POLITICO.

EU | OCTOBER 20-26, 2022 | VOLUME 8, NUMBER 34

ISSN 2406-5250 ILLUSTRATION BY PIERRE BUTTIN FOR POLITICO

Beset by populists at home and

darkening economic clouds
WILL THE REAL
abroad, the French president is EMMANUEL MACRON
learning to embrace his country’s
protectionist tradition PAGE 22 PLEASE STAND UP?!
 Page 2 October 20, 2022
By Paul Dallison
TRUSS, BORRELL AND THE ART OF THE POLITICAL APOLOGY: First, a word from
our corrections department: We would like to say sorry to Donald Trump for any offence
taken when he was described in this column as “Fuckface Von Clownstick, a sentient
CAPS LOCK button, a xenophobic sweet potato, Rome burning in human form, and a
mangled apricot hell beast.” If any offense was taken it was all a giant misunderstanding.
Yes, it’s been a week full of
that old favorite, the political
non-apology apology, in which
the blame is put on the offendee
rather than the offender.
Liz Truss, the alleged British
prime minister, did at least admit
that covering the entire country
DE-
in lighter fluid and then very
CLASSIFIED
WHO’S UP
Munster cheese:
Bad news for mun-
ster’s hated rival
raclette, which
is one of many
items to have
been banned from Strasbourg’s
Christmas market by the mayor in
a quest for local authenticity. Jean
Rottner, president of the Grand
Est region, described the list as
“clownish” — although presum-
ably that’s local clowns.
Private plane rental firms: The
world’s second-richest man,
Bernard Arnault, sold his private
jet to avoid being tracked by Twit-
ter users dedicated to shaming his
pollution antics. “The result now
is that no one can see where I go
because I rent when I use private
planes,” he told French radio.
WHO’S DOWN
Donald Trump:
Another week, an-
other right-winger
buying a social
media platform.
American rap-
per Kanye West, who now goes by
Ye (short for Ye Gods That’s A Ter-
rible Thing To Say), has agreed to
buy Parler, the platform popular
among U.S. conservatives. Trump
must be furious as his own social
site — the laughably titled Truth
Social — has been a major flop.
Old toilets: Japan’s oldest
toilet has been damaged after
an employee of an organization
that preserves cultural relics
accidentally drove into it. Asked
by Declassified for comment, the
hapless driver said: “Are you tak-
ing the piss?”
THIS WEEK ON EU CONFIDENTIAL
EUROPEAN
LEADERS TALK
ENERGY, CHINA
POLITICO PODCASTS ARE AVAILABLE ON ALL MAJOR PLATFORMS, INCLUDING APPLE, GOOGLE, STITCHER, SPOTIFY AND ACAST. GO TO POLITICO.EU/EU-CONFIDENTIAL-PODCAST
Leading off
richer, it was just the execution Thankfully, he put the record
and timing that were off. straight in a tweet that said “the
Truss also said that she would metaphor I used has caused of-
“definitely” lead the Conserva- fense because it was misunder-
tive Party into the next general stood.” He then wrote a blog post
election, expected in 2024. For about it in which he doubled, tri-
non-Brits, “definitely” is a slang pled and quadrupled down on
expression that means “there is his point.
literally no chance whatsoever “My reference to ‘jungle’ has
of this happening.” no racist, cultural or geographi-
But Truss was positively grov- cal connotation,” he wrote to
elling compared with Josep Bor- all those woke snowflakes in
rell, the EU’s foreign policy chief. the Gulf states. He then added:
publicly striking a match may that I have made.” Lovely stuff. Borrell was accused by the “Some have misinterpreted the
not have been the best option. “I wanted to act, to help peo- United Arab Emirates of making metaphor as ‘colonial Euro-cen-
“First of all, I do want to ac- ple with their energy bills, to deal “racist” remarks after he com- trism.’ I am sorry if some have
cept responsibility and say sorry with the issue of high taxes, but pared Europe to a garden and felt offended.” Boom! A classic
for the mistakes that have been we went too far and too fast,” she the rest of the world to a jungle. of the genre. An apology with-
made,” Truss said in an interview added. Again, “we” not “I.” Plus “Most of the rest of the world out an ounce of actual apology.
with the BBC. See what she did “too far and too fast” suggests she is a jungle, and the jungle could If there isn’t a course on that at
there? “The mistakes that have did believe in what she was doing invade the garden,” Borrell said in the College of Europe, then there
been made” not “the mistakes by trying to make the rich even a speech at the College of Europe. ought to be.
This week in history
October 21, 1959: The Guggenheim Museum opened in New York City. Sixty-three years later and climate
activists entered another art museum, London’s National Gallery, and threw tomato soup over Vincent
Van Gogh’s famous “Sunflowers” painting. It is not known if the activists plan to throw sunflowers at Andy
Warhol’s “Campbell’s Soup Cans” work of art.
CAPTION COMPETITION BACKHANDED AWARD
Liz Truss
THE ‘3,2,1 ... COMING,
READY OR NOT’
AWARD FOR HIDING
FROM SCRUTINY
If there’s one takeaway from
the latest episode in the season
finale of “The U.K.” it’s that “Prime
Minister” Liz Truss is not, repeat
not, hiding under a desk. That was
made very clear by House of Com-
mons leader, Penny Mordaunt,
who was sent to fill in for Truss in
the chamber because the “PM”
was otherwise occupied.
Labour MP Stella Creasy took her
own guess as to where Truss was,
saying, “All we know right now is,
unless she tells us otherwise, the
prime minister is cowering under
her desk and asking for it all to
go away.” Turns out that if you
want to make an entire parliament
laugh, you just say, as Mourdant
did to Creasy: “The prime minister
is not under a desk.”
“THIS YEAR’S GLASTONBURY FESTIVAL SATURDAY NIGHT HEADLINER WAS A CONTROVERSIAL
CHOICE FOR MANY.” Things are so bad for Truss that
even Labour leader Keir Starmer
Can you do better? Email pdallison@politico.eu. Best entries appear in our Friday newsletter, and here next week.
was able to fire off some jokes,
turning Margaret Thatcher’s line
“the lady’s not for turning” into an
attack on the current “pm” as “the
lady’s not for turning ... up.”
Truss has also slumped to the low-
est-ever popularity rating of any
LAST WEEK’S WINNER British political leader, which has
BY MIKE OEHLERS had a devastating impact on the
Conservative Party’s polls. The
“I was this far from shouting at Putin.” latest poll of polls by Electoral
Calculus predicts the Conserva-
tives would finish behind the Scot-
Thanks for all the entries. tish National Party if an election
The only prize is the gift of laughter, which I think we were held today — and the SNP
can all agree is far more valuable than cash or booze. only competes in Scotland.
This week’s episode comes from the heart of the European Quarter in Brussels, where the 27 EU leaders are meeting once again for a European Council. Host
Suzanne Lynch and our POLITICO team unpack what’s at stake, including the latest efforts to quell rising energy costs and address supply challenges as a
result of the war in Ukraine. We’ll also dive into the latest on what Europe is doing to support Ukraine militarily, financially and with Russian sanctions. Finally,
the leaders will hold a strategic discussion on China, and POLITICO’s Stuart Lau explains where relations stand between Brussels and Beijing.
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 DECLASSIFIED TOO Page 4 October 20, 2022

Palate cleanser AGENDA

Thursday,
Lens
Insider tips from our newsroom on where to eat in and around the EU quarter. October 20 — A weekly glimpse into a reporter’s notebook, er, camera roll
Friday, October 21:
European Council
Thursday,
October 20 —
Friday, October 21:
Informal meeting
of transport
ministers
Friday, October 21:
Coreper I
Monday, October
24: Environment
Council

INFLUENCERS:
Agri-food: Ana
Patrícia Carvalho
is now general
counsel and
compliance officer
for Nestlé Zone
Europe, after
working as the
company’s general
counsel for R&D in
MAGGIE COWLES Switzerland.
Comms: Jeta
Chaba Thai thanks to the long bar-style table up against
the window. It’s got no-frills decor, but the
Bejtullahu joins
Savion Ray as
RUE JACQUES DE LALAING 20A tasteful black-hued plates make the dishes’ public affairs
colors stand out. director, via the
This unassuming restaurant serves truly de- NGO Eurochild.
lightful Thai dishes. Who’s picking up the check? The mains are
Environment
quite democratically priced, from €10-€20,
What’s good? Thai cuisine is a relatively new move: Camille
but dessert will set you back about €10, too.
addition to the Brussels bubble, and the food Maury has been
here is splendid with flavorful bursts in every promoted to
Spotted: At lunch, the restaurant is abuzz
bite. The massaman curry’s sweet spices senior policy
with an EU bubble crowd munching away or
really popped, and the smooth fried tofu al- officer at WWF.
ordering takeout. After all, it’s located smack
most melts on the tongue. The curries come
served with a mound of al dente jasmine rice,
in the EU Quarter and just a stone’s throw
away from the Berlaymont and Justus Lipsius.
CORRECTIONS:
Correction:
Week 42: The Hague
making for a generous portion. In the article
And as if that weren’t enough, small butter- Fun fact: Chaba Thai is Brussels-weather “Ukraine digs in A thick autumnal fog descends on the Binnenhof government
flies carved out of carrot are perched atop proof: Two large gazebos cover its terrace, for the winter
the dish — a delightful reminder that Thai meaning that you can safely sit outside, even war” on Page 22
building in The Hague. The complex is home to both legislative houses,
cuisine is also famous for its vegetable and under heavy rain. They don’t have outdoor
heaters — good for the environment — so be
of last week’s along with the office of the Dutch prime minister which is on the upper
fruit sculptures. print edition a
sure to wear layers if you go in cold weather. paragraph was floor of a small tower called the “Torentje” facing out onto the Hofvijver
What’s not? Since there’s just one waiter cut due to a
for the restaurant, you might have to wait a Insider tip: Go for the sticky rice with mango production error. lake, partially seen here.
bit during lunchtime peak hours if there’s a for dessert. I promise you won’t regret it. This led to a
crowd. misattribution
How to get there: Turn the corner off Rue of the quotation
Vibe: Chaba Thai recreates a hipster version de la Loi at the Thon hotel. The restaurant beginning with
of the Thai street food experience thanks to is tucked away on the opposite side, right in “they want
the open kitchen, where you can watch the front of the Greek Permanent Representation. families …” The Joshua Posaner, POLITICO’s senior policy reporter in Berlin, files an image a week
cooks whip up your meal. The design means correct author is this year from wherever he’s reporting (or vacationing). Look for it on this page in
that you can easily sit and eat on your own — SARAH ANNE AARUP Oleksii Riabchyn. each print edition, and on the @politicoeurope Instagram account each weekend.

