European Parliamentary Research Service Blog

Written by Micaela Del Monte.

On 24 February 2022, Russia’s invasion of Ukraine threw the international status quo into disarray by violating the country’s sovereignty and integrity. Since then, over 1 000 civilian casualties have been reported and over 3.8 million people have been forced to flee the country. Many others are displaced within Ukraine’s borders, while civilian infrastructure, including hospitals, schools, roads and buildings, is being targeted by Russian military action. The shelling of civilians and the alleged use of chemical and/or biological weapons by Russian military forces have spurred the international community to accuse Russia of war crimes, genocide and crimes against humanity.

Against this backdrop, Ukraine’s President, Volodymyr Zelenskyy has been addressing parliaments around the world to plead the cause of the Ukrainian people and ask for both military and humanitarian help. He began by addressing the European Parliament, before continuing with many others, both in Europe and further afield. The latest in a line of historical leaders mobilising rhetoric in times of war, Zelenskyy’s speeches have each been tailor-made to their specific audience and have been consistent in reminding policy-makers around the world of the humanitarian tragedy unfolding as a result of the war and of the Ukrainian people’s military needs.

Taking a look at speeches given by Zelenskyy to the European Parliament and several national parliaments between 1 and 24 March 2022, in the month after Russia invaded Ukraine, this briefing summarises the Ukrainian president’s main messages and offers some thoughts about the narrative used by Zelenskyy to keep Russia’s war on Ukraine at the top of national and international agendas.

Read the complete briefing on ‘Russia’s war on Ukraine: Speeches by Ukraine’s President to the European Parliament and national parliaments‘ in the Think Tank pages of the European Parliament.

Written by Irina Popescu and Frederik Scholaert.

Brexit has reshaped fisheries relations in the North-east Atlantic on an unprecedented scale, with far-reaching consequences for the fishing sector in the region and beyond. This situation is highlighted in the European Parliament’s resolution on the future of fisheries in the Channel, North Sea, Irish Sea and Atlantic Ocean in the light of the United Kingdom’s withdrawal from the EU. After Brexit, most of the fish stocks in the region, managed for decades under EU rules, have become shared stocks jointly managed with the UK. Access for EU vessels to UK waters is now subject to licences delivered by UK authorities. Difficulties and delays were experienced however in licencing EU vessels to fish in the 6‑12 mile UK territorial waters and in the waters of Jersey and Guernsey in 2021. Access for EU vessels to UK waters is maintained for an adjustment period lasting until 30 June 2026, but the conditions after this date remain uncertain. More restrictive rules in the UK and the Falkland Islands are expected to affect UK-flagged vessels owned by EU fishing companies. More generally, relations between coastal states in the region have become less predictable, as seen in the unilateral decisions of Norway, Iceland and the Faroe Islands to increase their mackerel quotas in 2021, for example.

One of the most significant changes, fiercely contested until the final hours of the Brexit negotiations, concerns the transfer of EU fishing quotas to the UK. The total transfer is considered to represent 25 % of the value of the EU landings from UK waters. The EU-UK Trade and Cooperation Agreement (TCA) gradually reduces the EU fishing opportunities for 55 shared stocks from 2021 to 2025, specifying how the EU and UK shares change each year for each stock. Most of the quota transfer occurs in 2021 (60 %), with the remainder phased-in over the following years, to reach 70 % in 2022, 80 % in 2023, 92 % in 2024 and 100 % in 2025. For 2021, the Scientific, Technical and Economic Committee for Fisheries (STECF) estimated the quota reduction due to the TCA at 73 697 tonnes.

An EPRS analysis focused on the impact of the TCA changes on 16 of the most affected stocks, which together represented a quota transfer of 62 211 tonnes in 2021 (around 84 % of the total amount calculated by the STECF), with a value estimated at €103 million.[1]

The quota reduction mainly affects France, Ireland, the Netherlands, Denmark, Germany, Spain and Belgium. Sweden, Poland, Portugal, Estonia, Lithuania and Latvia are affected to a lesser extent. France, Ireland and the Netherlands take the brunt of the 2021 transfer by value for the analysed stocks.

volume of the Brexit quota transfert (tonnes) value of the Brexit quota transfert (€ millions)

Western mackerel is by far the stock with the highest Brexit transfer (almost 30 % of the value of the analysed stocks), and as such it is an illustrative example. The EU share decreased from 41.68 % in 2020 (pre-Brexit) to 35.15 % in 2021 (post-Brexit), leading to a transfer of 24 021 tonnes, with a value estimated at €30.08 million. More than half of this amount is provided by Ireland, with the Netherlands, Germany and France sharing most of the remainder. In practice, the effect of the Brexit transfer due to the TCA cumulates with the effect of the change in total allowable catches (TAC) from 2020 to 2021, resulting in a net quota change. The TAC trend has a major impact on the net quota change: if the TAC decreases, as was the case for Western mackerel in 2021, the impact of the quota reduction from the Brexit transfer is amplified, from 24 021 tonnes to 33 812 for the EU total, and accordingly for each Member State (shown below in light shades).

Quota changes for the EU and the UK, and by Member State (tonnes)

An updated EPRS analysis of the Brexit quota transfer in 2022 is currently in progress.

[1] The stocks covered by the EPRS analysis are Mackerel (Western), Herring (North Sea), Blue whiting (Northern), Norway pout (North Sea), Mackerel (North Sea), Sole (North Sea), Norway lobster (zone 7), Anglerfish (zone 7), Hake (Western), Saithe (North Sea), Anglerfish (North Sea), Anglerfish (West of Scotland), Pollack (zone 7), Megrims (zone 7), Cod (North Sea) and Hake (North Sea). The net quota change is the difference between a Member State’s quotas for a given stock for two successive years. We used the initial fishing opportunities for 2020 and 2021, as indicated in Regulations 2020/123 and 2021/1239. The Brexit transfer for a Member State in a given year is calculated by applying the EU share reduction according to the TCA to the quota from the previous year. EU and UK quota shares are from the EU-UK TCA, Annexes 35 and 36. To neutralise unusual pandemic effects, the value is based on 2019 prices from the European Market Observatory for Fisheries and Aquaculture Products (EUMOFA). National sources have been used for German and Irish prices (unavailable in EUMOFA).

Written by Marika Lerch and Ionel Zamfir.

On 16 March 2022, after a fast-track procedure, the International Court of Justice ordered provisional measures in the Ukraine v Russia case. In bringing the case, Ukraine argued that Russia had wrongfully claimed a genocide in Ukraine to justify its invasion. Russia, meanwhile, rejected the Court’s jurisdiction. Given the lack of evidence for Russia’s genocide allegations, and the principle that any action to prevent genocide must be taken in good faith and in line with international law, the Court called on Russia to suspend military operations immediately.

The case at the International Court of Justice

On 26 February 2022, the Ukrainian Government lodged a case with the International Court of Justice (ICJ), regarding ‘Allegations of Genocide under the 1948 Convention on the Prevention and Punishment of the Crime of Genocide (Ukraine v Russian Federation)’ and requested that the Court order provisional measures, including an immediate suspension of the military operations. The Court fast-tracked the procedure and, on Wednesday 16 March 2022, announced its decision to order the following provisional measures:

1. Russia must suspend the military operations launched in Ukraine on 24 February immediately;
2. Russia must ensure that any military or irregular armed units directed or supported by it, and any organisations and persons under its control take no steps to advance the military operations;
3. Both parties must ‘refrain from any action which might aggravate or extend the dispute before the Court or make it more difficult to resolve’.

The ICJ is the principal judicial organ of the United Nations (UN), instituted by Articles 92 to 96 of the UN Charter. The Court is competent to settle disputes submitted by States that have accepted its jurisdiction, in accordance with international law, through judgments that are binding and without appeal for the parties concerned. Neither Ukraine nor Russia have made a declaration accepting the ICJ’s compulsory jurisdiction under Article 36 of the ICJ’s statute. Therefore, the ICJ’s competence in the Ukraine case derives solely from the Genocide Convention, which both Russia and Ukraine have ratified. It obliges state parties to prevent and punish genocide and gives the Court jurisdiction over disputes between parties relating to ‘interpretation, application or fulfilment’ of the Convention.

Ukraine’s main claim before the ICJ is that Russia has falsely accused it of attempting a genocide in the Luhansk and Donetsk oblasts of Ukraine as a pretext for recognising Luhansk and Donetsk as independent republics and engaging in a military invasion. Ukraine’s application does not claim that Russia has committed the crime of genocide, but it hints that it may be ‘planning acts of genocide in Ukraine’ (para. 24). The question of whether abuse of the Genocide Convention as an argument for military intervention provides sufficient jurisdictional grounds for the ICJ to decide is apparently not straightforward. Ukraine’s argumentation has been described by academics as taking a creative approach.

Russia did not take part in the first Court hearing, held on 7 March 2022. In a letter to the Court, of 5 March 2022, Russia argues that the ICJ has no jurisdiction, basing its argument on two points: i) the Genocide Convention governs neither the use of force between States nor the recognition of States, so the subject of Ukraine’s claim and request falls outside the Convention; and ii) the ‘military operation’ was not legally based on the Genocide Convention, but on Article 51 of the UN Charter – on exercising the right of self-defence in the event of armed attack – and customary international law. Russia argues that references to acts of genocide in the President’s statement announcing the military intervention do not provide a sufficient basis to claim that there was invocation of the Convention or the existence of a dispute under it.

Contradicting Russia’s assertion, the Court’s decision of 16 March 2022, adopted with a sound majority of 13 votes to 2, considers that there is sufficient evidence for Ukraine to invoke the compromissory clause in Article IX of the Convention, which attributes jurisdiction to the ICJ for disputes arising under the Convention. Some noteworthy arguments of the Court to support its preliminary decision are as follows: in discharging its duty to prevent genocide, every State may only act within the limits permitted by international law; the Court ‘is not in possession of evidence substantiating the genocide allegations of the Russian Federation’; the Court is ‘doubtful’ that the Convention authorises unilateral use of force in the territory of another State.

The judges from China and Russia voted against the first two provisional measures directed at the Russian Federation. In their declaration, annexed to the Court’s conclusions, they essentially support the Russian interpretation that the ICJ does not have jurisdiction since the issue of concern is one of state recognition and use of force in international law, which do not fall within the scope of the Genocide Convention. Both voted in favour of the third measure, however. Three other judges made declarations and another presented a separate opinion. Two of these opposed the application of the third measure to Ukraine.

As expected, the Russian government – through Kremlin spokesperson Dmitry Peskov – stated on 17 March that Russia could not ‘take this [preliminary] decision into account’. As the ICJ has no mechanisms to enforce its ruling, UN State Parties can take the case to the Security Council, where Russia’s veto power would block any enforcement measures. The United States (US) acted in a similar way in 1986, when it refused to implement the ICJ ruling in Nicaragua v the United States on financing of military and paramilitary activities in Nicaragua, and voted against a Security Council resolution calling for full and immediate compliance.

Another case, moved by Ukraine in 2017, is pending before the ICJ, alleging Russia’s violation since 2014 of the International Convention for the Suppression of the Financing of Terrorism through its support for separatist forces in eastern Ukraine, and of the International Convention on the Elimination of Racial Discrimination in Crimea through suppression of the rights of Crimean Tatars and ethnic Ukrainians. Other judicial avenues are currently being activated or considered as means to hold the Russian leadership accountable for war-related crimes, namely the International Criminal Court and the establishment of a special tribunal on the crime of aggression.

Commission President Ursula von der Leyen welcomed the ICJ order in a tweet, insisting that Putin heed the clear message from the international community. The High Representative/Vice-President of the Commission, Josep Borrell, referred to the ICJ’s 16 March ruling to underscore his call for an immediate halt to military actions.

Broader implications of the decision

The court decision is considered a ‘near total’ victory for Ukraine, while non-respect of the decision is expected to cause further reputational harm to Russia. Although the decision does not rebut all Russia’s stated grounds for invasion, it marks an important step towards proving the illegality of the war under international law. The blocking by Russia of the UN Security Council’s attempt to condemn the invasion, meanwhile reveals the limitations of the UN system and the need for it to be revisited.

