Home Society POLITICO’s back-to-school policy briefing: What you need to know (and worry about)
POLITICO’s back-to-school policy briefing: What you need to know (and worry about)

POLITICO’s back-to-school policy briefing: What you need to know (and worry about)

by host
POLITICO’s back-to-school policy briefing: What you need to know (and worry about)

Welcome back! After a scorching summer, Brussels people are trickling back into the office or, for many of you, the home office setup.

A word of warning: It’s going to be an intense rentrée.

From the war in Ukraine to spiking energy prices, EU officials will have their hands full keeping their policy agendas on track amid escalating geopolitical crises. The most obvious field to be disrupted is energy, as leaders scramble to fill up gas reserves and keep the Fit for 55 package on rails.

But other areas will also be popping off. In tech world, the Media Freedom Act will occupy agendas and headspace, while the AI Act is headed for a busy fall season in Parliament.

For folks who follow industrial policy, the Commission is set to roll out a draft on new emergency powers to manage supply chains. Competition lawyers will want to wheel out the Google Android file, which is likely to expected to reach a decision stage in coming weeks.

And that’s just for starters.

Agriculture, trade, finance, transportation, sustainability… all have packed policy agendas crying out for attention before most of us have even emptied our suitcases into the laundry.

On that note, here’s POLITICO’s back-to-school guide for policy wonks. Adjust your reading glasses, and enjoy.


What you should look out for: Expect energy to be at the top of the political agenda as EU leaders look to stave off the worst effects of the energy crisis spurred by Russia’s war in Ukraine. Overall, the EU is doing well in filling up its gas reserves, with storage already at the 80 percent target the bloc set itself for November. But a cold winter may mean even this is not enough to keep industry going and households warm.

Why it needs your attention: Record-high energy prices are already affecting businesses, while governments are bracing for the worst: energy rationing, blackouts and public backlash to eye-watering utility bills. But the focus won’t just be at home — expect the bloc’s solidarity over Ukraine and sanctions to be tested. Just look at Bulgaria and Hungary, which have already indicated their return to Russia for gas. Moscow’s Gazprom may also cause further disarray if Russian President Vladimir Putin turns off the gas taps. Whether countries will hog energy supplies for themselves or stand arm-in-arm in a worst-case scenario is also an open question.

Also keep in mind that … Along with securing enough supplies, EU governments will also be scrambling to tame demand this fall. Germany, Spain and others have already announced sweeping demand-side measures including temperature limits. A reform of the EU’s wholesale electricity market is also on the cards, with some countries calling for the price of power to be delinked from gas and other fossil fuels. Expect lawmakers to give larger importance to related proposals, including on renewable energy permitting, energy efficiency and the energy performance of buildings.

— By Victor Jack


What you should look out for: The bloc’s flagship climate legislation, known as Fit for 55, is entering the decisive stage of EU lawmaking. Finding compromise between Parliament and EU governments in the Council won’t be easy. 

The bits of legislation heading for trilogue talks over the coming weeks include a wide-ranging reform of the EU’s carbon market, on which MEPs and capitals hold sharply divergent views. The phaseout of pollution subsidies under the new carbon border tax temporarily sank the climate bill in Parliament, which will seek to defend a more ambitious timeline than the Council. Industry will be lobbying for a slower pace.

Another key element to watch is what happens to the EU’s planned carbon price for transport and buildings, which will make fossil fuels used for heating homes and driving cars more expensive with the goal of discouraging their use. It’s an explosive proposal: The price wouldn’t come into effect for years, but the prospect of higher fuel and energy bills is a tricky thing to sell to voters in the best of times — never mind during a period of sharply rising living costs. Parliament, unlike Council, wants to exempt households from the price. 

Why it needs your attention now: Now’s the moment of truth for the EU’s climate ambitions: Can the Continent translate its plans into action during a time of economic and geopolitical upheaval? 

