European Parliamentary Research Service Blog

Written by Carmen-Cristina Cîrlig (1st edition).

The confiscation of criminals’ illicit profits is considered an effective tool in the fight against organised crime, identified as a major threat to EU security. However, despite the comprehensive set of EU rules on asset freezing and confiscation, there are still obstacles on the path to recovering criminal assets, as shown by the European Commission’s June 2020 evaluation of the 2014 directive on freezing and confiscation of instrumentalities and proceeds of crime and the 2007 Council decision on asset recovery offices (AROs).

To address this situation, in May 2022 the European Commission adopted a proposal to amend the 2014 directive with a view to strengthening the EU’s asset recovery and confiscation rules and reinforcing the powers of AROs.

The European Economic and Social Committee adopted its opinion on the proposal on 14 December 2022. In the European Parliament, the Committee on Civil Liberties, Justice and Home Affairs is in charge of the file and published its draft report on 14 February 2023.

Versions

• March 2023: Revision of the EU rules on asset recovery and confiscation (1st edition)

Proposal for a directive of the European Parliament and of the Council on asset recovery and confiscation Committee responsible:Committee on Civil Liberties, Justice and Home Affairs (LIBE)COM(2022) 245 final
25.5.2022Rapporteur:Loránt Vincze (EPP, Romania)2022/0167(COD)Shadow rapporteurs:Caterina Chinnici (S&D, Italy)
Malik Azmani (Renew, Netherlands)
Sergey Lagodinsky (Greens/EFA, Germany)
Nicolaus Fest (Identity and Democracy Group, Germany)
Assita Kanko (ECR, Belgium)
José Gusmão (GUE/NGL, Portugal)Ordinary legislative procedure (COD)
(Parliament and Council on equal footing
– formerly ‘co-decision’) Next steps expected: Committee vote

Written by Agnieszka Widuto.

The energy crisis of 2022 has brought new challenges for the EU electricity market. Concerns over very high prices (driven in part by their coupling with gas prices), security of energy supply, and the need to increase decarbonisation have sparked discussions on the need to redesign the EU’s electricity market.

The EU has already taken a number of short-term measures to contain the energy crisis. The REPowerEU plan of May 2022 was introduced to phase out Russian fossil fuel imports, diversify supplies, boost energy savings and accelerate the clean energy transition. Other measures, focusing more specifically on electricity, included a Council regulation of October 2022 on an emergency intervention to address high energy prices, which introduced electricity demand reduction targets and set a revenue cap on inframarginal electricity producers, i.e. those producing electricity below the cost of the most expensive ‘marginal’ fuel source.

More long-term structural electricity market reform aims to make the market more resilient, contain excessive price volatility and ensure secure energy supplies, especially from clean sources. The reform is expected to focus on the following areas: making electricity bills less dependent on short-term fossil fuel prices, e.g. by reducing the role of gas in short-term markets; pricing inframarginal technologies on the basis of their true production costs; boosting the role of renewables; better protecting consumers against price volatility and empowering them to produce and share electricity; and improving market transparency, surveillance and integrity. There is also an ongoing discussion as to whether the current merit order system based on marginal pricing, effectively responsible for coupling electricity prices with gas prices, should be reformed.

The Commission is expected to present its legislative proposal on the electricity market reform in mid-March 2023.

Read the complete briefing on ‘Reforming the EU electricity market‘ in the Think Tank pages of the European Parliament.

Written by Antonio Albaladejo Román.

Food insecurity remains one of the most pressing global challenges. The COVID-19 pandemic and Russia’s invasion of Ukraine have made the food crisis significantly worse in recent years, threatening millions of people worldwide. Despite some promising trends, food inflation remains consistently high, and it depends on a volatile environmental and geopolitical context. The EU has devoted substantial resources to tackling the immediate effects of the crisis. However, in the long run, the key to food security will be sustainable agri-food systems.

2021: Hunger on the rise

Global food security was already under strain before Russia’s invasion of Ukraine. The disruptions caused by the COVID-19 pandemic and the subsequent economic rebound led to severe bottlenecks in global agri-food chains and skyrocketing energy prices in the second half of 2021. In addition to fuelling inflationary pressures on consumers and food producers, the rising cost of energy also affected the price and availability of fertilisers, a critical input for agriculture whose manufacture is heavily dependent on natural gas. As global food prices surged, the number of people facing hunger worldwide rose to 828 million in 2021 – 150 million more than pre-pandemic levels. Nearly 2.3 billion people (30 % of the world’s population) were facing moderate or severe food insecurity. Acknowledging the gravity of the situation, United Nations (UN) Secretary-General António Guterres warned during the UN Food Systems Summit in September 2021 that hunger was ‘on the rise again’. The disruptions felt across the world also hit the EU. In January 2022, annual inflation in the euro area reached 5.1 % (3.5 % for food, alcohol and tobacco), up from 0.9 % in January 2021 (1.5 % for food, alcohol and tobacco), and basic products such as bread became more expensive for EU consumers (7.3 % year-on-year increase in January 2022, up from 1.7 % in January 2021).

2022: Russia invades Ukraine

Russia’s unprovoked attack on Ukraine in February 2022 exacerbated existing challenges to global food security, pushing energy and food prices to historic heights. Before the war, Russia and Ukraine accounted for 34 % of global exports of wheat, 27 % of barley, 17 % of maize and 55 % of sunflower oil. Russian and Ukrainian agricultural exports are particularly important for many African and Middle Eastern countries, where food security was already unstable. Moscow’s exports of natural gas and mineral fertilisers influenced global agricultural markets, and Russia was the world’s largest exporter of nitrogen-based fertilisers, second largest of potassium and third largest of phosphorus (the three most important mineral substances for fertiliser production). To prevent the food crisis from worsening, the EU, the United States and other like-minded countries avoided imposing sanctions on agricultural and food products; Moscow meanwhile weaponised its energy, grain and fertiliser exports. Russia deliberately targeted agricultural production facilities, blockading Ukrainian Black Sea ports for months to prevent Kyiv’s agricultural exports (of which 80 % were seaborne) – until the UN–Türkiye-brokered Black Sea Grain initiative and EU solidarity lanes allowed exports to resume.

The repercussions of Russia’s war for international agricultural markets were swift and severe. In March 2022, the UN Food and Agriculture Organization (FAO) reported an all-time peak in global food prices, which would remain high despite subsequent easing. Fertiliser prices rose sharply as well; this was due to export restrictions in several countries and production cutbacks owing to high energy costs. Humanitarian and non-governmental organisations reported increased difficulties in assisting food-stressed regions on account of rising costs and higher numbers of people in need. Although food availability was never at risk in the EU, European farmers faced higher costs for their main inputs (such as energy, fertilisers and animal feed), which aggravated food inflation. EU fertiliser prices jumped by 149 % in September 2022, following a 70 % fall in European ammonia production owing to high energy prices. The EU also imports large quantities of Ukrainian maize (an average of 11 million tonnes annually) and oilseeds, which are critical for animal nutrition. Finally, extreme weather events in Europe caused significant reductions in key crop yields. As a result, euro area inflation rose to 7.4 % in March 2022, and continued climbing to a 10.6 % peak in November, with food, alcohol and tobacco seeing the highest inflationary increase over 2022 after energy, reaching 13.8 % in December.

2023: What outlook for food security?

Although global food prices fell for the 10th consecutive month in January 2023, food inflation remains consistently high in many countries, reaching 14.1 % in January in the euro area. This mismatch is the result of both a reduced price pass-through from global to consumer prices, and ongoing geopolitical uncertainty fuelling price instability despite some positive trends. Energy prices, which affect farmers and fertiliser producers, already started to decline in the second half of 2022. In addition to containing inflationary pressure on agri-food chains, lower energy prices might influence the use of fertilisers by farmers in 2023, with direct effects on future crop yields. The EU solidarity lanes and the Black Sea Grain initiative have continued to facilitate the safe export of Ukrainian foodstuffs to international markets. The initiative had allowed over 18 million tonnes of grain and foodstuffs to be exported as of January 2023 (of which over 50 % to developing countries) and the agreement is due for renewal in March, after the latest extension. Should Russia refuse to renew the deal, Ukrainian seaborne exports could again be at risk, with dire implications for international markets and food-stressed countries. Even if Ukrainian grain exports were to continue, the country’s agricultural output is likely to be significantly smaller compared with the 2021-2022 season. Indeed, many of the positive trends are highly dependent on geopolitical and environmental factors, and could change abruptly. Weather shocks during 2023 also warrant special attention. Persistent drought, which has severely affected food security in east Africa, is forecast to continue. In Europe, a repetition of the water and heat stress experienced in 2022 could lead to diminished crops yields again this year, affecting EU consumers and global food security, given the bloc’s role as an agricultural exporter.

EU action to strengthen food security

EU concerns over food security are not new, but Russia’s war on Ukraine has made them top political priorities. The current food crisis is the result of several drivers, some of which are circumstantial and already addressed by the EU and the international community. Following the EU leaders’ March 2022 Versailles Declaration, the European Commission put forward a series of measures to ensure global food security and food affordability. Internationally, EU solidarity lanes have allowed Ukraine to export over 23 million tonnes of agricultural products to global markets. The EU has earmarked €8 billion between 2020 and 2024 for global food security, and will further support the food systems of around 70 countries under the 2021‑2027 multiannual financial framework. Acting multilaterally, the Commission is a key partner in eight global coalitions to strengthen food security, and has actively advocated lifting agricultural export restrictions.

Domestically, the Commission has pursued the double objective of mitigating the war’s immediate impact on EU farmers and consumers while boosting agricultural production to meet global demand. This support for farmers affected by higher input costs included advances of direct payments, a €500 million package, and temporary State aid measures. The Commission also permitted the temporary use of fallow land to increase food and animal feed production, and an easing of import requirements for animal feed. Member States were also encouraged to reduce value added tax rates for staple foods, and use the Fund for European Aid to the Most Deprived to cushion the effect of food inflation on lower-income households.

To increase the EU’s agricultural resilience to external shocks, the Commission aims to reduce Europe’s dependency on imports of critical inputs, in particular fertilisers and plant-based proteins for animal feed. Over the long term, the decisive challenge for food security in Europe and the world will be the transition to sustainable and resilient food systems capable of feeding a growing population. This objective is at the core of the farm to fork strategy, which aims to make EU food production more resilient and environmentally neutral while remaining competitive and able to provide EU consumers with affordable and nutritious food. To that end, in a March 2022 resolution, the European Parliament called for a reinforced European strategic autonomy in food, feed and fertilisers. In a July 2022 resolution, Parliament encouraged the EU to make the global transformation to sustainable food systems a central objective of its international financial instruments.

Read this ‘at a glance’ on ‘Food security in 2023: EU response to an evolving crisis‘ in the Think Tank pages of the European Parliament.

Written by Issam Hallak (1st edition).

In the aftermath of the 2008 financial crisis, which showed the need for more sophisticated and demanding capital requirements for banks, new regulations were agreed at international level – known as the Basel III Agreements. In the EU, they were implemented essentially by amending the Capital Requirements Directive (CRD) and adopting the Capital Requirements Regulation (CRR).

