Big EU plans mean more money – POLITICO

Good morning and welcome to Thursday’s Playbook.

DRIVING THE DAY: MONEY       

STRATEGIC FORESIGHT MEANS BIG SPENDING: The European Union needs more than €620 billion annually to finance the Green Deal and REPowerEU, Commission Vice President Maroš Šefčovič said ahead of the publication of this year’s strategic foresight report today. “We must unlock financing from both the public and private sectors” to scale up the investments, he told Playbook and my colleague Giovanna Faggionato.

Expanding EIB mandate: According to the report, obtained by Playbook, the European Investment Bank “should provide stronger support to strategic investments relevant to the two [digital and green] transitions such as raw materials, green tech or biotechnology, especially for cutting-edge projects.”

One possibility to help achieve that would be to review the EIB’s mandate and expand its role to use all its firepower, senior officials said, with the report considering it “the largest public bank in the world.”

Good timing: The bank will get a new president next year, who will informally be chosen this fall — Commission Executive Vice President Margrethe Vestager is in the running — and it could be a good moment to review its policies. 

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Riskier projects: “Public funding should be better used as a catalyst for private investments, notably for riskier, breakthrough sustainability projects,” the report says. That would indicate a potential change of approach for the EIB’s lending, which until now focused on infrastructure projects.

What would it mean? Leveraging the power of the world’s biggest multilateral financial institution toward higher-risk spending would help fill a potential gap in the risk-averse European funding landscape. Critics of EU efforts to bolster innovation often point to the lack of venture capital for innovative technology or startups.

Fall homework: The report is on the table for EU governments to discuss at the September 19 General Affairs Council shortly after finance ministers decide on the new EIB leader, weighing Denmark’s Vestager as one of their choices.

And that’s not all: The wide-ranging report builds on figures from the Commission’s Joint Research Center. It notes a need for €92 billion for the Net-Zero Industry Act from now until 2030 and an additional €120 billion for the digital transition.

Labor needs: It asks policymakers to think deeply about changes in the EU’s population as it ages, and the need for more skilled labor. “To manage demographic change, the EU needs robust tools for granular forecasting of skills and workforce needs in key sectors,” the report argues. “The EU needs to attract more global talent and support the creation of talent pools and partnerships with third countries,” it adds, calling for “adapting education and training to enhance the integration.”

New targeted trade agreements: The report also calls for “more flexible and targeted” trade pacts. Focusing on specific areas — such as clean technology — might allow for faster deals to be struck to boost investment in a crucial industry. 

EU-US green peace: Shifting to more sustainable production and consumption is a major theme. “Creating a green transatlantic marketplace facilitating access to incentive schemes and preventing discrimination would support green investments and sustainable production,” the report says, in a nod to recent EU-U.S. tensions over American subsidies for green tech.

EU-CHINA       

EU TRADE DIPLOS TALK CHINA TODAY: Trade envoys from the 27 EU member nations will discuss how to react to Beijing’s new export restrictions on two key raw materials, germanium and gallium. China dominates in the production of these minerals, which are fundamental to producing microchips and fiber optics, which in turn are key to the EU’s digital and green transitions.

Backstory: The Netherlands announced new restrictions on exports of advanced microchip machines to China last Friday. In response, Chinese trade officials on Monday hit back with an export-control regime tantamount to threatening a ban on exports of germanium and gallium to unfriendly countries. And that’s “just a start,” an influential Chinese trade policy adviser said Wednesday.

Thierry Breton’s top official sounds gloomy: “Germanium is for fiber optics and optics in general, and 90 percent comes from China. Gallium: China is the only [producer] in the world, so it’s a single point of failure if that doesn’t work,” said Kerstin Jorna, the Commission’s director general for the internal market and industry, on Wednesday.