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 Page 5 October 20, 2022
ECB UNDER POLITICAL FIRE AS RECESSION LOOMS
Central bank is set to
become a top target for
governments seeking to
deflect responsibility amid
the cost-of-living crisis
BY JOHANNA TREECK
IN FRANKFURT
The European Central Bank is feeling
the heat from governments worried
that aggressive monetary tightening
WILL EU PROSECUTOR’S COVID VACCINE
PROBE ENSNARE VON DER LEYEN?
The prosecutor has
given no hints so far, so
POLITICO’s here with
a rundown of what the
investigation may — and
may not — be looking at
BY SUZANNE LYNCH
AND CARLO MARTUSCELLI
It’s the scandal that won’t go away
— and produces more intrigue than
answers.
The EU’s public prosecutor’s of-
will darken already dire economic
prospects.
“I’m concerned to see lots of ex-
perts and certain European monetary
policymakers explaining to us that
we need to break demand in Europe
to better contain inflation,” French
President Emmanuel Macron told
Les Echos in an interview earlier this
week. “One must be very careful.”
As economic pain starts to bite
over the winter, the central bank will
become an increasingly likely target
for governments seeking to deflect
responsibility for citizens struggling
to make ends meet.
fice on Friday said it was investigat-
ing the EU’s purchase of coronavirus
vaccines during the pandemic’s peak.
Yet the cagey announcement offered
almost no details — nothing on whom
it was investigating, what potential
crimes it was looking for, or why it
had taken the step now.
Enter the Brussels speculation ma-
chine. Its top chatter: Ursula von der
Leyen’s texts.
For months, pressure has been pil-
ing up on the European Commission
president since her admission that
she swapped texts with Pfizer Chief
Executive Albert Bourla while the EU
was negotiating its vaccine contract
with the company. Two EU watchdog
The ECB has raised interest rates
by 50 basis points in June and 75 ba-
Inflation sis points in September and signaled
further tightening ahead. President
continues Christine Lagarde has said that, given
to be current inflation pressures, interest
rates may have to rise to a level where
primarily they hurt growth.
driven by Echoing Macron, the Portuguese
Finance Minister Fernando Medina
energy and expressed concerns over the speed
at which the ECB is raising interest
food prices. rates and the implications this may
have on growth.
Macron and Medina spoke just
over a week before the ECB next
Given that the agencies have already chided her over
EU prosecutor the matter, venting over the Commis-
specifically sion’s refusal to produce the texts.
investigates But is the European Public Pros-
criminal ecutor’s Office even looking into this
matters, matter? For now, there’s no way of
it can’t be knowing.
overstated how In the meantime, POLITICO breaks
bad this would down what this might mean for von
be for von der der Leyen and the EU, and looks at
Leyen if she what (or who) else might be in the
was swept up EU prosecutor’s crosshairs.
in the probe.
HOW DID THIS ALL START?
OLIVIER HOSLET/
EFE VIA EPA In April 2021, von der Leyen told the
New York Times that she had traded
texts with the Pfizer CEO for a month
in the run-up to the EU signing its
News
policy meeting on October 27. With
inflation hitting a record 10 percent
in September and showing no signs
of easing, investors are currently bet-
ting on another 75-basis-point move.
Earlier this month, Finnish Prime
Minister Sanna Marin caused some
consternation, tweeting a quote from
a research student at the University
of Helsinki that read: “There is some-
thing terribly wrong with the prev-
alent monetary policy ideas when
central banks are protecting their
credibility by pushing economies
SEE ECB ON PAGE 16
contract with the U.S. pharmaceu-
tical giant.
In the deal, the Commission com-
mitted to buy 900 million Pfizer-BioN-
Tech shots on behalf of EU members,
with an option to purchase another
900 million.
WHY DID THIS BOTHER PEOPLE?
The remarks prompted chatter
about whether von der Leyen had
freelanced during the contract ne-
gotiations and circumvented normal
channels.
Journalists requested access to the
texts, only to be told there was no
SEE VON DER LEYEN ON PAGE 16
 News
GEORGIANS
BRISTLE AT
RUSSIAN
INFLUX
People still
carry bitter BY DATO PARULAVA
IN TBILISI
memories
of Putin’s As you walk the streets of Tbilisi, Rus-
invasion in sian speakers are everywhere. That’s
not something Georgians are happy
2008
about, to put it mildly.
Even before President Vladimir Pu-
tin announced a mobilization of extra
troops on September 21, Georgia was
the second most popular destination
(after Turkey) for Russian runaways;
About 50,000 arrived in the Cauca-
sian nation since Moscow launched its
war against Ukraine. In late September,
those inflows only accelerated, with
kilometers-long queues of cars snaking
toward the mountain-flanked Upper
Lars border crossing.
For Georgians, the conflict in
Ukraine revives painful flashbacks of
their own experience of a Russian inva-
sion in 2008. That means many have
little sympathy for the new arrivals as
they are widely suspected of still back-
ing Putin’s war, but just not wanting
to fight in it.
A Georgian Graffiti, sprayed in black, on the
protester wall of the Dedaena bar in Tbilisi pro-
steps on a claims: “Russian warship, go fuck your-
Vladimir Putin self,” in homage to Ukrainian forces’
poster at a defiant refusal to surrender Snake Is-
demonstration land in the Black Sea.
held in Tbilisi. A QR code at the bar’s entrance re-
Attendees directs Russian visitors to a website,
demanded where they are asked to complete a
the country’s “visa form” designed specifically for
government them. They won’t be allowed in for a
close its drink unless they confirm that, among
borders with other things, they didn’t vote for Putin,
Russia. that Russia occupied Georgian territo-
ries, that Crimea is Ukrainian, and that
DATO PARULAVA
FOR POLITICO they wish glory to Ukraine.
Data Lapauri, founder of the De-
daena bar, said he didn’t think it was
his responsibility to make Russians feel
at home, adding the bar introduced
“visas” because Russian visitors didn’t
know how to behave themselves and
disrespectfully demanded to be served
in Russian and to pay in rubles.
“Many were aggressive, half of them
refused to come in after seeing the list.
But we need to know that the guests
we serve are not our enemy, that they
recognize our territorial integrity,” he
said.
The “visas” caused an uproar
among Russians and the bar received
numerous online threats, including
warnings that the establishment would
be burned down due to its “discrimi-
natory” policy.
POLITICS AND PRICES
After Putin declared war, many Geor-
gians flew the Ukrainian flag in soli-
darity. Some even hung the blue and
yellow banner in residential elevators.
There was an outpouring of fury when
CCTV cameras showed that Russian cit-
izens were secretly tearing them down.
Georgian frustration only grew
when an allegedly Russian user in a
popular Telegram channel asked —
seemingly unironically! — whether
it would be OK to cross the border
with the pro-war “Z” symbol post-
ed on the windshield. Another user
warned: “There’s a good chance you’ll
be punched in the face here because
of such symbols.”
As soon as the mobilization was an-
nounced, more than 50,000 Russians
came through the Upper Lars check-
point within a week. Around 35,000
left Georgia in the same period.
For Georgians who oppose Russian
influx, it’s not all about politics — it’s
also a bread-and-butter issue that is
spurring skyrocketing rents and soar-
ing food prices.
Lasha Nonikashvili is one of many
students forced to relocate because of
spiraling rents. For a year and a half,
he lived in an apartment close to his
university and work, paying 750 lari
(€280). But as Russians started to ar-
rive, his landlord jacked up the rent.
“She demanded I pay 1,300 lari
(€480), which she said was a discount
for me because others paid more,” he
said. Eventually, he had to move out
and settle for an unfurnished apart-
ment.
A recent study on Russia’s exodus
suggested it was “young, educated
and wealthy” Russians who fled the
country when the war started. How-
ever, there is little information about
the new arrivals who fled since Putin
announced the mobilization. Many in
Georgia are concerned that they will
become an economic burden.
According to IDFI, a Tbilisi-based
non-governmental organization, more
than 60,000 Russian citizens have ac-
tive bank accounts in Georgia. More
than 45,000 of those were opened
since the war started.
“They certainly played their part in
contributing to inflation, as growing
demand leads to soaring prices. On
the other hand, they had a positive
economic effect too. There is an eco-
nomic growth that can be attributed
to them, but this will be only tempo-
rary,” said Goga Tushurashvili, a head
of research at IDFI.
FRONTIER FRUSTRATIONS
Georgia unilaterally abolished a visa
regime with Russia in 2012 in an at-
tempt to boost tourism, so Russians
can enter with ease and stay in the
country for up to a year.
Many Georgians, however, are now
demanding this policy be revisited.
Some say the visa regime must be re-
introduced, while others want borders
to be closed altogether.
A survey conducted in March for
the Caucasus Research Resource Cen-
ters, an independent research organi-
zation, suggested that 66 percent of
Georgians are in favor of introducing
a visa regime for Russians. Several op-
position groups have also urged the
Georgian government to revise the
visa-free policy but to no avail.
On September 7, around 200 Geor-
gians gathered on Tbilisi’s central
Rustaveli Avenue to demand the gov-
ernment close the border to Russians
and encouraged crowds to step on Pu-
tin’s portrait. Many did so.
Ani Kavtaradze, who co-organized
the demonstration said she was con-
cerned about security as so many new
arrivals are young Russian men eligi-
ble for military service. She sees them
as people “who fled the regime only
when they were personally affected
— not before.”
“They should’ve stayed there and
dealt with it. Had they done so, they
wouldn’t need to escape now. This
country, 20 percent of which they’ve
occupied, shouldn’t become a shelter
for them. I don’t feel a moral respon-
sibility towards Russians but towards
those whom they killed and who died
defending us,” she said.
One of the main hurdles for those
who want a tougher visa regime is
that Georgia’s government, run by
the Georgian Dream party founded by
former Prime Minister Bidzina Ivan-
ishvili, is seen as keeping tight with
October 20, 2022 Page 6
the Kremlin. It has denied access to
Moscow’s critics.
This opens up the perverse situa-
tion where Putin’s many opponents
find it harder to get into Georgia than
nationalistic draft dodgers.
“We could’ve opened the border
for those persecuted by Russia’s to-
talitarian regime or for those asking
for asylum in line with international
conventions. But quite the opposite
is happening: The border is closed
for political refugees, not for average
draft dodgers or those who didn’t want
to give up comfort and fled to avoid
sanction,” said Irakli Khvadagiani, a
historian.
FIGHTING PUTIN
That doesn’t mean all the Russians find
Georgia inhospitable.
Znuk Zanuzok, a 35-year-year-old
from Moscow, who decided to leave
Russia to avoid the draft, certainly
hasn’t felt badly treated. “Georgians
are like kittens. They are so welcoming.
When they express their discontent
because of the past, they do it without
aggression,” he said.
With no immediate plans for the
future, he wants to get a job and earn
some money in Tbilisi before he’s on
the move again.
Other Russian citizens told POLIT-
ICO that Georgians needed to better
understand that it’s nearly impossible
to fight against Putin’s regime.
A 33-year-old LGBTQ+ activist, who
asked not to be named, said Russia
registered him as a foreign agent. He
fled to Georgia when he was notified
by the Russian prosecutors that they
were investigating him on trumped-
up charges.
“It’s so hard when you’re affiliat-
ed with an aggressor country, when
you’re told that you’re doing nothing
to stop it. I feel immense guilt know-
ing that I worked for 15 years to help
people, tried to change something,
and still — this is happening,” he said.
He understood why some Georgians
demanded the closure of the border to
Russians as many of his compatriots
have never stood up against the re-
gime. But, he said, there are also many
who have done so in vain.
“If Georgia closes borders, I have
nowhere to go. At least I can do some-
thing to help people from here. If I go
to Russia, they will arrest me. I’d rather
die because the worst thing that can
happen to you is being in a Russian
prison,” he said.
He added that many Russians who
arrive know little about the local sen-
sitivities and the history of Russian ag-
gression against Georgia. “We are so
thankful to Georgia because it allowed
us to be safe, despite what Russia has
done to Georgia,” he said.
Egor Eremeev is an IT specialist
from Russia. He said he left his home
country in 2021 after the Russian
government started to crack down
on the protest movement of Alexei
Navalny, the opposition leader who
was poisoned with the nerve agent
Novichok in 2020 and is currently
imprisoned.
When Russia attacked Ukraine, he
was already in Tbilisi. He co-found-
ed an organization called Helping to
Leave which assists Ukrainians to evac-
uate to a safe place.
Having done his share of protest-
ing in Russia, he argues the Russian
people cannot be held responsible for
not being able to stop Putin as they live
in a dictatorship. He believes that the
regime can only be challenged by the
nomenklatura, an elite group of pow-
erful people holding high positions.
“Russian people are prisoners. Un-
fortunately, the repression machine
works well in Russia. I have been in-
volved in protest movements since
2011 and protests only ended up in
imprisonments,” he said. “If anybody
can remove Putin it’s the nomenkla-
tura, so we need to pressure the no-
menklatura.”
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Gene therapy is a transformative
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 News
THE FARMING MEP
WITH A RENEGADE PLAN
TO FIX THE FOOD SYSTEM
French
BY EDDY WAX
Green
IN LE GUA, FRANCE
Benoît
Biteau says Benoît Biteau, a French Green MEP,
the bloc believes he’s got the answer to the
global food crisis. And it doesn’t
should go involve dismantling the European
full steam Green Deal.
ahead to Biteau, 55, has slammed food poli-
cymakers for their response to Rus-
its climate sia’s war in Ukraine, which exacer-
goals amid bated one of the worst global hunger
a global crises for decades.
The EU rushed to suspend envi-
food crisis. ronmental rules on leaving space
for nature on farms so that farmers
could quickly boost the production
of animal feed to replace the corn
stuck in Ukraine. “It’s pretty much
the exact opposite response than the
one we should be taking,” Biteau told
POLITICO.
Biteau — an ebullient first-time
MEP who sports an earring, pony-
tail and muttonchop moustache — has
emerged as a loud and increasingly
compelling alternative to Brussels’
farming orthodoxy, advocating organ-
ic agriculture and a swift turn away
Benoît Biteau from chemical dependence and pro-
stands ductivity-focused food policymaking.
outside his While the war in Ukraine has un-
constituency leashed shockwaves that threaten to
office in Le tip millions into starvation, inside the
Gua, south- EU it has fired up the bloc’s search
west France. for greater food sovereignty.
Inflows of Ukrainian grain have
PHOTO BY
EDDY WAX been trapped by Russia’s invasion and
the cheap and plentiful natural gas
from Russia used to make nitrogen-
based fertilizers has become scarcer
and costlier. Food prices are higher
for EU consumers, while many coun-
tries around the world are struggling
to afford imports.
All this has provided fuel for de-
tractors of the bloc’s 2030 green
farming agenda who say that now is
not the time to be making environ-
mental leaps that could curtail crop
yields. The French government is
now openly questioning the EU’s
Farm to Fork strategy, which contains
targets to slash the use of pesticides
and fertilizers, and to massively boost
organic farming.
In May, Erik Fyrwald, the CEO
of the seeds and agrichemicals gi-
ant Syngenta, said the impact Rus-
sia’s war is having on global hunger
meant the EU should rethink its plan
to boost organic farming. He said it
produces lower yields than conven-
tional agriculture, which uses syn-
thetic fertilizers and pesticides.
“Food is being taken away from
people in Africa because we want or-
ganic produce and our governments
support organic farming,” he told the
Neue Zürcher Zeitung, a Swiss news-
paper.
That’s a load of manure, accord-
ing to Biteau. The MEP said that or-
ganic farming performs well, and
that high food prices are mainly be-
ing driven by market speculators who
profit from unfounded fears of future
shortages, and that entrenched farm
lobby interests are instrumentalizing
the war to thwart the bloc’s urgently
needed green goals for farming.
“Today it’s the war in Ukraine
used as an alibi, tomorrow it’ll be
droughts, then floods. The truth is
we need to act fast because other-
wise we’re going to see even more
