Brussels Playbook: Paris-Berlin tensions — Financial rumblings — AI rap battles

Опубликовано: Tuesday, 21 March 2023 05:27

Presented by Equinor

By JAKOB HANKE VELA

with ZOYA SHEFTALOVICH

PRESENTED BY

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DRIVING THE DAY: GERMAN-FRENCH TENSIONS

PARIS-BERLIN FIGHT BREWS AHEAD OF EUCO: As EU affairs ministers meet today to prepare for EU leaders’ European Council on Thursday and Friday, they will be working hard to focus on the summit’s supposed topics — economic competitiveness and ammunition for Ukraine. But the fight flaring up again between German and French officials over the future of cars and nuclear energy could overshadow or disrupt the EUCO.

What’s up: France is furious at Germany’s sudden veto of the EU law to make cars emission-free by 2035. At the same time, Paris is fighting for its own favorite non-renewable energy — nuclear power — which it wants included in the EU’s green industry package.

United in diversity 1: “I am a supporter of permanent Franco-German compromise, but also of truth in the Franco-German relationship. When we have a disagreement, we don’t hide it, we work to overcome it,” French Transport Minister Clément Beaune told POLITICO.

United in diversity 2: Germany’s unusually late blockade of the EU’s green car rules is clearly hurting Berlin’s reputation as a compromise-builder, but some diplomats from other EU countries are almost nonchalant, saying they’re now used to the late decisions, mixed messaging and uncoordinated policy swings from Chancellor Olaf Scholz’s government. Indeed, Berlin’s messy approach to EU politics has a lot to do with the infighting ruling coalition, which is itself much like a small EU — and also united in diversity.

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QUID PRO QUO IN THE MAKING? France wants the summit conclusions to include a reference to the importance of nuclear power for EU industry decarbonization, two diplomats said. But that’s a no-go for Scholz’s government, which includes the nuclear-skeptic Green party. Although the disputed paragraph wasn’t in the draft conclusions circulated Monday evening by European Council President Charles Michel, Paris continues to push to include nuclear power under the EU’s clean tech legislation.

In recent days, France has lobbied to include nuclear energy in the EU’s Net Zero Industry Act — a legislative package that aims to ramp up the bloc’s clean tech manufacturing — and it’s also making a renewed push to give nuclear-based hydrogen a bigger role in meeting EU renewable energy goals. The fact the European Commission, under pressure from Berlin, downgraded the role of nuclear power under the Net Zero Industry Act before it was presented last week particularly angered Paris, according to two diplomats. Hans von der Burchard, Giorgio Leali, Joshua Posaner and Victor Jack have the full details.

BANKING TURMOIL

CREDIT SUISSE FALLOUT: Market anxiety about banking contagion receded on Monday after UBS’ 11th-hour takeover of Credit Suisse. The mood improved as a result of the hasty marriage taking stress out of the banking system, but also due to market expectations of extra liquidity and a slowdown in interest rate hikes.

Nothing to see here! EU regulators and politicians were quick to offer reassurances to quell jitters, arguing that the fundamentals of EU banks remained healthy, and that what happened in Switzerland and California couldn’t happen in the eurozone, as our Financial Services colleagues report in their must-read newsletter this morning.

European Central Bank President Christine Lagarde told MEPs from the Economic and Monetary Affairs Committee on Monday that “the EU banking sector remains strong in terms of its aggregate, capital and liquidity provision … Liquidity ratios on average are clearly above minimum requirements and even above pre-pandemic levels.” And the ECB is “ready to respond as necessary to preserve price stability and financial stability in the euro area.”

Caught flat-footed: But some of the nerves in the banking sector come as the EU has still not agreed on a bloc-wide European Deposit Guarantee Fund — which was meant to make banks more resilient for future crises and guarantee bank deposits across the Union to avoid bank runs. If a new crisis really does hit the EU, each country’s government will have to deal individually with bank runs.