It is argued that Russia’s genocide-related war justification is based on an abusive interpretation of the concept of humanitarian intervention. Central to this is the ‘responsibility to protect’ (R2P) doctrine, which was developed in response to the atrocities committed in Rwanda and in the former Yugoslavia in the 1990s. At the 2005 high-level UN World Summit, UN member states committed to the principle of the responsibility to protect populations from genocide, war crimes, ethnic cleansing and crimes against humanity through the use of appropriate diplomatic, humanitarian and other peaceful means, and should these fail, through collective action endorsed by the Security Council, in accordance with Chapter VII of the UN Charter. This was in line with ICJ jurisprudence. In Bosnia and Herzegovina v Serbia (2007), the ICJ stated that ‘every State may only act [to prevent genocide] within the limits permitted by international law’. However, some states, in particular the US and the United Kingdom, and civil society organisations, have indicated support for humanitarian intervention in extremis without UN consent, when the Security Council proves dysfunctional because of the veto of a permanent member. In contradiction to the R2P, Russia did not use the diplomatic means at its disposal before the war, such as referring its allegations of genocide to UN bodies. The principle of genuine respect for international law appears all the more important, since the use of baseless genocide allegations in the world has been widespread and is ‘as old as the Genocide Convention itself’. An important implication of the ICJ ruling is that there is ‘no rule in international law automatically giving one state a right to invade another state to stop a genocide’. Condoning such justification for war would pose a terrible danger.

Read this ‘at a glance’ on ‘International Court of Justice preliminary decision in Ukraine v Russia (2022)‘ in the Think Tank pages of the European Parliament.

Written by Etienne Bassot.

This edition of EPRS’s six-monthly assessment of the delivery of the six policy priorities of the current European Commission, led by Ursula von der Leyen, comes as the Commission approaches the middle of its five-year term. On the eve of taking office in November 2019, then-President elect Ursula von der Leyen stated that ‘Europe urgently needs’ a ‘geopolitical Commission’. Russia’s war on Ukraine, unfolding as this publication was being written, confirms the relevance of this challenge beyond what most experts had envisaged at the time. The pressing need for the Union to develop its ‘strategic autonomy’, brought into focus by the various barriers thrown up during the initial coronavirus lockdowns, has become even starker, and not just in the field of security and defence policy – with war on the EU’s borders – but also in fields such as energy and food, where dependence on external suppliers risks compromising the Union’s stability.

Published on the eve of the 2021 State of the Union address, the previous issue of this publication was drafted as the United States and North Atlantic Treaty Organization (NATO) troops were withdrawing from, and the Taliban taking over, Kabul. This issue comes as war has returned to Europe and millions of refugees are fleeing Ukraine to the European Union. This is a stark reminder to European citizens, as well as their leaders and representatives, that peace and democracy, which are at the heart of the European project, cannot be taken for granted.

Among its many effects, this most dramatic crisis has strengthened unity among the 27 Member States. It has pushed security and defence higher on the European Union agenda, a subject that was already a priority for the French Presidency of the Council of the EU. This is evidenced first in the Versailles Declaration following the 10‑11 March 2022 informal meeting of the Heads of State or Government, which analysed Russia’s war on Ukraine as ‘a tectonic shift in European history’. It is also seen in the decision to take more responsibility for the EU’s security and bolster its defence capabilities, and later in the endorsement of a reinforced, updated Strategic Compass by the European Council on 24‑25 March (see Section 4).

It is no longer the pandemic, but the war on Ukraine and its numerous consequences, that define the European agenda. As the cover photograph of this publication illustrates: on 1 March 2022, the European Parliament, chaired by its new President, Roberta Metsola, held an extraordinary plenary session on the situation in Ukraine at which the President of Ukraine, Volodymyr Zelenskyy, was welcomed with a standing ovation.

The predominance of Putin’s war on Ukraine in the media and our conversations – reaching unprecedented levels of coverage and spread due to the extent of social media use in Ukraine, Europe and worldwide – should not divert our attention from other major ongoing challenges: the policy priorities of the European Commission. On climate change, this Commission’s first priority and an area where President von der Leyen wants Europe to lead globally, the latest Intergovernmental Panel on Climate Change (IPCC) report, released on 28 February 2022 raises the alarm on ‘increasing climate risks’ (see Section 1). Helping the EU recover from the coronavirus crisis (see Section 3), turning the EU into a digital continent (see Section 2), promoting the European way of life (see Section 5), and the new push for European democracy, notably with the Conference on the Future of Europe (see Section 6), are all high on this Commission’s agenda.

This paper monitors all six of these priorities. It combines a two-page presentation of each priority and an infographic illustrating in a single page (page 3), the degree of progress– both overall and under each of the six priorities.

Our assessment is that, of the almost 500 initiatives foreshadowed (504), more than half (57 %) have already been submitted (288). It is worth noting that almost one in five of the Commission’s initiatives are non-legislative in character, such as strategies, action plans and other communications. Among these 266, almost half (47 %) have already been adopted (135), while the great majority of the remainder are either proceeding normally through the legislative process (113, or 74 %) or close to adoption (11, or 7 %). Conversely, a certain number are proceeding very slowly or are currently blocked (29, or 19 %).

These numbers reflect the state of play as the Commission reaches the mid-point of this five-year EU political cycle, during which the executive continues to come forward with new proposals, whilst simultaneously the twin branches of the legislature (the European Parliament and the Council of the EU) are fully engaged in considering and (very often) amending them. The ranking and proportionate progress have remained stable compared with the previous assessment, which is all the more remarkable as the Commission has returned to a more ‘business-as-usual’ mode after more than one year in pandemic mode.

With a focus on each of the six policy priorities, our assessment shows how the European Commission is performing at the different stages of announcing and tabling proposals, followed by the three institutions’ progress in negotiating and finally adopting legislation. The European Green Deal ranks highest in the number of initiatives planned (125) but the executive has tabled less than half of them (or 45 %), leading to only one-fifth being adopted by the co-legislators so far (20 %). The third priority, ‘An economy that works for people’, comes next (101), but this time with more initiatives tabled (68 %) and the highest number of initiatives adopted (32 %). The urgent need to recover from the economic consequences of the pandemic explains this result and why the third priority has overtaken the lead expected for the second ‘twin transition’ – digital – in terms of initiatives planned, tabled and adopted. This latter totals 84 initiatives planned, half of which are already submitted (44), and 14 already adopted (17 %). For ‘A stronger Europe in the world’, an area with relatively few legislative initiatives, by definition and by contrast with the majority of the Commission’s priorities, over three in four (78 %) initiatives have already been tabled (see Section 4), but a fair amount of work remains to be done for the other priorities (38 % of the proposals remain to be submitted for ‘A Europe fit for the digital age’, 39 % for ‘Promoting our European way of life’ and 49 % for ‘A new push for democracy’ (see Sections 2, 5 and 6). This latter priority comes lowest in terms of number of initiatives announced (55), as neither the Conference on the Future of Europe, which is expected to come to a close this spring, nor (however important), upholding EU values, especially fundamental rights and the rule of law, require such proposals to proceed.

The next edition of this biannual paper will monitor the situation in September 2022, on the eve of the 2022 State of the Union address. The coming months will be crucial for this Commission to deliver on its commitments and on the ‘main elements guiding the preparation of the Commission work programme’ for 2023. The Commission is expected to set out its plans in writing to the Parliament, under the 2010 Interinstitutional Agreement between the European Parliament and the European Commission.

In the face of the latest events and their ‘tectonic’ magnitude, this publication and the next will continue to monitor this Commission’s ambition to become a ‘geopolitical Commission’.

For more information on how the von der Leyen Commission’s agenda is proceeding, a proposal-by-proposal assessment is available on the European Parliament’s ‘Legislative Train Schedule’ website, also developed by EPRS, at: http://www.europarl.europa.eu/legislative-train/.

Read the complete ‘in-depth analysis’ on ‘The six policy priorities of the von der Leyen Commission: State of play as the Commission approaches mid-term‘ in the Think Tank pages of the European Parliament.

Written by Clare Ferguson.

As Members gather in Strasbourg once again for the April 2022 plenary session, the key debates on the agenda return to the subject of Russia’s war on Ukraine. Members are expected to hear Council and Commission statements on EU protection of children and young people fleeing the war against Ukraine on Tuesday morning. They will then hear statements on the conclusions of the European Council meeting of 24‑25 March 2022 on Wednesday, also with the newly re-elected President of the European Council, Charles Michel. The EU leaders’ meeting focused on Ukraine and the issue of energy security, sanctions and economic issues such as commodity imports. In the Parliament’s first ‘Question Time‘ sessions for nine years on Tuesday afternoon, Commission President Ursula von der Leyen will spend an hour taking Members’ questions on implementation of the current Commission’s political priorities. Josep Borrell, High Representative of the European Union for Foreign Affairs and Security Policy is then scheduled to answer questions on EU security and the recently adopted Strategic Compass.

Well before Russia’s invasion of Ukraine, Parliament’s Committee on Industry, Research and Energy (ITRE) had insisted that the proposed revision of the rules on trans-European energy infrastructure projects should require energy projects to be more environmentally sustainable and exclude fossil fuel infrastructure. Major energy infrastructure projects benefit EU citizens by boosting the single market and securing EU supplies and such projects of common interest are therefore sometimes eligible for EU funding. The committee argues for a wider role for the EU Agency for the Cooperation of Energy Regulators (ACER), and for a new stakeholder committee to ensure projects can call on good expertise. The committee’s report also calls for a transitional period to 2029, as well as for the regulation to cover CO2 storage, and for a derogation for already-included natural gas projects. Members are expected to debate and vote on an agreed text reached between the EU co-legislators on the rules governing funding of major energy projects on Tuesday afternoon.

In line with the EU’s climate ambitions, the European Commission’s ‘Fit for 55’ proposals seek to revise the entire EU 2030 climate and energy framework. The first legislative proposal from the package is expected to come to plenary on Monday evening, when Members are scheduled to debate a proposed revision of the market stability reserve for the EU emissions trading system (ETS). The world’s first and largest carbon market, the ETS aims at reducing greenhouse gas emissions by capping the volume of emissions permitted and encouraging trading of unused allowances. However, a surplus of emission allowances has built up due to recent economic crises. The proposed revision of the market stability reserve aims to correct this, by maintaining the already doubled intake rate (24 %) and minimum number of allowances placed in the reserve (200 million) to December 2030. Parliament’s Committee on the Environment, Public Health and Food Safety (ENVI) agrees with the proposal, stressing that it will avoid further increases in the surplus. The committee’s report would form the position for trilogue negotiations with the Council, subject to any amendments voted in plenary.

On Wednesday lunchtime, Members are expected to hold a debate on a provisional agreement reached between Parliament and the Council on the first of the Commission’s proposals on an EU data strategy. The data governance act should set the rules for sharing or trading data for legitimate uses – such as medical research or combating climate change – whilst preserving data rights. The co-legislators reached a compromise on re-use of publicly held data, limiting public authorities’ ability to grant rights to data and ensuring they seek consent. Parliament also succeeded in tightening the rules for ‘data brokers’. Organisations wishing to share data for the common good will have to register as ‘altruism organisations’ and follow a Commission rulebook. Parliament also insisted on strengthening aspects of the composition and tasks of the proposed European data innovation board, which will enforce the act.

The economic uncertainty resulting from Russia’s invasion of Ukraine and the recent pandemic has underlined the need to strengthen the EU’s economic and competitive resilience. Against this background, Parliament considers two budget-related files during this plenary session. Parliament’s guidelines for the 2023 EU budget (Section III – European Commission) launch the annual budgetary debate on Tuesday lunchtime. Underlining the need for a just transition to a greener economy, Parliament’s Committee on Budgets (BUDG) highlights the importance of economic, social and territorial cohesion. The BUDG committee’s report lists a number of budgetary priorities, including stronger health union, the green and digital transitions, fundamental rights and the rule of law. The report also underlines the need to spread payments evenly throughout the period of the current multiannual financial framework. The guidelines provide the basis for Parliament’s trilogue negotiations on the 2023 budget ahead of the European Commission’s proposal of the draft budget.

Following delays in launching certain programmes, Parliament’s Committee on Budgets (BUDG) reiterates its concern regarding the effect of such payment delays on the Union’s recovery. To prevent payment crises, the committee calls on the Commission to present proposals for payment increases immediately in future. Members are scheduled to consider draft amending budget 1/2022 on Tuesday lunchtime. The amendments seek to strengthen the 2022 EU budget by transferring €12 billion in commitments from 2021. Further transfers will be made to the budgets of subsequent years of the 2021-2027 multiannual financial framework.