violent climate events which will truly
threaten food sovereignty,” he said.
WALKING THE TALK
Biteau balances his responsibilities
as an EU lawmaker with tending to
his large organic farm in Nouvelle-
Aquitaine, in southwest France,
where he grows grains and pulses,
practices agroforestry and raises lo-
cal, endangered livestock breeds.
In between murmuring to his
Poitevin donkeys in the local Sain-
tongeais dialect, he explained how
he follows the principles of agroecol-
ogy by rotating his animals across the
fields to naturally fertilize the soil and
growing some 17 crops for human
consumption — lentils, wheat, soya,
millet, buckwheat and others — on
the other half of his land. He feeds his
animals with grass, clover and alfalfa
from his own meadows rather than
water-intensive corn or soybeans im-
ported from South America.
His farm escaped the worst rav-
ages of this summer’s record-break-
ing drought and heat wave, he said,
which he credits to planting such a
diverse range of crops. “If all farmers
worked like me we’d have no need
for Bayer, Monsanto, BASF, or the
seed companies, because farmers
find their autonomy again,” he said.
As he poured out herbal tea in his
cozy constituency office, with the
village church bells chiming in the
background, Biteau said he distrust-
ed the “divine mission” of massive
agrichemical companies to feed the
world, saying that instead of focus-
ing on maintaining lucrative exports
the EU should be helping countries
in the Global South strengthen their
own food autonomy.
The EU is a food export power-
house, but recent vulnerabilities in
global supply chains have exposed its
reliance on importing critical ingredi-
ents like corn, soybeans and fertilizer
in order to keep that system ticking
over. Biteau believes the EU’s export-
focused model comes at too great a
cost to the environment and climate
in Europe and beyond.
“It’s what I do on my farm that
gives me the credibility and the le-
gitimacy behind what I say,” he said,
adding that he wanted to return his
family farm to the “peasant common
sense” of his grandfather, after inher-
iting the land from his father aged 40.
Biteau’s farming credentials are
firmly established in France, where
he was the agriculture point person
on this year’s presidential election
campaign for Greens leader Yannick
Jadot, a close ally. Biteau received a
early boost in his career when the
then Agriculture Minister Michel Bar-
nier (later of Brexit fame) awarded
him the prize for being the nation’s
best sustainable farmer in 2009.
Having spent close to two decades
evangelizing greener farming at home
and being garlanded for it, Biteau’s
profile is now growing in Brussels,
where in January the Green group
chose him as one of its top voices in
the Parliament’s agriculture commit-
tee, widely considered to be a bastion
of conservative farm interests.
“He’s a heavyweight [and] and
shrewd operator,” said a Parliament
official in the committee. “He’s con-
sistent and on message for the tran-
sition towards sustainability [and]
green issues.”
Biteau has used the largely honor-
ary position as the committee’s first
vice president to campaign against
gene-edited crops and the herbicide
glyphosate, and in favor of a more
October 20, 2022 Page 8
sustainable water policy (he was be-
hind a recent resolution calling for
more EU action against drought).
Biteau fought in vain against the
latest iteration of the Common Agri-
cultural Policy, the EU’s massive farm
subsidy scheme, which will still dole
out some €270 billion over the next
five years and has been criticized
as a non-green pseudo-reform. In-
stead of paying subsidies based on
farm size, farmers should receive EU
funds based on how many workers
they employ, which would encourage
greener, less intensive types of food
production, he argued.
He already plans to run for a second
term in 2024. “I want to bring a differ-
ent way of looking at things,” he said.
BIG FARMER
Biteau’s views have made him few
friends in the agricultural establish-
ment. In fact, they’ve endangered
his life.
A man shot at him and his family
on his farm in May last year. No one
was hurt and the gendarmerie are still
investigating. In a separate incident,
his harvest of buckwheat was found
to been contaminated with datura,
a psychoactive plant also known as
devil’s weed that can be fatal if con-
sumed in large doses.
Biteau said he regularly receives
death threats in the post and online.
Referring to the haters, he said: “They
systematically try and pour opprobri-
um, discredit and suspicion on who
I am, including about what I man-
age to do on my farm except that I
no longer hear from anyone who’s
visited my farm.”
He is fervently opposed to the FN-
SEA, France’s main farmers’ lobby,
which has close ties to President Em-
manuel Macron. The FNSEA’s current
chief Christiane Lambert is also the
president of Copa, the powerful EU
farm lobby, and she regularly hob-
nobs with EU farm ministers at their
monthly meetings in Brussels, Prague
— or most recently in Luxembourg.
Biteau accuses the lobbies of being
in league with the big agrichemical
giants whom he describes as “grave-
diggers,” keeping farmers shackled to
a lose-lose cycle of debt and chemi-
cal dependence amid an energy and
cost-of-production crisis.
He described European Ag-
riculture Commissioner Janusz
Wojciechowski as a “marionette” of
vested farm interests, and has a long-
running feud with fellow French MEP
Jérémy Decerle, a cattle farmer who is
part of Macron’s EU grouping Renew.
“I find that what he defends is not
coherent with what agriculture and
farmers need,” Decerle said of Biteau,
accusing him of doing down French
farmers. “This type of radical mes-
sage or stance is rather dangerous
for citizens and for agriculture,” he
said, adding that green NGOs exert as
much power as farm lobbies in Brus-
sels, if not more.
Asked if Biteau is a major player
in the world of farm politics, Decerle
said: “He’s part of the game, but that’s
to be expected.” The two are no lon-
ger on speaking terms.
Biteau is relentless in his attacks
on the farming establishment and in
particular the main lobby groups rep-
resenting farmers. “They are hitting
farmers’ capacity to have revenue so
that they can enrich themselves, and
they claim to be defenders of farm-
ers,” he says of the agriculture lobby
groups like Copa & Cogeca and the
FNSEA.
“I don’t dispute the political legiti-
macy of Monsieur Biteau as an MEP
— I don’t share his ideas — [but] Mon-
sieur Biteau cannot dispute the pro-
fessional legitimacy of the FNSEA,”
said Arnaud Rousseau, the group’s
first vice president.
“This is not the first time Mon-
sieur Biteau attacks us, and it cer-
tainly won’t be the last.”
 N OV E M B E R 2 9
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BRUSSELS &
ONLINE
Join the
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L E A D I N G PA R T N E R S
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towards a more sustainable future. Is the EU on track to peak
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J O I N U S TO E N G AG E W I T H :
AL GORE
former vice president, United States
PASCAL CANFIN
MEP (Renew Europe, France)
SIMON STIELL
executive secretary, United Nations Framework Convention on
Climate Change (UNFCCC)
DIEDERIK SAMSOM
head of cabinet of the executive vice president for the Green Deal
Frans Timmermans, European Commission
CATHERINE MCK ENNA
chair, UN’s High-Level Expert Group on the Net-Zero Emissions
Commitments of Non-State Entities (HLEG)
LAURA COZZI
chief energy modeler, International Energy Agency (IEA)
KADRI SIMSON
EU commissioner for energy
ALEXANDRA VAN HUFFELEN
state secretary for digital, The Netherlands
ANDREA VENA
chief climate and sustainability officer, European Space Agency (ESA)
JULIA POLISCANOVA
senior director for vehicles and emobility, Transport & Environment
P R E S E N T I N G PA R T N E R S N E T WO R K I N G PA R T N E R
 News
BRITAIN’S MARIO DRAGHI TAKES THE WHEEL
Orthodoxy
has BY ESTHER WEBBER
AND ANNABELLE DICKSON
returned IN LONDON
to the UK
Treasury in Lurching erratically from economic
to political crisis and back again, Brit-
the form of ain has called for its very own “Su-
technocrat per Mario.”
Jeremy Jeremy Hunt is the staid — some
Hunt would say dull — establishment fig-
ure suddenly pulled back into govern-
ment as a counterweight to the disas-
trous crash and burn of Liz Truss’
now-junked economic plan.
Hunt was named chancellor — the
most senior position in government,
beneath the prime minister — after
Truss sacked her hitherto close ally
Kwasi Kwarteng last Friday.
Three years after Hunt left the Cab-
inet, having refused a demotion from
an ascendant Boris Johnson, Tory
moderation appears back in fashion.
“Hopefully what it signifies is
the re-emergence of dullness,” said
a weary former government aide,
who worked with Hunt during his
long Cabinet career.
In a hastily arranged TV statement
Monday, Hunt struck a markedly dif-
ferent tone from the libertarian de-
fiance of Truss and Kwarteng. He
stressed the need for “confidence
and stability” in the U.K. economy
and paid homage to the British state’s
most important financial institutions
— the Office for Budget Responsibil-
ity (OBR) and the Bank of England
— in an obvious attempt to reassure
markets that normality has returned.
As expected, Hunt swiftly an-
nounced the reversal of most of the
key elements of Truss and Kwarteng’s
Many Tories tax-slashing mini-budget, which had
are skeptical sent the pound plummeting and bor-
that Jeremy rowing costs soaring when it was pre-
Hunt can sented last month.
rise to the Hunt even echoed Mario Draghi’s
challenge. famous “whatever it takes” line — de-
livered as president of the European
JUSTIN TALLIS/AFP
VIA GETTY IMAGES Central Bank during the eurozone cri-
sis of 2012 — as he pledged that the
U.K. government would “make what-
ever tough decisions are necessary”
to calm the markets.
Indeed, allies of Hunt have — per-
haps optimistically — taken to refer-
ring to Hunt as “Jeremy Draghi,” given
the rescue job lying before him. And
while the new chancellor may lack
Draghi’s grand financial pedigree, it’s
true that like the former ECB chief
he has been drafted in to the top of
government — without any vote — to
dramatically change his nation’s eco-
nomic course and calm the choppi-
est of waters.
Jonathan Portes, professor of eco-
nomics at King’s College London,
compared the U.K. to Italy’s “dysfunc-
tional” pattern of swinging between
“incompetent right-wing populists”
and “well-intentioned technocrats,”
who “can’t actually seem to turn the
ship around.”
Strikingly, upon taking office Hunt
immediately sought to reassert the
wisdom of the so-called Treasury or-
thodoxy which Truss and Kwarteng
had purposefully set out to disrupt
with their unfunded tax cuts, side-
lining of the OBR and abrupt sack-
ing of Tom Scholar, the most senior
civil servant at the finance ministry.
Two long-serving Conservative
MPs who have been heavily critical
of Truss reached for the same word
as they offered cautious praise for
the decision to put “a grown-up” in
charge of the economy.
The markets also responded pos-
itively both to Hunt’s appointment
and his first acts as chancellor. But the
task ahead of him remains daunting,
given the ongoing political and eco-
nomic turbulence facing the U.K., and
the significant financial hole still pres-
ent in the government’s plans which
he has pledged to fill in a broader fis-
cal statement on October 31.
CLOSE TO DOOM
Giles Wilkes, a partner at Flint Global
and former No. 10 economic adviser,
said the U.K. government had been
backed into a corner by the unforced
errors of the mini-budget, and now
had little choice but to revert to the
norm.
“You should be able to take a bold
step left or right without worrying
you’re about to plummet to your
doom,” he said of the U.K. chancel-
lor, but “this government has now
gone into such a close-to-doom
position that the gravity of the Trea-
sury orthodoxy is all it can think
about.”
Plenty of Tories are skeptical that
Hunt can rise to the challenge, point-
ing out that while he — like Truss
herself — may be one of the most
experienced Cabinet ministers in par-
liament, he had a decidedly mixed
track record during his years in office.
As culture secretary, he was em-
broiled in scandal during News Corp’s
proposed takeover of BSkyB, and as
health secretary he fought a seem-
ingly never-ending battle with doc-
tors while preparing the country — by
his own subsequent admission — for
the wrong kind of pandemic before
COVID-19 struck.
He then launched two under-
whelming bids to become party
leader, being roundly beaten by Bo-
ris Johnson in 2019 before becom-
ing one of the first candidates to be
eliminated from this year’s race after
receiving a meager 18 votes of sup-
port from fellow MPs.
“I don’t think he is particularly
good,” a second former government
aide said. “He is just doing what the
Treasury wants him to do, because
they’ve got into such a state.”
While fellow Tory MPs appeared
willing to rally behind Hunt as he ad-
dressed the Commons for the first
time Monday afternoon, many pri-
vately suggested he was only a stick-
ing plaster for the Truss government’s
wider woes and questioned how long
either figure would be in their post.
October 20, 2022 Page 10
One MP observed that while he
thought Hunt’s appointment was the
right move, it made Truss “look even
more nuts” as she made U-turn after
U-turn on a series of flagship policies.
The same ex-aide quoted above
agreed, adding: “She signed her own
death warrant the moment she ap-
pointed Hunt. Once you put some-
one in of such a different political
opinion, you can’t even claim this is
about recognizing the markets and
we are back on growth. The whole
thing is dead.”
HUNT FOR PM?
Others, however, point out that
Hunt’s appointment to the number
two job in government — and serving
under such a weakened prime min-
ister — has strengthened his position
to the point that some would say he’s
already in charge.
In a whirlwind day on Monday he
made a televised statement, gave a
series of broadcast interviews, an-
swered dozens of questions in the
Commons and convened a private
meeting with backbench Tory MPs to
settle their nerves about the change
of course. Truss, by contrast, was
heavily criticized for her public si-
lence.
Paul Goodman, editor of party bi-
ble ConservativeHome, wrote: “At a
stroke, Truss has bigged him up and
made herself dependent on him for
support. When it comes to economic
policy, and much else, he is in a po-
sition to dictate terms for as long as
she lasts.”
Despite his new-found power, how-
ever, Hunt insists he has no desire
to succeed Truss as prime minister,
should she fall.
“I rule it out,” he told Sky News on
Monday evening. “Mrs Hunt rules it
out. Three Hunt children rule it out.”
For the time being, however, Hunt
is very much running the show.
Seb Whale contributed reporting.
 Page 11 October 20, 2022
FOR THE EU TO MINE ITS WAY
OUT OF RELIANCE ON CHINA, IT’LL
HAVE TO CONVINCE THE LOCALS
A man works
at the site of
a rare earth The EU is heavily
metals mine in dependent on foreign
Jiangxi, China. powers for valuable
JIE ZHAO/CORBIS
VIA GETTY IMAGES
materials needed to power
its green transition
BY LEONIE CATER
AND ANTONIA ZIMMERMANN
Europe wants to start mining its
own backyard in an attempt to end
reliance on China for raw materials
crucial for green technologies like
electric car batteries.
But for the Europeans who live
near mineral-rich grounds, open-
ing new mines — with their poten-
tial for local environmental dam-
age — is out of the question.
“It’s been my family’s home area
since time immemorial,” said Ca-
rina Gustafsson, a campaigner who
lives near a major reserve of rare
earth minerals in southern Sweden
that’s a potential mining site. “I
really feel like it’s personal — this
mining is threatening in so many
ways.”
The pushback from campaigners
like Gustafsson around the bloc is
causing a headache for EU leaders.
Critical raw materials like lithi-
um, cobalt and rare earth elements
Special report: European Union, Inc.
are found in technologies rang-
ing from electric vehicle batteries
to wind turbines and solar panels
— tech that lies at the heart of the
bloc’s push to go carbon neutral
by 2050.
For now, the EU depends in
large part on autocratic regimes for
its supply of these materials, espe-
cially China, which provides nearly
98 percent of the EU’s supply of
rare earths.
“Lithium and rare earths will
soon be more important than oil
and gas,” European Commission
President Ursula von der Leyen
said last month. “Our demand for
rare earths alone will increase five-
fold by 2030.”
To avoid the risk of being cut
off, Brussels is cooking up new leg-
islation expected in the spring to
diversify where it gets these materi-
als from, including by starting new
mining projects.
Yet in order to ensure a steady
pipeline of such materials and
avoid potential blackmail by auto-
cratic providers, the bloc needs to
revive certain industrial activities
that its environmentally conscious
residents would prefer not to have
to worry about again.
The EU woke up to its reliance
on foreign powers for this green
gold dust late in the game, develop-
SEE MINES ON PAGE 15
 Special report: European Union, Inc.