GULP: There’s still concern that Credit Suisse could be the first domino in a chain that stretches round the world, report Izabella Kaminska and Hannah Brenton in their analysis of what went wrong — and what still could go wrong. The way the Swiss structured the rescue might have made things worse, Izabella and Hannah say. Since the crisis a decade and a half ago, regulators have tried to prevent financial institutions in distress from infecting each other with their problems by forcing losses onto bondholders (rather than depositors and ultimately the taxpayer), they report. But Swiss regulators turned this normal way of doing things on its head with Credit Suisse, wiping out the bondholders first — triggering fury.

RUSSIAN WAR

CHINA-RUSSIA LATEST: Russian President Vladimir Putin and his Chinese counterpart Xi Jinping met for over four hours in the Kremlin on Monday, ahead of formal talks today during which they will “draw up a new blueprint for China-Russia comprehensive strategic partnership,” according to Beijing’s readout.

How today will play out: Putin and Xi will begin with a presentation ceremony for delegations, followed by two rounds of talks. The leaders will then sign more than 10 documents “on the development of cooperation between the two countries in various fields,” according to Russian state media. After that, Xi and Putin will deliver statements, followed by a state dinner. Xi is also expected to meet with Russian Prime Minister Mikhail Mishustin.

What Ukraine’s got to say about the Beijing-Moscow axis: Not much, actually. Ukrainian President Volodymyr Zelenskyy is happy to unleash withering criticism against countries including Hungary and Germany for getting too close to the Russians, but he’s playing a diplomatic long game with Moscow’s No. 1 ally, reports Veronika Melkozerova. Zelenskyy wants to keep Beijing onside as an investor, trade partner and potential middleman, Veronika writes.

Now read this: By virtue of its investments and growing influence in Europe, China is poised to significantly expand its role in EU politics, argues Andrew A. Michta, dean of the College of International and Security Studies at the George C. Marshall European Center for Security Studies, in this opinion piece for POLITICO.

SANCTIONS CALL: Several European foreign ministers called Monday for the EU to sanction oligarchs involved in “destabilization attempts” in Moldova and Georgia, amid rising fears of Russian interference.

RUSSIA’S RESPONSE TO ICC WARRANT: Russia’s top investigative body announced Monday that it had opened a “criminal” case against the prosecutor and judges of the International Criminal Court (ICC), while former President Dmitry Medvedev threatened to target the court in The Hague with missile strikes, as Playbook’s own Ketrin Jochecová reports. The ICC last week issued an arrest warrant for Putin over his part in the unlawful forced deportations of Ukrainian children to Russia. (Jamie Dettmer writes that while Putin likes to claim he’s de-Nazifying Ukraine, he’s wanted on some of the same charges heard against the Nazis.)

Hungary’s response to ICC warrant? Bloomberg reported that Hungary blocked the EU from issuing a joint statement about the ICC’s arrest warrant for Putin, citing people familiar with the matter. EU top diplomat Josep Borrell released a statement on Sunday under his own name only in response to the warrant, while on Monday, EU justice ministers issued their own statement in support of the warrant which Hungary didn’t co-sign.

IN OTHER NEWS

MACRON’S GOVERNMENT SURVIVES NO-CONFIDENCE VOTE: The French government survived Monday’s no-confidence votes in the parliament, triggered after President Emmanuel Macron pushed through a deeply unpopular pensions overhaul.

Just 9 votes from the precipice: Prime Minister Elisabeth Borne’s government survived the first vote with a thinner majority than initially expected, as 278 MPs, mostly from the left and the far right, voted in favor of a cross-party motion of no confidence, falling just short of the 287 votes needed to topple the government. A second motion, backed only by the far-right National Rally, also failed. Clea Caulcutt has the details.

EU WARNS OF RACIST AI: Commission Vice President Věra Jourová is warning that the EU must react to the rapid advances in artificial intelligence and “take seriously” the risk that machines mimic or even worsen human prejudice and racism. “We have some immediate challenges” when it comes to AI, Jourová told Playbook, which “can perpetuate or even stimulate racial bias if data to train algorithms does not reflect the diversity of EU society.”