On 27 October 2021, the Commission tabled two interconnected proposals to amend the CRR and the CRD, respectively. The objective is two-fold: (i) implementing the final arrangements of the Basel Agreement; and (ii) enhancing the harmonisation of banking supervision in the EU.

The main amendments concern the introduction of an ‘output floor’, i.e. a lower bound for minimum capital requirements calculated using banks’ own methods, consideration of environmental, social and governance (ESG) components in risk assessment, and harmonisation of the selection of board members and directors of credit institutions.

The Council issued its common approach in November 2022. The decision by Parliament’s ECON Committee to enter negotiations was confirmed in plenary on 15 February 2023.

Versions

• February 2023: Urban wastewater treatment: Updating EU rule (1st edition)

Proposal for amending Regulation (EU) No 575/2013 as regards requirements for credit risk, credit valuation adjustment risk, operational risk, market risk and the output floor; Proposal for amending Directive 2014/59/EU; amending Regulation (EU) No 575/2013 as regards requirements for credit risk, credit valuation adjustment risk, operational risk, market risk and the output floor Committee responsible:Economic and Monetary Affairs (ECON)COM(2021) 663, 27.10.2021;
COM(2021) 664, 27.10.2021Rapporteur:Jonás Fernández (S&D, Spain)2021/0341(COD);
2021/0342(COD)Shadow rapporteurs:Othmar Karas (EPP, Austria), Eric Poulsen (Renew, Denmark) 2021/0341(COD) / Gilles Boyer (Renew, France) 2021/0342(COD), Ville Niinistö (Greens/EFA, Finland), Marco Zanni (ID, Italy), Johan Van Overtveldt (ECR, Belgium), Dimitrios Papadimoulis (The Left, Greece)Ordinary legislative procedure (COD)
(Parliament and Council on equal footing
– formerly ‘co-decision’) Next steps expected: Trilogue

Written by Irmgard Anglmayer and Susanna Tenhunen.

COVID-19 was not the first epidemic, and it will not be the last of its kind. It is one of the most recent in a set of epidemics the World Health Organization (WHO) has designated Public Health Emergencies of International Concern (PHEIC) since 2009. Although experts had warned of the prospect of a pandemic, the sheer scale, suddenness, and serious social and economic consequences of COVID‑19 took the world by surprise. The outbreak provided a timely reminder of health as a public good. It also emphasised the need to prioritise preparedness and long-term prevention at all levels of governance, from local to global, and to ensure an effective response capacity.

From its outbreak, the COVID-19 pandemic cast unprecedented strain on European health systems and European solidarity. Looking back from today’s perspective, the common European response was a success story. Member States’ initial national containment measures and lock downs were limited and insufficient to stop the spread of the coronavirus. The early lessons from the pandemic show that cross-border challenges to health systems and economies, including supply chain problems, vaccine development and procurement and measures to sustain the economy, could no longer be overcome by Member States acting alone. Public health measures needed to be consistent, coherent, transparent and coordinated, to ensure maximal effectiveness.

This EPRS study on the EU’s Public health response to the COVID‑19 pandemic assesses the lessons learned from the pandemic, the current state of play, challenges, and opportunities for improvement to public health governance in the EU, and includes a series of recommendations to strengthen the EU’s resilience and preparedness for future cross-border health threats. It was drawn up at the request of the European Parliament’s Special Committee on the COVID‑19 pandemic: lessons learned and recommendations for the future (COVI).

The study covers five main areas (or ‘pillars’):

Integrated pillars 1 and 2 analyse the EU vaccines strategy and study its impact. In particular, they examine the role played by the European Medicines Agency (EMA) in activating the fast-track procedure to issue conditional marketing authorisation for COVID‑19 vaccines, which allowed timely and equitable access. In this context, the study also touches upon transparency issues at the different stages of vaccine research, development and manufacturing, authorisation and procurement.

The study gives an overview of national vaccination strategies in the 27 EU Member States and discusses some factors behind the differences in countries’ vaccination progress and coverage. The analysis on vaccine uptake builds on Vaccine Tracker data collected by the European Centre for Disease Prevention and Control (ECDC). A substantial variation is found between EU countries in terms of vaccine uptake, with a higher vaccine coverage rate in the older age groups. The study reveals that vaccine hesitancy, infodemic, and trust in public authorities are some of the pivotal elements underpinning the effectiveness of national vaccination programmes. In some Member States, initial reluctance turned into vaccination acceptance, while it remains relatively high in others.

Finally, pillars 1 and 2 discuss the scientific evidence regarding vaccine effectiveness, based on clinical trials and epidemiological studies. A correlation analysis shows a general negative relationship between COVID‑19 mortality rates/excess mortality rates and national vaccination progress. However, the fact that excess mortality rates were still high in 2022, suggests that vaccines need to be supplemented by other policies and tools to restore EU public health.

Pillar 3 discusses effectiveness, coherence, and the European added value of the EU’s public health response to COVID‑19. In this regard, it presents an early ex-post assessment of EU action. The study finds that after a slow start, the EU was very effective in mobilising a variety of resources in terms of public health, financial support and civil protection, to provide emergency support and long-term structural support within the EU. The European Health Union, the EU vaccines strategy, the joint procurement and deployment of vaccines and medical countermeasures, the ‘Green Lane’ approach, and the EU Digital COVID certificate to maintain the integrity of the single market are examples of successful common European action. In the global context, the COVID‑19 pandemic triggered a significant reversal in progress towards the United Nation’s Sustainable Development Goals (SDGs). Despite EU and other actors’ major contributions to global health, the COVID‑19 pandemic widened global inequities, one of the major issues being access to COVID‑19 vaccines worldwide.

Pillar 4 changes the focus from a backward-looking assessment of lessons learned to a forward-looking approach on how to further strengthen the EU’s prevention and preparedness for future cross-border health threats. The study looks at the extended mandates of the EU agencies ECDC and EMA, the state of health preparedness under the newly created Health Emergency Preparedness and Response Authority (HERA), the EU global health strategy, the future WHO pandemic treaty, and the rising challenges of antimicrobial resistance (AMR). Based on its findings, it reiterates that prevention and preparedness will need to be anchored in robust forms of international cooperation. This requires a ‘one health’ approach, together with a focus on the social and environmental determinants of ill health, and greater global cooperation.

Pillar 5 reviews the state of play of the EU’s competences in the public health domain, followed by key discussions on the citizen-driven proposals on public health presented at the Conference on the Future of Europe (CoFoE). It reviews Europe’s transition from a period of immediate emergency response to the COVID‑19 pandemic, to managing recovery and strengthening prevention. It concludes with reflections on the EU’s upgraded framework for serious cross-border health threats and summarises positions expressed in favour – as well as those with a more sceptical tone towards a potential Treaty change.

From a methodological point of view, the study builds on various complementary methods for data collection, including systematic desk research; a literature review of peer-reviewed scientific publications on vaccine effectiveness; a quantitative data collection of COVID‑19 vaccine roll-out in the 27 EU Member States; and interviews with key stakeholders involved in or affected by EU’s COVID‑19 response and crisis management.

Finally, drawing on the lessons from COVID-19, the study makes 12 recommendations to improve the EU’s prevention, preparedness and response to future cross-border health threats. The study was presented to the European Parliament’s COVI special committee on 28 February 2023. The web streaming of that event is available on the European Parliament website.

Timeline on the EU public health response Vaccination coverage by the end of September 2022 COVID-19 certificate required to access certain public spaces Timeline of COVID-19 vaccines authorisations in the EU Timeline of vaccine development Vaccination progress by country (vaccine doses administered per 100 persons) Vaccination coverage by the end of September 2022 (aged 60 and above)

Written by Pieter Baert (1st edition).

Value added tax (VAT) is one of the key revenue raisers in national budgets, representing on average almost one-fifth of all tax revenue collected in the European Union (EU). To help strengthen the fight against VAT fraud and reduce the administrative burden for businesses, the European Commission tabled a three-part initiative – VAT in the Digital Age – on 8 December 2022.

As a first objective, the Commission proposes to introduce an EU-wide reporting system on intra-EU business-to-business (B2B) transactions, whereby companies would share, in real-time, data drawn from electronic invoices with the authorities. This would allow Member States to keep a close eye on the trail of VAT collected and to intervene when there is suspicion of fraudulent practices. Second, the European Commission proposes to introduce a harmonised framework for charging VAT in passenger transport and short-term accommodation platforms. Lastly, the initiative proposes measures to lower VAT compliance costs for companies operating across borders.

For the proposal to become a directive, the Council needs to vote on it with unanimity, after having consulted the European Parliament and the European Economic and Social Committee.

Versions

• February 2023: VAT in the digital age (1st edition)

Proposal for a Council directive amending Directive 2006/112/EC as regards VAT rules for the digital age Committee responsible:Economic and Monetary Affairs (ECON)COM(2022) 701
08.12.2022Rapporteur:Olivier Chastel (Renew, Belgium)2022/0407(CNS)Shadow rapporteurs:Lidia Pereira (EPP, Portugal)
Aurore Lalucq (S&D, France)
Mikuláš Peksa (Greens/EFA, Czechia)
Andżelika Anna Możdżanowska)Consultation procedure
(CNS) – Parliament
adopts a non-binding
opinion Next steps expected: National parliaments’ opinions

Written by Vivienne Halleux (1st edition).

Under the European Green Deal, the European Commission tabled a proposal for a recast of the Urban Wastewater Treatment Directive in October 2022. Dating back to 1991, and instrumental to the achievement of European Union water policy objectives, the directive needs to be updated and adapted to new challenges and realities.

The recast proposal would introduce new obligations to better control pollution due to rainwater, impose stricter standards for nutrient removal and require advanced treatment for the removal of micro-pollutants. To cover treatment costs, a system of extended producer responsibility (EPR) targeting pharmaceuticals and cosmetics would be set up. To align the directive with the Green Deal’s ambitions, an energy neutrality obligation would be introduced for wastewater treatment plants. Requirements on water reuse and sludge management would be clarified to enhance circularity. Health parameters would be monitored in wastewater to support public health action. While the deadline for submitting feedback on the proposal still lies ahead, initial stakeholder reactions already reveal diverging views on the proposed EPR scheme.

The co-legislators have started work on the proposal. Parliament’s Committee on the Environment, Public Health and Food Safety, responsible for the file, plans to consider its rapporteur’s draft report at the end of April 2023. The Council intends to hold a policy debate on 16 March 2023.

Versions

• February 2023: Urban wastewater treatment: Updating EU rule (1st edition)

Proposal for a directive of the European Parliament and of the Council concerning urban wastewater treatment (recast) Committee responsible:Environment, Public Health and Food Safety (ENVI)COM(2022) 541 final
26.10.2022Rapporteur:Nils Torvalds (Renew, Finland)2022/0345(COD)Shadow rapporteurs:Deirdre Clune (EPP, Ireland)
Marek Paweł Balt (S&D, Poland)
Margrete Auken (Greens/EFA, Denmark)
Nicola Procaccini (ECR, Italy)
Nikolaj Villumsen (The Left, Denmark)Ordinary legislative procedure (COD)
(Parliament and Council on equal footing
– formerly ‘co-decision’) Next steps expected: Publication of draft report

Written by Karin Smit Jacobs.