Parliament returns to goods vehicle hire rules on Monday evening, in its second reading of a proposal to loosen restrictions on transport operators. The European Commission’s proposal to grant haulage companies the same right to hire vehicles without a driver in another Member State as in their own Member State originally aimed at harmonising the rules across the EU. However, Parliament and Council wished to preserve Member States’ ability to protect their national vehicle tax bases from market distortion. The draft agreement reached by Council and Parliament would allow countries to restrict their own haulage companies from hiring vehicles without drivers in other EU Member States, but prevents them from restricting goods vehicle hire outright, if all the rules are observed.

• Trans-European energy infrastructure
• Revision of the market stability reserve for the EU emissions trading system
• Use of vehicles hired without drivers for the carriage of goods by road
• Data governance act
• Amending budget 1/2022: Adjustment of the multiannual financial framework
• Parliament’s guidelines for the 2023 EU budget: Section III – European Commission

Written by Ulrich Jochheim.

Hours before the Beijing Winter Olympics officially opened on 4 February 2022, Chinese President Xi Jinping had a long meeting with Russian President Vladimir Putin. In the joint statement issued after the meeting, the Chinese leader for the first time voiced his country’s outright opposition to NATO enlargement and support for Russia’s ‘proposals to create long-term legally binding security guarantees’ in Europe. This stance might be seen as the culmination of a relationship, formed in 1992, between the newly proclaimed Russian Federation and a China that had just started emerging from the stupor following the Tiananmen Square massacre.

This relationship has seen major shifts since 1992. At the outset, China’s population was greater than Russia’s and both countries had a very similar level of GDP. Nowadays, thanks to China’s exceptional growth performance, its economy is more than eight times bigger than Russia’s. Similarly, trade with Russia is not of major importance to China in terms of value. However, the high share of raw materials (including food) in Russian exports and the transfer of Russian military technology are of strategic importance to China in these relations.

Since 2012, the relationship has evolved into an informal alliance in the face of what both countries consider a rising threat from the West to their regimes. At present, China’s response to Russia’s full-scale invasion of Ukraine seems to be more favourable to Russia than it was in 2014 when Russia annexed Crimea. China has been critical of NATO’s enlargement to central and eastern Europe, and less insistent about respect for the territorial integrity of nations – something that it has traditionally upheld in light of the ‘open Taiwan question’. On 30 March, Russian Foreign Minister Sergey Lavrov met his Chinese counterpart Wang Yi in China to discuss the bilateral relationship.

Experts posit that China is likely to support the kind of solution to the Ukraine war that would be the least likely to challenge the power monopoly of the Chinese Communist Party.

Read the complete briefing on ‘China-Russia relations: A quantum leap?‘ in the Think Tank pages of the European Parliament.

Mineral fuel trade between Russia and China Trends in Chinese and Russian GDP growth since 1989 (constant US$ million)

Written by Elena Lazarou.

Cooperation with third countries is embedded in several dimensions of EU security and defence policy. The Strategic Compass, adopted in March 2022, dedicates one of its main sections to the role of partnerships.

Background

Third countries (i.e. non-EU countries) can take part in EU common security and defence policy (CSDP) in various ways. These range from contributing to CSDP missions, financial investment and joint training, to taking part in dialogue and defence industrial initiatives. In its section on partnering, the Strategic Compass, approved by the Council in March 2022, calls for stronger tailored bilateral partnerships with like-minded partners, such as the US, Norway, Japan, the UK and Canada, multilateral organisations such as the North Atlantic Treaty Organization (NATO), the United Nations (UN) and regional organisations. It also stresses the importance of partnerships with the eastern and southern neighbourhood, the western Balkans, Asia, Africa, and Latin America, emphasising participation in CSDP missions and operations and support for capacity-building. It also envisages an EU security and defence partnership forum.

Permanent structured cooperation (PESCO)

Established in 2017, PESCO is designed to deepen defence cooperation among the 25 participating EU Member States. There are now 60 PESCO projects addressing a range of domains: training (9), land (8), maritime (8), air (10), cyber (10), space (4), and joint services (11). In 2020, the Council set out conditions ‘exceptionally’ permitting third countries to take part in PESCO, providing the countries added ‘substantial added value’ and shared the EU’s founding values, and no external dependencies resulted. Countries must submit their requests to participate to the project’s lead country, and all participating Member States must agree unanimously. The Council and the High Representative/Vice-President of the Commission must be notified, with the Council giving formal approval. In May 2021, EU defence ministers agreed to invite the US, Canada and Norway – three key NATO allies – to join the PESCO military mobility project. The focus is on facilitating cross-border troop and equipment movement and harmonising transportation rules; a goal also shared by NATO. The EU has also acknowledged Ukraine‘s wish to join PESCO projects, so as to deepen EU-Ukraine defence cooperation. Third-country-controlled entities can participate as of 31 December 2025.

European Defence Agency (EDA)

To help Member States with their capabilities development, the EDA can sign administrative agreements (AAs) with third countries, to allow their participation in military-technological programmes, providing there is reciprocal transparency and they adopt EU intellectual property rights legislation. The EDA has AAs with four non-EU countries: Norway, Switzerland, Serbia and Ukraine; and two organisations: the Organisation for Joint Armament Co-operation and the European Space Agency. In November 2021, the EDA was mandated to conclude an AA with the US, to outline a future framework for cooperation. In principle, an AA between a third country and the EDA is considered a pre-requisite for that country’s participation in a PESCO project.

European Defence Fund (EDF) and European defence industrial policy

The EDF supports research and development in EU defence capabilities, by co-financing measures that contribute to competitiveness, innovation and strategic autonomy and to a stronger defence technological and industrial base (EDTIB). The Fund has been endowed with €8 billion for the 2021-2027 period, of which €2.65 billion for research and innovation, and €5.3 billion for capabilities. The EDF regulation stipulates that, apart from non-EU countries that are members of the European Economic Area, only entities established in the EU or associated countries – and that are not subject to control by third countries or third-country entities – are eligible for EDF grant schemes. In cases of derogation from this rule, ‘there shall be no unauthorised access by a non-associated third country or non-associated third-country entity to classified information regarding action supported by the Fund’. In June 2020, the Commission announced a list of projects funded through the preparatory action on defence research and the European defence industrial development programme (precursors of the EDF), four of which involved the US, Canada and Japan.

Space

The 2016 space strategy promotes synergies between the civil and defence sectors. Geopolitical competition extends to outer space, and autonomous space capabilities enhance situational awareness, not least through the European global navigation satellite system (Galileo), Copernicus, and the European geostationary navigation overlay service (EGNOS). The EU earmarked €13.2 billion for space activities in the 2021-2027 period, managed by DG DEFIS. In 2004, the EU and US agreed on cooperation between Galileo and the global positioning system (GPS), while the EU signed agreements with Norway (2010) and with Switzerland (2013) on cooperation on satellite navigation and Galileo-related classified information exchange. According to the EU’s negotiating directives, the UK can access Galileo’s public regulated service (PRS), but third parties cannot take part in encrypting the PRS system. The UK is participating in Copernicus as a third country in the 2021-2027 period. This allows it to apply for EU Copernicus tenders.

The Commission’s space-based secure communication system, part of its space package, secures uninterrupted access to satellite communications and improved connectivity. Here, dialogues with third countries are expected on space traffic management while third countries may participate in the 2023-2027 ‘Union secure connectivity programme’. Similarly, the Roadmap on critical technologies for security and defence notes that in order to reduce strategic dependence, the EU needs to coordinate with like-minded partners such as NATO, the US, Canada, Norway and Japan. Transatlantic coordination on critical technologies also takes place within the EU-US Trade and Technology Council.

CSDP missions and operations The Strategic Compass includes the creation by 2025 of the EU rapid deployment capacity, a modular force of up to 5 000, including substantially modified EU battlegroups. Operational since 2007, but yet to be deployed, the battlegroups are of a rotating nature and can involve non-EU countries. For example, the Nordic battlegroup includes Norway; and Ukraine and Serbia took part in the Greek-led Balkan battlegroup. Ukraine was invited to join the Visegrad battlegroup in 2016.

The Council has highlighted EU support for regular dialogue with third countries, while facilitating partners’ participation in CSDP missions. The EU currently has seven military and 11 civilian missions under CSDP, while the 20 framework cooperation agreements (FPA) currently in force provide the political and legal basis for third-country participation in missions. These also clarify that this contribution should be without prejudice to operational planning and EU decision-making autonomy. The EU’s counter-piracy mission EUNAVFOR Atalanta has, for instance, involved Colombia, South Korea, Montenegro, Ukraine and others, while Turkey contributes to the EUFOR Althea mission in Bosnia and Herzegovina. The new EUTM Mozambique mission is also open to third-country involvement. In all, more than 45 third countries have contributed to CSDP missions so far. In January 2021, the EU Military Committee (EUMC) recommended developing criteria for non-EU country participation in CSDP missions, and creating a CSDP ‘partners consultative mechanism’ to be chaired by the EEAS. According to the EUMC recommendation, the basic conditions for a third country to become a ‘CSDP partner’ would be an FPA, a security of information agreement (SIA), good neighbourly relations with the EU, shared EU values and principles, and respect for international law. Also in 2021, the EU enhanced the modalities for participation of third countries in CSDP missions and operations by ensuring a greater level of information-sharing. Partner countries have also taken part in CSDP exercises. For example, in 2020, the US, Canada and Norway joined in the EEAS EU Integrated Revolve 2020 exercise to improve crisis management.

The European Parliament has welcomed third-country involvement in CSDP missions and third-party involvement in the EDA, noting that participation in PESCO should be based on ‘established and effective reciprocity’. Parliament has also asked to be ‘fully involved’ in the process of opening PESCO to third countries. Parliament’s 2020 annual report on common foreign and security policy (CFSP) meanwhile, acknowledged the contribution of Eastern Partnership (EaP) countries to CSDP, and called for deeper EU-EaP cooperation in EU-related defence policies. On the EDF, Parliament has recognised the need to regulate access to companies controlled by third countries and noted that while third countries may offer ‘technological and operational added value’, this must not weaken the EU’s strategic security interests or undermine EDF objectives. Parliament has also stressed the need to be ‘creative’ regarding EU-UK cooperation on CFSP and CSDP.

Read this ‘at a glance’ on ‘Third-country participation in EU defence‘ in the Think Tank pages of the European Parliament.

Written by Marcin Grajewski.

EU officials say that the 23rd summit between the European Union and China on Friday 1 April will focus on Russia’s war on Ukraine, the engagement of the international community to support Ukraine, the dramatic humanitarian crisis created by the conflict, its destabilising nature for the international order and its inherent global impact. The meeting, to be conducted by video-conference, is also expected to discuss bilateral issues and areas of shared interest, such as climate change, biodiversity and health, as well as ways to ensure a more balanced and reciprocal trade relationship. The EU is also likely to urge China to end its trade ban on imports from Lithuania, which followed the country’s decision to open a de facto Taiwan embassy in its capital. In recent years, China has become more of a rival for the EU than a declared strategic partner.

This note gathers links to the recent publications and commentaries from many international think tanks on EU-China relations, the country’s attitude to the war on Ukraine and its policies on other issues. Analyses on the war and its implications can be found in a previous edition of the ‘What Think Tanks are Thinking’ series.