Jourová pointed to facial recognition software as one famous example, which “can exhibit high misclassification rates when used on some groups.” On the occasion of today’s International Day for the Elimination of Racial Discrimination, the values and transparency commissioner warned that racism “continues to be a scourge on the whole of society.” Equality Commissioner Helena Dalli called on EU countries to do more, warning that several have not put in place anti-racism plans and “still have to deliver on this necessary protection.”

SPEAKING OF AI SPATS: ChatGPT, the language model developed by OpenAI, has been dragged into a rap battle of a different kind. Green MEP Daniel Freund, a frequent critic of Hungarian Prime Minister Viktor Orbán, asked ChatGPT to write a rap song about corruption in Hungary. The result: “From football clubs to luxury castles; Orban’s empire is built on scams and hustles; It’s time to clean up, it’s time to fight; We won’t back down until Orban’s out of sight.”

Hungarian government spokesman Zoltan Kovacs responded by asking ChatGPT to come up with a rap about Freund: “Yo, let me tell you ’bout Daniel Freund; A German politician that you need to comprehend; Representing the Greens in the Bundestag; Fighting for justice and freedom, he’s got swag.” The song, Kovacs said, was proof that ChatGPT “is nothing more than a bullshit generator.” Guess this is where we’re at in the political discourse.

ICYMI — GLOBAL WARMING GETTING WORSE: A sprawling assessment of tens of thousands of scientific papers on the state of the planet, released Monday, indicates that scientists still don’t have answers to many of the questions that will define how well the world copes with the worst of climate change, report Karl Mathiesen and Zia Weise.

RYANAIR VS. FRENCH AIR TRAFFIC RULES: Ryanair has launched a petition addressed to European Commission President Ursula von der Leyen, urging Brussels to force France to guarantee overflights over its territory in the case of strikes by air traffic controllers. French air traffic control strikes “have disrupted over 1,000,000 passengers in 2023 to date,” the airline claimed, noting that “overflights (not flying to/from France) are cancelled while French flights are protected,” unlike in other EU countries. The petition had just over 37,000 signatures at the time of writing.

Europe for everyone: Ryanair, a private low-cost airline, may have done more for cross-EU mobility and integration than millions of government funds spent on free Interrail tickets and similar programs. The airline benefited from the Commission’s liberalization of a market largely dominated by former state monopolies such as Air France and Lufthansa — and is loathed by many politicians in France, Germany and other big EU countries, because it has made life harder for their cherished national airlines.

**Jeremy Hunt, chancellor of the exchequer will headline POLITICO Tech U.K. Launch event that will take place on Wednesday, April 19 afternoon. Register today to follow the discussion online.**

AGENDA

— General Affairs Council 9:30 a.m.; arrivals and doorsteps from 8:15 a.m.; joint doorstep by Ukraine’s Deputy PM for European and Euro-Atlantic Integration Olha Stefanishyna and Swedish Minister for EU Affairs Jessika Roswall at 2 p.m.; press conference at 5 p.m. Watch.

— EEAS Schuman Security and Defense Partnership Forum; arrivals at 8 a.m.; keynote speech by EU High Representative Josep Borrell at 9 a.m.; press conference at 1 p.m. Watch.

— European Parliament Committee on Economic and Monetary Affairs holds public hearing on Silicon Valley Bank failure and implications for financial stability in Europe at 2:30 p.m. Watch.

— Parliament President Roberta Metsola meets Minister for Foreign Affairs of Ukraine Dmytro Kuleba (remotely) at 11 a.m.; meets Foreign Minister of Cyprus Constantinos Kombos at 2 p.m.; meets the Federal Minister for the EU and Constitution at the Federal Chancellery of Austria Karoline Edtstadler at 5:30 p.m.

— Commission President Ursula von der Leyen receives the Chair of the Council of Ministers of Bosnia and Herzegovina Borjana Krišto at 4 p.m. Watch.

— Council President Charles Michel meets the EU High Representative Josep Borrell at 7 p.m.