China is increasingly investing in key European infrastructure, including ports. This is something that has drawn attention at both EU and Member State level, in particular regarding strategic dependency on China and how it affects the EU’s economic interests. This short briefing provides an initial overview of existing, publicly known Chinese interests in EU ports.

Chinese investments in EU ports

In 2021, the EU exported €223 billion of goods to China and imported goods worth €472 billion. China is thereby Europe’s foremost trading partner when it comes to imports of goods, of which a substantial part passes through EU ports, in particular maritime ports. To stimulate economic growth, China has opened new global trade routes, enhancing its international presence by contracting and investing in a network of transport infrastructure, in the framework of its Belt and Road Initiative (BRI), launched in 2013. In line with this strategy, Chinese firms have since been developing economic interests in ports in European counties, including Greece, Germany, the Netherlands, Belgium, Spain and Italy.

The main players are two Chinese state companies – COSCO Shipping, the world’s largest shipping company, the third largest in the container transport sector, and the fifth largest port terminal operator, and China Merchants Port Holdings (the sixth largest port terminal operator globally) – as well as Hutchison Port Holdings (a subsidiary of CK Hutchison Holdings, a private company headquartered in Hong Kong and listed on the Hong Kong stock exchange), the second largest port terminal operator in the world.

The following developments have taken place in relation to COSCO and other Chinese companies when it comes to European ports.

In Germany in 2022, COSCO, which initially planned to take a larger stake in the company operating the Hamburg container terminal Tollerort, finally purchased a 24.9 % holding, following reported protests in the coalition government. In addition, Hutchison Port Holdings operates an inland multi modal terminal at Duisburg. According to a 2019 study, in Greece COSCO owns a majority stake in terminals in the port of Piraeus, operating two terminals via a subsidiary, and has operational control via a majority stake in the Piraeus port authority. Furthermore, China Merchants Port Holdings has a minority stake in Thessaloniki. In Belgium,COSCO owns a controlling stake in a container terminal in Zeebrugge and a minority stake in a container terminal in Antwerp. China Merchants Port Holdings has a minority stake in Antwerp and Hutchison Port Holdings operates an inland terminal in Willebroek. In the Netherlands, both COSCO Shipping and Hutchison Ports have stakes in container terminals in the port of Rotterdam. Hutchison Port Holdings operates two terminals, Euromax and Delta, which makes it the largest container terminal operator in Rotterdam. It also operates inland terminals in Venlo, Amsterdam and Moerdijk. In Spain,COSCO has controlling stakes in the largest terminals in the ports of Valencia and Bilbao. Hutchison Port Holdings also has a stake in Barcelona. In France, China Merchants Port Holdings has minority stakes in terminals in Montoir, Dunkirk, Le Havre and Fos. In Malta, China Merchants Port Holdings has a minority stake in Marsaloxlokk. In Sweden and Poland, Hutchison Port Holdings has stakes in Stockholm and Gdynia, respectively. In Italy in 2016, COSCO bought 40 % of the port of Vado Ligure. This operation also involved Hong Kong’s Qingdao Port International Development, which bought a further 9.9 % of the new container terminal. Until 2016, COSCO had a 50 % stake in the Conateco (Consorzio Napoletano Terminal Containers) terminal in Naples; it then sold its entire stake to MSC (Mediterranean Shipping Company). There has also been somemedia speculation over possible Chinese interest in the Italian ports of Taranto (which hosts an important Italian naval base) and Palermo.

EU action

In 2019, in its Strategic Outlook, the European Commission declared China ‘an economic competitor in the pursuit of technological leadership, and a systemic rival promoting alternative models of governance’. The same year, the EU adopted new rules for better screening of foreign direct investment into the EU, according to which countries have to consider the implications of foreign direct investment (FDI) in critical infrastructure, including ports. In December 2022, the EU adopted new rules for ensuring resilience of critical entities, including ports, in which the potential threat posed by FDI in critical infrastructure in the EU is acknowledged. The rules underline that services, the economy and the free movement and safety of EU citizens depend on the proper functioning of critical infrastructure.

The EU has also recognised the need to step up investment in infrastructure development around the world. In December 2021 it launched the Global Gateway, which aims inter alia to develop trade networks and transport hubs. It promotes smart, clean and secure links in digital, energy and transport and strengthens health, education and research systems across the world.

In addition to adopting legislation with the Council, such as the FDI screening rules, and rules on critical infrastructure, the European Parliament has recently adopted several resolutions on relations with China. On 16 September 2021, the Parliament voted a resolution calling for a new EU-China strategy, in which it stated that a future EU strategy on China should provide the necessary tools and data to address threats stemming from China, including via its BRI. It also called for greater coordination between the EU’s Connectivity Strategy and the Blue Dot Network in order to provide a sustainable alternative to the BRI. It stressed that BRI projects must be closely monitored, ‘including with regard to their negative political effects in the EU’.

Outlook

Analysts have pointed to significant uncertainties for the logistics sector in Europe, arising from Russia’s invasion of Ukraine, the impact of the pandemic and changing China-Russia and China-US relations. A 2022 study on the impact for the Netherlands’ maritime logistics sector developed a number of scenarios resulting from changing Chinese influence in the world. In one scenario, China plays a strong role in European logistics or becomes influential to the point of strategic dependence on China. In others, China’s role in European logistics is weakening either as a result of the roll-out of alternative infrastructure projects, such as the Global Gateway, or increasingly negative views of China’s investments in Europe, which build on negative views of globalisation and China’s role in it, as well as greater cooperation between Russia and China since the start of the war in Ukraine. For scenarios involving the increasing influence of China, the study suggests the need for cooperation to sustain long-term competitiveness and maintain a high level of prosperity, but points to the potential for a detrimental impact on the Netherlands’ ‘strategic room for manoeuvre’ and the competitiveness of Dutch companies.

Concerns have been voiced in recent years by both think tanks and governments in relation to the possible use of state-owned companies for political influence. Risks highlighted in relation to Chinese ownership of European ports include altering the flow of goods from one European port to another and having access to the inner workings of European container terminals. Whereas some have pointed to the apparent pro-China course of Greece since COSCO’s investment in the Port of Piraeus as an example, others say that gaining political leverage over Greece as an objective of COSCO or the Chinese Communist Party cannot be confirmed based on publicly-available information. While the political leadership could, if needed, gain political leverage by using state-owned port operators, they suggest doing this would be costly for the companies, so the Chinese government would most likely not use the companies as an ‘overt political tool’. Nonetheless, they suggest that port investments could be an indirect source of political leverage – the more a country’s economy benefits from the presence of Chinese port operators, the more it depends on good relations with China. Some have also raised concerns regarding large-scale investments by Chinese companies in European ports, some of which are logistical hubs for NATO equipment.

Read this ‘at a glance’ on ‘Chinese strategic interests in European ports?‘ in the Think Tank pages of the European Parliament.

Written by Katrien Luyten.

Russia’s unprovoked and unjustified invasion of Ukraine on 24 February 2022 has forced millions of people to flee Ukraine and seek refuge in the EU and neighbouring countries. Reacting swiftly, the European Union (EU) decided to grant these refugees EU-wide temporary protection; by the end of December 2022, 3.8 million third-country nationals were benefiting from this possibility. This first-ever activation of the Temporary Protection Directive has generally met with a very positive response, as it has avoided extreme pressure on national asylum systems and offered security to the people affected.

Temporary Protection Directive

According to United Nations data, Russia’s invasion of Ukraine has caused more than 8 million refugees to seek refuge elsewhere in Europe. The EU strongly condemned the aggression and moved quickly to grant protection to people fleeing Ukraine. Council Implementing Decision (EU) 2022/382 of 4 March 2022 – which entered into force the same day – took account of the mass arrival of displaced people from Ukraine and activated Council Directive 2001/55/EC of 20 July 2001 (the Temporary Protection Directive (TPD) for the first time ever. The TPD enables EU Member States to move rapidly to offer protection and rights to people in need of immediate protection to prevent national asylum systems from being overwhelmed. Although the directive had been invoked several times before, for instance in response to the migratory flows from North Africa in 2011 and the migration crisis in 2015, it had never actually been activated.

Temporary protection waives the need to examine individual applications and allows Ukrainian nationals – as well as other third-country nationals or stateless persons benefiting from international protection in Ukraine and their family members – to enjoy harmonised rights across the EU. These rights include access to a residence permit, education, medical care, housing, the labour market and social welfare assistance.
Once admitted to EU territory, these people can move freely within the EU, choose the Member State in which they wish to enjoy the rights attached to temporary protection, and join family and friends in the numerous diaspora networks across the EU. Temporary protection does not prevent these people from applying for international protection. When the temporary protection period ends, the general laws on protection and on aliens in the Member States will apply, including on return. A new European Commission website informs people fleeing the war in Ukraine about their rights, including their eligibility for temporary protection and their rights of travel within the EU.

By the end of December 2022, 3 826 620 displaced people from Ukraine were benefiting from temporary protection in the EU, with Germany (967 715), Poland (961 340) and Czechia (432 415) being the main host countries, according to Eurostat. These numbers may differ from the operational data collected by EU agencies, such as the European Union Asylum Agency (EUAA), or by international ones such as the United Nations High Commissioner for Refugees (UNHCR). The Member States hosting the highest numbers per 1 000 inhabitants were Czechia (41.1), Estonia (28.8), Poland (25.5) and Lithuania (23.3). Over 98 % of the people fleeing the war were Ukrainian citizens, the vast majority of them female (65 %); 14 % of the male refugees were boys aged 0 to 14. This substantial difference in numbers is owing to the fact that most men aged 18 to 60 are banned from leaving the country. Eurostat data nonetheless show an increase in the share of adult men since the start of the war (from 7 % in March 2022 to 26 % in December 2022). Moreover, men aged 18 to 64 represent 15 % of all beneficiaries of temporary protection in the EU. Temporary protection was initially granted for one year but was later prolonged until March 2024. Another extension of one year is possible, depending on how the situation evolves.

Implementation of the Temporary Protection Directive

The Commission, which coordinates cooperation and the exchange of information among the Member States through a ‘solidarity platform’, has produced operational and other guidelines to help them apply the directive. As this is the first time the directive has been activated and given the speed with which it had to be implemented and applied, from day one it has come under a lot of scrutiny. EU agencies, such as the EUAA and the Agency for Fundamental Rights (FRA), the intergovernmental Organisation for Economic Co‑operation and Development (OECD) and the European Council on Refugees and Exiles (ECRE) – a network of non-governmental organisations – are among those who have analysed the measures taken by the Member States to address the arrival of displaced people from Ukraine. Despite the emergence of divergent practices and policies because of different interpretations of the TPD – such as its scope and eligibility; reception support; access to rights; freedom of movement in the EU; and how to deal with circular movements to and from Ukraine –overall, assessment of the implementation has so far been positive.