EUROPE’S
MICROCHIPS
SUCCESS IS
ALSO ITS
PITFALL
A die bonding
machine,
at right,
Intel’s chips project is
assembles Europe’s largest foreign
chips on a investment but Europe is
lead frame at
the Infineon
divided on its merits
Technologies
AG microchip
and sensor BY PIETER HAECK
manufacturing AND LOUIS WESTENDARP
facility in
Regensburg, The €68 billion investment of U.S.
Germany. tech giant Intel into a new micro-
chips manufacturing site in the
KRISZTIAN BOCSI/
BLOOMBERG VIA German city of Magdeburg could
GETTY IMAGES be Europe’s single largest foreign
investment to date — but it’s too
early to claim this means Europe’s
industrial policy on chips is a hit.
The European Commission
last February presented its grand
chips plan to double its global mar-
ket share in the semiconductors
industry by 2030. It is the bloc’s
most audacious attempt in roll-
ing out large-scale public support
programs worth billions to boost
its local industries. If it succeeds,
Europe would rival similar schemes
in the U.S., China and elsewhere
— and would be a rare success of
industrial policy for a bloc that for
the past decades has banished state
interventionism in favor of free
markets.
Commission President Ursula
von der Leyen already called the
strategy a “success” in her annual
address to Parliament in Septem-
ber. “This is what trusted connec-
tivity looks like,” she added at a
conference in Tallinn this month,
referring to Intel’s Germany proj-
ect and the state aid approval for a Microchip production
€730 million investment of STMi-
cro in early October. Despite billions of dollars earmarked to shore up domestic production in
But there are major hurdles that the U.S. and the EU, those two regions still are nowhere to be seen when
still stand in the way. Critics have it comes to the most advanced production of semiconductors (based on
argued that lining up money is one wafers less than 10 nanometers wide). For that technology, South Korea
thing, but allocating it in the right and Taiwan dominate.
way, and solving other bottlenecks
— like finding skilled workers for The figures below, based on numbers from the end of 2020, the latest
the sector — is another. figures available, show the geographical breakdown of wafer production,
What’s worse, the EU’s plan is by region and by size. The smaller the size, the more advanced the
also getting scathing criticism from technology.
smaller EU countries that fear the Europe’s political push to support
grand industrial policy scheme the chips industry has triggered
would benefit only the big EU  ! &  % '  % $  ! #  ! #  $( 
investment commitments since it
countries, as well as from smaller, was launched in February.
   ') !  &! $ 