China’s ‘enlightened authoritarianism’ as an alternative to liberal democracy
Barcelona Centre for International Affairs, March 2022

China can see the limits of bailing out Russia’s economy
Bruegel, March 2022

Six reasons why backstopping Russia is an increasingly unattractive option for China
Bruegel, March 2022

China offers Russia respite but not a solution
Bruegel, March 2022

Can China bail out Putin?
Bruegel, March 2022

China and Russia are joining forces to spread disinformation
Brookings Institution, March 2022

China’s choices and the fate of the post-post-Cold War era
Brookings Institution, March 2022

Ukraine presents opportunity to test China’s strategic outlook
Brookings Institution, March 2022

Caught between Russia and the West? China’s struggle for a position on Ukraine
Bertelsmann Stiftung, March 2022

The war in Ukraine: Troubling lessons for Taiwan
American Enterprise Institute, March 2022

Putin is creating the multipolar world he (thought he) wanted
Egmont, March 2022

Mapping China’s rise in the Western Balkans
European Council on Foreign Relations, March 2022

Let a thousand contacts bloom: How China competes for influence in Bulgaria
European Council on Foreign Relations, March 2022

The war in Ukraine: China walking amid the shrapnel
European Policy Centre, March 2022

Could China be a partner for the West in managing the Ukraine crisis?
Foreign Policy Centre, March 2022

Amid the turbulent international landscape, China and Europe must reinforce trust
Friends of Europe, March 2022

Keeping China out of the Ukraine conflict
Friends of Europe, March 2022

The China factor in Russia’s war: Implications for Europe
German Council on Foreign Relations, March 2022

China faces the consequences of supporting Russia
German Marshall Fund, March 2022

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

War in Ukraine: Asia takes sides
Istituto per gli Studi di Politica Internazionale, March 2022

What is China’s position in the Russian-Ukrainian conflict?
Institut français des relations internationales, March 2022

China signals desire to improve ties with India, but is that what New Delhi wants?
International Institute for Strategic Studies, March 2022

The rise of China and NATO’s new Strategic Concept
NATO Defence College, March 2022

China is too tied to the global economy to risk helping Russia
Peterson Institute for International Economics, March 2022

New technology restrictions against Russia could also target China
Peterson Institute for International Economics, March 2022

China bought none of the extra $200 billion of US exports in Trump’s trade deal
Peterson Institute for International Economics, March 2022

Great power rivalry in a changing international order: Concepts and theories
Rand Corporation, March 2022

The dependence of China of Spain’s supply chains
Real Instituto Elcano, March 2022

China’s economic support for Russia is not a panacea
Bruegel, February 2022

How China’s investment in Middle East is evolving
Bruegel, February 2022

Learning the right lessons from Ukraine for Taiwan
Brookings Institution, February 2022

Germany and the trade conflict between Lithuania and China
Centre for Eastern Studies, February 2022

Ukraine is severe test of China’s new axis with Russia
Chatham House, February 2022

Russia’s escalation in Ukraine: Views from Asia
European Council on Foreign Relations, February 2022

Games changer: How China is rewriting global rules and Russia is playing along
European Council on Foreign Relations, February 2022

Europe’s role in promoting US-China arms control cooperation
Hague Centre for Strategic Studies, February 2022

The continued downturn of US-China relations and Beijing’s approach to the Ukraine crisis
Istituto Affari Internazionali, February 2022

Convaincre et contraindre Les interférences américaines dans les échanges technologiques entre leurs alliés et la Chine
Institut français des relations internationales, February 2022

China’s path to geopolitics: Case study on China’s Iran policy at the intersection of regional interests and global power rivalry
Stiftung Wissenschaft und Politik, February 2022

Chinas nukleare Aufrüstung betrifft auch Europa
Stiftung Wissenschaft und Politik, February 2022

In the electric vehicle race, China coming first
Bruegel, January 2022

How Chinese competition helps western conglomerates
Bruegel, January 2022

China’s bullying of Lithuania spurs European unity
Carnegie Europe, January 2022

Coercion with Chinese characteristics: How Europe should respond to interference in its internal trade
European Council on Foreign Relations, January 2022

How to counter Chinese interference: Keeping an eye on the geopolitical ball
Friends of Europe, January 2022

Lithuania, China and EU lawfare to counter economic coercion
Centre for European Policy Studies, December 2021

China’s approach to global economic governance
Chatham House, December 2021

China’s new military base in Africa: What it means for Europe and America
European Council on Foreign Relations, December 2021

Read this briefing on ‘EU-China ties and Russia’s war on Ukraine‘ in the Think Tank pages of the European Parliament.

Written by Andrés García Higuera.

Automated decision-making by systems that use machine learning to dynamically improve performance are still seen as lacking the ‘human perspective’ and flexibility to adapt to the particular nuances of specific cases. But perhaps, as they lack the ‘cunning’ to hide their biases, automated systems actually make fairer decisions than do humans, when these decisions are based on data that have been properly curated.

Machine learning systems can perform tasks for which they were not initially developed. While it is usually possible – and very effective – to develop specific algorithms to solve well-defined problems, this is not always the case when confronting more complex situations. In these instances, it may be more efficient to explore ways in which the machine can develop or adjust its own decision-making algorithms, rather than for human programmers to try and specify every step, taking all possible nuances into account.

Machine learning (ML) is a form of artificial intelligence (AI) in which computers develop their own decision-making processes for situations that cannot be directly and satisfactorily addressed by available algorithms. The process is adjusted through the exploration of existing data on previous similar situations that include the solutions found at the time. The system trains itself to come to a decision-making process whose solutions would match those of the training examples, when confronted with the corresponding initial data. The assumption is that new problems arising in similar situations can interpolate between those examples and, therefore, the appropriate solutions will follow similar lines.

The task of programmers is no longer to identify the specific steps constituting the right algorithm to solve the problem, but to find the right data or set of examples that will lead the ML system to adjust its decision-making process properly. The risks of this method are obvious, as it cannot be guaranteed that the resulting system will extrapolate situations in a meaningful way when the problem deviates significantly from the original learning data. The advantages are also evident, as this method facilitates solutions for very difficult problems in a dynamic, self-adjusting and autonomous way.

Potential impacts and developments

Machine learning systems do not rely on a direct expression of knowledge, but on implicit information emanating from a wealth of data. The broader and more balanced the dataset is, the better the chances will be of obtaining a valid result; but there is no a priori way of knowing whether the available data will suffice to collect all aspects of the problem at hand. The outputs of systems based on AI can be biased owing to imbalances in the training data, or if the data source is itself biased with respect to ethnicity, sex or other factors. A typical example is the poor results some facial recognition systems present when identifying black women, because not enough images of that specific population were used in the learning process. This leads to biases related to the sampling of data and results in pernicious decisions and discrimination. Although these biases are bad enough, they are not the only ones possible; biases can already be present in the data that reflect previous decisions, which are not guaranteed to be correct. This potential discrimination against minorities and other population groups leads to major ethical concerns. Machine learning systems therefore act as a mirror of society and replicate previous biases that become assimilated as a result.

A further problem relates to complicated accountability in AI, because so many actors and different applications are involved. When AI misbehaves, or the output is incorrect, who is responsible for the error? The user that benefits from the system, its owner, the manufacturer or the developers? The situation is currently unclear and that is why transparency and traceability are so important in AI – to provide complete and continuous information on how the AI tool is designed, developed, validated and used in day-to-day practice. ‘Blaming the machine’ has become the new way to designate a scapegoat, but someone has to be clearly accountable if we want actions to be taken towards correcting malfunction and possible biases. This leads to a problem of acceptance and trust. Both the party affected by the decision and the one that will be accountable for it need to rely on the system and accept its outputs. Even if the performance of an AI system is high, reliable, secure and unbiased, it may still be rejected, because the parties affected do not understand or trust the technology. In this respect, improving education on AI, as well as involving different stakeholders throughout the whole development process might increase AI acceptability and applicability.

Finally, there are privacy and security concerns, both in normal circumstances and in case of cyberattacks that can affect results or compromise data protection. It is therefore important to build more robust and reliable systems, as well as to increase the layers of protection in AI tools.

Anticipatory policy-making

Researchers are currently working on solutions to detect and compensate for biases in the data used for training ML systems and to obtain AI tools capable of ensuring a fair and safe use independently of sex, gender, age or ethnicity. There is always a trade-off between limiting access to some information on grounds of confidentiality to mitigate bias and reducing the accuracy of the AI mechanism. Additionally, data can be anonymised and access to it can be allowed solely on grounds of legitimate interest. However, both these solutions present important safety risks and it is not always clear what can be defined as legitimate interest. Furthermore, the different availability of data depending on population can also affect the process.

Having access to all the information seems always to be the best way to ensure a good result. Although AI systems may appear to be black boxes, it is possible to introduce mitigating measures, such as the tracking and explainability of the decisions taken using methods like SHAP or LIME. These methods allow checks on the reasoning followed in a specific decision-making process, by highlighting the conditions and data used and their effect on making a final choice. The user or supervisor can thus decide whether the result is sufficiently justified depending on the context at a more personal level. This leads to the question of who that supervisor should be, as well as the need for auditing depending on the level of risk for different applications.

Artificial intelligence has become a sector with huge economic potential and Europe cannot lag behind on innovation as a result of over-regulation. Regulatory sandboxes set up temporary reprieves from regulation to allow technology and the related legislation to evolve together. Rather than increasing regulation, it is crucial to ensure that existing rules, such as the EU’s General Data Protection Regulation (GDPR), cover all new aspects that may appear as the technology evolves. European legislation such as the proposed AI act (together with the data act proposal and the data governance act) may apply not only to algorithms but also to datasets, thereby enforcing the explainability of decisions obtained through systems based on ML.

The idea of setting up AI ethics committees to assess and provide certification for the systems or datasets used in ML is also proposed by organisations such as International Organization for Standardization (ISO) or European Committee for Electrotechnical Standardization (CEN). The Organisation for Economic Co-operation and Development (OECD) follows similar lines in its recommendations on AI. While setting up standards and certification procedures seems a good way to progress, it may also lead to a false impression of safety, as the ML systems and the datasets they use are dynamic and continue to learn from new data. A dynamic follow-up process would therefore also be required to guarantee that rules are respected following the FAIR principles of data management and stewardship (FAIR: Findability, Accessibility, Interoperability and Reusability). The European Parliament’s Special Committee on Artificial Intelligence in a Digital Age (AIDA) presented a Working Paper on AI and Bias last November, paying special attention to data quality. It refers to the need to avoid ‘training data that promotes discriminatory behaviour or results in underrepresentation of certain groups, and keeping a close eye on how feedback loops may promote bias’.

Read this ‘at a glance’ on ‘What if machines made fairer decisions than humans?‘ in the Think Tank pages of the European Parliament.

Listen to policy podcast ‘What if machines made fairer decisions than humans?’ on YouTube.

Written by Stefano Spinaci.

The EU’s commitment to the objectives of the Paris Agreement, and the ambitious European Green Deal, require significant investment. It is estimated that hundreds of billions of euros are needed in the current decade to reach the carbon reduction targets.

The EU taxonomy is a classification system that aims to channel public and private investment into environmentally sustainable economic activities in order to achieve environmental objectives, such as those in the fight against climate change.

It establishes a dynamic list of economic activities considered to be environmentally sustainable, provided they contribute substantially to at least one environmental objective and do not significantly harm any other. The European Commission claims that such a common understanding of what constitutes environmentally sustainable investment can facilitate the funding of the transition to a more sustainable economy by bringing clarity to investors, avoiding market fragmentation and reducing the risk of greenwashing.

While the basic legal act for the taxonomy is already in force, the process of establishing detailed criteria on how to classify activities as green is ongoing. A first delegated act on reporting obligations of companies was adopted on 6 July 2021.

The focus of this briefing is the two delegated acts determining which activities should be considered as sustainable and contributing to the fight against climate change, and be reported as such. The first climate delegated act came into force on 1 January 2022, establishing criteria for activities helping to mitigate or adapt to climate change. Activities in the nuclear and gas sectors are the subject of a complementary delegated act proposed by the European Commission on 2 February 2022.

Read the complete briefing on ‘EU taxonomy: Delegated acts on climate, and nuclear and gas‘ in the Think Tank pages of the European Parliament.

Listen to policy podcast ‘EU taxonomy: Delegated acts on climate, and nuclear and gas‘ on YouTube.

Written by Suzana Anghel and Ralf Drachenberg.

Russia’s war on Ukraine and the linked issue of energy security constituted the clear focus of the European Council meeting held on 24‑25 March 2022. The meeting included a joint session with the President of the United States of America, Joe Biden, and it formed part of a trilogy of summit meetings in Brussels (NATO, G7 and EU) demonstrating Western unity in support of Ukraine and in response to President Vladimir Putin’s unacceptable violation of international law. The main outcomes of the meeting were: i) the creation of a new Ukraine Solidarity Trust Fund; ii) a voluntary EU joint purchasing scheme for gas, similar to that put in place for coronavirus vaccines; and iii) the endorsement of the new EU ‘Strategic Compass’. However, no further steps were taken with regard to Ukraine’s EU membership application, no common EU approach was found to address increased energy prices and no further sanctions were imposed on Russia at this stage, despite calls by some EU leaders for energy and/or transport bans. In general, the conclusions reiterated, or built further upon, the Versailles Declaration of 11 March. Important elements included the need to further reduce the EU’s strategic dependence in energy and other sensitive areas, notably critical raw materials, semi-conductors, health, digital and food security. The meeting also saw Charles Michel re-elected as President of the European Council for a second term of 30 months.

1. General aspects

The European Council meeting began with the customary address by the President of the European Parliament, Roberta Metsola. President Metsola had already met 13 of the EU Heads of State or Government bilaterally in the first two months of her mandate, in addition to addressing two informal meetings of EU leaders. Besides stating the Parliament’s view on the main agenda points, she also used the opportunity to address other topics on which the EU urgently needs to advance, notably migration and the rule of law.