During a November 2022 public hearing in the European Parliament on the TPD’s implementation, promising practices highlighted included enhanced and quicker registration and information provision, a more flexible approach to assessing documents and an integrated system covering various service providers. Things that could be done to improve the TPD’s implementation include applying the TPD more consistently; eliminating the practical, administrative and legal barriers to accessing rights; ensuring early and systematic identification of people with specific needs; and applying the lessons learned and good practices more broadly for the benefit of asylum management in the EU.

The FRA is monitoring the broader fundamental rights impact on the EU of the Russian war, paying specific attention to aspects such as the situation at the borders, the situation of children and of non-Ukrainian nationals fleeing the war to the EU, as well as the challenges of human trafficking, sexual and gender-based violence and xenophobic disinformation and hate speech.

Some claim that the EU is offering people displaced from Ukraine preferential treatment compared with the way asylum seekers, refugees and subsidiary protection holders from other countries, are treated under the EU’s asylum rules. In response, the Commission has pointed out the temporary nature of this protection, clarifying that as soon as it expires, the general laws on protection and on non-EU citizens in the Member States will apply. Given the current deadlock in the war in Ukraine, it remains to be seen if that will be the best way to handle the Ukrainian refugee situation in the longer term.

Lessons for the future Proposed crisis and force majeure regulation

As part of the proposal for an EU pact on migration and asylum, the Commission proposed a regulation addressing situations of crisis and force majeure in migration and asylum policy. The proposal – which would repeal the TPD – would address situations of migration and asylum crisis and force majeure more broadly, and grant those affected immediate protection status. The Commission insists that the crisis and force majeure proposal will give a solid response to needs on the ground while also catering to different situations. Despite this, it has received criticism, not least because of the narrow personal scope of immediate protection as compared to temporary protection, and because immediate protection, unlike temporary protection, would have a one-year duration, without the possibility of extension.

Potential impact on the EU asylum system

The 2015 migration crisis exposed a number of deficiencies and gaps in the EU’s policies on asylum. To address the situation, the Commission proposed a reform of the common European asylum system. Experts have already started analysing the possible impact of the EU’s response to the Ukrainian refugee arrivals on the future of the EU’s asylum system. The Swedish Institute for European Policy Studies argues that flexible models of responsibility-sharing between the Member States might be a more realistic option than static ones. This requires political will and unity among leaders. Furthermore, ‘political realities, particularly in the Council’ – as the European Policy Centre warns – seem to be ‘pointing in a different direction’ and ‘indicat[ing] the re-emergence and continued attachment to the earlier political dividing lines around solidarity’. The Hertie School agrees that the current willingness across the EU to welcome refugees from Ukraine illustrates a growing ‘geopolitisation’ of protection.

Read this ‘at a glance’ on ‘One year of temporary protection for people displaced from Ukraine?‘ in the Think Tank pages of the European Parliament.

Written by Luisa Antunes with Michael Sicaud-Clyet.

The European Union is committed to achieving climate neutrality by 2050, which requires a drastic increase in the share of energy from renewable sources in the electricity mix. However, the availability of some renewable energy sources is variable and intermittent, creating concerns about system reliability. Devising new energy storage capacities could solve this issue and contribute to the EU’s climate neutrality goal.

Historically, energy systems have been dominated by large power plants able to produce great quantities of energy in a short time. This centralised mode of production has the advantage of easily balancing supply and demand at any time. However, such primarily fossil fuel-powered plants, are not known for being nature-positive. As part of the European Green Deal, the Fit for 55 package aims at adjusting the EU climate laws to achieve climate neutrality, by reducing EU greenhouse gas emissions to at least 55 % by 2030 compared to 1990. With fossil fuels still constituting a large part of the energy mix, the EU will need to considerably increase its share of renewable energy to pursue this objective.

Renewable energy is a sustainable resource that naturally renews or replenishes itself. Common sources include wind, solar, geothermal energy, hydropower, biomass, and biogas. It is estimated that between 2018 and 2050, the worldwide renewable energy share in power generation will increase from 25 % to 86 %, with most of the increase coming from wind and solar. In the EU, over 60 % of the EU-28 electricity mix still had to become renewable, and further electrification is expected. However, a major obstacle hinders renewable energy penetration in the power grid: wind turbines and solar panels have variable, or intermittent, nature (e.g. they are dependent on weather and climate conditions), and thus cannot be programmed ‘on demand’ at the request of power grid operators to fulfil market needs, unlike most of the fossil fuel power plants they will replace. Power grids necessitate a permanent balance between production and demand. Therefore, it is an ongoing challenge to increase the share of renewable energy in the electricity grid.

One of the ways to achieve this is through energy storage. The main types of energy-storing systems are: electrochemical (batteries), mechanical (pumped hydro storage), and chemical (hydrogen). These technologies can help provide flexibility, encompassing different timescales: from a discharge time of hours for batteries, to several months for pumped hydro storage. Hydrogen has an average power range (1 kW‑1 GW) as well as an average life duration (<30 years), but very poor efficiency (20‑40 %; hydrogen will also likely be used to decarbonise hard-to-abate industrial processes, so capacity may be built up despite the poor efficiency). Both the power range (1 kW‑50 MW) and life duration (<20 years) of batteries are lower, but they are more efficient (90‑98 %). A third possibility is pumped hydro storage, which has the highest power range (10 MW‑3 GW) and life duration (>80 years). However, it has intermediate efficiency (70‑85 %) and is less environmentally sustainable, as it contributes to biodiversity loss in aquatic life.

Energy storage system limitations include their limited storage capacity, high cost, and extensive requirements in terms of physical space and transportation infrastructure. Thus, the process of storing energy still needs to be optimised to reach the EU’s commitment to decarbonise the energy sector by 2050.

Potential impacts and developments

Optimising energy storage would allow an increase in wind and solar energy use. Since 2016, the increase in annual battery installations in the EU has been accompanied by a rising share of renewables in the energy mix and a decrease in the share of fossil energy, laying the groundwork for the virtuous cycle that will be required in the future to drive adoption of renewables. Innovation is key to improving the elasticity of substitution between renewable and fossil-fuel energy production, as it enables the full potential of these natural resources to be exploited by dispatching their energy to the grid whenever it is needed.

Another beneficial impact would be on the stability of the power grid, where deferring large quantities of excess energy over different periods could help stabilise fluctuation in supply and demand. At a time of geopolitical and economic uncertainty, energy storage could enhance the EU’s energy security, reducing dependence on third-country fossil fuels, strengthening strategic autonomy and potentially increasing its geopolitical leverage. Developing climate-neutral energy storage systems and technologies would ensure larger distribution and prevent extreme price fluctuations, contributing to affordable energy, a priority in tackling energy poverty in the EU.

However, several barriers persist in developing and deploying storage systems. First, how to increase the capacity and efficiency of existing technologies, whilst ensuring an ideal economic and regulatory context, for their development. Moreover, in the short term, the impact of energy storage on greenhouse gas emissions is more uncertain and would depend on the competitiveness of renewable energy sources compared to fossil fuels. There is also a wide application gap at national level: most Member States require storage facility operators to pay double network or energy taxes (as both producers and consumers), a burden that discourages its development. Unlike for gas, a common regulatory approach for electricity storage is still missing. In addition, energy storage can have a harmful impact on the environment and human health: the mining, use, disposal and recyclability of raw materials – especially for batteries – are yet unresolved issues that further touch upon issues of human rights and labour standards.

Anticipatory policy-making

Energy storage is part of the principles stipulated in EU law, that Member States, regulatory authorities, and system operators must follow to deliver appropriate investment incentives for generation and efficient electricity dispatch. In its 2020 resolution, the European Parliament called on the European Commission to develop a comprehensive strategy on energy storage to enable the EU’s transformation to a climate-neutral economy. The Commission’s REPowerEU plan further highlights energy storage as a significant asset to ensure the flexibility and security of the EU’s energy supply. Currently, only 5 % of the EU’s installed capacity is used for storage. The European Commission estimates that the EU will need to store six times more energy to achieve net-zero greenhouse gas emissions by 2050.

The EU supports energy storage in three main areas: a strategic framework for the development of energy storage technologies, EU research and innovation funding instruments, and a legislative framework for its development. Legislative and non-legislative policy action on market regulation and economic incentives could help boost demand by lowering market prices and resolving double taxation issues.

Several Horizon Europe research and development projects are currently in place to find ways to increase the capacity and efficiency of existing technologies and make power grids more flexible. New technologies will need to be developed to increase the share of renewable energy in the EU and the consumer contribution to decentralised energy storage.

Pumped hydro storage can be harmful for biodiversity, and batteries’ raw materials need to be more recyclable. To ensure energy storage is more nature positive, as well as technological and economically viable, standards to assess the environmental impacts of energy-storage systems should be developed and extended to other forms of energy storage.

Read this ‘at a glance’ on ‘What if increased energy storage could help fix climate change?‘ in the Think Tank pages of the European Parliament.

Written by Marcin Grajewski.

Russia’s war on Ukraine has been redefining the European Union’s security, defence and foreign policies, changing its priorities on the continent and globally. The biggest military conflict on European soil since World War II has shone a spotlight on territorial defence and the shifting international order. Before the brutal conflict erupted a year ago, security and defence policy had focused mainly on conflict prevention and the strengthening of international security in general.The main foreign policy objectives had included the preservation of peace, strengthening international security and promoting international cooperation.

The war has highlighted the importance of NATO and transatlantic relations for European security, despite efforts to bolster the EU’s ‘strategic autonomy‘. The conflict has solidified EU solidarity in foreign and security policy, but also brought to light certain divisions among Member States.

This note gathers links to recent publications and commentaries from many international think tanks on European defence, security and foreign policies. It includes only the most recent papers related to Ukraine. Earlier reports on Russia’s war on Ukraine can be found in the previous item in the ‘What think tanks are thinking’ series.