European firms that feel skirted. Germany and France each roped
“Why don’t you look at your •  ! 
   &  # $  !' &  !( '  ((
 ( 
in a commitment for a multibillion
own companies that are already “mega fab.” Intel committed to a
here?” Harald Wack, chief execu- •!    #  & $ )    % #  !) '  !( %  €17 billion facility in German Mag-
tive of Wack, a family-owned busi- deburg in March that it plans to ex-
ness, said he told German ministry •#     $ȝ ) !  ! %  % &  ' %
 (&  !( # ! 

pand in years to come; an Amer-
officials as he searched for money • $ȝ ! 
 & 
 ! %  ) 
 & $ & $
   ) 
ican-French-Italian consortium
to support his €100 million new of GlobalFoundries and STMicro
factory, right about the same time   %   
teamed up for a €5.7 billion facility
as Intel was shopping for public in the French Alps in July.
funds. “But you can’t get through.” Already the size of Intel’s in-
Source: IC Insights Giovanna Coi/POLITICO vestment is without precedent.
RACE TO ATTRACT CHIPS GIANTS
“Over the next 10 to 15 years, we

want to build eight modules” that
would “certainly” exceed €68 bil-
lion, Christin Eisenschmid, Intel
Germany’s general manager, said.
That would make the project
the single biggest foreign direct
investment in European history,
according to German Trade and
Invest, a state-backed investment
agency.
While Intel has taken the plunge
in Europe, the bloc is still hoping
to attract commitments from two
other big manufacturers of cutting-
edge chips: Taiwan’s TSMC — the
world’s largest chips manufacturer
— and South Korea’s Samsung.
But Europe is competing with
other parts of the world for those
precious manufacturing bucks.
TSMC has committed invest-
ments in Japan and Arizona, and
Samsung reportedly eyes an ex-
pansion in Texas. That’s on top of
investments from both in Asian
countries. Both have up until now
been reluctant to publicly pledge
any investment in the EU.
Industry executives are pushing
Brussels to court both companies
further.
“Unfortunately, at the moment
we seem to try and do this [shift]
with Intel, and Intel just doesn’t
While Intel have the technology,” Hermann
has taken Hauser, venture capitalist and
the plunge founder of Acorn Computers
in Europe, (which spun off of chip designer
the bloc is ARM), told POLITICO in July. “We
still hoping need to do it with TSMC and Sam-
to attract sung.”
commitments Hauser is joined in his criticism
from two by other experts. “The Intel fab
other big does not make Europe more inde-
manufacturers pendent, it does not lead to more
of cutting-edge security of supply, it does not lead
chips. to more competitiveness,” said
Jan-Peter Kleinhans from Stiftung
Neue Verantwortung.
The role of TSMC became even
more remarkable over the sum-
October 20, 2022 Page 13
mer. Production in Taiwan is still
way ahead of the rest of the world
— especially in the category of
high-tech chips.
Tensions around the island, trig-
gered by a visit by U.S. Speaker of
the House Nancy Pelosi, reminded
everyone of the importance of Tai-
wan for the industry.
“We cannot depend on Tech
Taiwan,” Internal Market Commis-
sioner Thierry Breton said in early
September in Eindhoven.
SUPPORT THE LOCAL SCENE
The focus on massive projects
championed by one of the three
big manufacturers has attracted
criticism as well — both in the in-
dustry and among lawmakers in
Brussels.
Europe is home to many small
and medium-sized hidden champi-
ons in the field of machinery and
chip design, which fear they are
fed crumbs, while the big players
eat cake.
Bavaria’s Wack, the electronics
precision cleaning company, start-
ed working on its new €100 million
factory around the same time that
the Intel deal was announced. The
Bavarians tried to get public fund-
ing as well but failed, Harald Wack,
the CEO, said. “I’ve gone from the
secretary of state to the finance
minister with the same issue,” he
said.
One beacon of hope for them
is a more modest project down
south in Europe, in Catania, Sic-
ily. French-Italian chips-maker
STMicro got the European green
light for €292 million of Italian
state aid for a factory produc-
ing silicon carbide wafers used to
print chips on — as part of Italy’s
recovery plan.
Another concern, especially of
politicians in smaller EU member
countries, is that only larger EU
states that can match private mon-
ey will benefit from investments.
The German government for ex-
ample will invest at least €6.8 bil-
lion in the Magdeburg site.
The European Parliament’s law-
maker leading the file, Dan Nica
(S&D, Romania) has pleaded that
the Chips Act should “reduce dis-
parities between the levels of de-
velopment” of EU countries — i.e.
it should benefit smaller countries
too. A report published in October
by think tank Bruegel also warned
for a subsidy race, calling it “un-
surprising” that Germany obtained
the first large investments.
Some industry champions are
convinced that Intel’s public sub-
sidies for the fab in Magdeburg
create the dynamics for a bigger,
thriving semiconductors hub.
“Once [manufacturers] are there,
they will attract the suppliers, the
customers, the talent. That first
fab will pay for number two,” Peter
Wennink, chief executive officer of
chips supplier ASML, said.
The industry association Silicon
Saxony estimated that in Saxony
alone, around 100,000 people will
be working in the microelectron-
ics and communications industry
in 2030, which would be 27,000
more than today.
But that doesn’t mean Germans,
nor other Europeans, are expect-
ed to get bang for their taxpayers’
buck just yet.
According to Alan Priestley, VP
analyst at Gartner, Europe needs
at least another five years to set up
an “ecosystem” of chips knowl-
edge rivaling the U.S. Only then
would the bloc push to attract a
TSMC investment, he said.
“Magdeburg isn’t expected to
come up until 2027,” Priestley said.
“They might have started digging
the hole — but it’s not instant grati-
fication. This takes time.”
 Special report: European Union, Inc.
GO BIG OR
GO GREEN?
THE EU’S
MASSIVELY
EXPANDING
BET ON
HYDROGEN
An employee
works at the
blast furnace,
Brussels is pumping
at right, in the more and more cash
ThyssenKrupp into hydrogen projects,
plant in
Germany.
and dragging its feet on
In late 2021, climate standards for it
a high-
profile study
compared
the emissions BY AMERICA HERNANDEZ
of making
hydrogen Two back-to-back crises have
from natural pushed Europe to bet increasing
gas using amounts of cash on a hydrogen
CO2 capture revolution to meet industrial ambi-
techniques tions and reduce carbon emis-
to those from sions. But its promise to keep its
burning coal, economy growing while meeting
prompting a 2050 climate targets looks increas-
massive outcry ingly tenuous.
over the EU For the hydrogen industry, it’s
plan, which a subsidy boom. European Com-
had pitched the mission President Ursula von der
method as low- Leyen is promising a €3 billion in-
carbon. vestment vehicle, dubbed a hydro-
gen bank, to “help guarantee the
INA FASSBENDER/
AFP VIA GETTY purchase of hydrogen” by spurring
IMAGES demand using cash from the EU
Innovation Fund.
That comes on top of more than
€13 billion in state aid approv-
als for national and cross-border
projects so far: €5.4 billion for Hy-
2Tech, a cross-border initiative to
perfect the technology; €5.2 billion
for Hy2Use, aimed at applications
in hard-to-decarbonize sectors
such as steel, cement and glass;
more than €2 billion for German
projects in steel, chemicals and
production abroad; €220 million
for a Spanish plant, and €194 mil-
lion for a Romanian plant.
Two more cross-border state
aid hydrogen schemes — dubbed
Important Projects of Common
European Interest — are also in
the works, to focus on infrastruc-
ture and mobility, though amounts
have yet to be released.
Regulators aren’t quite sure how
to spend this bonanza.
For the hydrogen bank, “we’re
looking at various ways it should
be shaped, all options are still
on the table,” said Justin Rosing
from the Commission’s energy
department at the World Hydro-
gen Congress on October 12. “The
initial idea is to look at contracts
for difference” to bridge the gap
between the cost of hydrogen pro-
ducers’ need and what buyers are
willing to pay. “The initial focus
is on domestic production, but
we need to look at imports ... so
we’re really at the initial stage of
exploring it,” Rosing added.
€430 BILLION RECOVERY PITCH
Before May 2020, there was no
such thing as a standalone EU
hydrogen strategy. Hydrogen was
mentioned only as a complement
to rolling out renewable energy
and better power grid connec-
tions in the Commission’s Green
Deal plans.
Only when the coronavirus
crisis threatened to derail those
green dreams in early 2020, did
the Commission move swiftly to
prioritize hydrogen, according to
Jorgo Chatzimarkakis, CEO of in-
dustry lobby Hydrogen Europe.
“The crisis broke out, there
was a pressure on policymakers
to deliver right away, to mobi-
lize the funds needed for a green
recovery,” he recalled. “We were
very, very fast in reacting to what
the Commission needed ... we
came back to them in May with a
concrete plan.”
That industry road map called
for 40 gigawatts (GW) of electro-
lytic capacity to be built across
the EU by 2030, to use renewable
electricity to jolt hydrogen out of
water. A further 40 GW of produc-
tion capacity would also be built
abroad with the hydrogen then
imported by the EU.
Those plans had a €430 billion
price tag over a decade.
“Now, the moment we present-
ed that number to the Commis-
sion, you should have seen their
eyes, the way they reacted,” said
Chatzimarkakis. “But it was not,
‘Crap that’s crazy.’ It was, ‘How do
you break this down, how do you
do that math?’”
Hydrogen Europe backed up its
estimates with a letter signed by
81 chief executives of European
firms, pledging they were willing
to invest in the plan if the Com-
mission were to set up a “clean
hydrogen alliance” to facilitate
projects, similar to previous initia-
tives for batteries.
It worked.
By July 2020, the Commission
had a hydrogen strategy, an in-
dustry alliance and a target to pro-
duce 10 million tons of renewable
hydrogen in the region over the
next decade.
The costs were calculated as up
to €470 billion for renewable hy-
drogen by 2050 — and as much as
€18 billion for hydrogen made by
chemically stripping then-cheap
natural gas and capturing escap-
ing CO2 emissions, as an inter-
mediate production process until
the price of renewable hydrogen
came down.
There was a long way to go.
Last year hydrogen accounted for
2.5 percent of the world’s final
energy demand and was respon-
sible for 2.5 percent of global CO2
emissions.
The Commission aimed to
boost hydrogen’s share to 14 per-
cent of the EU’s final energy de-
mand by 2050 — and pay to have
existing polluting production
methods mitigated with nascent
CO2 capture techniques before
being replaced down the road
with the water-and-electrolysis
method.
It was a controversial choice
that has dogged the Commission
ever since.
GREEN PROMISE IMPERILED
In late 2021, a high-profile study
compared the emissions of mak-
ing hydrogen from natural gas
using CO2 capture techniques to
those from burning coal, prompt-
ing a massive outcry over the
EU plan, which had pitched the
method as low-carbon.
Energy Commissioner Kadri
Simson told POLITICO that regu-
lators were focused on scaling up
“both production and consump-
tion, and that was the reason
when we presented our hydrogen
strategy ... it was covering both
renewable hydrogen and low-
carbon.”
That market-making rationale
drew the ire of climate activists,
including Sweden’s Greta Thun-
berg. “If nothing else, at least it’s
refreshingly honest,” Thunberg
tweeted.
Skyrocketing gas prices since
the Russian invasion of Ukraine
have eliminated the argument that
it was necessary to fund gas-based
hydrogen until large-scale renew-
able production sites got up and
running.
The Commission’s response to
the latest energy-supply crunch
has been to adopt more of the
industry’s plans: The REPowerEU
strategy, released earlier this year,
proposes weaning the bloc off
Russian oil and gas by not only
making its own hydrogen, but
importing 10 million more tons
by 2030 from “reliable suppliers”
across the globe.
And there’s a new threat to
hydrogen’s green climate creden-
tials: The Commission is consider-
ing draft legislation that would not
require strict proof that the ma-
chines used to jolt hydrogen out of
water are solely powered by new
renewable energy installations
until 2027.
That would mean that elec-
trolysis machines plugged into the
local power grid might, at times
when it’s cloudy or not windy,
be running on electricity coming
from natural gas or coal.
Climate Action Network Europe
and other climate change cam-
paigners warned von der Leyen
that scrapping the strict energy
reporting requirements risked
making the nascent hydrogen
economy “a subsidy-bloated and
inefficient market that result[s]
in disastrous unintended conse-
quences for the environment and
climate.”
The legislation is already a year
behind schedule. This month, Hy-
drogen Europe urged von der Ley-
en to act — and to further relax the
rules by pushing the strict renew-
able reporting requirements to
2028 and allowing all first-mover
projects making hydrogen out of
water to benefit from an addition-
al 10 years of looser green rules.
“Reducing policy uncertainty
now for renewable hydrogen is
paramount if Europe does not
want to lose global leadership,”
the letter warns.
GLOBAL LEADERSHIP MIRAGE
According to the International
Energy Agency, the EU is still only
halfway to meeting its own pro-
duction targets.
“Based on the current project
pipeline, low-emissions hydrogen
production from water electrolyz-
ers in Europe could reach close
to 5 million tons of hydrogen by
2030,” the IEA’s September Global
Hydrogen Review 2022 report
reads.
But even with more flexible
green reporting rules to ramp up
more projects, the EU has a long
way to climb if the goal is to be the
global No. 1.
China still leads the hydrogen
market, followed by the U.S. and
the Middle East. The EU is fourth,
just ahead of India, according to
data from BloombergNEF, and
production costs for electrolyzer
systems are four times higher in
Europe than in China.
But according to Chatzimarka-
kis — who is “extremely happy to
see that our European campaign
to make hydrogen big is working,”
even if it means that EU-based
firms are now being tempted by
sweeter tax credits in the U.S. —
there’s still time for Europe to
speed ahead.
That is, if von der Leyen is will-
ing to up the ante. “The €3 billion
for the hydrogen bank … I tend to
interpret the €3 billion as an an-
nual contribution,” he said with a
smile.
Pietro Lombardi contributed reporting.