— NATO Secretary-General Jens Stoltenberg presents NATO’s Annual Report for 2022 at 2 p.m. Video will be available after the event.

— Commission VP Frans Timmermans receives members of the Polish parliament; meets with Jens Stoltenberg.

— Commissioner Dubravka Šuica in New York; meets Secretary-General of the United Nations António Guterres; meets the head of the EU delegation to the U.N. Olof Skoog; participates in the China-Europe Water Platform High-Level Dialogue Conference; participates in reception hosted by King Willem-Alexander of the Netherlands and President of Tajikistan Emomali Rahmon.

— Commissioners Ylva Johansson, Kadri Simson and Olivér Várhelyi receive Minister of Foreign Affairs of Georgia Ilia Darchiashvili.

— Czech President Petr Pavel begins official visit to Germany; meets Chancellor Olaf Scholz, President Frank Walter-Steinmeier and former President Joachim Gauck.

BRUSSELS CORNER

ENFRANCHISING NEWS: People who are eligible to vote will be able to do so at any polling station at the next communal election in 2024, provided it’s in their municipality, according to a draft law adopted Monday by the Brussels government. The new law aims to modernize the Brussels municipal electoral code, regional Minister Bernard Clerfayt announced in a press release.

VDL ACCOUNTABILITY TRACKER: Ursula von der Leyen still refuses to be interviewed by POLITICO, despite assurances from her team that they are just looking for an opportune moment. We could think of a few! It’s now 511 days since von der Leyen’s team refused to answer POLITICO’s requests for an interview … and counting.

CULTURE CORNER: The LEGS dance festival kicks off Wednesday and runs until April 2 in Brussels and Charleroi … And the Scéal Eile Irish film festival is on until March 25 in Brussels, Antwerp and Ghent.

NEW JOB: Playbook alum Florian Eder will in June join Germany’s Süddeutsche Zeitung for a new adventure, setting up and running a new editorial unit to develop digital products, for which Florian will “assume overall responsibility,” as the company said in a press release. “The times for political journalism have never been more exciting,” Florian said. “I’m really looking forward to building a team and developing new digital formats that build on the quality of reporting and analytical depth, the strengths of Süddeutsche Zeitung.”

MORE NEW JOBS: Former Irish perm rep Declan Kelleher has been appointed chair of the governing board of the European Policy Centre. Kelleher, who had a long career in the Irish diplomatic service, including as ambassador to China, succeeds fellow Irishman David O’Sullivan, who is now the European Commission’s sanctions envoy (though he remains a member of the EPC board).

Fun fact: Kelleher’s brother is Colm Kelleher, the high-flying banking executive and chair of UBS — Credit Suisse’s new owner.

MORE MORE NEW JOBS: Aude Maio-Coliche is the EEAS’ new director for strategic communication and foresight. She was previously head of division for Central Africa. Cosmin Dobran will be the new director for integrated approach for security and peace.

10 YEARS OF LAUGHS: The MEP Assistant, aka the “Brussels bubble’s inner voice,” is celebrating 10 years since posting its first meme (on tumblr, natch). The account is the brainchild of former parliamentary assistant Quentin Deschandelliers.

BIRTHDAYS: MEPs Dimitrios Papadimoulis, Giuseppe Ferrandino and Angel Dzhambazki; Former MEP Pál Csáky; Former Daily Telegraph correspondent Alex Spillius; RAND Europe’s Stijn Hoorens; Former Welsh First Minister Carwyn Jones.

THANKS TO: Suzanne Lynch, Paola Tamma and the POLITICO finserv team, Playbook reporter Ketrin Jochecová and producer Grace Stranger.

**A message from Equinor: By working together, we can develop a decarbonised energy system for Europe and its industry. In collaboration with RWE, we have presented a concrete plan to replace German coal-fired power plants with gas-fired, hydrogen-ready power plants, and to build production of Norwegian low-carbon and renewable hydrogen to be exported to Germany by pipeline. The collaboration will strengthen energy security for Europe’s leading industrial country while at the same time offer a viable route to a necessary energy transition for hard to abate industries.**