Sleeves rolled up: Nicola Beer, a liberal Renew Europe lawmaker and the rapporteur on the Critical Raw Materials Act, said: “This for me shows that the Chinese put their boxing gloves on, and that makes our work here more and more important … So it’s clear that we need our own extraction, processing, recycling capacities,” but also “more reliable trade with other countries.”

LITHUANIA STICKS IT TO BEIJING: Meanwhile, Lithuania, the EU’s biggest China hawk, isn’t backing down, my colleague Stuart Lau reports. As Vilnius prepares to host the NATO leaders’ summit in less than a week, a new government strategy on the Indo-Pacific region published Wednesday reinforces Lithuania’s decision to build strong economic ties with Taiwan, in defiance of intense pressure from China to change course.

UPDATE ON NATURE RESTORATION LAW       

RENEW DIVIDED ON NATURE LAW BUT WANTS TO LEAD ON COMPROMISE: The Renew group still can’t get all its members to rally in support of the EU’s controversial nature law. And given how tight next week’s plenary vote in the European Parliament is likely to be, every vote counts. Still, Renew hopes to play a key role in securing a compromise deal to pass the text.

Refresher: The nature restoration law, a key part of the Green Deal, has come under fire from conservative lawmakers — and part of the Renew group — over the past months. Critics argue the Commission’s plans will have detrimental impacts on farmers, foresters and fishermen, and could even threaten food security — an idea the Commission, NGOs and scientists strongly reject. Bartosz Brzeziński has more here.

Searching for common ground: Despite divisions and a small group of MEPs calling for the vote to be postponed to September, Renew decided to submit to Parliament’s plenary the same text as the one adopted by EU countries two weeks ago. That’s a rare move in the EU decision-making process, but Pascal Canfin, French Renew member and chair of the environment committee, told my colleague Louise Guillot it may be the only way to secure a majority for the text.

Divide and conquer: Renew hopes it will be able to divide the EPP, which wants to kibosh the law. “Our analysis is that a certain number of EPP delegations … may be interested in voting in favor of the general approach in line with their government’s vote in the Council,” Canfin said, adding that “by adopting this strategy, we give ourselves a chance of winning in plenary.”

Will it work? Sirpa Pietikäinen of the EPP told Louise it’s possible some members of her group could be convinced by Renew’s compromise deal — but “at this point it is almost impossible to see what is going to be the outcome.”

Next steps: MEPs are scheduled to debate the text at 9 a.m. next Tuesday in Strasbourg, while the vote is expected on Wednesday.

And after that: If the Parliament adopts a position on the text next week, inter-institutional negotiations with the Council can begin. If not, the file will stall — likely until after next year’s European election.

MIGRATION       

STOP TURNING BLIND EYE TO DEATHS AT SEA, EU AGENCY WARNS: The EU Agency for Fundamental Rights (FRA) has called on the Commission, EU member countries and EU agencies to act now to prevent future tragedies like June’s migrant shipwreck off Greece. In its new report, previewed by Playbook and to be published today, it outlines six areas for action.

Details: The report calls for independent investigations of all shipwrecks with the help and expertise of specialized human rights bodies. “The EU should find ways to apply the transparency and accountability principles laid out in EU rules when investigating migrant shipwrecks,” it argues.

ICYMI: That’s pretty much what MEPs asked for in a letter to the Home Affairs Commissioner Ylva Johansson, as Playbook reported Tuesday.

What else: FRA also calls for the Commission and member countries to share their search and rescue protocols to develop best practices. Countries should establish independent border monitoring and ensure better protection of survivors. Shipwreck survivors who request asylum should have their own category in EU law as asylum applicants with special needs. It also asks for the voluntary relocation mechanism to be open to all asylum applications, regardless of their nationality.

Legal pathways: Member countries should also provide legal pathways for people who need protection, for example by promoting humanitarian admission programs or opening talent partnerships to migrants and refugees, the report says.