Mines
CONTINUED FROM PAGE 11
ing its first strategies on raw mate-
rials in the late 2000s.
“The overall situation in terms
of China has become even worse
over time and around 80 percent
of all critical raw materials [are]
coming from China,” said Frank
Umbach, research director at the
European Centre for Climate, Ener-
gy and Resource Security at King’s
College London.
The country entered the raw
materials market in the mid-1980s
and quickly became a major sup-
plier.
Part of China’s strategy is not
A rare earth only to control raw material mines
mine in China’s at home, but also abroad, he said.
Jiangxi
province.
The Democratic Republic of Congo
— where Chinese companies have
already invested billions of euros
EPA
— supplied about 70 percent of the
cobalt in 2021.
Beijing has a “record of black-
mailing this dependency,” Umbach
said, pointing to a two-month em-
bargo China imposed on rare earth
exports to Japan in 2010. Tokyo
had captured a Chinese fishing
boat in Japan-controlled waters
that have long been also claimed
by China.
Such incidents risk becoming
more frequent, Umbach warned.
The European Commission is
acutely aware of the danger. As
part of its plan to avoid replacing
one dependency with another,
the EU executive seeks to es-
tablish priority mining projects
within the bloc — and ensure they
can benefit from streamlined per-
mitting procedures and private
investments.
Many countries — including
some with ongoing mining proj-
ects — support the plan. A Franco-
German paper calling for greater
financing for raw material produc-
tion within the bloc last month re-
ceived support from several coun-
tries including Denmark, Ireland,
Poland, Greece, Portugal, Finland,
Belgium and Romania.
But while the EU executive may
have these countries on board, it
faces a harder time convincing lo-
cal residents.
Mining still has a “dirty” im-
age, conceded EU Internal Market
October 20, 2022 Page 15
Commissioner Thierry Breton in a
blog post. Environmentalists warn
that the possibility of opening
new mines within the block risks
harming biodiversity and polluting
groundwater. That’s making local
residents aware of the environ-
mental cost of the green transition
— currently being paid by com-
munities on the other side of the
globe.
FIGHTING TALK
The trade-off is being felt acutely
in Jönköping county, Sweden,
home to the EU’s most notable
deposit of heavy rare earth met-
als, an area of forest and farmland
named Norra Kärr.
Campaigners have long fought
back against attempts to mine it.
The proposed site is located near-
by a Natura 2000 area — mean-
ing it’s protected by EU law — and
uphill of Lake Vättern, Sweden’s
deepest and second-largest lake
which provides 250,000 people in
Sweden with fresh water.
Most recently, Canadian com-
pany Leading Edge Materials pre-
sented a plan for an open cast pit.
The proposal has sparked intense
debate in recent years — but cam-
paigners have so far succeeded in
staving off the plans.
“It has been the sustaining life
force and still is — not just for hu-
mans but for farmlands,” said Gus-
tafsson, the Swedish campaigner.
“[The plan] is mental to me. Men-
tally insane.”
The situation is a microcosm
for the puzzle of how to marry the
hunt for green transition technolo-
gies with protecting valuable water
sources, biodiversity and sustain-
able agricultural livelihoods, said
geologist Julie Klinger. “The poten-
tial [environmental] fallout from
[mining Norra Kärr] is really quite
serious,” she added.
The mining project’s future re-
mains in limbo.
The project is far from the only
contentious mining plan in the EU.
From lithium mines in Western
Spain and Central Portugal, to a
copper mine in Romania — where
opponents have been buying up
land within the project develop-
ment area — campaigners could
hamper the EU’s attempt to mine
its way out of China’s monopoly.
ANOTHER WAY?
Umbach, the King’s College Lon-
don researcher, said that where
“promising projects” emerge in
Europe, they run “immediately
also into local environmental pro-
tests. So it’s obviously difficult.”
Other aspects of the Com-
mission’s plan might hold more
promise, according to Klinger, the
geologist. While the EU may need
to open new mines, she said, this
should be a “distant third [choice]
behind reprocessing waste and
behind recycling,” adding that
Sweden is also reprocessing min-
ing waste to extract rare earth ele-
ments.
In addition to strong pockets of
local resistance, mines can take a
long time to start producing, she
pointed out — the EU needs new er w
supplies of critical raw materials
yesterday.
NGOs also want to see the EU
think more about how to reduce
consumption, by promoting public
transport over the production of
new electric vehicles, for example.
“The EU really focuses on the
supply side, but you should really
think about the demand side, it’s
much more important,” said Ben-
jamin Sprecher, an assistant pro-
fessor at TU Delft.
He expects the EU to go through
“a long period of making many
mistakes … The question is wheth-
 News
Von der Leyen
CONTINUED FROM PAGE 5
record of such messages.
But the EU Ombudsman later re-
vealed that the Commission had never
explicitly asked von der Leyen’s team
to look for the texts, since it didn’t
consider them “documents” that mer-
ited preservation. In a report on its
findings, the ombudsman branded
the approach “maladministration.”
The Commission countered that
it can’t provide the texts because
“short-lived, ephemeral documents
are not kept.”
Another EU watchdog, the Euro-
pean Court of Auditors, later piled on
in its own probe. The agency found
von der Leyen had intervened in ear-
ly talks with Pfizer and sidelined the
usual negotiating teams to personally
hash out a preliminary deal.
“We asked the Commission to pro-
vide us with information on the pre-
liminary negotiations for this agree-
ECB
CONTINUED FROM PAGE 5
into a recession.”
Marin later clarified that it was not
her intention to call into question the
ECB’s independence. Still, the criti-
cism highlights politicians’ instinct to
point fingers and divert blame from
themselves. This will only get worse
as economic pain begins to bite in
earnest. Recession is now the base
case scenario for most economists,
who project that Germany and Italy
will lead Europe into the downturn.
Still, ECB policymakers have
stressed that they will keep their
eyes firmly fixed on their price sta-
bility mandate. “We will do whatever
is necessary to bring inflation back to
our 2 percent target over the medium
ment,” the court wrote in a report.
“However, none was forthcoming.”
A Pfizer official last week told the
European Parliament that the compa-
ny did not negotiate its vaccine con-
tract via text message. But while the
legalese of the contract itself might
have been decided by teams of law-
yers, it’s not clear what politically sen-
sitive decisions were taken in those
crucial preliminary negotiations, of
which there is no public record.
SO WHAT CAN WE TELL ABOUT
WHETHER THE EU PROSECUTOR IS
LOOKING INTO THIS?
Not much, unfortunately.
The timing is interesting, but the
EU prosecutor could very well be in-
vestigating any of the numerous vac-
cine contracts the EU signed, as well
as other officials inside or outside the
Commission.
One factor to consider: the EU
prosecutor’s remit is to probe the
misuse of EU funds. And most of the
vaccines were ultimately paid for by
EU members — not the EU itself. How-
ever, €2.5 billion in EU money was
term,” Vice President Luis de Guin-
dos said last week while recognizing
that the eurozone may be sliding into
recession.
After reacting late to resurgent in-
flationary pressures, the hawks on
the Governing Council have been
particularly vocal in recent weeks.
Several Council members, including
Austria’s Robert Holzmann, have ex-
pressed support for another 75-basis
point increase at next week’s policy
meeting followed by another sizable
increase in December.
And this will not be the end of
it, they insist. Bundesbank chief
Joachim Nagel has warned of risks
should monetary tightening be
stopped too early, while Belgium’s
national bank chief, Pierre Wunsch,
said he “would not be surprised if
we have to go to above 3 percent.”
Signs of inflation expectations
becoming unanchored may indeed
leave policymakers little choice but
used to finance some of the upfront
costs of vaccine production.
The issue is HOW BAD COULD IT GET FOR VON
potentially DER LEYEN?
toxic for Given that the EU prosecutor specifi-
von der cally investigates criminal matters,
it can’t be overstated how bad this
Leyen would be for von der Leyen if she
was swept up in the probe. But again,
given her there is no proof so far.
involvement On Monday, a Commission spokes-
man said it “hadn’t received any in-
in a similar formation on this topic yet.”
scandal Nonetheless, the issue is poten-
tially toxic for von der Leyen given
while her involvement in a similar scandal
while she was Germany’s defense
she was minister.
Germany’s During an investigation into Ger-
many’s awarding of lucrative defense
defense contracts during her time as minis-
minister. ter, it emerged that data had been
wiped from von der Leyen’s phones,
precluding it from being used in the
probe.
Though investigators cleared von
der Leyen in the matter, she told a
German parliamentary inquiry that
ECB President to keep going. An Ifo survey among
Christine almost 1,700 experts conducted last
Lagarde has
said that,
month showed eurozone inflation
is expected to remain as high as 3.6
given current percent in 2026, director of the Ifo
inflation Center for Public Finance and Polit-
pressures, ical Economy, Niklas Potrafke, told
interest rates POLITICO. The ECB targets 2 percent
may have to inflation.
rise to a level “History teaches us that these is-
where they hurt sues will only be exacerbated if we
growth. delay action,” Irish central bank chief
Gabriel Makhlouf said Tuesday. “Rais-
DANIEL ROLAND/
AFP VIA GETTY ing interest rates is absolutely neces-
IMAGES sary as persistent inflation is damag-
ing to macroeconomic stability and
longer-term living standards.”
At the same time, however, politi-
cians are not alone in their concern
that the ECB may do more harm than
good fighting inflation that continues
to be primarily driven by energy and
food prices that the central bank has
little influence on.
Some of the more dovish policy-
October 20, 2022
Date Page
Page16
X
“lessons had been learned.”
Von der Leyen is also no stranger
to the world of pharmaceuticals. Her
husband, Heiko, is a director at the
U.S. biotechnology company Orgen-
esis, and she’s a doctor by training.
WHO ELSE COULD IT BE?
Albanian Prime Minister Edi Rama
made waves earlier this month when
he admitted that Italy’s Foreign Min-
ister Luigi Di Maio broke vaccine con-
tract rules to give Albania shots on
humanitarian grounds early in the
pandemic.
But this would seemingly be out-
side of the EU prosecutor’s remit
since the vaccines were purchased
with Italian funds, and that dona-
tion doesn’t seem to meet the bar
of “extremely high public interest”
mentioned by the EPPO.
WHAT’S NEXT?
Probably a lot of silence from the
EU prosecutor and a lot of rumors
in Brussels — until investigators of-
fer more clarity (or journalists figure
out more).
makers have argued for a more gradu-
al approach to avoid a repeat of previ-
ous tightening cycles where the ECB
raised rates only to be forced into a
U-turn. “There’s one thing that I’m
always worried about as a decision-
maker, and it’s not to be pushed to
backtrack on this path that we have to
follow,” said Portugal’s central bank
chief Mário Centeno.
Institute for International Finance
chief economist Robin Brooks cau-
tioned that central banks driving into
the fog should not do so at maximum
speed. “There’s massive global uncer-
tainty. Slow down!” he advised in a
tweet following the IMF and World
Bank meetings.
A possibly dangerous discussion
about the ECB’s role in the current
crisis is set to be flanked by a vivid
debate about the best policy path on
the Governing Council.
Ivo Oliveira contributed reporting.
 Page 17 October 20, 2022
Legislators only just beginning to come up with AI regulation
Politicians around the world only in recent years have started to draft legislation to define and regulate artificial intelligence. Among the assessed countries in the most recent AI report by Stanford
University, the U.S. is the country with the highest number of AI-related bills. Data from POLITICO Pro’s legislative monitoring tool shows the increasing activity at EU level.
AI-related bills passed into law in select countries between 2016 and 2021
In number of passed pieces of legislation
PRO BRIEF
Source: Stanford Institute for Human-Centered Artificial Intelligence (2022) AI Index report, POLITICO Pro legislative tracker
COMPETITION
Poland gets OK for ETS
subsidy
Poland won European Union
approval for a €10 billion state aid
program to partly compensate
big energy users for higher costs
resulting from the Emissions
Trading System (ETS). The
program covers part of so-called
indirect emission costs — or higher
electricity prices from carbon
prices on electricity generation
— between 2021 and 2030. As a
rule, the subsidy will cover up to
75 percent of a company’s indirect
emission costs but it can in some
cases be increased to 1.5 percent
of a company’s gross value added.
F I N A N C I A L S ER V I C E S
Truss keeps up
investment dream
Liz Truss insisted her plan for
low-tax “investment zones” will
survive even as she was forced to
ditch most of her economic plans
in a humiliating climbdown. The
U.K. prime minister has junked
a host of tax-cutting measures
— including planned reductions
in income and corporation tax —
after her package of reforms sent
the markets sliding. But Truss
told her Cabinet the “investment
zones” plan, aimed at attracting
foreign investment and boosting
British growth by loosening
regulation and promising favorable
tax rates, will live on.
H E A LT H C A R E
Moderna agrees to
cancel surplus order
Moderna and Gavi, the Vaccine
Alliance, said October 17 that they
had agreed to cancel a remaining
order of COVID-19 vaccines for the
poorest countries and set up a
framework for these countries to
access variant-adapted vaccines
in 2023. The agreement means
COVAX won’t be stuck with older
vaccines that many countries no
longer want, and it won’t be on the
hook to pay for vaccines that aren’t
being used. The deal comes as
countries increasingly turn to newer
vaccines adapted to target the
Omicron COVID-19 variant.
C Y B ER S E C U R I T Y
Countries approve ICT
conclusions
European Union member
countries on October 17 approved
the Council’s conclusions aimed
at strengthening ICT supply-
chain security. The conclusions
recommend strengthening
public procurement or foreign
direct investment screening
frameworks and invite the
Commission to issue guidelines
for contracting authorities
to assess the cybersecurity
practices of tenderers and their
subcontractors. Member countries
also support mechanisms
for financing secure digital
infrastructure and deepening
international cooperation.
AI-related legislative procedures and press releases by EU bodies over time
In number of files (left axis) and press releases (right axis) mentioning AI
S U S TA I N A B I L I T Y
Commission ordered to
rework repair proposal
The European Commission’s
proposal for so-called right-
to-repair legislation received
a negative opinion from its
independent quality control
body on October 17, meaning it
will have to come up with a new
proposal. The legislation, which
aims to encourage the repair
and refurbishment of products
rather than their replacement,
was tentatively scheduled to be
presented on November 30 as
part of a larger circular economy
package. There is a risk the bill
won’t become law before the end
of the European Parliament’s
mandate in 2024.
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pro@politico.eu
T E C H N O LO GY
France renews data-
retention order
The French government has
renewed a data-retention order,
according to a text published in
the country’s Official Journal on
October 18. “In order to safeguard
national security, electronic
communications operators … are
enjoined to retain, for a period of
one year, the traffic and location
data listed in … the French Post
and Electronic Communications
Code,” reads the decree. The
data includes the date, the time
and the duration of electronic
communications as well as
information allowing mobile
communications localization,
among other personal information.
By Cornelius Hirsch/POLITICO Pro DataPoint
F I N A N C I A L S ERV I C E S
Global inflation to stay
high for years
Global inflation pressures are set
to remain elevated for years to
come, a quarterly survey showed
October 17. The survey, conducted
by Germany’s Ifo Institute, now
puts the median inflation rate at
9.5 percent for this year, compared
with 7.7 percent expected in
the second quarter. Inflation is
expected to decline only slowly
in the years ahead, with the
expected median for 2023 rising to
7.5 percent, from 6.2 percent seen
in the second quarter. The survey
shows inflation expectations
varying significantly across the
globe, and even within Europe.
COMPETITION
Microsoft blasts UK’s
Activision probe
The U.K. competition watchdog’s
investigation into Microsoft’s $69
billion bid for Activision Blizzard
“incorrectly relies on self-serving
statements by Sony,” according
to a filing from Microsoft made
public on October 18. In the
document, Microsoft criticizes
the U.K. Competition and Markets
Authority (CMA) for relying heavily
on game console rival Sony over
how its Playstation might suffer
if it loses access to Activision’s
blockbuster game “Call of Duty.”
The CMA’s investigation into
Microsoft’s record-breaking deal
is due to be completed by March
2023.
News
TRADE
EU countries green-
light trade conclusions
The EU’s 27 countries on
October 17 green-lit conclusions
on the Commission’s trade
and sustainable development
reform, describing the new policy
approach as “necessary” to build
broad support for the bloc’s
trade agenda. The Commission
published in June its so-called
15-point action plan to bolster
green chapters in trade deals.
Brussels hopes its move toward
sanctions-based sustainability
provisions will help boost support
for its trade policy within Europe.
The Parliament passed on
October 6 its own resolution on
sustainability in trade deals.
H E A LT H C A R E
EMA backs dengue
vaccine
The EU drugs regulator has given
its thumbs up to a new vaccine
to protect against the growing
threat from the mosquito-borne
virus dengue, in a move that also
enables countries worldwide
to adopt the jab. Takeda’s shot
is designed to protect against
four strains of the virus and
can be given to anyone aged
4 and over. While there is one
vaccine currently available, the
Japanese drugmaker’s shot has
demonstrated wider protection for
young children and people older
than 45 years.
 Commentary

In climate action era,

COP27 could have been
an opportunity for moral
leadership. Instead, the
monarch is undermining
his own legacy.