Also keep in mind that … COP27 is just around the corner. The annual United Nations climate summit in Egypt this November will be more low-key than last year’s Glasgow conference, but serves as a checkpoint for what progress has — or hasn’t — been made. The European Union and other wealthy, high-emitting countries are facing growing calls from developing nations to create a dedicated fund for compensating climate-related damages, a controversial issue that risks overshadowing the summit. 

— By Zia Weise


What you should look out for: In September, the Commission sets out its Media Freedom Act to bolster pluralism and limit political and commercial interference in news media. The law will also seek to limit social media’s ability to remove and downgrade news content on their platforms. Brussels will also move forward this fall with new liability rules for artificial intelligence applications and the right to repair for digital devices. And a battle over whether Big Tech should be contributing to telecoms infrastructure will also see a consultation in the fall over how to pay for networks in future.

In other words: bills, bills, bills. Attention will shift to the next paradigm shift: artificial intelligence (the AI Act) and industrial data flows (the Data Act) that are needed to train the algorithms. While previous bills were mainly about taming U.S. Big Tech, lawmakers will now have to prove they can find the balance between innovation and regulation.  

Lawmakers are also set to wade into a couple of issues that have been lingering for years, or that need a more sector-specific approach. Platform workers’ job status, health data and political advertising are all set to get tailor-made rules.

What needs your attention: On the digital files, multiple Parliament committees are increasingly keen to have their say. The AI Act is jointly managed by two committees, while the Data Act’s different angles — ranging from data-sharing between companies to cloud switching — ended up in different hands as well.

Lawmakers already face the challenge to make sure the bills don’t contradict each other. Making sure that legislation will work in practice is a particular concern in Council. One example is the relationship between the European Health Data Space, the bloc’s first sector-specific regulation, vis-à-vis the Data Act, the horizontal data legislation. 

Also, keep in mind that: Other bills are just very political and moving targets. Lawmakers will discuss the EU’s support for semiconductors, amid growing tensions between China and Taiwan, an island critical for the world’s chips supply. Political advertising is a hot topic with a slew of European elections coming up, including a crucial vote in Italy in September.

Politicians are also tasked on setting new rules on platform work just as Uber drivers and Deliveroo couriers may rely on the extra income to cope with increased costs to the. Bottom line: there’s still a lot of work on digital legislation.

— By Pieter Haeck and Clothilde Goujard


What you should look out for: The EU finalized a new law on cybersecurity in critical infrastructure like power plants and train systems earlier this year. This fall, it’s turning its attention to even more critical things to secure: coffee machines and fridges.

The Commission plans to present a new Cyber Resilience Act (CRA) mid-September that would impose new cybersecurity requirements on makers of anything connected — from consumer items like doorbells, washing machines and smart watches all the way to connected cars, industrial machinery and security cameras. 

The gist is that software components, cloud environments and frankly every bit of a product’s supply chain present vulnerabilities for cybercriminals and espionage. The CRA aims to create rules to protect digital products that have not been covered by any previous regulation. A smoke detector in a coffee shop might not pose much of a threat but the stakes change when it is inside a nuclear reactor.

Why it needs your attention now: The backdrop is that Europe got a major cyber scare in 2017 when networks were attacked with avalanches of internet traffic that came from hacked connected devices like cameras and fridges. The attack, known as Mirai, prompted European officials to start working on a law to better secure these internet-connected devices.

But since 2017, lots has changed, and more hawkish cybersecurity officials are now pushing the EU to also take the new law as an opportunity to better protect software and hardware used in Europe against geopolitical shocks.

Also, keep in mind that: EU officials aim to make the law a global trendsetter — much like it did with privacy requirements in its landmark General Data Protection Regulation. In doing so, they’ve set themselves up for a race against U.K. legislators working on a similar legal framework

— By Antoaneta Roussi


What you should look out for: The SMEI, which stands for Single Market Emergency Instrument. The European Commission is aiming to publish its draft on new emergency powers to manage supply chains on September 13. The instrument is meant to offer a toolbox to prepare for and handle future crises, drawing lessons from recent crises like the pandemic and the war in Ukraine.