JOHANSSON PUSHES BACK AGAINST WARSAW: Home Affairs Commissioner Ylva Johansson on Wednesday pushed back against Poland’s sharp criticism of the Union’s migration pact, arguing it’s not true that the new law would force countries to accept refugees redistributed from other EU countries.

Background: The law seeks to distribute the burden of new arrivals across the EU, but allows countries to refuse redistributed migrants — if they pay €20,000 for every person they knock back, as Playbook reported.

Bad math: Johansson said it was “highly likely” Poland would actually benefit from the system, with other EU countries having to either accept some of its migrants or pay money. “Given that Poland is home to more than a million refugees from Ukraine, it is highly likely that under the rules being negotiated, Poland itself would qualify for solidarity from other member states,” she tweeted.

ROAD TO EU ELECTION       

LIBERALS FIGHT OVER LEAD CANDIDATE: The Renew group is divided over whether to get behind the so-called Spitzenkandidaten system that’s seen as a way to democratize the appointment of a Commission president and increase voter turnout at next year’s European election.

Decisions, decisions: “There’s no agreement in the political family at this stage,” said Stéphane Séjourné, Renew’s leader in Parliament. Séjourné has proposed offering up a team of candidates for various top EU jobs next year instead of uniting behind a single lead candidate for the campaign.

But but but: Séjourné’s stance puts him at odds with the broader Alliance of Democrats and Liberals for Europe group — which will campaign at the EU level, and agreed in late May to unite behind a single Spitzenkandidat. Read more by Eddy Wax.

ALDE’S DELEGATION TO ASSESS CZECH ANO PARTY: MEPs Annelou van Egmond, Eva Kjer Hansen and Dan Barna will lead the fact-finding mission in September to find out whether former Czech Prime Minister Andrej Babiš and his ANO 2011 party are liberal enough to remain in ALDE. “They will speak to ANO representatives and experts to examine ANO’s relationship to Europe, rule of law, transparency, migration and minorities,” a senior ALDE official told Playbook.

PUIGDEMONT’S IMMUNITY: The EU’s General Court on Wednesday ruled that former Catalan President Carles Puigdemont, along with two other separatist MEPs, should lose their parliamentary immunity amid a long-running legal battle over the way the European Parliament responded to requests from the Spanish Supreme Court. More from Eddy here.

RUSSIAN WAR       

HAPPENING TODAY — EU SEEKS DEAL ON AMMO ACT: Negotiators from the European Parliament, Commission and the Spanish Council presidency will today seek to strike an agreement on the act in support of ammunitions production (ASAP), which funnels public money to boost the capacity of ammo and weapons manufacturing in the EU. One official said today’s trilateral negotiations will be a “make it or break it” moment before the summer recess.

SWEDEN CRUNCH TIME: NATO will host a meeting today with senior officials from Turkey, Sweden and Finland, with the goal of unblocking Stockholm’s membership bid — and there are hopes for progress ahead of next week’s summit of the alliance’s leaders.

Blue-sky view: “It is still possible to have a positive decision on Sweden at the summit,” NATO Secretary-General Jens Stoltenberg told our colleague Lili Bayer in an interview on Wednesday. (More from Lili’s interview with Stoltenberg here.)

Reality check: Ankara and Budapest have yet to ratify Sweden’s membership, and it is likely too late now for the two countries’ parliaments to sign off before leaders assemble in Lithuania. But Stoltenberg said a “political decision” is “possible.”

PRIGOZHIN NOT OFF THE HOOK: Russia’s investigation into warlord Yevgeny Prigozhin, who led his Wagner Group of mercenaries on an ill-fated mutiny against the Kremlin last month, has not been dropped, according to Russian state TV. Rossiya-1 aired an episode of “60 Minutes” Wednesday evening, in which its host Yevgeny Popov, who is a member of the Russian state Duma, said “the investigation is ongoing,” and added: “We need to get to the bottom of who was on whose side. We need to punish and prosecute them.” Reuters has a write-up.