Charles Michel’s first term as European Council President ends on 31 May 2022 (see EPRS outlook). During this formal European Council meeting, EU Heads of State or Government unanimously re‑elected Charles Michel for a second and final mandate. He was also re-appointed as President of the Euro Summit for the same two-and-a-half-year mandate.

As Charles Michel’s invitation indicated, to address transatlantic cooperation in the context of the Russian invasion of Ukraine, US President Joe Biden joined one session of the European Council. Subsequently, the President of Ukraine, Volodymyr Zelenskyy joined the meeting by video link.

Due to the high number of meetings on the day of the European Council, notably the North Atlantic Treaty Organization (NATO) Summit and G7 meeting – as well as the heavy agenda of the European Council itself – the Euro Summit scheduled to take place following the European Council was postponed and will now take place alongside the European Council meeting on 23‑24 June 2022.

The conclusions confirmed that EU leaders would return to all the current agenda items at a special European Council meeting, likely in mid-May, announced by French President Emmanuel Macron.

The indicative leader’s agenda for 2021‑22, updated in December 2021, concludes in March 2022, but has not been further extended for the time being.

2. European Council meeting Russia’s invasion of Ukraine

The European Council reiterated its call on Russia to withdraw its troops and to respect Ukraine’s territorial integrity and its internationally recognised borders. It urged Russia to abide by the order of the International Court of Justice, and stressed once again its violation of international law. The EU leaders condemned Russia’s targeting of civilian populations and infrastructure, called for ‘an immediate end to war crimes’, and urged Russia to facilitate the disbursement of humanitarian aid and the creation of humanitarian corridors.

The joint readout of the discussion with the US President stressed the united and coordinated Western response, expressed readiness to go beyond existing sanctions on Russia and Belarus, discussed humanitarian needs and assistance, and stressed the importance of ‘strengthening democratic resilience in Ukraine, Moldova and the wider Eastern partnership region’. The joint readout also underlined the importance of the transatlantic agenda and of ‘transatlantic security and defence through robust EU-NATO cooperation as described in the strategic compass’.

Support for reconstruction of a democratic Ukraine was at the centre of the EU leaders’ debate. They agreed on a Ukraine Solidarity Trust Fund, with funding to be the subject of an international conference to be organised in due course. Estonia also put forward a proposal to set up an ‘escrow account’ to fund Ukraine’s reconstruction from a share of gas and oil payments. Referring to the Versailles Declaration, EU leaders renewed their invitation to the European Commission to present its opinion on Ukraine’s request for EU membership ‘in accordance with the relevant provisions of the Treaties’. They did not agree to offer Ukraine a ‘fast-track’ to membership.

Millions of Ukrainians have fled the war, with one in four being displaced. The EU leaders called for intensified efforts in support of refugees, and stressed that the EU would ‘continue to provide coordinated political, financial, material and humanitarian support’ to Ukraine, which in the words of the Prime Minister of Latvia Krišjānis Kariņš, ‘is fighting our battle’ for values. European Commission President Ursula von der Leyen stressed that the EU is providing humanitarian aid and working on ‘securing safe passage’. She added that €17 billion mainly from cohesion funds (due to additional flexibility) would be made available to front-line EU countries, €3.4 billion of which would be frontloaded to swiftly provide liquidity to EU countries hosting refugees.

No further sanctions were adopted, the focus being set on full implementation of existing sanctions and on the elimination of loopholes. However, EU leaders called on the world to align with existing sanctions, and stressed the Union’s readiness to adopt ‘further coordinated robust sanctions on Russia and Belarus’. This was a compromise solution between Member States (including Ireland, Poland and the Baltic countries), which wished to go much faster with sanctions and Member States (including Belgium, Germany, Greece and the Netherlands), which stressed that it might take time to cut energy dependency in a sustainable way. Estonian Prime Minister Kaja Kallas spoke of ‘smart containment’, stressed the importance of unity and underlined that there can be no return to ‘business as usual’ that signals ‘to dictators of the world’ that they may continue their disruptive behaviour.

The G7 meeting and NATO Summit, which preceded the European Council meeting, also focused on the situation in Ukraine. The G7 leaders underlined their unity and determination ‘to restore peace and stability and uphold international law’, and warned against ‘the use of chemical, biological and nuclear weapons’. While they did not propose new sanctions, they called for Russia to be isolated in international organisations and multilateral fora, which might result in Russia’s suspension or even exclusion from the United Nations. Prior to the summit, the US and its allies questioned Russia’s participation in the G20, whilst China has thus far opposed any exclusion. The NATO leaders committed to continue to fight false narratives and expose ‘fabricated narratives or manufactured “false flag” operations’. They warned of ‘severe consequences’ in case of use of chemical or biological weapons and confirmed the further strengthening of the eastern flank. They also reaffirmed NATO’s open door policy and called on China to play a constructive international role. Jens Stoltenberg’s mandate as NATO Secretary-General was also renewed for an additional year.

Ukraine’s President Volodymyr Zelenskyy, participated in two of the meetings. At the NATO Summit, he stressed that the Ukrainian army has proved its value and contribution to European security and urged leaders to give or sell 1 % of their equipment to Ukraine, in particular tanks, aircraft and air defence systems. When addressing the European Council, he asked EU leaders not to be ‘late’ in endorsing Ukraine’s European path and urged them to determine their position in earnest.

Main message of the President of the European Parliament: Roberta Metsola stressed that Ukraine ‘looks to the EU as its destination’. She also underlined that Europe should help the displaced and that Parliament would be ‘a constructive and pragmatic partner’ in finding solutions on asylum and migration. Speaking of hope, she welcomed the Ukraine Solidarity Trust Fund initiative.

Security and defence

As flagged up in the EPRS Outlook, EU leaders endorsed the EU Strategic Compass. They continued the debate initiated in Versailles on bolstering defence capabilities in preparation for a special meeting in May 2022, at which further decisions are expected. The strategic compass offers a long-term vision, which requires sufficient means. A share of two per cent of GDP for defence spending ‘must be the floor not the ceiling’. As President Biden urged, the allies must share the burden of transatlantic security, step up defence investments and foster EU-NATO cooperation.

Main message of the President of the European Parliament: Roberta Metsola stressed that the EU was at risk and that it should show solidarity, raise national defence spending and use the ‘common EU budget more efficiently’, channelling resources ‘towards the causes that need them the most.’

Energy security

EU leaders reaffirmed their commitment to phase out the Union’s dependence on Russian fossil fuels, and called again on the Commission to present an ambitious plan by May 2022. In a joint statement, Presidents Biden and von der Leyen committed to stepping up cooperation on security of supply. The US will supply an additional 15 billion cubic metres at least of liquefied natural gas (LNG) in 2022, aiming to reach at least 50 billion cubic metres per year. A joint task force was established to assess ‘immediate energy security needs’. President von der Leyen stressed that the energy partnership with the US would enable the acceleration of the green transition and would help phase out EU fuel dependency on Russia.  

EU leaders agreed to refill gas storage to prepare for next winter, and tasked the Commission with establishing ‘solidarity and compensation mechanisms’. They also agreed to work on a voluntary joint procurement mechanism allowing the ‘common purchase of gas, LNG and hydrogen’, which would offer the EU enormous ‘bargaining power’ and would be open to Ukraine, Georgia, Moldova and the Western Balkans.

The most heated part of the debate focused on energy prices and the reform of the energy market. President von der Leyen stressed that EU leaders had explored various options to mitigate the impact of high energy prices on consumers and businesses and invited Member States to make the best possible use of the Commission’s toolbox. Regarding the Commission communication envisaging measures to cap energy prices, the Prime Minister of Italy Mario Draghi stressed that the Council will discuss the subject in May 2022, when the Commission will present options for decoupling energy prices from gas prices.

Main message of the President of the European Parliament: Roberta Metsola expressed support for a coordinated European approach to energy prices and for replenishing gas storage. She stressed that the ‘long-term target must be zero gas from the Kremlin’.

Economic issues

The EU leaders’ main message on economic issues was to further reduce the EU’s strategic dependence in the most sensitive areas, such as critical raw materials, semi-conductors, health, digital and food, by pursuing an ambitious and robust trade policy and fostering investment.

To ensure the single market functions correctly during crises, EU leaders called for strict implementation and enforcement of the single market rules, implementation of the industrial and small and medium-sized enterprise (SME) strategies, the completion of the single market in digital and services, better ecosystem interconnection across Member States, as well as improving the security and diversity of supply chains.

EU leaders endorsed the annual sustainable growth survey, inviting Member States to reflect the results in their national reform and stability or convergence programmes, as well as the draft Council recommendation on the economic policy of the euro area.

Considering the likely impact of the war in Ukraine on food security and affordability in the EU and its neighbourhood, EU leaders discussed the issue in depth and invited the Council to proceed on the Commission’s recent communication on this issue. They stressed the need to preserve the integrity of food supply chains, and invited the Commission, in coordination with international partners, to prioritise work on global food security and affordability, which will be the core objective of the FARM (food and agricultural resilience mission) initiative.

External relations

In preparation for the forthcoming EU-China summit on 1 April 2022, EU leaders considered relations with China in the context of Russia’s invasion of Ukraine. They also discussed the political crisis in Bosnia and Herzegovina, reiterating the country’s European perspective and stressing the importance of finalising constitutional and electoral reform.

The Covid-19 pandemic

Perhaps surprisingly, given the increase in case numbers across the EU – even if mortality rates are now significantly lower than they were in January 2022 – Covid-19 was not a key focus of this European Council meeting. Indeed it was rarely mentioned by EU leaders’ as they arrived for the meeting.

As expected, the European Council discussed coordination efforts as well as global health governance, solidarity, and future preparedness. They also welcomed progress on the issue of an Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) waiver for medical products, which has been under discussion at the World Trade Organization since October 2020.

Read this briefing on ‘Outcome of the meetings of EU leaders, 24‑25 March 2022‘ in the Think Tank pages of the European Parliament.

Citizens often turn to the European Parliament to ask what the European Union (EU) is doing to ensure a supply of microchips and semiconductors.

Computer chips are ubiquitous. We use them in an impressive range of products, from computers to medical devices, 5G and artificial intelligence systems, and security and defence devices. The production of these chips is dependent on a large global supply chain in which countries all over the world participate. Disruptions in one part of the supply chain can lead to major problems. In 2020, a storm in Texas and fires in Taiwan and Japan, combined with the coronavirus pandemic, led to a global shortage in chips.

We import nearly all the chips used in the EU, mostly from Taiwan. This means that the EU is dependent on foreign production, making it vulnerable to supply chain disruptions and trade disputes. To prevent shortages in the future, the European Union is planning to increase the production of chips in EU countries. 

Boosting the production of microchips in the EU

In February 2022, the European Commission proposed a European chips act. The aim is to double the EU’s current market share of chips to 20 % by 2030. To achieve this target, the EU would increase its funding of the chips industry to almost €5 billion. The EU also aims to encourage a large amount of private investment.

The European Union would boost chips production in several ways. The proposed European chips act would establish a mechanism promoting research into the development of chips, in part by making it easier for researchers to test new prototypes. The proposed legislation also aims to help companies train staff to work on chips. Additionally, the EU would set up a chips fund, which would finance start-ups and help them attract investment. The European chips act would also fund factories that produce chips.

Lastly, the Commission proposes to improve coordination between EU countries in monitoring potential shortages, and evaluating future supply and demand.  

You can find more information about progress on the proposal on the legislative train schedule website. The Parliament and government ministers from the EU countries are now considering the proposal.

Position of the European Parliament

The European Parliament has not yet adopted a formal position on the proposal for a European chips act. However, in a June 2021 resolution, Parliament already called on the Commission and EU countries to invest in the production of chips and similar technologies.

Further information

• European Chips Act – Questions and Answers, European Commission, 2022
• Digital sovereignty: Commission proposes Chips Act to confront semiconductor shortages and strengthen Europe’s technological leadership, European Commission 2022
• Ten issues to watch in 2022, European Parliamentary Research Service, In-Depth Analysis, 2022

Keep sending your questions to the Citizens’ Enquiries Unit (Ask EP)! We reply in the EU language that you use to write to us.

Written by Guillaume Ragonnaud and Marcin Szczepanski.

Russia is a major global commodity producer and exporter. The country’s invasion of Ukraine has already pushed commodity prices to historically high levels, and could also lead to commodity shortages. This situation may cause considerable economic damage, with far-reaching consequences for EU industry.