Why it needs your attention now: The new instrument may add a range of new powers to the EU’s crisis-response arsenal. A document setting out a public consultation — closed in May — gives some insights on the Commission’s aims, with options including measures on stockpiling, monitoring of key supplies, priority orders and joint procurement.

While everyone wants to avoid a repeat of the border closures and internal export restrictions seen at the onset of the pandemic, views differ inside the Commission on how to achieve this goal. Internal Market Commissioner Thierry Breton has pushed for a structural approach, telling EU lawmakers in April that the Commission was examining measures taken by international partners, including export controls. But in June EU competition chief Margrethe Vestager said that she would “be particularly attentive” to make sure the new tool isn’t too interventionist and doesn’t become a heavy burden for businesses.

Also, keep in mind that: … The new tool has already sparked concerns in some quarters. A group of nine countries, including the Netherlands, Sweden, Belgium and Denmark, warned the EU not to go too far. “We have rising concerns about the direction that the preparatory work is taking,” they wrote in a letter sent to the cabinets of Commission President Ursula von der Leyen and several commissioners. “The call for evidence hints at a proposal that is less about facilitating a well-functioning single market and more about steering industries in a non-crisis environment, to prepare for future unknown crises,” they added. It’s no surprise that the proposal, initially expected to land in the spring, is taking a bit longer than anticipated. 

— By Pietro Lombardi


What you should look out for: A decision in the Android case. Margrethe Vestager’s antitrust crusade has had some big wins and harsh reverses in the EU courts. The Commission’s record €4.34 billion fine for Google over how it runs the Android operating system faces its sternest test from the General Court on September 14.

Why it needs your attention now: Apart from the massive fine, the EU case centers on the foundation of Google’s business model: how the company leveraged its power in mobile ecosystems to get Google Search installed on millions of Android smartphones which has helped make it an advertising powerhouse.

What’s it all about? Brussels views Google’s contracts with smartphone-makers and telecoms operators as a way to cement the search giant’s global dominance to the detriment of rivals. The case was fueled by a complaint by Fairsearch, an association that includes Oracle, Naspers and others. Another win, building on the thumbs up the Commission got on its earlier shopping search case, can only encourage more antitrust action against Big Tech. A loss, following court defeats over Intel and Qualcomm this year, would force the Commission to look again at its procedures and embolden tech giants who want to fight regulators.

The future picture: As for Google’s Android abuses, many will fall under the EU’s Digital Markets Act rules. Google will be prohibited from tying operating systems such as Google Android with its own search services, and users will also be allowed to un-install pre-loaded apps, such as Chrome. But should the Commission fail to convince EU judges in the Android case, more intense scrutiny could be placed on these specific provisions in the DMA.   

— By Samuel Stolton


What you should look out for: Food security will be at the top of agenda in September, with the EU’s agriculture ministers meeting twice this month, once in Prague for an overview of the drought-battered summer harvest and then in Brussels a few days later.

Why it needs your attention now: Hunger soared to the top of the agenda in Brussels in the wake of Russia’s invasion of Ukraine, which pushed up food and fertilizer prices. Countries outside the EU can’t afford food, while high prices are also hitting EU consumers.

What to watch out for: There will likely be some conflict when ministers discuss the Commission’s push to cap greenhouse emissions on livestock farms. Diplomats will also scrutinize a Commission proposal to slash the EU’s pesticide use by half by 2030; many of the EU’s farm ministers don’t like it. The debate on other controversial areas like an EU-wide nutrition label and fishing rights will also feature over the next few months.

