Brussels Playbook: Sanctions time — Who really gets EU funds — Europe’s Starlink
What’s driving the day in Brussels.
By JAKOB HANKE VELA
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DRIVING THE DAY: MORE SANCTIONS TALKS
THE SEARCH FOR MORE WAYS TO PUNISH RUSSIA: EU ambassadors and experts will meet today to discuss the 10th sanctions package against Russia, after having received comments from their capitals on the Commission’s plans.
Playbook walked you through the main proposals on Monday (new sanctions against individuals, financial sanctions and trade bans), but there’s new information on a particularly interesting proposal, which would aim to prevent Russia from circumventing oil sanctions.
THE DUBAI COMPANY AND ITS RUSSIAN SHIPS: EU diplomats and officials are discussing a proposal to sanction Dubai-based shipping company SUN Ship Management Ltd, which is suspected of helping Russia circumvent restrictions on its oil exports, four diplomats told POLITICO’s Brussels Playbook on condition of anonymity.
Change of clothes: Russian state-owned company Sovcomflot is believed to have transferred its entire fleet of 92 vessels in April 2022 to SUN in order to circumvent EU and international sanctions, three of the diplomats said. The company, whose previous name SCF Management Services resembled that of Sovcomflot, was subsequently renamed SUN Ship Management.
SUN Shipping “is basically Sovcomflot, but with a different name,” said one of the diplomats. “Anyone arguing to keep them off the EU sanctions list is basically doing the Russian government’s bidding.”
Cyprus-flagged vessels: A website that purports to represent the company states that it is “owned by UAE and Russian nationals and managed by multinationals” and owns, manages and operates a fleet of 92 Liberian- and Cypriot-flagged “Crude Oil, LNG and chemical vessels with a capacity of more than 150,000 tons DWT.”
The company has become one of the main transporters of Russian oil with Cyprus-flagged vessels, and has shipped oil to countries including India and Cuba, providing a major source of funding for Russia, also according to the same three diplomats.
Russian whac-a-mole: The episode also highlights a shortcoming of the EU’s sanctions practice — every time the bloc hits a Russian source of financing, a new company appears that takes the place of the old one.
WAR PLANE WARNING: The United States on Tuesday cautioned that Russia still has a strong air force, underscoring the need to provide Ukraine with further support as Russia’s assault continues in the eastern region of Donbas. Lili Bayer has the story.
EU TAX HAVENS LIST UPDATE: EU finance ministers on Tuesday added Russia, the British Virgin Islands, Costa Rica and the Marshall Islands to the bloc’s blacklist of tax havens, which means additional scrutiny for banks and financial operators dealing with those countries. The updated roster now holds 16 countries.
EU CASH TRANSPARENCY
WHO’S PROFITING FROM THE EU’S SUBSIDY BONANZA? MEPs want to know — and have passed a little-noticed measure to make sure governments will have to publish data on the biggest winners from the EU’s recovery fund.
Why it matters: The EU is disbursing a record €724 billion to national governments (some €340 billion in grants) under its historic NextGenerationEU fund — but it’s unclear which companies or individuals are really pocketing the lion’s share, as national governments have been shy about publishing details on final beneficiaries.
That’s set to change: Under an amendment approved by MEPs Tuesday, which will now become law, EU governments will be forced to “create an easy-to-use public portal containing data on the 100 final recipients receiving the highest amount of funding,” including the recipient’s full name if they are a person, or legal name and VAT number if it is a legal entity as well as the amount they received.
EU governments had initially resisted such transparency requirements, but agreed to the amendment as part of wider legislation, agreed Tuesday, on repurposing unused recovery funds for energy investments (the RePowerEU package).
In the public domain: The amendment stipulates that the information should be published — so journalists, researchers and citizens will be able to check where the public money is going. “This new provision is a big win in terms of transparency,” MEP Siegfried Mureşan, who led negotiations on the law on behalf of the center-right EPP, told Playbook, adding it would help disclose the actual companies or people receiving the EU funds.
Get ready for surprises: Eva-Maria Poptcheva, a Spanish MEP with the Renew group, told Playbook she believes the transparency requirement may reveal some uncomfortable truths: “My concern is that in many EU countries, the money is not reaching the real economy, but that there are many transfers between administrations and that large multinationals are benefiting, but not small and medium-sized enterprises.”
Just the start? Poptcheva, who led talks for the law on behalf of Renew together with MEP Dragoș Pîslaru, said she believed governments would ultimately disclose more than the 100 biggest beneficiaries — to avoid giving the impression that just a few were benefiting.
Digital laggards: Damian Böselager, a German MEP from the new federalist Volt party, who was also involved in the negotiations, said he hoped the rules would increase pressure on countries to modernize their reporting systems. Germany, he pointed out, is one of the last big countries that has still not joined the Commission’s digital ARACHNE system — a database that allows EU auditors and national authorities to comb through procurement contracts and other public payments to detect fraud.
What’s next: Governments will have to publish the list of final recipients in April, Poptcheva said, and will have to update it twice a year.