LAWMAKERS CALL FOR GOOGLE ADS SUSPENSION: The European Parliament should suspend advertising campaigns run through Google’s parent company Alphabet and on YouTube over fears the EU institution could be sponsoring Russian propaganda, a group of cross-party lawmakers wrote in a letter seen exclusively by POLITICO Morning Tech’s Clothilde Goujard. 

Twenty-four lawmakers from the S&D, Renew, EPP, ECR and the Greens also asked Parliament President Roberta Metsola to audit previous online campaigns that have run on Google and request compensation if it finds the tech company misled the Parliament.

Background: The request comes after a report claimed Google may have misled advertisers after its video-ad platform placed small, muted videos on websites including state-owned Russian propaganda websites. “Although the precise amount of money spent by the Parliament on these websites in unclear, we can never tolerate to actively fund dictators, sleazy companies and terrorists,” said the lawmakers, led by the S&D’s Paul Tang. 

Rebuttal: Google said the report makes “many claims that are highly inaccurate based on unreliable sampling.” The tech firm added that it monitors its video-ad services to ensure it doesn’t charge advertisers for spam.

THREADS TEST DRIVE       

IS THREADS A TWITTER KILLER? While you were sleeping, Meta rolled out its new Twitter competitor Threads to users in the U.K., U.S., Australia and elsewhere (though not the EU yet), with 5 million sign ups in the first four hours, according to Facebook chief Mark Zuckerberg. Playbook’s own Zoya Sheftalovich signed up and has this preview for Playbookers …

The good: The app is easy to use, can import your Instagram contacts in a snap, and has a fun, buzzy vibe that feels a bit like the early days of social media. There’s already a fair bit of content, and I’ve noticed a bunch of folks who quit Twitter post-Elon have signed up. Plus, blue-check accounts are actually verified, rather than paid-for — which makes the content more palatable, rather than the algorithm-induced cage fight that Twitter has become lately.

The bad: You can tell this rollout was rushed out, as a bunch of key features were still missing overnight: no private messaging, you couldn’t choose to only see posts from accounts you follow, there didn’t seem to be a way to order your feed chronologically. Not to mention that those of us who’ve spent years building up our Twitter following will have to start from scratch (speaking of which — Thread me @zoyasheftalovich).

IN OTHER NEWS       

POLITICO’S POWER 40: Who really wields power in Brussels? It’s a question we put to Europe’s policy and politics reporters to find out who is making things happen behind the scenes — shaping laws, setting political agendas and sparking public conversations. See the inaugural POLITICO Power 40 list here.

Some of the names on the list: Anna Jarosz-Friis, the acting director of the Ukraine Service at DG NEAR … Thanasis Bakolas, the EPP’s secretary-general … DG Trade Director General Sabine Weyand … ETNO’s Alessandro Gropelli … SEC Newgate EU’s Victoria Main … Defend Democracy founder Alice Stollmeyer.

CONSTITUTIONAL COURT RULING STOPS GERMAN VOTE ON HEATING LAW: Germany’s Constitutional Court on Wednesday blocked the parliament from voting this week on a controversial plan to encourage home owners to replace fossil fuel heating systems with greener options. The court upheld a center-right CDU lawmaker’s complaint that his rights had been violated as parliament didn’t have enough consultation time before the vote. AP has the background.

Party pooper: The news broke last night as the SPD leadership was celebrating a summer party — Chancellor Olaf Scholz and his aides retired to a tent for a crisis meeting.

BRUSSELS PULLS FUNDING FROM TURKISH ASSOCIATION: The European Commission has stopped funding Turkish association Yavuz Sultan Selim and is attempting to claw back money that has already been paid out due to concerns about respect for European values, according to a letter seen by my colleague Jacopo Barigazzi. The letter is signed by Commission Vice Presidents Margaritis Schinas and Věra Jourová.