— By Eddy Wax and Bartosz Brzezinski


What you should look out for: Trilogues get going on critical Fit for 55 files including the crunch car and van CO2 standards legislation which includes a ban on the sale of all but zero emissions vehicles from 2035. All three institutions have agreed to that date, but there’s a lot of details still to haggle over once talks start in early September. The big issue will be on how to handle a German-made (and messy) compromise in Council that aims to carve out a role for e-fuels. It will also be a big few weeks for aviation’s decarbonization agenda. Trilogues on the EU’s sustainable aviation fuel file begin on September 8, where there will be a fight on two fronts: the level of the proposed green fuel mandate (with MEPs pushing for a high one), and what kind of fuels should be classed as green (with countries pushing for a broad definition). Those talks will come amid an international discussion at the U.N.’s ICAO conference at the end of the month, where it’s hoped there will be an agreement on net-zero aviation carbon emissions by 2050. MEPs are also under pressure to set a position on new EU requirements to build charging and refueling infrastructure and on an instrument to boost green shipping fuels. 

Why it needs your attention now: The package of climate measures target everything from cars and planes to trucks and ships, and depending on the outcome, they’ll shake up the transport sector for years to come.

But, also keep in mind that… There’s much more to come. In the fall, the Commission is set to drop new legislative proposals for Euro 7 emission standards setting legally binding limits on a range of non-CO2 pollutants for cars, vans, trucks and motorbikes. A revision of the bloc’s truck and bus CO2 standards is also upcoming. 

— By Josh Posaner, Mari Eccles and Hanne Cokelaere


What you should look out for: Deforestation will be September’s hot topic — off the back of a summer that saw wildfires burn forests serving as essential carbon sinks. The EU is set to finalize a new law aimed at banning products driving deforestation from entering the internal market, which will force companies to police their supply chains. Another big ticket item: new EU air quality guidelines that the Commission is set to unveil at the end of October as part of a broader legislative package meant to address pollution. 

Why it needs your attention now: It’s crunch time in negotiations on deforestation between the Parliament, the Council and the Commission, which all have different ideas about how this new mechanism should work, as well as which products it should cover. The air quality revamp is being keenly followed by countries failing to hit the current targets — something made even more difficult as they’re preoccupied with keeping homes warm this winter, which could mean shifting to more polluting forms of heating like coal.

But, also keep in mind that… These are just a couple of the green initiatives on the fall agenda for sustainability wonks. Discussions are currently underway on tightening EU rules on environmental crimes, a new regulation for more sustainable batteries and stricter EU waste export legislation. On top of that, the Commission is due to present a four-part Circular Economy Package in November. Major industrial players and green groups will also be anxiously on the lookout for the EU’s upcoming legislation on critical raw materials. 

— By Leonie Cater, Antonia Zimmerman and Louise Guillot


What you should look out for: Geopolitics and trade merge as the EU seeks to take on China and even the U.S. in two key — and controversial — bits of legislation to be pored over in the fall. This month, the Commission will introduce a draft bill to ban products made with forced labor from being sold on the EU market — a bill said to target China for its reported use of forced labor in its Xinjiang region. The other is a new policy weapon — known as the anti-coercion instrument — which would allow Brussels to impose sanctions more easily on economic rivals like China and even the U.S. The fate of that initiative be decided in the coming months, as both the European Parliament and EU countries move toward reach their respective positions.

Also, Brussels is keen to close and ratify more trade deals after finalizing one with New Zealand in June. The EU and Australia hope to seal their trade deal in the coming months, while Brussels also wants to sign deals with Chile and Mexico.

Why it needs your attention now: “While there is support within the EU to target forced labor, it’s unclear how the EU will go about it. MEPs want an embargo at the EU’s borders on imports and exports of products made under duress, rather than allowing the goods to enter the EU market freely before investigating them and potentially removing them from store shelves. But the Commission fears such measures might fall afoul of international trade law.

The anti-coercion instrument is likely to hit resistance from the more free-trading countries in the Council, who have warned the proposal could exacerbate trade conflicts — especially at a time when the war in Ukraine has made securing new partnerships (and trade deals) a top priority for the bloc.

But also, keep in mind that: The EU’s also implementing measures to make its trade deals greener. That includes Brussels’ future rules for corporate sustainability due diligence, which will require EU-based companies to keep tabs on their global supply chains to mitigate human rights and environmental risks.