The EU must reconcile geopolitics and democracy
Carnegie Europe, February 2023

Can Europe influence U.S.-China rivalry?
Carnegie Europe, February 2023

The unfulfilled promise of EU foreign and security policy towards Iran
Centre for European Policy Studies, February 2023

The South China Sea and Indo-Pacific in an era of ”multipolar” competition
Centre for European Policy Studies, February 2023

The impact of the war in Ukraine: Annual report 2022
Centre for European Reform, February 2023

Europe and the Iran nuclear threat
Centre for European Reform, February 2023

A new momentum grows for UK-France defence cooperation
Chatham House, February 2023

Seven ways Russia’s war on Ukraine has changed the world
Chatham House, February 2023

Culture notes: Will the EU find its voice at last?
Chatham House, February 2023

Europe: Crossing the East-West divide
Deutsche Gesellschaft für Auswärtige Politik, February 2023

The European Union and Latin America: Renewing the partnership after drifting apart
Deutsche Gesellschaft für Auswärtige Politik, February 2023

Repair, replace, reimburse: Sustaining a European tank coalition for Ukraine
European Council on Foreign Relations, February 2023

Russia’s defeat in Ukraine must be the top transatlantic priority
European Policy Centre, February 2023

One year of war in Ukraine: Why Western policy towards Russia has not changed enough
Finnish Institute of International Affairs, February 2023

Leopard 2 tanks and Ukraine’s war: Keeping an eye on the geopolitical ball
Friends of Europe, February 2023

Pushing back against the authoritarians: Everyone can play a part, not just the military
Friends of Europe, February 2023

Watching China in Europe: February 2023
German Marshall Fund, February 2023

Turkey’s disengagement from the European Union
German Marshall Fund, February 2023

Comment la guerre a déjà changé l’Union européenne?
Institut Jacques Delors, February 2023

Guerre en Ukraine et nouvel ordre du monde
Institut Montaigne, February 2023

Back to the roots: Nato returns to territorial defence in Europe
Istituto per gli Studi di Politica Internazionale, February 2023

European missile defence: Right questions, unclear answers?
International Institute for Strategic Studies, February 2023

La guerre en Ukraine et l’action de l’Union européenne : expertise technique et politique
Robert Schuman Foundation, February 2023

Germany’s fragile leadership role in European air defence
Stiftung Wissenschaft und Politik, February 2023

Is European strategic autonomy over?
Carnegie Europe, January 2023

Is European defence missing its moment?
Centre for European Reform, January 2023

Europe’s strategic technology autonomy from China
Deutsche Gesellschaft für Auswärtige Politik, January 2023

How Europe can shape changes in the world economy
Deutsche Gesellschaft für Auswärtige Politik, January 2023

Strategy, capabilities, technology: A manifesto for new European defence
European Council on Foreign Relations, January 2023

Will 2023 mark a shift towards a more realist EU foreign policy?
Friends of Europe, January 2023

What to watch in 2023
German Marshall Fund, January 2023

Souveraineté numérique: Politiques européennes, dilemmes américains
Institut français des relations internationales, January 2023

Naval combat systems: Developments and challenges
Istituto Affari Internazionali, January 2023

Europe-Africa relations in a multi-crises world: Turning the page after COVID-19, the EU-AU Summit and the war against Ukraine
Istituto Affari Internazionali, January 2023

Geopolitics and energy security in Europe
Friedrich Ebert Stiftung, January 2023

Time to re-engage with Kosovo and Serbia: Strengthening EU foreign and security policy amidst internal contestation
Barcelona Centre for International Affairs, December 2022

Centre of gravity: Security and defence in the Indo-Pacific – What role for the European Union
Brussels School of Governance, December 2022

A tactical pause in relations with the West: China plays on hopes for peace
Centre for Eastern Studies, December 2022

Can we ever build a common European home? The perils and promise of an old idea
Centre for European Policy Studies, December 2022

The rise of mega-regions: Eurasia, the Indo-Pacific, and the transatlantic alliance in a reshaped world order
Centre for European Policy Studies, December 2022

Strengthening US-EU cooperation on trade and technology
Chatham House, December 2022

Open strategic autonomy in European defence: what countries must do
Clingendael, December 2022

Realising the EU hybrid toolbox: opportunities and pitfalls 

Clingendael, December 2022

Nach der Ostpolitik Lehren aus der Vergangenheit als Grundlage für eine neue Russland- und Osteuropapolitik
Deutsche Gesellschaft für Auswärtige Politik, December 2022

Fragmentation nation: How Europeans can help end the conflict in Yemen
European Council on Foreign Relations, December 2022

The growing EU engagement in Central Asia: Challenging the Russian predominance in its traditional backyard
European Institute for Asian Studies, December 2022

The EU-ASEAN commemorative summit: Advancing bilateral cooperation in challenging times 

European Institute for Asian Studies, December 2022

Seize the geopolitical moment: The Western Balkans and European security
Friends of Europe, December 2022

Watching China in Europe: December 2022
German Marshall Fund, December 2022

Analysing political acceptability of reforms among national policymakers
GLOBSEC, December 2022

Not one without the other: realigning deterrence and arms control in a European quest for strategic stability 

Hague Centre for Strategic Studies, December 2022

Stocks militaires: une assurance-vie en haute intensité?
Institut français des relations internationales, December 2022

EU foreign policy integration at times of war: From short-term responses to long-term solutions
Istituto Affari Internazionali, December 2022

Naval defence cooperation in the EU: Potential and hurdles 

Istituto Affari Internazionali, December 2022

Military expenditure: Transparency, defence inflation and purchasing power parity
International Institute for Strategic Studies, December 2022

How to save the WTO with more flexible trading rules
Peterson Institute for International Economics, December 2022

EU responses to the potential of an armed conflict in the Taiwan Strait
Polish Institute of International Affairs, December 2022

A strategic feasibility test: Is the old European dream of peaceful multilateralism dead?
Brussels School of Governance, November 2022

The US-EU trade and technology council: Assessments and recommendations
Centre for Strategic and International Studies, November 2022

Promoting the rule of law in EU external relations: A conceptual framework
College of Europe, November 2022

The war against Ukraine and European defence: When will we square the circle?
Egmont, November 2022

A like-minded partner? India’s evolving domestic politics and implications for the EU
European Institute for Security Studies, November 2022

After the storm: The EU in uncharted waters
European Policy Centre, November 2022

Diversity and power in the European Union
European Policy Centre, November 2022

Securing our future: 100 African and European voices on climate change, conflict and security
Friends of Europe, November 2022

Euro-Mediterranean economic cooperation in the age of deglobalisation
Istituto Affari Internazionali, November 2022

Read this briefing on ‘EU security, defence and foreign policies‘ in the Think Tank pages of the European Parliament.

Written by Lasse Boehm and Alex Wilson.

The European Union acted decisively and unanimously in condemning the brutal war and its immense human cost, imposing sanctions on Russia and supporting Ukraine. Russia’s invasion of Ukraine on 24 February 2022 also triggered concern over the EU’s energy security. Throughout 2022, Europe showed determination to fill gas storage facilities and find additional gas supplies elsewhere. During the winter of 2022/2023, the EU has fared better than initially feared. Gas demand has been lower than in previous years thanks to EU efforts to save energy, and a major increase in shipments of liquefied natural gas (LNG) helped buffer the reduction of supplies from Russia.

But this should not leave any room for complacency. Part of the EU’s success is down to favourable circumstances such as warmer than usual weather in the winter of 2022/2023 and lower LNG demand in China as a consequence of COVID-related restrictions, and it is not clear yet how enduring the improvements in energy efficiency will be. The prospects for next winter are highly uncertain, given the inherent difficulty in predicting metereological conditions or the state of the global economy, as well as the possibility of a complete interruption of fossil fuel supplies from Russia, which could hamper the ability of storage sites to fill over the summer period.

While actions taken so far have managed to buffer the immediate impact of the war, the harder reality is that the EU remains dependent on outside suppliers for its energy security. In 2023, the EU will have to shift its focus from crisis response mode to a long-term vision of how it wants to manage its energy security – from sprint to marathon. This includes the supply of raw materials, renewables manufacturing, increased interconnections, and the future of joint energy purchasing. High inflation and the growing cost of capital could make it harder for new renewable investments to get off the ground, and the EU remains far from meeting some of its more ambitious goals in this respect.

Read the complete briefing on ‘EU energy security and the war in Ukraine: From sprint to marathon‘ in the Think Tank pages of the European Parliament.

EU dependency on energy imports from Russia (million tonnes of mineral fuels – oil, gas and solid fossil fuels) LNG capacity per Member State (billion m3, October 2022) Gas storage (available storage capacity (Twh) and filling rate)

Citizens often send messages to the President of the European Parliament (or to the institution’s public portal) expressing their views on current issues and/or requesting action from the Parliament. The Citizens’ Enquiries Unit (AskEP) within the European Parliamentary Research Service (EPRS) looks into these issues and replies to the messages, which may sometimes be identical as part of wider public campaigns.

The President of the European Parliament has recently received a large number of messages expressing concerns about the development of the East African Crude Oil Pipeline (EACOP) and calling for the European Union to fund Uganda and Tanzania’s green energy transition. In its resolution of 15 September 2022, Parliament expressed ‘grave concern about the human rights violations in Uganda and Tanzania linked to investments in fossil-fuel projects’. The EU, together with its member countries, is the largest provider of climate financing in the world.

Please find below the main points of the reply sent to citizens who took the time to write to the European Parliament and its President on this matter.

Main points made in the reply in English European Parliament position on the East African Crude Oil Pipeline (EACOP)

The European Parliament is monitoring the political situation in Uganda and Tanzania closely. As you are aware, the European Parliament adopted a resolution on 15 September 2022, in which it expresses ‘grave concern about the human rights violations in Uganda and Tanzania linked to investments in fossil-fuel projects’.

The European Parliament ‘calls for the EU and the international community to exert maximum pressure on Ugandan and Tanzanian authorities, as well as the project promoters and stakeholders, to protect the environment and to put an end to the extractive activities in protected and sensitive ecosystems’. In addition, the European Parliament ‘calls on the promoters of the EACOP project in Uganda and Tanzania to resolve all disputes that should have been resolved prior to the launch of the project’. Finally, Parliament urges TotalEnergies to ‘study the feasibility of an alternative route to better safeguard protected and sensitive ecosystems and the water resources of Uganda and Tanzania.’

Financing of energy transition

The European Union strongly supports the transition to a low-carbon, more resource-efficient and sustainable economy globally. This is part of the EU’s efforts to achieve its climate and energy goals in line with the Paris Agreement and the 2030 UN Sustainable Development Goals.

The EU, together with its member countries, is the largest provider of climate financing in the world. More than a third of its budget for support to neighbouring and developing countries is earmarked for efforts to tackle climate change. The EU continues its commitment towards the jointly set goal of mobilising USD 100 billion per year to 2025, to contribute to climate action support regarding developing economies. The aim is to support developing countries to implement the 2015 Paris Climate Change Agreement.

In 2021, the European Union mobilised €23.04 billion from public sources to support developing countries to reduce their greenhouse gas emissions and adapt to the impacts of climate change.

Written by Marcin Szczepański.

The United States (US) has been imposing sanctions on Russia since its illegal annexation of Crimea in 2014. Since the outbreak of Russia’s war on Ukraine in February 2022, these sanctions have become increasingly severe and far-reaching. The US, together with the European Union and other close allies, has targeted Russian assets, international trade and the economic sectors involved in the war, as well as specific individuals and entities engaged in sanctioned activities.

The sanctions seek to weaken Russia’s ability to wage war by dampening its financial capacity and economy, and by blocking its various sectors, such as industry, defence and energy, from accessing technology and inputs. They are also meant as punishment for Russian elites and their cronies involved in many aspects of the war, from financing to disinformation.

To apply the abovementioned sanctions, the US cooperates with the EU through various fora such as the Trade and Technology Council, focused on export controls. A similar forum is the G7, which is pivotal in the flagship actions against the invaders; examples include blocking Russian banks’ access to the SWIFT payments system and introducing an oil price cap. While often identical or similar, the US and the EU sanction regimes differ in terms of the activities covered and persons and entities targeted.