Background

Richly endowed with natural resources, Russia plays a crucial role in global energy, raw materials and agricultural markets. In 2021, it was the second global producer and net exporter of crude oil, the second producer and first net exporter of natural gas, and the sixth producer and third net exporter of coal. Supply chains around the world, meanwhile, rely on Russia for its metal exports. The country is, for instance, the top producer of palladium (40 % of world production), a metal used in catalytic converters and for chemical production and petroleum refining. Palladium belongs to the platinum-group metals, which are on the EU’s critical raw materials list. Russia is also a top agricultural commodity producer. With a considerable part of its territory within the Eurasian wheat belt, Russia boasts around 25 % of global arable land. It overtook the EU in 2016 to become the world’s largest wheat exporter, and is expected to increase its lead by 2030. In 2021 Russia was the world’s top exporter of nitrogen fertilisers, and ranked second for phosphorous and potassium fertilisers. It is also a major source of materials used to produce fertilisers in Europe (e.g. natural gas for nitrogen fertilisers). Lastly, Russia is, by far, the world’s most forested country, hosting 20 % of the global forest area.

By 15 March 2022, the EU had adopted four packages of restrictive measures against Russia, affecting trade flows among other areas. The fourth package includes an EU import ban on some steel products and denies Russian products and services most-favoured-nation treatment on EU markets (meaning that Russia may be subject to higher tariffs and import bans). The US has also targeted Russia with similar, far-reaching sanctions. So far, Russia’s exports of commodities to the EU have been spared the sort of comprehensive trade bans imposed on other sectors, but this could change. From its side, on 10 March 2022, Russia imposed retaliatory export bans (on 48 countries, including the EU Member States and the US) on more than 200 products. These include some manufactured products, such as cars, railway carriages, telecoms, and electrical and agricultural equipment, as well as some commodities such as wood and timber, with repercussions for many sectors. For now, energy and raw materials – such as metals – are not covered by the ban. Extending the list to these could have grave consequences for EU industry and for its green and digital transformation. Russia is also considering withdrawing from the WTO, which would likely complicate trade still further.

Main commodities imported by the EU from Russia

The EU imported commodities worth €108.3 billion from Russia in 2021, a sum representing 65 % of all goods it imported from Russia that year. Energy commodities represented 91 % of commodity imports (€98.9 billion), raw materials 7 % (€7.3 billion) and food commodities 2 % (€2.1 billion). Imports of the top 20 commodities for which the EU depended on Russia most in 2021 (Figure 1) totalled €103.4 billion, representing 95 % of EU imports from Russia. The highest dependency rate was for nickel ores. Nickel is used for many products (mainly stainless steel, a range of alloys, electroplating and the fast-growing electric vehicle battery market). In 2021, Russia was the world’s third biggest nickel producer, mining 250 000 tonnes (9.2 % of global production). A number of energy commodities (natural gas, oil, coal) also feature prominently in this ranking. Coke and iron ore, two materials used in steelmaking are in the top 20. Iron ore is also mainly used in steelmaking, through the blast furnace route. Sulphur, used mainly to produce sulphuric acid, is of prime importance for many industrial sectors. Synthetic rubber is used to produce tyres and other consumer goods.

Top 20 EU commodity imports from Russia, 2021 Potential impact on EU industry

The future magnitude of the impact of Russia’s war on the EU economy is largely unknown, depending not least on the duration of the war and on the policy responses made. While commodity prices started from historically elevated levels owing to strong demand, they have recently reached or neared record highs. Agricultural commodity prices had been rising steadily since 2020, and the FAO food price index reached an all-time high in February 2022. The war is likely to keep commodity prices high, which is expected to exert even stronger inflationary pressures. Together with supply-chain disruptions, and high energy and oil prices squeezing incomes, this situation could cause a global stagflationary shock.

The OECD’s initial simulations after two weeks of conflict suggested that global growth could be reduced by over 1 percentage point, and global inflation could rise by close to 2.5 percentage points in the first full year from the start of Russia’s invasion. Energy-intensive industries (such as chemicals and steel manufacturing, fertilisers and transport) are expected to be impacted by higher prices and/or possible disruptions in the availability of energy products, possibly causing industry shutdowns. By 8 March 2022, high power prices resulting from surging gas prices had already taken 900 000 tonnes of aluminium and 700 000 tonnes of zinc smelting capacity offline in Europe. Furthermore, higher prices, metal shortages, and also logistics problems, could severely affect other industries (e.g. electric vehicle production).

Global supply chains, in which the EU is highly integrated, were already under pandemic-induced stress. The war may help to reconfigure supply chains permanently, particularly if it causes closer alignment of China and Russia. Experts also consider that the war may rupture the Belt and Road Initiative: the declining use of the Russian transport infrastructure that supports supply chain links between the EU and Asia is a case in point. This reconfiguration may come in the form of a tightening of supply chains or ‘friendshoring‘. If the oil shock of the 1970s can offer a guide to the future, accelerated innovation and the use of alternative energy sources are likely to become the new, transformational forces for EU industry. However, it has first to weather the deteriorating economic climate, the shock to supply chains, and surging oil and energy prices.

Read this ‘at a glance’ on ‘Russia’s war on Ukraine: Implications for EU commodity imports from Russia‘ in the Think Tank pages of the European Parliament.

Written by Marcin Grajewski.

Inflation has reached the highest level in decades in the European Union, United States and many other countries, with the Ukraine conflict adding upward pressure on prices of energy and food. The Russian invasion has intensified the already near-record growth of consumer prices resulting from the coronavirus pandemic and broken supply-chains. The war has sharply curbed supply of energy, wheat and other products from Russia and Ukraine, their major producers. The countries’ exports look set to dwindle further if the war continues and the EU imposes a ban on its massive gas and oil imports from Russia, adding to the already strict sanctions on Moscow.

Some central banks have signalled that they will further increase interest rates, and ‘stagflation’, or high inflation coupled with economic stagnation, could follow. Before the invasion, many experts had expected rapid price growth to be temporary. Now, they believe inflation could become more entrenched, further squeezing households’ real income in coming months.

This note gathers links to the recent publications and commentaries from many international think tanks on resurgent inflation. Analyses on the war and its implications can be found in a previous edition of the ‘What Think Tanks are Thinking’ series.

The week inflation became entrenched
Bruegel, March 2022

The impact of the war in Ukraine on food security
Bruegel, March 2022

Can Europe manage if Russian oil and coal are cut off?
Bruegel, March 2022

Inflation in America: Experts react to the latest CPI release
Brookings Institution, March 2022

Stagflation: Real threat or imagined?
Council on Foreign Relations, March 2022

Russia’s war on Ukraine: There is worse to come (for the West as well)
Centre for European Reform, March 2022

Ukraine crisis could trigger cascading risks globally
Chatham House, March 2022

How agriculture bureaucrats are manipulating food prices and our diets
Mises Institute, March 2022

Inflation: Who or what is the culprit?
Mises Institute, March 2022

The European Economic Advisory Group’s report on the European economy 2022 –-Economic policy for the next decade: A changed role of governments?
IfO, March 2022

Economic consequences of the Russian invasion of Ukraine
IfO, March 2022

Preiskontrollen eignen sich nicht, um die Inflation zu bekämpfen
DIW Berlin, March 2022

World economy in spring 2022: Slower growth amid higher inflation
Euro Area Economy Spring 2022: War in Ukraine impairs post-pandemic recovery
Kiel Institute of the World Economy, March 2022

Does rational economic policy require a Stability and Growth Pact?
Österreichische Gesellschaft für Europapolitik, March 2022

Why I worry about inflation, interest rates, and unemployment
Peterson Institute for International Economics, March 2022

Fed gets a grip on 2022, still optimistic on 2023
Peterson Institute for International Economics, March 2022

Why US inflation surged in 2021 and what the Fed should do to control it
Peterson Institute for International Economics, March 2022

What is needed to tame US inflation?
Peterson Institute for International Economics, March 2022

Will anchored inflation expectations actually anchor inflation?
Peterson Institute for International Economics, March 2022

Higher oil prices stemming from Russia-Ukraine war may be temporary
Peterson Institute for International Economics, March 2022

Beyond oil, natural gas, and wheat: The commodity shock of Russia-Ukraine crisis
Atlantic Council, March 2022

What about inflation and the Russia-Ukraine crisis?
Atlantic Council, March 2022

Why inflation is President Biden’s biggest political problem
Brookings Institution, February 2022

The weakness of average inflation targeting
Bruegel, February 2022

Who is suffering most from rising inflation?
Bruegel, February 2022

East-west divergence in central bank action will not last much longer
Bruegel, February 2022

Russia’s energy role in Europe: What’s at stake with the Ukraine crisis
Council on Foreign Relations, February 2022

What do the data tell us about inflation expectations?
IfO, February 2022

Inflation rises could again poison euro zone politics
Chatham House, February 2022

Inflation politics is clearer than inflation economics
Brookings Institution, January 2022

Taking stock of the new Fed and ECB monetary policy frameworks
Brookings Institution, January 2022

Inflation expectations
Centre for European Policy Studies, January 2022

Inflation: Policymakers should stop driving it and start fighting it
Heritage Foundation, January 2022

European inflation is not American inflation
Peterson Institute for International Economics, January 2022

Inflation: Learning the proper lessons from history
Council on Foreign Relations, January 2022

Read this briefing on ‘Inflation in the wake of coronavirus and war‘ in the Think Tank pages of the European Parliament.

Written by Kjeld van Wieringen with Julia Hüntemann.

Within the scope of the European Union’s new industrial strategy, the European Commission acknowledges the need for a more strategic approach to renewable energies. Following up on the presentation of the strategy, the European Parliamentary Research Service organised a webinar, in cooperation with Parliament’s Directorate-General for External Policies of the Union, to assess developments in the global solar photovoltaic (PV) industry. The event identified opportunities as well as challenges – not only for the EU – but also for India, to reduce their dependence on solar PV technologies manufactured in China.

China emerged as the dominant producer of PV modules by 2008. By 2012, it accounted for 64 % of worldwide production, and as of 2017, 8 of the top-10 solar manufacturers were Chinese, supplying ca. three quarters of the world’s solar panels. China’s unprecedented surge as a global provider of solar panels was also enabled by a 75 % decline in production costs. While China’s success in this industry has been deemed a result of Beijing’s commitment to establish market leadership, the country has not always dominated the supply chain. In 2007, 30 % of PV manufacturing was in Europe, making the region the initial front-runner in the solar revolution. However, the swift price decreases achieved by cost reductions among Chinese PV manufacturers in combination with significant state subsidies allowed them to outcompete their European counterparts, driving them into bankruptcy. In 2012, a proposal by the Commission to implement anti-dumping duties of up to 67.9 percent was aborted, following Chinese threats to retaliate with tariffs on French wine and German cars, and thus failed to save the European solar panel industry. Currently, Europe holds less than 0.2 % of PV cell production capacities. While PV manufacturers in the EU can no longer match the cheap prices offered by Chinese competitors, Indian PV manufacturers were never able to do so, as the country joined the ‘solar race’ at a time when the China had already established market leadership.

Solar installation companies have been incentivised to rely on the cheap equipment exported from China, both in Europe and in India. Without them, solar installations – and therefore green transition plans – could not have advanced at the pace they did. Nevertheless, an unpleasant aftertaste lingers, as the dependency on Chinese solar equipment is increasingly deemed a cause for concern both in the EU and in India. 

Both Europe and India consider a domestic PV manufacturing industry important because it would provide lucrative employment opportunities, and a source of technological leadership and international prestige. More importantly however, in-house PV manufacturing would make the solar sector a source of energy security, allowing the EU and India to cut the unwanted dependencies that accompany imported oil and gas. With Europe importing 80 % of its solar panels from China, and India up to 90 % of its required solar equipment, dependencies are simply shifting from imported oil or gas to imported solar equipment, leaving much to be desired when it comes to the solar sector as a genuine source of energy security. 

In May 2020, India’s Prime Minister Narendra Modi deemed this dependence on foreign suppliers untenable and proclaimed a new policy focus on domestic (solar) manufacturing, through the ‘Atmanirbhar Bharat Abhiyan’ (Self-Sufficient India) and ‘Make in India’ initiatives. Around the same time, a letter signed by Ministers from Austria, Estonia, Greece, Latvia, Lithuania, Luxembourg, Poland and Spain called on the Commission to consider solar PV to be a strategic value chain, to receive more support under Covid‑19 recovery packages. Similarly, in the summer of 2020, 90 organisations from the European solar sector urged for solar PV manufacturing and research and development (R&D) to be at the core of the Green Deal.

