state of the rule of law in the country, there are doubts whether Hungary will be able to successfully fulfill tis role. A debate on whether it should be blocked from taking over the presidency on 1 July 2024 is in full swing. In this Policy Position, Thu Nguyen analyses the institutional role of Council presidencies, and argues that the Hungarian presidency will not be able to do much damage considering both the institutional corset and the time period in which it will operate.
Labour shortages are affecting member states across the EU, with the average EU job vacancy rate doubling between 2012 and 2022. These labour shortages may cause the EU’s most severe migration crisis yet, putting common EU objectives such as the green and industrial transitions at risk. In order to combat labour shortages and create a migration system fit for the future, the EU must focus on simplifying and harmonising its legal framework on labour migration, expanding migration opportunities to low- and medium-skilled workers, and aligning migration legislation with other policy objectives.
The EU’s green agenda for 2023 is packed. Beyond finalising and implementing Fit for 55, the EU must react quickly to challenges that emerged recently and which put the climate objectives at risk. This policy position outlines four challenges that are particularly important, urgent and for which it remains unclear what the EU’s solution will look like: 1) Avoiding overcapacity of fossil fuel infrastructure; 2) Improving cross-border energy connections; 3) Reforming the electricity market; and 4) Keeping green technologies competitive in the EU.
The Conference on the Future of Europe will not be the place where the future of the EU will be decided. For that, there are too many obstacles standing in its way: First, it comes at the wrong time. Secondly, it is too short and its governance structures are too heavy. And lastly, it lacks the necessary support at member state level to bring about concrete policy changes. But it also does not have to. The future of EU democracy will be decided in national and European parliamentary elections. Instead of overpromising on the Conference, EU institutions and national governments should ensure that their results are translated into concrete action at EU level.
Last week, the Conference on the Future of Europe was concluded. Now far-reaching reform proposals are on the table. However, there is a great risk of these proposals petering out. The Russian war of aggression shows how urgently the EU needs reforms. The German government should therefore seize the opportunity presented by the Conference. First, it should take its own European policy ambitions seriously and join forces with France to push for treaty changes. Second, it must find pragmatic steps in the short term to develop a constructive agenda from the Conference proposals, even below the threshold of treaty change.
The technology giants Google, Apple, Facebook, Amazon and Microsoft are on the rise, recently also in the financial services business. This poses new challenges not only for competition regulators and consumer protection agencies, but also for financial market supervisors. The European financial market rules have a blind spot with regard to big tech and this endangers financial market stability. To prevent technology giants from flying under the radar of financial supervision, Sebastian Mack argues in this policy position for making group supervision of financial conglomerates fit for the digital age.