While all these sanctions have had a tangible negative impact on Russia’s economy and long-term competiveness, they cannot materialise with the same speed as a military attack. Moreover, Russia is making continuous and active efforts to dodge these sanctions, not without help from its allies and trading partners, albeit with varying degrees of success.

The European Parliament has been a staunch supporter of introducing and maintaining sweeping and regularly revised sanctions against Russia. It has also voiced its support for strong transatlantic cooperation on sanctions and has urged the Council of the EU to substantially widen their coverage.

Read the complete briefing on ‘Russia’s war against Ukraine: US sanctions‘ in the Think Tank pages of the European Parliament.

Written by Gisela Grieger.

Since Russia launched its unprovoked war against Ukraine on 24 February 2022, the United States (US) has worked in lockstep with allies and partners, notably the European Union, its Member States and other G7 countries, towards a strong collective response. This has included several packages of economic sanctions against Russia aimed at severing the country from technologies and financial sources that fuel its war, and directly targeting the persons and entities involved. The US in cooperation with the EU has garnered support from a large majority of the international community to condemn Russia’s invasion of Ukraine as a violation of the United Nations (UN) Charter, and has worked towards isolating Russia in multilateral fora, including within the G20, in defence of the US-led, rules-based international order. Moreover, the US has been at the forefront of multilateral actions to tackle the multiple adverse implications of Russia’s war of aggression both for Ukraine and the whole world, including food and energy insecurity.

The US has provided significant military, financial and humanitarian assistance to Ukraine and its EU neighbours, while steering clear of engaging in direct confrontation with Russia. In January 2023, the US decided to send 31 M1 Abrams tanks, but no fighter jets. By 20 November 2022, the US had provided a total of almost US$48 billion in assistance to Ukraine. In December 2022, the 117th US Congress (2021‑2022) passed government spending legislation that appropriates an additional US$45 billion for Ukraine. By then, Congress had already appropriated a total of US$68 billion in support for Ukraine in three different packages. However, modifications to Congressional appropriations for Ukraine cannot be excluded, owing to the ongoing controversy over raising the US federal debt ceiling. Moreover, the December 2022 government spending legislation authorises for the first time US Department of Justice transfers of assets forfeited by Russian oligarchs to assist Ukraine. Recent polls consistently show a solid majority (65 %) of US respondents support US assistance to Ukraine. However, there is a significant partisan gap in the degree of support, with 47 % of Republicans stating the US spends too much, while only 10 % of Democrats say so.

This briefing complements an earlier ‘At a glance’ note by Matthew Parry and Marcin Szczepański.

Read the complete briefing on ‘Russia’s war against Ukraine: US support‘ in the Think Tank pages of the European Parliament.

Written by Marianna Pari with Radosław Kleina.

Providing an overview of the European Union’s economic and budgetary situation and challenges for 2023, a year with many unknowns, the publication of the European Parliamentary Research Service (EPRS) seventh annual ‘Economic and Budgetary Outlook for 2023‘, was the occasion for an online roundtable on 7 February 2023. This edition’s special focus sheds light on the EU’s economic governance framework and its impending revision.

Speaking at the event were Nicolae Ștefănuță (Renew, Romania), Member of the Committee on Budgets and rapporteur on the 2023 EU budget, Géraldine Mahieu, Director for Investment, growth and structural reforms at the European Commission’s Directorate‑General for Economic and Financial Affairs and Martin Larch, Head of the Secretariat of the European Fiscal Board. The event was hosted by Etienne Bassot, Director of the EPRS Members’ Research Service. Tim Peters, Head of the EPRS Budgetary Policies Unit, moderated a lively and insightful discussion on the EU’s economic governance framework, the revision of the multiannual financial framework (MFF) and the use of Recovery and Resilience Facility (RRF) funds.

Is the EU Budget fit for purpose?

In Nicolae Ștefănuță’s opinion, the current multi-annual EU budget is not fit for purpose and does not allow for an adequate response to considerable challenges, such as the Russian war of aggression against Ukraine and the ensuing cost for financial, military and humanitarian assistance as well as high energy prices and inflation. He underlined that a full revision of the MFF, and not merely a limited review, is therefore necessary. Mr Ștefănuță explained the political consequences for EU citizens of the lack of sufficient resources. Referring to the system of own resources, he expressed the opinion that an EU budget capped at around 1 % of the Union’s gross national income (GNI) was far from being sufficient, as already evidenced in the 1977 MacDougall Report.

How do NGEU and the RRF support the European economy?

Referring to the economic outlook for 2023, Géraldine Mahieu of the European Commission remarked that the EU economies had shown remarkable resilience over the past year. She took the audience through the reasons why, despite the Russian war of aggression against Ukraine and the ECB’s tight monetary regime, economic growth had turned out to be higher than initially expected. While this trend could continue in 2023, there are, however, great uncertainties.

Ms Mahieu explained the implementation of RFF funds in detail, standing at €142.3 billion, and the impact they are already having on the economy, not only through the investment component, but additionally through the reform measures included in the national plans. She underlined that acting together also enhanced convergence. According to Ms Mahieu, the total impact was estimated on average at a 1.3 % increase in gross domestic product (GDP), of which one third was the result of positive spill-over effects across Member States. In relation to the energy crisis, Ms Mahieu explained that a total of €270 billion remains available for the Member States for the REPowerEU programme, which aims to achieve independence from Russian fossil fuels while supporting the green transition. Such resources come on top of those already allocated to investment measures for the green transition as part of the agreed national recovery plans. Ms Mahieu pointed out that the experience of implementing the RFF had proved to be crucial in designing an urgent response to the energy crisis. With regard to the economic governance, the aim is to make this framework more simple, more transparent and effective, and increase Member States’ ownership.

Economic outlook for 2023 and economic governance review

The third panellist, Martin Larch provided the European Fiscal Board’s perspective. He explained why 2023 is a very particular year and how views diverge, depending whether we consider yearly or quarterly forecasts. Mr Larch pointed out that, even though from an annual perspective 2023 looks like a year of economic slowdown – based on quarterly data, it appears that the economic slowdown is already behind the EU, with most of the Member States returning to or exceeding pre-pandemic GDP levels. Mr Larch elaborated on how the fiscal response to the energy crisis has affected the terms and balance of trade with countries exporting energy to the EU. Mr Larch also pointed out that the attempt to compensate households for price increases clashes with the European Central Bank’s efforts to stifle inflation.

Focusing on Member States’ indebtedness and the applicable fiscal rules, Mr Larch went on to explain how EU countries are grouped according to their debt-to-GDP ratio, and therefore have varying capacity to overcome shocks and recover and provided insight into how that influences their position during Council discussions on fiscal rules. Continuing his reflections on the future of the economic governance framework Mr Larch pointed out the inherent risk of continuing to govern under unclear rules. In response to a question about the EU having a central fiscal capacity, Mr Larch noted that the European Fiscal Board supports this idea and added that, from a risk-sharing point of view, it would be desirable to have a larger common budget with the possibility of running a deficit when necessary. However, he acknowledged that that presented a political challenge.

During the Q&A session, Mr Ștefănuță evaluated the RRF instrument positively, but defended an enhanced role for the European Parliament, in particular in the scrutiny of expenditure. To ensure democratic legitimacy, the various off-budget instruments should be part of the EU budget, including the funding of a possible future ‘European Sovereignty Fund’. In the lively discussion that followed, Ms Mahieu underlined that the RRF is subject to the discharge procedure, that the European Parliament has been involved in the development of the RRF at several stages, and the continued dialogue and exchange of information between the Commission and Parliament. Ms Mahieu described the measures taken by the European Commission to verify that RRF funds were spent appropriately, including checks and audits of milestones and targets, and the publication of the largest recipients of RRF funds.She also explained the process to ensure that funds are effectively spent on the green and digital transformation.

Written by Gisela Grieger.

On 7 February 2023, the President of the United States, Joe Biden, gave his State of the Union (SOTU) address to a joint session of the 118th US Congress (2023-2024). Unlike in 2022, when the US had a ‘united’ government, with the President’s party, the Democrats, holding the majority in both chambers of Congress, Biden now faces a ‘divided’ government, with a Republican-led House of Representatives, and has to decide on a potential second-term bid in 2024. While in 2022, Russia’s then newly launched war of aggression against Ukraine featured prominently in the SOTU, references to US foreign policy in 2023 played only a marginal role. A key priority of Biden’s speech was to make benefits of his legislative achievements tangible for US voters. In contrast to 2022, President Biden ‘recycled’ several proposals that have not (yet) materialised, rather than presenting new ones.

Background

The SOTU address is mandated by the US Constitution, which in Article II, Section 3, Clause 1 provides that the President ‘shall from time to time give to the Congress Information of the State of the Union, and recommend to their Consideration such measures as he shall judge necessary and expedient’. From 1790 to 1946, the speech was referred to as the ‘Annual Message’, and since 1947, it has been known as the SOTU address. Over time, both its content and form have changed. Some US presidents presented the address in writing, albeit most of them in-person. President Biden gave his 2023 SOTU address against the backdrop of a challenging political situation for his domestic policy agenda in the wake of the 2022 mid-term election and ahead of the 2024 presidential elections. Since January 2023, the House of Representatives has a narrow (222-213) Republican majority, while the Senate is controlled by a razor-thin (51-49) Democratic majority. The Republican Party has been engulfed both in infighting over its future direction and in leadership issues, as was on full display during the marathon 15 voting rounds to elect the new Speaker of the House, Kevin McCarthy (R-California). The election process was marked by a group of far-right MAGA (Make America Great Again) and Freedom Caucus holdouts who extracted sweeping House rule concessions from McCarthy in exchange for abandoning their opposition to him. Democrats elected the first House Minority Leader of colour, Hakeem Jeffries (D-New York), unanimously.

Domestic policy

President Biden presented the US economy’s positive trends as regards job creation, the unemployment rate, inflation, energy prices, the number of new small business set-ups, and the reduction of the federal deficit. The data he floated were quickly fact-checked by several media and variously found to be mostly true, to be lacking context and partly exaggerated, or to be inaccurate. Biden also recalled the major tenets of his transformative vision for the US economy. These include building an economy ‘from the bottom up and the middle out, not from the top down’, i.e. an economy that grows the American middle-class by creating new manufacturing jobs through industrial policy initiatives, and reverses a past trend of importing goods and exporting jobs. Biden was eager to show-case how the bills he signed into law would make a difference for individual Americans. The list of bills included, inter alia, the Infrastructure Investment and Jobs Act, the Chips and Science Act, the Inflation Reduction Act (IRA), the Bipartisan Safer Communities Act, the Election Count Reform Act and the Respect for Marriage Act. Biden elaborated extensively on the ‘unfair’ US tax system, stressing that he signed into law a minimum corporate tax of 15 %, ‘less than a nurse pays’, and highlighting the need to continue funding long-standing social security and healthcare entitlement programmes, such as Medicare for seniors. He proposed, among other things, to introduce a minimum tax on billionaires who should not ‘pay a lower tax than a school teacher or firefighter’. He ‘recycled’ a laundry list of social policy proposals – including pre-school for 3- and 4-year-olds, paid leave, and restoring the child tax credit to halve child poverty – unlikely ever to get Republican buy-in. He took issue with large US companies, calling out Big Pharma’s prescription drug prices, much higher than those in comparable OECD countries (the IRA caps insulin prescription costs at US$35 per month, but only for seniors on Medicare), and oil companies’ buybacks of their stocks as opposed to investing in fixed assets to exploit more oil and thus reduce energy prices. On the consumer protection agenda, he made the case for a junk fee prevention act to rein in companies requiring excessive fees (‘junk fees’) from consumers, and for adopting bipartisan Big Tech legislation not passed in the last Congress. He called for passing the Protecting the Right to Organize (PRO) Act that seeks to ban ‘non-compete clauses‘, which limit job changes, from being imposed on workers. Against the backdrop of rising crime and police violence against people of colour, Biden called for police reform, a reintroduced ban on assault weapons, and more resources under his new border plan to address illegal immigration at the border with Mexico. Finally, he called for continued efforts on his four-part 2021 Unity Agenda on bipartisan issues: cancer, fentanyl, mental health, and veterans.