Also watch out for Brazil’s elections. Things will heat up around the EU’s deal with the Latin America bloc of Mercosur countries. The deal’s been frozen since 2019, but has gained renewed attention since Russia’s war in Ukraine. The EU still has to negotiate additional commitments around deforestation in the Amazon ahead of the Brazilian elections in October, where current president Jair Bolsonaro is fending off a challenge from left-wing former President Luiz Inácio Lula da Silva.

— By Sarah Anne Aarup and Barbara Moens


What you should look out for: EU capitals and MEPs will try and hammer out their own approaches to implementing global bank capital reforms, revising the insurance capital framework, and modifying core rules for capital markets before moving onto trilogues — although this could kick into next year.

Why it needs your attention now: The final Basel III reforms, Solvency II framework and Markets in Financial Instruments Regulation (MiFIR) may be technical pieces of legislation but they underpin how banks, insurers and capital markets function in the EU. There are deep divisions on how far to go in freeing up bank and insurance capital to try and boost the economy versus making sure they have enough resources set aside in case of difficulties. Capital markets reforms are also hugely controversial. The EU wants to create greater transparency through a ticker tape for share prices across the bloc’s disparate trading landscape as it tries to create truly European capital markets, but there’s strong resistance from stock exchanges and countries like Germany. It may take a lot of negotiations to find a way through.

Also keep in mind that… There’s a growing fight in the European Parliament over how to incorporate the threat from climate change into the bank and insurance reforms. On the one hand, German EU lawmaker Markus Ferber, from the European People’s Party, wants to remove extra climate checks for insurers and environmental disclosures for banks. On the other hand, Spanish MEP Jonás Fernández wants to make favorable capital treatment for banks contingent on green criteria. Plus, other lawmakers have proposed hitting the financial sector with punitive capital charges for fossil-fuel financing. 

Euro clearing

What you should look out for: The European Commission has to come up with a plan this fall to dislodge euro clearing from London after Brexit. It’s already delayed the end of market access for London’s clearinghouses numerous times amid difficulties getting the business to shift to the continent and concerns a sharp cutoff could lead to instability in financial markets.

Why it needs your attention now: Yet Brussels has made it a political goal to move euro clearing and set itself a December deadline to come up with a legislative proposal. The Commission is considering hitting EU banks with higher capital charges to force them to shift their derivatives positions out of London. This could be hugely controversial as the industry is overwhelmingly resistant to a forced move — and could also create unintended consequences. 

Also keep in mind that… Clearing is the only remaining area of U.K. financial services to still have market access after Brexit. The Commission fears the EU wouldn’t be in control in a crisis, but without the huge scale of London’s dominant clearinghouses, EU banks and investors could face higher prices and bigger risks when they hedge interest-rate moves. The U.K. is also fiercely opposed to the effort to shift the business — making this a major Brexit flashpoint to watch.

— By Hannah Brenton


What you look out for: For the doctors and nurses that staff Europe’s hospitals the change of seasons means one thing: the return of the coronavirus, and with it the possibility of overflowing ICUs and back-to-back shifts. Whether the bloc’s exhausted health workforce, already pushed to the brink, can put up with yet another COVID winter is an open question. 

Why it needs your attention: Health authorities’ room for maneuver is narrowed as people tire of restrictions and bristle at the return of any impositions on their daily lives. But it’s not all doom and gloom. The Omicron variant is milder than its predecessors. The population has built up immunity from previous waves of infection. And the arrival of variant-adapted jabs, expected for September, will add another medicinal weapon to the EU’s armory. 

Also keep in mind that… There’s movement on the legislative front as well. Negotiators are set to begin discussions over the European Health Data Space — the Commission’s proposal to set data standards in order to allow better use of digital patient files across the bloc. The EU executive is also planning its revision of the basic pharmaceutical legislation. It’s the biggest reform to the EU’s rules for medicines in 20 years. Tackling inequalities in access to medicines between the East and West is high up on the agenda. But expect the pharmaceutical industry to fight tooth and nail against anything it deems too much of an imposition on its bottom line. 

— By Carlo Martuscelli

Source link