BY ABDOULIE CEESAY
As a Gambian, I was watching the
actions of Britain’s new king with
great hope.
You may think this strange. Af-
rica is still reckoning with centuries
of Western colonial exploitation,
after all — a legacy that lined the
Global North’s coffers while deplet-
ing our natural resources, leaving
us impoverished and vulnerable to
the worst effects of climate change.
However, the upcoming COP27
U.N. Climate Change Conference
was a landmark opportunity for
the so-called “Climate King” to
help remedy the dangerous lack of
understanding threatening to cur-
tail climate negotiations.
A historic opportunity that, sad-
ly, he will miss.
The fact is that the world’s rich-
est are almost entirely respon-
sible for historic emissions. Last
year’s COP26 — which King Charles
opened — failed the Global South
and did not do enough to shape
the kind of global cooperation
needed to combat climate change.
Pledges made at COP26 haven’t
curbed carbon emissions, and we
are still waiting on the $100 bil-
lion promised to help developing
countries. Meanwhile, in the wake
of the destruction in Central Af-
rica, Pakistan and beyond, the call
for reparations and accountability
from the West is only growing.
But Western leaders are actively ig-
noring climate justice. Former United
States Secretary of State John Kerry
just recently dismissed the prospect
of compensating for “loss and dam-
age,” questioning which government
possesses the “trillions of dollars”
required by — or, as some believe, are
owed to — the Global South.
This is ultimately an issue of
climate justice — one which will
make or break a climate action alli-
ance between the Global North and
Global South.
And Charles could have gone
some way in overcoming this trust
deficit — not by making pledges, or
taking part in political discussions,
but by standing above politics, from
a position of moral leadership the
world would be forced to take notice.
COP27 was an opportunity for
him to use his rank to usher in a
new era of climate action, one built
on the social capital of the royal
family and the Church of England,
demonstrating to naysayers that
the British monarchy still has a rel-
evant role in modern leadership.
It’s been done before. The late
Queen Elizabeth countered the leg-
acy of colonialism that scarred our
lands. She won hearts and minds
across the region through her rela-
tionships with African leaders like
Nelson Mandela and her behind-
the-scenes influence in pressuring
the South African government over
its institutionalized racist segre-
gation. Former Canadian Prime
 October 20, 2022 Page 19

Minister Brian Mulroney credited

Charles’ mother with helping bring
an end to South Africa’s apartheid.
Today, climate experts, former
royal advisers, even the prime min-
ister of Australia all claim Charles is
one of the most significant climate
advocates of our time. Even when
the environment was hardly on most
people’s agenda, he withstood criti-
cism for his position on pollution,
and even took on British officials’
fury for his outspoken opposition to
sewage disposal in the North Sea.
And the world needs moral lead-
ers now more than ever before.
The global challenges we face,
specifically irreversible climate
change, are occurring at a time
of increased polarization and dis-
trust. Moral leaders can help unite
people against common threats by
symbolically guiding public opin-
ion and promoting shared values.
Religious leaders, for example, are
now transforming the once conten-
tious relationship between climate
change and faith. Even Pope Francis
has urged “radical’” climate action.
And Dr. Mohammad bin Abdul Karim
Al-Issa — a prominent Muslim scholar
and secretary-general of the world’s
largest Islamic NGO, the Muslim
World League — is building a revolu-
tionary coalition of climate, science
and faith leaders in the Global South,
known as Faith For Our Planet.
For his part, the King spent his
life traveling, building relations
with the Global South and advo-
cating for climate action through
unparalleled philanthropic work.
By snubbing COP27 at the behest of
his prime minister, he’s undermin-
ing his legacy, altering how history
will remember him.
Were he to have to use his moral
leadership on the world stage,
Charles might also retain greater
loyalty among the Commonwealth
— after all, from Antigua to Bar-
buda, votes are being planned to
remove him as head of state.
Saddest of all, however, his ab-
sence grants endorsement to a far
more destructive legacy — that of
colonial rule. It will essentially say to
the people of the 56 Commonwealth
countries and beyond that they have
been abandoned to face the destruc-
tion the empire helped shape.
The world is inching ever closer
to planetary disaster. War, food
shortages and displacement re-
quire the monarch’s leadership to
inspire humanitarian action, and to
influence climate solutions that are
grounded in compassion and tran-
scend petty partisan politics.
The king has a duty, to country
and God, as well as the future of hu-
manity, not to abandon his legacy at
this year’s COP27. For if he does, not
only will it harm the planet, it will
also implicitly endorse one of the
darkest chapters in history, cement-
ing the dispute between the Global
North and South permanently.

Abdoulie Ceesay is the deputy majority

leader of Gambia’s National Assembly.
He’s also a member of Gambia’s del-
egation to the African, Caribbean and
Pacific states for the EU Parliamentary
Assembly and the founder of the Help
Foundation Gambia.

Photo by Yui Mok/PA Wire

King Charles is MIA

 Opinion

THE EU’S TAKEN TOO

MANY FINANCIAL RISKS
ON COVID-19 AND UKRAINE
Ukraine, events which have creat- ations are becoming increasingly eration are, however, very real.
The current BY JOHAN VAN OVERTVELDT ed massive short- and longer-term exemplary of the bloc’s response In the case of the Ukrainian
off-budget AND MONIKA HOHLMEIER financing needs. to unforeseen crises. We already MFA, we see two potential risks:
crises Since Russia’s invasion began, used this kind of financing for the First, there is the risk of
solutions skirt WHEN MONEY GETS TIGHT in Eu- the EU has provided €2.2 billion to pandemic-related Recovery and default.
parliamentary rope, the European Commission Ukraine in the form of Macro-Finan- Resilience Facility (RRF), as mem- There is no crystal ball to predict
scrutiny, and member countries resort to cial Assistance (MFA). And in Octo- ber countries distributed money the further course of the war. As it
undermining budgetary instruments outside of ber, the Commission will borrow a among themselves, while trying to stands today, there is still no clear
the bloc’s the regular European Union bud- further €5 billion in MFA long-term exclude the European Parliament end to Russia’s invasion of Ukraine,
legitimacy and get. This became abundantly clear loans to lend to Ukraine. This al- from scrutinizing the spending as and the future ability of the country
accountability. first during the pandemic, then lows the war-torn country to benefit much as possible. to repay its long-term loans is un-
again with Russia’s invasion of and from Europe’s AAA credit rating. The risks threatening the suc- certain — though one can only hope
the bloc’s subsequent support for Such European borrowing oper- cess of this kind of borrowing op- that in every possible scenario,

these debts will be repaid.
In case of default, however, the
EU budget provides a “first-loss
protection” of 9 percent for inves-
tors, reinforced with a member
country guarantee of 61 percent,
as a “second layer of protection.”
But, to be frank, there isn’t enough
room in the current EU long-term
budget — also known as the Multi-
annual Financial Framework — to
solve this problem, if Ukraine isn’t
able to repay and member coun-
tries refuse to step in. In such a
case, massive cuts to existing EU
programs would be unavoidable.
The second risk relates to fraud
and misuse of money.
Despite our justified solidar-
ity with the Ukrainian people and
our support for the sovereignty of
their country, we shouldn’t forget
that before the war, corruption
was endemic in Ukraine. In 2021,
the country ranked 122nd on the
Corruption Perceptions Index,
between countries like Gabon and
Zambia — a problem that Euro-
pean institutions are well aware
of. A September 2021 report by the
European Court of Auditors even
stated that “grand corruption was
still a key problem in Ukraine,”
despite the EU’s repeated efforts to
improve rule of law.
Of course, it’s next to impos-
sible to check every euro that will
be spent, but this MFA support
doesn’t foresee a strong oversight
of the transferred money at all.
Without proper budgetary control
supported by democratic checks
and balances, these European
loans could easily fall into the
wrong hands. And if major
fraudulent schemes were to come
to the surface in Ukraine, the pub-
lic backlash would likely be fero-
cious.
Giving financial support to
Ukraine is a clear necessity, but the
money must be spent to achieve its
intended goals, and it must reach
most of the population.
Potentially even more danger-
ous than risks associated with the
Ukrainian MFA, however, is the lack
of information regarding where
the money from the RRF is going.
While reform and investment plans
with agreed targets and milestones
suggest a certain level of reliability,
the Parliament isn’t able to scruti-
nize this information.
Until now, the information pro-
vided by the Commission and mem-
ber countries has not only been
very basic, it doesn’t enable the
Parliament to trace back the finan-
cial flows either, even though the
regulation explicitly foresees the
transfer of concrete information on
RRF spending under discharge.
It’s essential that member coun-
tries provide lists of the measures
financed with these funds to both
the Commission and the Parlia-
ment. European taxpayers expect
the Parliament to insist on scru-
tiny to ensure the €750 billion are
being spent in accordance with
legislation, and assure citizens
that the COVID-19 recovery fund
was the right decision to show soli-
darity across the bloc.
As the chairs of the two budget-
ary committees within the Parlia-
ment, we want to stress that these
current off-budget crises solutions
contribute further to an already
complex budgetary galaxy and en-
tail great financial risks. But more
importantly, these “creative’”
solutions undermine the Union’s
legitimacy and parliamentary ac-
countability.
Both with the RRF regulation
and the MFA support for Ukraine,
there is no guaranteed sound fi-
nancial management, as the main
EU budgetary control structures
are largely absent. However, if we
want the EU to be a strong union,
and not risk losing the support of
a large majority of its citizens, we
need to put all European expendi-
ture under parliamentary scrutiny
and control.
Otherwise, we face major risk of
fraud and corruption.
Johan Van Overtveldt is chair of the
Committee on Budgets. Monika Hohl-
meier is chair of the Committee on
Budgetary Control.
We must tackle
Europe’s winter
cyber threats head-on
If we subscribe to a narrative of fear,
we’re doing the Kremlin’s work for
it. It’s time to prepare, not panic.
BY JAMIE COLLIER
AND JAMIE MACCOLL
THE RECENT LEAK OF THE NORD
STREAM natural gas pipeline has
demonstrated the vulnerability of
European energy infrastructure.
Yet, in addition to such physical
threats, the Continent must also
brace for the prospect of height-
ened cyberattacks this winter.
These potential cyber threats to
energy supplies will lead to plenty
of doom-mongering as we approach
the colder months — but now is the
time to prepare, not panic. And
European governments and energy
providers alike should focus on the
opportunity to plan for the possible
dangers that lie ahead.
So, what kinds of cyber threats
might the Continent face as tem-
peratures drop?
European energy suppliers are
an obvious target for Russian state-
sponsored groups, as cyber opera-
tions provide a chance to apply
pressure on countries participating
in sanctions against Russia, or are
currently reducing their reliance
on Russian energy. Like any other
measure below the threshold of
armed conflict, such cyber opera-
tions are also attractive, as they are
painted with a veneer of deniabili-
ty. And from the Kremlin’s perspec-
tive, undermining public trust will
be just as important as any physical
or technical disruption caused.
Russia’s aggressive operations
have routinely pushed the boundar-
ies of what’s considered “acceptable
behavior” in cyberspace already.
Giving For instance, Russian cyberattacks
financial against Ukrainian electrical opera-
support tors in 2015 and 2016 caused power
to Ukraine outages in the depths of winter.
is a clear And additional destructive malware
necessity, but with the capability of shutting down
the money operations, sabotaging industrial
must be spent processes, and disabling safety con-
to achieve trollers to cause physical destruc-
its intended tion has also been detected since the
goals, and it start of the invasion.
must reach Beyond such destructive opera-
most of the tions, Russian intelligence agencies
population. and their associate front compa-
nies are likely to spread false nar-
INA FASSBENDER/
AFP VIA GETTY
ratives through information op-
IMAGES erations as well. These campaigns
seek to capitalize on domestic ten-
sions, arousing alarm and division.
In this vein, concerns around Euro-
pean energy supplies and the cost-
of-living squeeze could be stoked to
impose more pressure on Euro-
pean governments looking to wean
themselves off Russian energy.
Additional threats may also
come from cybercriminals, many of
whom operate with tacit approval,
and even encouragement, from
the Russian state. Cybercriminals
might be primarily financially mo-
tivated, yet Five Eyes security and
intelligence agencies have warned
that many Russian ransomware
operators have pledged support to
the government. And these groups
have a track record of targeting key
sectors and services — as shown by
their remorseless targeting of health
care providers in the United States
and Europe during the pandemic —
which makes the energy sector an
obvious target in the months ahead.
One of the main concerns here
will be the disruption of physical
processes, such as energy sensors,
October 20, 2022 Page 21
gas terminals, generators and pow-
er grids. In February, for example,
a ransomware attack affected oper-
ations at several major oil port ter-
minals in Belgium, Germany and
the Netherlands — a similar inci-
dent affecting gas terminals during
the winter months could cause sig-
nificant disruption. And while we
can be encouraged by the fact that
manual safeguards are increasingly
being put in place to minimize the
impact of cyberattacks, the energy
sector remains vulnerable.
Such threats are serious and will
require a proactive response in the
coming months to avoid any disrup-
tion. Yet, we should not be para-
lyzed by fear, as we have the agency
to meet these challenges head-on.
For one, NATO has already
warned that “any deliberate attack
against Allies’ critical infrastruc-
ture would be met with a united
and determined response.”
Though such warnings are wel-
come, there’s still sufficient ambi-
guity regarding NATO’s potential
response to a cyberattack carried
out to embolden the Kremlin. Ad-
ditionally, normative and deter-
rence-based restraints have had
limited impact on ransomware
operators thus far — as shown by
the ruthless targeting of critical in-
frastructure in recent years.
Such political responses must,
therefore, be combined with a re-
lentless focus on building operation-
al resilience. Rather than just trying
to prevent attacks, European energy
suppliers must also be able to recov-
er quickly, should they happen.
In this regard, European leaders
and energy operators should look
to the Ukrainian experience for in-
spiration. Beyond simply blaming
Russia, it’s Ukraine’s long-term ef-
forts to build cyber resilience help
explain the lack of highly destruc-
tive cyber activity since the start of
the invasion. The country’s cyber
defenders and private sector part-
ners clearly demonstrated this in
March and April, when they thwart-
ed Russian attempts to cause a
blackout via cyberattack that would
have affected 2 million people.
The apparent effectiveness of
Ukraine’s cyber resilience demon-
strates two lessons for the transat-
lantic community this winter:
First, we need to cultivate deep
and meaningful operational part-
nerships across both government
and industry. Policymakers often
pay lip service to the need for
information sharing and public-
private partnerships in cybersecu-
rity. But rather than just high-level
commitments to merely collabo-
rate, now is the time to build much
deeper working relationships be-
tween NATO members, cybersecu-
rity vendors and European energy
operators. This means engaging
deeply with the operational reali-
ties of network defenders.
Building resilience must also go
further than just protecting energy
sector networks — developing re-
solve will be equally important.
Many of the cyber operations target-
ing the energy sector will ultimately
seek to unnerve European society
and undermine support for Ukraine,
and in the face of cyberattacks and
disinformation campaigns European
citizens must remain united.
If we subscribe to a narrative
of fear, we’re doing the Kremlin’s
work for it. Instead, it’s time we
plan and tackle Europe’s winter cy-
ber threats directly.
Jamie Collier is an associate fellow at
the Royal United Services Institute and
a senior threat intelligence adviser at
Mandiant. Jamie MacColl is a research
fellow in cyber threats and cyberse-
curity at the Royal United Services
Institute.
 Cover story

WILL THE
REAL
EMMANUEL
MACRON
PLEASE
STAND UP?!