Foreign policy: Ukraine and China

In the presence of Ukrainian Ambassador Oksana Markarova, President Biden stated that ‘America is united in our support for your country’, adding, ‘We will stand with you as long as it takes.’ However, Biden did not go into details of past and future US support. Recent polls show that 47 % of Republicans believe the US is doing too much for Ukraine, compared with only 10 % of Democrats. Critics have argued that President Biden missed an opportunity to prepare Americans for a longer war in Ukraine. A Chinese spy balloon intruded into US air space a few days before the SOTU address, hovering over sensitive military facilities before being shot down over the Atlantic Ocean. Biden addressed Republican criticism that the balloon should have been shot down earlier, before completing its mission, and that US national security had been compromised. He stated, ‘Today, we’re in the strongest position in decades to compete with China or anyone else in the world. I am committed to work with China where it can advance American interests and benefit the world. But make no mistake: … if China threatens our sovereignty, we will act to protect our country. And we did.’ At least three such balloon intrusions had occurred under the Trump administration. On 9 February 2023, the House adopted a resolution in a bipartisan 419-0 vote condemning the intrusion.

SOTU address – A launch pad for Biden’s potential presidential bid for 2024?

During his SOTU address, President Biden did not reveal whether he would run for a second term. Some commentators have pointed to hints that could suggest his intention to run again. They include not only Biden’s focus on strong fundamentals of the US economy, legislative accomplishments, and unfinished business, but also his frequent efforts to reach out to his online audience (down 28 % from 2022) and explain in an unfiltered, unedited way how it would benefit from his agenda. His repeated direct appeals to Americans watching from home come as no surprise, as Biden’s approval rating stands in the low 40 %. Six in 10 Americans fail to see how Biden’s legislative wins benefit their daily lives. One reason, according to Biden, is that implementation of laws passed in 2022 has only just begun, and benefits will take time to materialise. A majority of Democrats consider Biden too old to run. However, the discovery of classified documents from his time as vice-president during the Obama administration – both in his former office at the Penn Biden Center for Diplomacy and the Global Engagement think-tank in Washington DC, and in his private home in Wilmington (Delaware) – does not appear to have affected him too much so far. In an ABC News poll of February 2023, 48 % of respondents stated that Biden ‘acted wrongly but not intentionally’, while 45 % said that Trump acted ‘intentionally’ and ‘did something illegal’. Biden had criticised former President Trump in a classified-document case of different dimensions and circumstances.

Working across the aisle with Republicans

During the 2022 mid-term election campaign, Biden warned of MAGA Republicans being a threat to US democracy. In his 2023 SOTU speech, by contrast, he portrayed his ‘Republican friends’ as partners in governance during the first two years of his presidency, putting conciliation over division in line with his aspiration ‘to restore the soul of the nation’ and ‘to unite the country’. In spite of Republican opposition in the House and looming House Oversight Committee investigations, including into his son, Hunter Biden, President Biden repeated his unwavering conviction that, despite their big differences, Democrats and Republicans could come together to craft compromise legislation in the next two years, stressing that he had signed some 300 bipartisan bills since taking office. A first litmus test for bipartisanship will be for President Biden and Speaker McCarthy to hash out an agreement on raising the federal debt ceiling by June 2023 at the latest, to avoid a US debt default either with or without government spending cuts.

Read this ‘at a glance’ on ‘President Biden’s 2023 State of the Union address‘ in the Think Tank pages of the European Parliament.

Written by Marcin Grajewski.

During his first visit to the European Parliament and the European Council, Ukrainian President Volodymyr Zelenskyy appealed to the European Union to provide his country with aircraft and other military equipment needed to repel Russia’s further military aggression. Greeted with a standing ovation in the European Parliament, Zelenskyy said that Ukraine was not only defending its own independence, but also the ‘European way of life’. EU leaders vowed to stand by Ukraine with steadfast support, but Member States have so far failed to make a firm commitment to send fighter jets to Kyiv.

In recent weeks, Russia has been pouring tens of thousands of freshly mobilised soldiers into Ukraine in a move likely in anticipation of a big offensive in February, coinciding with the first anniversary of the war. Russia has boasted of initial gains, but progress has been incremental at best. Overall, there is little movement at the front-line on either side, as the armies are locked in battle in snow-covered trenches, which both sides describe as the deadliest fighting of the war.

This note gathers links to the recent publications and commentaries from many international think tanks on Russia’s war on Ukraine. Earlier analyses of the war can be found in a previous edition of the ‘What Think Tanks are Thinking’ series.

More intensive arms supplies and training for the Ukrainian army
Centre for Eastern Studies, February 2023

Ukraine business resilience can inform reconstruction
Chatham House, February 2023

How Ukraine’s invention and resilience confounds Russia
Chatham House, February 2023

Germany too slow in arming Ukraine
Chatham House, February 2023

NATO can learn from Ukraine’s military innovation
Chatham House, February 2023

Expert insights: Russia and Ukraine
Clingendael, February 2023

Europe: Crossing the East-West divide
Deutsche Gesellschaft für Auswärtige Politik, February 2023

Sailing through the storm: Türkiye’s Black Sea strategy amidst the Russian-Ukrainian war
European Union Institute for Security Studies, February 2023

Leopard 2 tanks and Ukraine’s war: Keeping an eye on the geopolitical ball
Friends of Europe, February 2023

The Russians aren’t complying with the New START Nuclear Arms Control Treaty: Now what?
Heritage Foundation, February 2023

What is America’s strategic interest in Ukraine?
Hoover Institution, February 2023

Russian offensive campaign update
Institute for the Study of War, February 2023

Russian offensive campaign assessment
Institute for the Study of War, February 2023

A tale of two wars and the pitfalls of success
Rand Corporation, February 2023

Waffenlieferungen an die Ukraine
Stiftung Wissenschaft und Politik, February 2023

No time for timidity in Ukraine
Brookings Institution, January 2023

How the war in Ukraine hinders US-Russian nuclear arms control
Brookings Institution, January 2023

The long war in Ukraine
Brookings Institution, Foreign Affairs, January 2023

Refugees must be central to the reconstruction of Ukraine
Brookings Institution, January 2023

Scholz’s tank decision upends Germany’s long affair with Russia
Carnegie Europe, January 2023

Nearly one year in: How does this war end?
Carnegie Europe, January 2023

Ukraine: A wave of dismissals against a background of corruption
Centre for Eastern Studies, January 2023

Western tanks won’t reach Ukraine before spring
Centre for Eastern Studies, January 2023

Germany, Russia and Ukraine: From ‘turning point’ to missing the point
Centre for European Reform, January 2023

Is European defence missing its moment?
Centre for European Reform, January 2023

The West is sending light tanks to Ukraine: Will they make a difference?
Council on Foreign Relations, January 2023

The Scholz way
Deutsche Gesellschaft für Auswärtige Politik, January 2023

Send in the Leopards: Why Western allies should deliver tanks to Ukraine
European Council on Foreign Relations, January 2023

Digging in for the long haul in Ukraine: The army of the East and the army of the West
Friends of Europe, January 2023

When the Ukraine war ends, the winner will be…Turkey
Friends of Europe, January 2023

How the West can help Ukraine: Three strategies for achieving a Ukrainian victory and rebirth
GLOBSEC, January 2023

Ukrainian refugees in Visegrad countries: Societal attitudes and challenges of accommodating people fleeing thewar
GLOBSEC, January 2023

Interpol is doing Russia’s dirty work
Heritage Foundation, January 2023

How to get a breakthrough in Ukraine
Hoover Institution, January 2023

La Russie en guerre et le monde musulman
Institut français des relations internationales, January 2023

Russia’s war in Ukraine: What are the emerging military lessons?
Institute for International and Strategic Studies, January 2023

Keeping the right balance in supporting Ukraine
International Crisis Group, January 2023

La neutralité, une idée périmée en Europe?
Jacques Delors Institute, January 2023

Russia’s war on Ukraine: A sanctions timeline
Peterson institute for International Economics, January 2023

Avoiding a long war in Ukraine, gun violence, migrant surges
Rand Corporation, January 2023

The opposite of war fatigue: How European support for Ukraine keeps getting stronger Wilfried Martens Centre for European Studies, January 2023

Read this briefing on ‘Ukraine: Awaiting Russia’s offensive‘ in the Think Tank pages of the European Parliament.

Written by Clare Ferguson and Katarzyna Sochacka.

The highlight of the February II 2023 plenary session was a debate with the Council and the European Commission marking one year since Russia’s invasion and the start of its war of aggression against Ukraine. Members also debated the European Union response to the humanitarian situation following the earthquake in Türkiye and Syria. Members discussed EU funding allocated to non-governmental organisations incriminated in recent corruption revelations, following up on measures requested by Parliament to strengthen the integrity of European institutions and to establish an independent EU ethics body.

The European Commission and Council also made statements on a Green Deal industrial plan and access to strategic critical raw materials. Parliament discussed the outcome of the recent special European Council meeting, and among other topics concerning non-EU countries, the further repressions against the people of Belarus, in particular the cases of Andrzej Poczobut and Ales Bialiatski.

Finally, in a formal sitting, Members heard an address by Egils Levits, President of the Republic of Latvia.

REPowerEU chapters in recovery and resilience plans

Members debated and adopted the provisional agreement reached with the Council on REPowerEU chapters in recovery and resilience plans. The amendments to the Recovery and Resilience Facility (RRF) should enable EU countries to use their RRF plans to fund additional energy investment and reform measures necessitated by the twin climate and energy crises. Parliament’s negotiators have ensured that the RRF amendments prioritise tackling energy poverty and small businesses, and that spending under the plans will be fully transparent.