With pleas to re-shore PV manufacturing capacities to Europe gaining renewed momentum, the question remains how Europe will go about providing its domestic manufacturers with a business environment in which they can compete with their Chinese counterparts, without igniting another round of solar trade disputes, as experienced in 2012‑2013. The Commission’s anti-dumping and anti-subsidy investigation, valued at more than €20 billion but cut short following Chinese threats to increase tariffs on European wines and luxury cars, became one of the largest EU-China trade disputes. The European Union could consider diversifying its supply of solar equipment, a process which will require the navigation of domestic and international pressures, and thus demands – first and foremost – a careful study of mid- to long-term trends in the global solar industry. In an attempt to help the EU anticipate these pressures, the webinar concluded with an assessment of scenarios for cooperation and competition between the EU and its Indian and Chinese counterparts respectively. These scenarios were presented within a foresight ‘Best Case’, ‘Anticipated Case’ and ‘Worst Case’ framework. 

Best CaseAnticipated CaseWorst CaseEU-IndiaIndia and the EU find effective ways of cooperating more closely within the framework of the already existing EU-India Clean Energy and Climate Partnership. The EU has been collaborating closely with India in deployment of climate friendly energy sources, collaboration that could be extended to include the manufacturing, as well as the research and development arm of the supply chain. Energy cooperation could also be embedded deeper in the recently ratified EU-India Connectivity Partnership to find investment opportunities for automated production lines. This could be particularly valuable in trying to bring next generation solar technologies onto the market (see below).Narendra Modi has pledged to achieve self-sufficiency, cutting dependencies on PV imports irrespective of their country of origin. Under current circumstances, this goal seems unfeasible given that:
1)      PV manufacturing companies in India have poor access to debt capital, meaning they have difficulties in securing loans (unlike their Chinese competitors);
2)      PV manufacturing companies in India face high electricity prices, which make operations expensive in the first place;
3)      PV manufacturing companies in India face severe difficulties in establishing economies of scale, owing to strict labour laws enshrined in the Industrial Disputes Act of 1947.
If self-sufficiency is an unfeasible goal, we can expect India to diversify its supply of solar equipment away from China, favouring producers in Europe, Japan and the USA. Given the scale of India’s Nationally Determined Contributions, the ambition of its National Solar Mission and the according demand for solar equipment, European PV manufacturers should consider India a promising market.A number of scenarios could be envisaged.
1)      India decides to pursue closer energy cooperation with Quadrilateral Security Dialogue (QUAD) partners, particularly Japan, rather than the EU.
2)      In an attempt to offer its PV manufacturers a more competitive environment, India decides to launch a safeguard duty on solar equipment imports, irrespective of their country of origin, including those imported from Europe. (NB: India already imposed such a duty in 2018. This was gradually phased out in 2020.)
India’s solar energy ambitions are seriously slowed due to a government that creates an insecure investment climate while trying to negotiate between the incompatible interest of two stakeholder groups. On the one hand, the Government of India is committed to fast and cheap solar installations, an objective which requires cheap inputs from China. On the other hand, the Government of India has pledged verbal support to domestic PV manufacturers that compete with precisely those supplying cheap equipment to India. This policy flip-flop has resulted in the imposition of trade defence instruments, e.g. the safeguard duty in 2018‑2020, which was too low to support PV manufacturers in becoming globally competitive, but high enough to create bureaucratic hurdles and confusion, discouraging investors in solar installation.EU-ChinaImports of subsidised Chinese solar panels are regulated by country-neutral instruments such as anti-subsidy rules or safeguard duties.
This creates opportunities to diversify solar panel imports through partnerships with India, Japan, South Korea and Association of Southeast Asian Nations (ASEAN) countries.
Other European green energy industries (wind, hydrogen etc.) are not out-competed.Increased regulation of solar panel imports from China cause tensions but not a trade war.
The possible introduction of the Carbon Border Adjustment Mechanism raises tariffs on Chinese solar panels using energy from coal. Possible measures following human rights concerns about the solar panel value chain in Xinjiang and worsening EU-China relations could also raise further barriers.
Increased price of solar panels due to tariffs and increased reliance on domestic manufacturing slow solar installations in Europe to a small extent.Chinese counter measures cause another massive dispute or trade war.
Tariffs cause internal divisions and civil society protest in the EU, in light of economic and climate interests.
Higher solar panel prices (domestically or foreign manufactured, but hit by tariffs), slowing solar installations significantly. 
Alternatively, a lack of (carbon emission) tariffs on solar panel imports and other protective measures to protect European solar panel industries against unfair competition result in next generation European solar technologies and production being out-competed and supplanted. The same could be true for other green energy industries such as hydrogen and wind energy. Conclusions:

The webinar discussion led to the participants suggesting a number of options for further EU action.

1. Monitoring the supply chain: The European Parliament could monitor the solar PV supply chain, an exercise that could help the European Commission identify energy partnerships with countries sharing compatible production capabilities, manufacturing processes and quality systems. Similar scenarios of cooperation and competition could be conducted with regard to the USA, Taiwan, Malaysia and Japan.
2. Steer strategic discussions on the trade-off between strategic autonomy and Green Deal: Regular exchanges of views could be held between Parliament and the relevant Commissioners, to discuss the trade-off between strategic autonomy versus an uninterrupted implementation of the Green Deal that necessitates access to cheap solar equipment imported from China. The EU could take a clear stance in this trade-off, to avoid creating confusing signals for investors.
3. Encourage access to international investors and R&D institutes: At the European level, PV manufacturing companies have already joined forces with Europe’s leading R&D institutes to develop state-of-the-art solar technologies. Now, the EU needs to ensure that European PV manufacturers also have access to international R&D institutes as well as investors. Here, the International Solar Alliance, spearheaded by India and France, could be extremely important in advancing technology transfer and finding appropriate funding sources for R&D. Parliament could look into how multiannual financial framework (MFF) instruments, such as Horizon Europe, could help achieve investment partnerships beyond the EU.
4.  It is unclear whether PV manufacturing companies in the EU, or those anywhere else, could catch up with China in this generation of solar PV technologies (i.e. crystalline silicon PV which currently still accounts for 90 % of all installed solar panels globally.). However, Japanese, US and EU companies are still on a relatively equal footing with China when it comes to R&D in ‘next generation’ solar technologies, including perovskite and organic PV. Given that these solar technologies are largely still in the ‘lab’ stage and have not yet been commercialised, scope remains for European companies to enter the market. Oxford Photovoltaics, for instance, recently set a world record, with a 29.52 % conversion efficiency using a solar cell combining perovskite and silicon. Its investments of over €150 million and the expansion of its manufacturing by 2022 indicate that future next generation technology solar panel production in Europe is still within reach.

Written by Zsolt G. Pataki.

The fifth-generation mobile network (5G) is not just a performance booster for current mobile communication networks, but is also a technology enabling the convergence of communication networks with another fundamental block of the digital era – computing. 5G technology is defined by a complex ecosystem, composed of heterogeneous stakeholders, technologies, methodologies and best practices.

On the one hand, this ecosystem offers new opportunities for digitalisation, a key reason for which 5G technology is envisaged as providing a cornerstone of European resilience and as one of the seven flagship areas of the European Recovery and Resilience Facility. On the other hand, the complexity of this ecosystem poses unexplored security and privacy concerns, risks and challenges that might threaten the feasibility of the future development of 5G. These issues, along with a possible lack of awareness about them, are factors that might lead to serious vulnerabilities regarding personal data and sensitive information. Protecting information is essential for EU citizens’ security and privacy. Information leaks can severely damage the European Union: 5G network security has become an intense battlefield between Western countries and China, where some of the main providers of 5G network equipment are established.

In this context, and in addition to two earlier studies on the impact of 5G (on human health and on the environment respectively), the European Parliament’s Panel for the Future of Science and Technology (STOA)commissioned another important study. This study aims at identifying the risks that the deployment of 5G technology could pose to EU citizens’ privacy, security, and businesses, and exploring their potential implications.

The unrivalled capability and flexibility of 5G have been made possible by a decades-long process of convergence between computing and telecommunications. Their merger brings to light a new ecosystem, where telecommunications and computing collaborate to enable new scenarios, and where stakeholders can extend their business offering and compete with each other. Throughout this epochal shift, a wide debate around privacy and security has unfolded. The complexity of the 5G ecosystem requires a deep insight into its main components, and especially into how the components affecting privacy and security interact with each other. To this end, the authors of the study performed an impact assessment based on a research conceptual map divided into four categories (privacy, security, technologies, ethics/politics), focused on the identification and analysis of the new potential risks, challenges and opportunities that 5G technology entails with respect to privacy and security.

On this basis, they formulated a set of policy options for potential enhancements of the next releases of technical specifications and regulations, organised into three dimensions (privacy, security and ethics):

• The policy options for mitigating privacy risks and challenges include, inter alia, that any organisation involved in the EU 5G ecosystem should establish a controller or a processor and should encourage its own legal departments to perform a transfer impact assessment (TIA). A potential alternative path would be to adopt a hybrid approach where personal or sensitive data is stored locally, close to and within an individual’s national boundaries (edge cloud) and less-sensitive data is stored in the cloud. Adopting a personal data wallet – a digital area where individuals can access data, provide consent and receive notifications – could be considered as a fundamental tool for exercising the rights to privacy and data protection. New European legislation will also have to monitor the evolution of the privacy issue in the next specifications and deployments of 5G technology, and ensure data sovereignty, as the 5G ecosystem requires the cooperation of several stakeholders located worldwide.
• Options to reduce security risks and challenges include network softwareisation and flexibility, with standard rules and procedures to be considered for reducing ambiguities between network components, monitoring the evolution of multiconnectivity, and accelerating cybersecurity standards – as existing cybersecurity guidelines are implemented by service and component providers in line with their internal procedures, 5G should adopt common standards for cybersecurity.
• Ethics risks and challenges may be related to a lack of citizen awareness of the impacts of 5G on ethical issues. More democratic access to adequate information on 5G ethics impacts should be provided. Awareness and critical thinking should be nurtured in the context of digital and data literacy within lifelong education projects, as well as in schools. A tailored regulatory framework for applied ethics in 5G (in the same way as there are other kinds of applied ethics, such as AI ethics, roboethics, etc.), may be needed at the EU level. The accountability, trustworthiness and reliability of 5G and related technologies (e.g. AI, IoT, robotics, etc.) has to be considered in the regulatory framework governing the implementation of 5G verticals (e.g. eHealth, smart cities, energy, etc.).

The STOA Options Brief linked to the study contains an overview of several policy options. Read the full report to find out more, and let us know what you think via stoa@europarl.europa.eu.

Written by Clare Ferguson and Katarzyna Sochacka.

With the war in Ukraine high on Parliament’s agenda, the highlight of the March II 2022 plenary session in Brussels was a formal address by Justin Trudeau, Prime Minister of Canada. Members held a debate with the Council and the European Commission on the need for an urgent EU action plan to ensure food security inside and outside the EU, in the light of the Russian invasion of Ukraine. They also debated the power of the proposed joint European action to secure more affordable, reliable and sustainable energy. Turning to the ‘Suisse Secrets’ scandal, Members debated how to encourage anti-money-laundering standards in third countries. Members also discussed the outcome of the European Council meeting in Paris on 10 March 2022, and the preparations for the 24‑25 March 2022 meeting. Several legislative files were adopted, inter alia on roaming charges; the cohesion action for the presence of refugees in Europe and use of funds under the Asylum, Migration and Integration Fund (AMIF) Regulation, both in light of the war in Ukraine; and on the Status Agreement between the EU and Moldova on Frontex operations.

Roaming Regulation

Members debated extending and adapting current EU legislation on roaming charges. In interinstitutional negotiations on the proposal to revise the rules to increase transparency and network quality, Parliament succeeded in capping the wholesale roaming charges at €2 per gigabyte from this year, with a progressive reduction to reach €1 in 2027. Now that the Parliament has adopted the provisional agreement, it goes to the Council for confirmation, before citizens are able to ‘roam like at home‘ for a further 10 years.

Pilot regime for market infrastructure based on distributed ledger technology

Parliament is always keen to encourage technological solutions that benefit citizens in their daily lives. Members debated and adopted, by a large majority, the agreement reached between the co-legislators on a pilot regime developing trading and transactions in crypto-assets – usually known as cryptocurrencies (such as bitcoin and ethereum). Parliament is in favour of encouraging crypto-assets, as long as they do not pose a risk to financial stability, transparency or market integrity, or permit legal loopholes. Parliament’s Committee on Economic and Monetary Affairs (ECON) therefore proposed stricter limits on trading. Market capitalisation will be allowed up to €500 million in shares and issuance of bonds up to €1 billion.