Beset by populists at home and

darkening economic clouds
abroad, the French president is
learning to embrace his country’s
protectionist tradition

BY CLEA CAULCUTT
AND SARAH ANNE AARUP
IN PARIS

When EU leaders gather to hash out a

response to the energy crisis this week,
they may well be asking which Emmanuel
Macron is going to show up. Will it be the
protectionist champion of French inter-
ests they know so well? Or will it be the
swashbuckling reformer — hellbent on rip-
ping up the sacred rulebook and liberaliz-
ing the French economy — as he is known
at home?
Since sweeping into office in 2017, the
French president has shown one side of
his face in Paris, and another abroad. On
the domestic front, he’s seen as pushing
for deregulation and economic liberalism.
Internationally, and particularly in Brus-
sels, he’s perceived to be the foremost
proponent of the European Union’s pro-
tectionist impulses.
His ability to sing from two hymn
sheets has raised questions about what
the president really believes.
“His political DNA is [economically]
liberal,” said Chloé Morin, a French politi-
cal analyst, reflecting the perception in
Paris. “If you look at his writings at the
beginning, he speaks about releasing ener-
gies, removing blockages that shouldn’t
be there, and driving movement and cre-
ation.”
In Brussels, however, Macron stands
accused of having blocked free-trade deals
at every turn. His crusade for strategic au-
tonomy — Europe’s ability to act indepen-
dently on the global stage — has been seen
as a veiled bid for more protectionism.
Six months into his second term, Ma-
cron seems to have finally picked a side.
Constrained by political forces at home,
and responding to crises like the COVID
pandemic and the war in Ukraine, he’s
been much more vocal about defending
France’s -- and Europe’s -- interests and
has toned down some of his reformist
drive at home.
On the energy front, Macron is oppos-
ing the construction of the Midcat pipeline
between France and Spain, lobbying in-
stead for EU favoritism for renewables and
nuclear — France’s main energy asset.
In an interview about the car industry
this week, Macron called on Europe to
“prepare a strong response and move very
quickly” in response to what he describes
as protectionism from the United States
and China.
“The Americans buy American and
have a very aggressive state subsidy strate-
gy,” he said. The Chinese are closing their
markets… I strongly defend a European
preference on this topic and robust sup-
port for the car industry.”
LIBERAL BEGINNINGS
Macron started his political life as some-
thing of a free marketeer.
His earliest mark on French political life
came in the shape of a bus. As economy
minister under former president Fran-
çois Hollande, Macron fought to pass a bill

opening up different areas of the
economy to competition in 2015,
including the sacred monopoly of
France’s rail company the SNCF.
French trade unions launched a
wave of protests against Macron’s
plan to allow businesses to stay
open on Sunday, to deregulate
certain professions and to permit
privately run regional bus lines.
Macron battled hard to get the
bill through parliament, trying to
convince one MP at a time, before
the government decided to force
it through the National Assembly
without a vote.
A few months later, fleets of
so-called Macron buses started
crisscrossing the country, offering
cheap tickets to youths, students
and poor workers who could not
afford France’s state-of-the-art fast
trains. It was Macron’s first show-
down with France’s resistance to
change, and it set the blueprint for
the rest of his career.
“His first steps in politics were
made on liberalizing the economy,”
said Morin. “His [first] bill was
meant to deregulate, open things
up to competition, and he doesn’t
shy away from his economic liber-
alism in a country where even the
right is not liberal.”
After the presidential election,
Macron pressed on the accelera-
tor. “We had our timetable set out
for the first 12 months, with our
first five reforms. Our idea was to
go full-steam before the summer
[of 2018]. Though of course, it did
take longer,” said a former adviser
and early supporter of the French
president.
Before the COVID-19 pandemic
hit, Macron liberalized the job mar-
ket — making it easier to hire and
fire. He cut jobs benefits and de-
creased business taxes on compa-
nies from 33 percent to 25 percent.
The advisor, who wished to remain
anonymous, argued the reforms
were so efficient that they were
now hitting “structural unemploy-
ment” in France.
To be sure some of his liberal-
izations were underwhelming in
the global context. One commen-
tator in the right-leaning newspa-
per Le Figaro dismissed Macron’s
liberalism as “France discovering
Schröder or Blair 25 years late,”
referring to left-wing leaders that
helped liberalize the German and
British economies.
But in a country where whole
chunks of the political world are
wary of the private sector and have
a visceral attachment to the state,
his voice met stiff opposition.
Macron has also taken some
controversial public stances, prais-
ing market disrupters such as the
ride-hailing app Uber for bringing
jobs to the impoverished suburbs,
or slamming the French for being
less open to the world than the
Danes.
Such iconoclastic attitudes — in
France at least — helped create a
caricature about the president,
based on his past as an investment
banker for Rothschild and his ease
in cosmopolitan circles, that he’s
found difficult to shake off, and
which has hurt him politically.
During this year’s presiden-
tial and parliamentary elections,
Macron’s image as a free-market
fundamentalist was exploited by
opponents from both sides of the
political aisle.
During the presidential cam-
paign, the far-right leader Marine
Le Pen slammed his “globalized vi-
sion” that “deregulates” and “sub-
mits man to the law of the market
and the cash king.” Far-left leader
Jean-Luc Mélenchon called him the
“liberal” who let “private interests
enter the state,” needling him on
his use of private consultancy firms
to inform government choices.
The caricature persists despite
In Brussels, a Macron’s complete U-turn on state
totally different intervention during the COVID-19
crisis, when he dropped his fis-
caricature of the cal prudence policies in favor of
French president a “whatever-it-takes” support for
companies and households.
dominates. On HAIL THE PROTECTIONIST
the European Just a short train trip away in Brus-
stage, Macron is sels, however, a totally different
caricature of the French presi-
seen as anything dent dominates. On the European
but liberal. Be it stage, Macron is seen as anything
but liberal. Be it for international
for international trade or industry, Macron takes a
trade or industry, Paris-first — or at times Europe-first
— approach that more liberal-mind-
Macron takes a ed countries like the Nordics find
frustrating.
Paris-first — or After all, France’s love affair
at times Europe- with fierce independence verg-
ing on protectionism is nothing
first — approach new. Charles de Gaulle — who led
that more the country following World War
II — said that “Europe is the way
liberal-minded for France to become again what
it ceased to be at Waterloo: first in
countries like the world.”
the Nordics find “[Protectionism] is a kind of
constant in the French mindset,
frustrating. since 1945, it’s a by-product of the
war, the resistance and fact that
de Gaulle came to power with the
communists on board,” said Eric
ILLUSTRATION
BY PIERRE BUTTIN Chaney, economics consultant and
FOR POLITICO former chief economist for AXA.
Decades later, even under Ma-
cron, France’s protectionist in-
stincts have remained strong. After
Brexit, for example, Paris jumped
on the departure of the market-ori-
ented Brits to push for policies pro-
tecting domestic champions from
Chinese and U.S. competition.
Macron’s EU Commissioner Thi-
erry Breton is also big on the idea
of “strategic autonomy,” which
concretely means pouring money
into European high-tech industry
to reshore supply chains and fend
off foreign competition. Breton is
“an arch-Gaullist, there’s no ques-
tion about that,” said economist
Fredrik Erixon, who leads the lib-
eral ECIPE think tank.
And there’s no denying Paris’
influence in EU policy. From the
2022 European Chips Act and Raw
Materials Act to suspending state
aid rules to allow governments to
subsidize industries, policymaking
in the bloc has taken on a distinctly
French flavor.
Some experts and diplomats
argue that Macron is a liberal at
heart who’s held back by domestic
politics.
“I don’t think Emmanuel Ma-
cron is a protectionist,” Erixon
said, but “he’s very defensive when
it comes to the extent to which Eu-
rope should be opening itself up to
the rest of the world.” Erixon dubs
Macron’s “reciprocity ideology”
as “the red thread” in the French
president’s policy thinking.
Take international trade, a po-
litically difficult topic in France.
French citizens are some of the
most globalization-skeptic people
in the world: Just 27 percent of
them believe that more cross-bor-
der flows bring benefits, a 2021 sur-
vey shows. France polled the low-
est out of 23 countries, meaning
that the French dislike globaliza-
tion even more than the Russians.
That pressure was felt during
Macron’s reelection campaign,
which coincided with the French
presidency of the Council of the
EU. During a campaign debate in
April, Macron fended off the far-
right candidate Marine Le Pen’s
attacks by portraying himself as a
chief opponent to the trade deal
with Mercosur countries over envi-
ronmental concerns.
Indeed, the EU’s free-trade en-
gine nearly ground to a halt during
October 20, 2022 Page 23
the French Council presidency.
Instead, the EU upped its trade
defense tools and environmental
standards, stopping the import of
products linked to deforestation
and introducing an instrument to
force market access reciprocity for
public tenders.
During the French presidency,
Brussels only managed to political-
ly seal the trade deal with environ-
mentally friendly and economic
featherweight New Zealand on
June 30 — on the last day of the
French presidency. Ongoing talks
with Chile, Mexico, the Latin Amer-
ican Mercosur bloc and Indonesia
barely advanced, if at all.
And when Australia canceled a
submarine deal with France out of
the blue to buy American, France
in a fit of rage threatened to scup-
per the first meeting of the EU-U.S.
Trade and Technology Coun-
cil meeting before slapping back
against Canberra by putting EU-
Australia trade talks on the back
burner.
“Those who believe that a trade
policy is an international policy get
it wrong. A trade policy is a domes-
tic policy,” former EU Trade Com-
missioner Pascal Lamy said.
FORTRESS EUROPE
For the moment, the chances that
Macron will return to his stronger
liberal leanings don’t look high.
He may not have to stand for
election again, but he has lost his
absolute majority in parliament,
meaning it will be difficult for him
to push through controversial legis-
lation. Meanwhile, he finds himself
faced with a post-pandemic global
order that has been upended by
the war in Ukraine, and where Eu-
rope is bearing the economic brunt
of Russia’s aggression.
The eurozone’s trade deficit
reached €51 billion in August 2022,
marking the highest deficit record-
ed since January 2015, a dark mile-
stone that should sharpen minds
across the bloc.
In response, France has been
leading the charge against Europe’s
new energy reliance on the U.S.,
with French Finance Minister Bru-
no Le Maire blaming Washington
for soaring LNG prices and calling
on the EU to fight “American eco-
nomic domination and a weaken-
ing of Europe.”
The French president also has
a reason closer to home for sign-
ing a more protectionist and at
times nationalist tune: Marine Le
Pen’s presidential ambitions. It’s a
question of legacy for the second-
term president — a rarity in French
politics. A far-right takeover fol-
lowing his presidency would be a
nightmare scenario for the French
liberal.
“It’s going to be very difficult for
everybody,” said Gaspard Koenig,
who heads the free-market think
tank GenerationLibre. “Macron
doesn’t have any troops, his party
is an empty shell, we have no idea
who is going to fill his shoes. Will it
be someone with a liberal outlook?
Or will Macron’s heritage be a fight
between the extreme right and the
extreme left?”
Worries like that go a long way
toward explaining why, in an in-
terview with Les Echos on Sunday,
the French president declared vic-
tory — as a protectionist.
“I’ve been pleading in favor
of European sovereignty for five
years,” he said. And the mindset
of a lot of Europeans is starting
to change … We need to wake up,
neither the Americans, nor the Chi-
nese will cut us any slack.”
EU leaders would be wise to ex-
pect more of this Macron as they
continue to wrestle with the crises
besetting the Continent.
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deputy director-general, DG INTPA, European Commission

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