CO2 emission standards for cars and vans

Transport is the only sector in which greenhouse gas (GHG) emissions have continued to rise. In line with measures to tackle climate change, Members held a debate and approved the interinstitutional agreement reached with the Council on reducing road transport emissions under the ‘Fit for 55’ initiative. To set stricter CO2 emission standards for new cars and vans, Parliament’s negotiators have succeeded in introducing more ambitious zero low emission vehicle (ZLEV) incentives; limits to the maximum contribution of sustainable production (or ‘eco-innovation’) to CO2 reduction efforts; and have ensured measures are based on real-world energy consumption and emissions data.

Union secure connectivity programme 2023-2027

Members debated and approved an interinstitutional agreement on a proposal to ensure a resilient, interconnected and secure satellite system for the EU. Known as IRIS², this secure connectivity programme will run until 2027, setting up dedicated EU infrastructure to end EU dependency on other countries’ systems, which will be designed and deployed under private partnership to improve cyber-resilience and cybersecurity, high-speed broadband and seamless connectivity. The agreement on the proposal reflects Parliament’s priority for improved telecommunications security and a more sustainable space policy.

Electoral rights of mobile Union citizens

Parliament considered and adopted reports on two proposals to eliminate barriers to exercising the electoral rights of European citizens resident in Member States of which they are not nationals, such as a lack of information or difficult registration procedures. The Committee on Constitutional Affairs (AFCO) report on electoral rights in European Parliament elections underlines the need for improved access to voting booths, and encourages civil society involvement in ensuring citizens can obtain information, including in their own language. Members also debated and adopted a Committee on Civil Liberties, Justice and Home Affairs (LIBE) report on proposals reinforcing mobile citizens’ electoral rights in municipal elections. The LIBE report calls for an end to derogations and restrictions, and urges Member States to facilitate voting for citizens with disabilities. Both files fall under the consultation procedure (where the Council is not bound by Parliament’s opinion), and the Council has to adopt the proposals unanimously.

European Central Bank annual report

Christine Lagarde, President of the European Central Bank (ECB), attended the plenary for a debate on an Economic and Monetary Affairs (ECON) Committee own-initiative report on the 2021 ECB annual report. The report raises concerns about the high levels of inflation – at 2.6 % on average in 2021, but subsequently reaching 9.2 % in 2022. The ECON committee welcomes ECB measures to raise interest rates and the Bank’s recognition of the need to progress fiscal integration in the EU. However, it also warns that measures must be gradual, targeted and justified. The ECON committee particularly welcomes the ECB’s plans to incorporate climate risk in monetary policy.

EU accession to the Istanbul Convention

The Council of Europe’s Convention on preventing and combating violence against women and domestic violence (known as the Istanbul Convention) sets standards on prevention, protection, prosecution and services for those at risk of gender-based violence. Parliament has repeatedly called for EU accession to the Istanbul Convention as well as its ratification by those individual EU countries that have yet to do so. However, certain ‘deliberate misinterpretations’ persist. Members debated and adopted a joint report from Parliament’s Committee on Women’s Rights and Gender Equality (FEMM) and the LIBE committee on EU accession to the Istanbul Convention. The report calls for constructive dialogue, aimed at dispelling remaining Member State concerns, and stresses that while not exempting individual countries from the need to ratify, EU accession can take place before all have done so.

Question time – Strengthened EU Western Balkan enlargement policy

Members posed questions to Commissioner Olivér Várhelyi regarding the EU’s strengthened Western Balkan enlargement policy. Under Article 49 TEU, the Parliament must consent to any accession to the EU. Its budgetary powers give it direct influence over the amounts allocated to enlargement tools, and Parliament recommends full use of the new EU enlargement methodology to accelerate integration for countries that demonstrate commitment to EU-related reform.

Opening of trilogue negotiations

Members confirmed, without a vote, six mandates to enter into interinstitutional negotiations from the ECON committee, on reports on: i) requirements for credit risk, credit valuation adjustment risk, operational risk, market risk and the output floor; ii) on supervisory powers, sanctions, third-country branches, and environmental, social and governance risks; iii) on delegation arrangements, liquidity risk management, supervisory reporting, provision of depositary and custody services and loan origination by alternative investment funds; iv) on establishing a European single access point providing centralised access to publicly available information of relevance to financial services, capital markets and sustainability; and v) on amending certain directives and vi) regulations as regards the establishment and functioning of the European single access point. Members also confirmed, without a vote, one Committee on Industry, Research and Energy (ITRE) decision to enter into negotiations on the report on establishing a framework of measures for strengthening Europe’s semiconductors (‘chips act’), one decision from the LIBE committee on the report regarding digitalisation of the visa procedure, and one decision from the Committee on Employment and Social Affairs (EMPL) on the report on the 2023 European Year of Skills.

Read this ‘plenary at a glance’ on ‘Plenary round-up – February II 2023‘ in the Think Tank pages of the European Parliament.

Written by Jaan Soone with Jonas Matthias Winkel.

Resilience in transport refers to the ability of a transportation system to recover from disruptions, adapt to changing conditions and continue to provide users with reliable and efficient services. This resilience can be affected by various factors such as weather events, accidents, equipment failures, system overload, political crises and other unexpected events.

A resilient transport system is one that can quickly respond to these disruptions, recover and return to normal operations. For example, a resilient transport system may have redundancy built into its infrastructure or have contingency plans in place to mitigate the impact of disruptions.

Resilience in transport is important because it ensures that people and goods can continue to move efficiently and safely even in the face of unexpected events. This is particularly important for critical infrastructure such as airports, seaports and highways, where disruptions can have far-reaching impacts on the economy and society.

With the COVID-19 crisis and the war in Ukraine, the EU transport sector has had much to contend with in the last three years. This has further highlighted the importance of looking at the sector’s resilience. The Commission published a new contingency plan for transport in the summer of 2022 and an agreement was reached in December 2022 on improving the resilience of critical entities, including transport companies. 

During the COVID-19 crisis, contact restrictions, public transport closures and border closures affected traffic. In the current crisis, truck drivers have been stranded in conflict zones, the airspace in these conflict zones is closed, and Ukraine’s transport infrastructure has been destroyed and blocked. As a result, supply chains are disrupted and food and energy prices are rising across the world.

The EU decided on a number of immediate measures to support Ukraine’s economy and economic recovery and help to stabilise world food markets and improve global food security, including improvements in transportation links. On 12 May 2022, EU Member States decided to establish alternative transport links between the EU and Ukraine for all modes of transport. These ‘solidarity lanes‘ were developed, in particular, to transport agricultural products from Ukraine and bring the required grain to the world market. Normally, Ukraine delivers about 45 million tonnes of grain annually to the world market, but Russian blockades of Ukrainian ports have prevented grain from being shipped and have caused food prices to rise. The lives of millions of people who depend on this grain are at risk.

The solidarity lanes have already enabled more than 15 million tonnes of grain to be exported by sea, rail and road. In addition, the Black Sea Grain (BSG) initiative has unblocked Ukrainian ports in the Black Sea, helping to end tensions in global food prices. Through the BSG initiative, more than 12 million tonnes of food have already been shipped. The solidarity lanes are also being used for non-agricultural products, such as fuel and aid, and the corridors have already enabled Ukraine to generate more than €15 billion in revenue.

To maintain and further develop the corridors, the EU has mobilised new investment. The Commission is fast-tracking funding of €250 million to expand the corridors and, in the medium term, there will be investment in permanent infrastructure to further expand and strengthen the solidarity lanes. Together with partner financial institutions and the European Investment Bank, the EU is providing a total of €1 billion to strengthen and expand the corridors.

To develop a longer-term approach to ensuring transportation in times of crisis, on 23 May 2022 the Commission published a contingency plan for transport to improve the resilience of the transport sector in the EU in times of crisis. The Commission’s goal is to ensure that, even during crises, flows of goods are not interrupted and transport services can be provided without delay.

To improve crisis preparedness and response capabilities, the Commission is proposing a number of measures to respond quickly and effectively to crises. For example, it wants EU transport legislation to be amended quickly to introduce provisions to improve the way major crises are managed. The connectivity and sustainability of the EU transport system should also be improved and further financial resources mobilised to respond to crises.

Strengthening cybersecurity is an essential tool to improve the resilience of the transport sector, according to the plan. The Commission and EU agencies should therefore continue to support the development of cybersecurity protocols to ensure continuity of operations in the event of a disruption.

The Commission also recommends conducting emergency exercises to assess crisis preparedness. The lessons that can be learned from these exercises should help agencies prepare for emergencies.

The plan promotes several key principles that should apply in crisis response. For example, restricting the movement of goods and personnel must only be a last resort; there must be no discrimination based on nationality when measures are introduced; the measures taken must be coordinated; all measures must be disclosed transparently and be traceable; and attention should be paid to passengers with special needs and transport workers, who should be supported in the best possible way.

A number of other initiatives have been put in place to develop resilience in the EU’s policy measures, including those for improving resilience in transport.

In 2020, the Commission proposed to revise and expand the critical infrastructure directive to further strengthen the rules in light of the new challenges facing the EU, such as the rise of the digital economy, the growing impacts of climate change, and terrorist threats. The Commission argued that recent crises, such as the COVID-19 pandemic, have shown the vulnerability of increasingly interdependent societies in the face of high-impact, low-probability risks and how supply chain disruptions can have a negative economic and societal impact across a large number of sectors and across borders.

Following the changes introduced by the Council and Parliament, the legal act was adopted in December 2022. The directive aims to bolster resilience of ‘critical entities’ – organisations in sectors such as energy, transport, health and drinking water. To this end, EU countries will put in place national strategies, carrying out regular risk assessments, and identify the critical entities that provide essential services. According to the rules, these critically important organisations – such as transport operators, airports, ports and intelligent transport operators – will need to identify the relevant risks that may significantly disrupt the provision of essential services, take appropriate counter-measures to ensure their resilience, and notify authorities of disruptive incidents.

Meanwhile, some current rules on enhancing ship and port facility security, enhancing port security and civil aviation security already require entities in the aviation and maritime transport sectors to prevent incidents caused by unlawful acts and to resist and mitigate the consequences of such incidents. Furthermore, the 2014 EU maritime security strategy and its action plan, which are currently being revised, call for increased protection of critical maritime infrastructure, including underwater infrastructure.

Indeed, the EU has been pushing for greater focus on critical transport and energy protection for some years. The European programme for critical infrastructure protection (EPCIP), set up in 2006, aimed to provide a framework for activities to improve the protection of critical infrastructure in Europe, not only from terrorism but also from criminal activities, natural disasters and other causes of accidents. Meanwhile, a directive on critical infrastructure protection for the energy and transport sectors was adopted in 2008, which the new critical entities directive has replaced.

At the level of strategic planning, the 2020 Strategic Foresight Report aimed to introduceresilience as a new compass for EU policymaking. For example, the report lists transport infrastructure as one of the key enablers of economic resilience. In its 2022 Strategic Foresight Report, the Commission outlined how the policy priorities of greening and digitalisation can foster further resilience in the EU. For example, greater use of digitalisation and autonomous vehicles – which itself will depend on societal acceptance, on investment and on a supportive policy framework – would allow the development of mobility as a service, micromobility, pooling and sharing and new services to improve contact with regions, further improving transport efficiency as well as connectivity and accessibility.