The issue: The commissioners say French ministers have asked for a probe into EU Erasmus Plus funds for the organization related to workshops on “social networks after the pandemic and their effects on Islamophobia.” In April, two German MEPs asked for clarity on EU funding given to Yavuz Sultan Selim and claimed the organization is part of the İsmail-Ağa community, which the German Federal Office for the Protection of the Constitution classifies as “extremist.”

SPAIN’S SUMMER ELECTION: Spain is going to the polls on July 23 — the first time an election has been held so late into the summer. How might scorching temperatures, crowds and holidays shape things? Aitor Hernández-Morales has the analysis.

AGENDA       

— The European Parliament’s Committee on Civil Liberties, Justice and Home Affairs will discuss the migrant boat shipwreck off the coast of Greece at 10:30 a.m. Statements by Commissioner for Home Affairs Ylva Johansson and Frontex’s Executive Director Hans Leijtens. Watch.

— European Parliament’s Conference of Presidents meets at 8:30 a.m.

— Press conference by Commission Vice President Maroš Šefčovič on the 2023 Strategic Foresight Report at 2 p.m. Watch.

— High Representative Josep Borrell continues visit to Niger. Travels to Agadez to meet Governor Sadou Soloké and the President of the Regional Council Mohamed Anako … visits the field office of EUCAP Sahel Niger and the EU-funded social housing project DESERT … meets Sultan Oumarou Ibrahim Oumarou of Agadez and visits the mosque in the old city.

— Commission Vice President Věra Jourová meets with representatives of NGOs … speaks via video conference at an event on the rule of law report with Minister of Justice of Slovakia Jana Dubovcová.

— European Committee of the Regions 156th plenary session continues at 9 a.m. Debate on U.S. and EU subnational entities at 9:25 a.m. … Neighborhood and Enlargement Commissioner Olivér Várhelyi gives a statement in a debate on the role of LRAs in the EU enlargement process at 10:25 a.m. Agenda. Watch.

— NATO chief Jens Stoltenberg holds media briefing after the meeting of senior officials from Turkey, Sweden and Finland, expected around 4:30 p.m. Watch.

BRUSSELS CORNER       

BELGIUM UNDERESTIMATES FAR-RIGHT TERRORISM, REPORT SAYS: Extreme-right terrorism flies under the radar as Belgian authorities are too focused on other extremism, such as Islamist terrorism, warns Comité T in a new report.

GO WITH THE FLOW: Just in time for summer, the Flow open-air swimming pool reopened Wednesday. Given it’s the only public outdoor swimming pool in central Brussels, booking in advance is recommended.

BOYCOTT AT DELHAIZE: Trade union CNE has launched a website calling on the public to boycott Delhaize stores over the company’s franchising plan. Employees are protesting a potential loss of jobs.

DRUG RAID IN SAINT-GILLES: Brussels police discovered around 140 kilograms of drugs, as well as firearms, knives and €90,000 in cash in nine house searches around Place de Bethléem in Saint-Gilles. Six suspects were arrested, the Brussels Public Prosecutor said.

NEW JOB: Von der Leyen speechwriter and former Spiegel correspondent Peter Müller is returning to journalism. He’ll become co-editor in chief of the Augsburger Allgemeine newspaper, Müller told Playbook.

BIRTHDAYS: MEPs Geert Bourgeois, Michiel Hoogeveen and Anna Zalewska; Former MEPs Nathan Gill and Ángela Vallina; European Commission’s Peter Wagner; Duško Marković, former PM of Montenegro; Nursultan Nazarbayev, former president of Kazakhstan; Dalai Lama Tenzin Gyatso turns 88; Former U.S. President George W. Bush turns 77.

THANKS to Giovanna Faggionato, Camille Gijs, Louise Guillot, Eddy Wax, Jacopo Barigazzi, Clothilde Goujard, Stuart Lau, Gregorio Sorgi, Lili Bayer, Playbook reporter Ketrin Jochecová, editor Jack Lahart and producer Dato Parulava.

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