Macro-financial assistance to the Republic of Moldova

Moldova has found itself on the frontline in Russia’s most recent aggression against its neighbours. The country has experienced Russian interference in its own democratic process in recent years, added to an economic downturn exacerbated by the pandemic. Moldova has nevertheless opened its borders to welcome large numbers of Ukrainian refugees. The country enjoys good political and economic relations with the EU, and signed association and free trade agreements with the bloc – Moldova’s largest trading partner – in 2014. The EU has provided €160 million in EU macro-financial assistance since 2017. In response to a Moldovan request for further assistance, the Commission proposed (before the outbreak of the war), to start allocating €30 million in grants and up to €120 million in medium-term loans. Members adopted this proposal by an overwhelming majority.

The fight against oligarch structures, protection of EU funds from fraud and conflict of interest

The Parliament has long stressed that corruption threatens democracy, fundamental rights and the rule of law, and undermines citizens’ trust in the EU and its institutions. The sanctions necessitated by Russia’s war on Ukraine have highlighted the presence of Russian oligarchs and oligarchic structures on EU territory. Denouncing the current situation, especially in certain countries where EU funding is sometimes diverted to such persons (and not just Russians), Parliament’s Budgetary Control (CONT) Committee tabled a hard-hitting own-initiative report highlighting the need to protect EU funding against the risks of fraud and conflict of interest. Members debated and adopted a resolution which particularly condemns the use of EU agricultural funding for personal benefit, and warns against the threat to EU values of allowing oligarchs to gain control over the media and the judiciary.

Opening of trilogue negotiations

A number of committee decisions to enter into interinstitutional negotiations were announced: from the Legal Affairs (JURI) Committee on the proposal for a directive on corporate sustainability reporting, from the Employment and Social Affairs (EMPL) and Women’s Rights and Gender Equality (FEMM) Committees on the proposal for a directive to strengthen the application of the principle of equal pay for equal work or work of equal value between men and women through pay transparency and enforcement mechanisms, and from the ECON committee on the proposal for a regulation on markets in crypto-assets.

Read this ‘at a glance’ on ‘Plenary round-up – March II 2022‘ in the Think Tank pages of the European Parliament.

Written by Micaela Del Monte and Maria Margarita Mentzelopoulou.

Russia’s invasion of Ukraine has forced hundreds of thousands of people, mostly women and children, to flee the country and seek shelter in neighbouring countries. Ukraine’s civilian population is being subjected to shelling and violence, while outside Ukraine’s borders, the international humanitarian community has quickly mobilised to provide support. As the humanitarian situation deteriorates, children are particularly vulnerable.

Humanitarian situation: Ukraine’s children in danger

As of 16 March 2022, the United Nations (UN) Refugee Agency, UNHCR, estimated that more than 3.4 million people, mostly women and children, had fled Ukraine to neighbouring countries – mainly to Poland but also to Hungary, Moldova, Romania and Slovakia. As the days go by, the conflict is generating increasing numbers of casualties, destruction and displacement within and outside Ukraine’s borders, causing one of the greatest European humanitarian crises of recent times. The crisis has triggered the ‘biggest show of European mobilisation in recent years’, but the situation is disastrous, and the human cost already too high.

According to the UN Children’s Fund (Unicef), the war is posing an immediate and growing threat to Ukraine’s 7.5 million children. Since 24 February, 1.5 million children have fled the country, but there are still up to 6 million children trapped in Ukraine. With growing numbers of attacks on schools, hospitals and other civilian infrastructure, where many people have been sheltering, these children are in grave danger and are vulnerable to injury or death, as well as being deprived of food, clean water, education and health care. According to the United Nations (UN), as of 18 March at least 59 children had been killed as a result of the war, while media reports suggest that the number may have reached at least 100.

Children, together with women, are at extreme risk of violence and abuse, including human trafficking, smuggling and illegal adoption. The International Organization for Migration (IOM) has warned of the high risk of human trafficking and sexual exploitation of the population in distress, but also of the financial insecurity suffered by certain unaccompanied children and many women who have been separated from partners and support networks. Many children are without parental care, either because, amid the chaos, they were separated from their families or because they were living in residential care or boarding schools when the Russian invasion started. Among the latter category, of 100 000 children, it is estimated that half have disabilities and need special attention and care. Save the Children reports that Ukraine probably has among the highest rates of institutional care for children in Europe, ‘with about 1.3 % of all children living in some form of residential care facility’. Ukraine is also an international surrogacy hub, and infants born to surrogate mothers are currently stranded in shelters, as their parents cannot travel to collect them.

International and EU response

UNHCR is working with partners and local organisations on the ground to reinforce vulnerability screening and referrals for people with specific needs, while improving monitoring of unaccompanied and separated children, and referral to specialised services. Unicef has meanwhile published advice for the relevant authorities, aid workers and volunteers on protecting displaced and refugee children in and outside Ukraine. The guidance states that children could be at risk of human trafficking, child labour, sexual exploitation, illegal adoption and aggravated smuggling, and that displaced girls are at particular risk of gender-based violence. The Council of Europe’s Group of Experts on Action against Trafficking in Human Beings (GRETA) has also warned of the danger faced by people fleeing the armed conflict in Ukraine of falling victim to human trafficking and exploitation. There are already reports of traffickers targeting unaccompanied children fleeing Ukraine; many such children are currently unaccounted for, following the hasty evacuation of orphanages and foster homes. In some countries, specialised anti-trafficking non-governmental organisations are disseminating leaflets to refugees, warning them of the risks of accepting transport and accommodation from strangers, and informing them of how to seek help and report suspicious cases to the existing national helplines for trafficking victims.

The EU has stepped in to help civilians affected by the war in Ukraine, for instance with emergency aid programmes that will cover some basic needs, assistance at the EU borders, and activation of the Temporary Protection Directive (Directive 2001/55/EC). On 21 March, the Commission issued operational guidelines, establishing the existence of a mass influx of displaced persons from Ukraine, in line with the 2017 communication on the protection of children in migration. The guidelines stress that the ‘protection of migrant children arriving from Ukraine is a top priority for the EU’, and that provision must be made for children’s specific needs and rights, including physical and mental healthcare, and education. They further clarify that unaccompanied, separated and orphan children (covered by Article 16 of the Temporary Protection Directive) deserve particular attention, and that decisions must always consider the best interests of the child. On 10 March, the Commission published a statement calling for the protection of children in Ukraine following the bombardment of the children’s and maternity hospital in Mariupol, and called for the establishment of genuine humanitarian corridors to evacuate the most vulnerable. This was echoed in a declaration by the European ministers in charge of children.

Together with international organisations, the Commission has called repeatedly for an end to the war, stressing the need to stop attacks in civilian areas and on civilian infrastructure. One such attack on 16 March 2022 destroyed a theatre and a swimming pool in the city of Mariupol, where some 1 000 civilians, including children, were reportedly sheltering. According to the European Union Agency for Asylum, EU and neighbouring countries have focused their efforts on ensuring that children can access education, by simplifying the relevant procedures, waiving childcare fees, and providing for smooth integration into the school curriculum and language learning.

Finally, on 23 March, the Commission published a communication outlining action taken in response to the humanitarian crisis. The measures address the protection of children and their rights and include guidance for the registration of children upon arrival. Under the European Child Guarantee, national coordinators have a key role to play here and there is a specific focus on children from institutions and children at risk of trafficking and abduction. The Commission is also preparing dedicated standard operating procedures for transfers of unaccompanied minors. It will bring together Member States to pool experience and identify the educational needs of displaced children, while establishing a ‘school education gateway’ – a one-stop shop to link to educational material from Ukraine.

European Parliament’s position

Parliament has come up with a series of proposals in recent years, stressing the need for special protection for vulnerable groups – such as unaccompanied children and women and girls. Prioritising unaccompanied and separated children, Parliament has stressed that child protection must be the leading principle when dealing with children. In its resolution of 1 March, the European Parliament strongly condemned ‘the Russian Federation’s illegal, unprovoked and unjustified military aggression against and invasion of Ukraine’ and recalled that ‘attacks against civilians and civilian infrastructure as well as indiscriminate attacks are prohibited under international humanitarian law and therefore constitute war crimes’. It also called on the Commission, the Member States and UN agencies to offer the civilian population humanitarian assistance. Parliament referred to the numerous reports of ‘violations of international humanitarian law committed by Russian troops, including indiscriminate shelling of living areas, hospitals and kindergartens’, and pointed out that, since 2014, more than 14 000 people have died in a ‘conflict fomented by the Russian Federation in eastern Ukraine’. In addition, Parliament stressed the need to pay attention to vulnerable groups, ‘in particular children in institutional care, unaccompanied children, and children with disabilities and other serious illnesses, including childhood cancers’.

In a letter to European Commission President, Ursula von der Leyen, and European Council President, Charles Michel, the Socialists & Democrats Group in the European Parliament have called for an EU initiative to protect and assist children coming from Ukraine as well as those still there. The letter calls for an urgent agreement on an EU-Ukraine child protection package, to be set up jointly with the Ukrainian government, to protect and assist children in and from Ukraine. The group intends to raise this issue for debate during Parliament’s April plenary session.

Read this ‘at a glance’ on ‘Russia’s war on Ukraine: The situation of Ukraine’s children‘ in the Think Tank pages of the European Parliament.

Written by Ralf Drachenberg.

Charles Michel’s (first) term as European Council President comes to an end on 30 May 2022. In advance of his potential re-election by EU Heads of State or Government to that function, this paper looks at his activities during the course of his 30-month mandate to date, with a special focus on the institutional and inter-institutional dimension of his role.

In practice, the coronavirus pandemic has dictated the agenda of the European Council from almost the beginning of Mr Michel’s time in office. The resulting need to concentrate on ‘crisis management’ provided him, as it had his predecessors, with the opportunity to show leadership, applying a careful balance between the role of facilitator and that of agenda-setter. Despite the challenging circumstances he has faced, Mr Michel has managed to make his mark on the European Council’s agenda, notably on external relations, championing the concept of ‘strategic autonomy’. He demonstrated strong activism both prior to and after the outbreak of the war in Ukraine, playing an important role in European Union mobilisation to support the country. He has also adjusted the European Council’s working methods, in particular with the use of video-conferences of small groups of EU leaders to better prepare full European Council meetings. Cooperation between the European Council President and the European Parliament has increased in comparison to previous years, particularly regarding activities not required of the President by the Treaties. Mr Michel has also innovated in communications, notably through a newsletter aimed at EU citizens.

Read the complete briefing on ‘Charles Michel as President of the European Council‘ in the Think Tank pages of the European Parliament.

Written by Vivienne Halleux (1st edition).

On 17 November 2021, the European Commission tabled a proposal to revise EU rules governing shipments of waste. The proposed regulation aims at easing shipments of waste for reuse and recycling in the EU, to support the transition to a circular economy; ensuring that waste exported from the EU is managed in an environmentally sound manner in the destination countries; and stepping up enforcement to counteract illegal shipments of waste. While supporting the proposed streamlining and digitalisation of procedures, stakeholders have stressed the need for significant improvements to ensure that the new regulation fulfils its objectives, in particular as regards exports of waste.

The proposal is now in the hands of the co-legislators. In the European Parliament, the Committee on the Environment, Public Health and Food Safety (ENVI), responsible for the file, plans to consider its rapporteur’s draft report in May 2022.

Versions

• March 2022: Revision of the EU’s Waste Shipment Regulation (1st edition)

Proposal for a regulation of the European Parliament and of the Council on shipments of waste and amending Regulations (EU) No 1257/2013 and (EU) No 2020/1056 Committee responsible:Environment, Public Health and Food Safety (ENVI)COM(2021) 709
17.11.2021Rapporteur:Pernille Weiss (EPP, Denmark)2021/0367(COD)Shadow rapporteurs:Cyrus Engerer (S&D, Malta)
Linea Søgaard-Linell (Renew, Denmark)
Sara Matthieu (Greens/EFA, Belgium)
Pietro Fiocchi (ECR, Italy)
João Pimenta Lopes (The Left, Portugal)Ordinary legislative
procedure (COD)
(Parliament and Council on
equal footing – formerly ‘co-decision’) Next steps expected: Publication of draft report