EPP REVOLT OVER BERLUSCONI’S REMARKS: Pressure built up within the European People’s Party on Tuesday, after Playbook reported on leader Manfred Weber’s refusal to comment on Silvio Berlusconi’s anti-Ukrainian remarks that parroted Russian propaganda talking points.
At an EPP meeting Tuesday in Strasbourg, delegations from nine countries criticized the comments and several said they planned to boycott an upcoming gathering of conservatives in Naples, Italy if Berlusconi attended, four people present at or briefed on the exchanges told POLITICO.
Call him out: Irish MEP Seán Kelly was among the heads of delegation who intervened during the two-hour meeting. “I think what Berlusconi said was totally unacceptable and the EPP needed to take a stand on this,” he told Playbook. “Particularly given there are signs of a Russian offensive, we need to give Ukraine all the support it needs.”
Kelly said there was concern in the group about “softening” the position on Ukraine, and senior EPP members should call out Berlusconi’s behavior: “Particularly after Zelenskyy’s address to the Parliament just a few days ago, it’s important not just for Ukraine, but for the EU’s own values and ideals.”
Two days later: Later, on Tuesday evening, the EPP tweeted saying it “firmly rejects the remarks made by Silvio Berlusconi on Ukraine. They do not reflect our political line.”
Read more by Nicholas Vinocur.
SCRUTINIZING RULE OF LAW IN GREECE: The European Parliament will today discuss rule of law concerns in Greece and the wiretapping scandal that has shaken Athens.
The Socialists and Democrats group had pushed for the debate, entitled: “The erosion of the rule of law in Greece. The wiretapping scandal and the freedom of the press.”
Refresher: The scandal has engulfed Greece’s conservative government since last summer when it emerged that Nikos Androulakis, an MEP and leader of the social-democratic party Pasok, was under state surveillance. The government called this lawful but wrong. Since then, the list of people known to be wiretapped, either by state surveillance or with the Predator spyware, has expanded to include ministers, the heads of the armed forces and journalists.
Wide-ranging concerns: Last year, Greece became the EU’s lowest-ranked country in Reporters Without Borders’ annual press freedom list, while the EU also detailed its own fears about the Greek media landscape in its annual rule-of-law report.
SPEAKING OF RULE OF LAW ISSUES: With Poland’s elections approaching this fall, Rafał Trzaskowski, the mayor of Warsaw and one of the leaders of the center-right Civic Platform opposition party, is in a bind. Poland’s capital city could really use the billions in EU cash locked up in a rule-of-law dispute between the European Commission and the country’s nationalist government — but getting the money could end up helping that government. Aitor Hernández-Morales and Jan Cienski have more on Trzaskowski’s dilemma.
HUNGARY’S COMMISSIONER FACES CALLS FOR RESIGNATION: While speaking to the European Parliament on Tuesday, Hungarian EU Commissioner Olivér Várhelyi appeared to refer to MEPs as “idiots.”
Watch for yourselves: As he sat down after answering questions from MEPs, Várhelyi remarked in Hungarian: “How many other idiots are still there?”
MEPs reacted furiously, calling for an investigation into the commissioner. In a message to fellow MEPs, Hungarian center-left opposition lawmaker Csaba Molnár said Parliament “must demand [Várhelyi’s] resignation.”
A spokesperson for Várhelyi did not respond to a request for comment.
EU WILL BUILD ITS OWN ALTERNATIVE TO MUSK’S STARLINK: MEPs on Tuesday approved a €3 billion plan to create a European satellite constellation that will provide communication and internet services both for security services and public users.
Closing the security gap: The network, named IRIS² and first pitched by Internal Market Commissioner Thierry Breton, will help make the EU independent from other countries and commercial services for vital communications, “notably in security and defense,” Breton told Playbook.
“As we have seen in Ukraine, connectivity via satellites in conflict zones is crucial. This is an essential capability that Europe does not have at this stage and that IRIS² will provide,” he added.
MEP Christophe Grudler, who led negotiations on the file for Parliament, said the constellation’s “first services should be operational in 2024” and the “complete system in 2027.”
To get started, IRIS² will receive an initial budget of €2.4 billion in EU public funding, plus €642 million from the European Space Agency. Grudler said the project also aims to attract additional private capital.
Eyes in the sky: The EU is planning to outfit the satellites with additional features that would allow them to track other satellites as well as foreign objects in European airspace, such as spy balloons. Read more on those plans.
LGBTI MEP GROUP CALLS ON EU COUNTRIES TO JOIN BRUSSELS’ LAWSUIT AGAINST HUNGARY: Calls are growing for countries to join the Commission in its legal fight against Hungary’s anti-LGBTQ law.
Background: Brussels is suing Hungary at the EU’s highest court for what it says are breaches of the EU’s fundamental values enshrined in Article 2 TEU.
So far, Belgium and Luxembourg have confirmed they will back Brussels in the proceedings.
Rallying call: MEPs organized in Parliament’s LGBTI Intergroup on Tuesday urged more countries to join — pointing out that a record 17 EU leaders had signed a letter slamming Hungary’s bigoted and discriminatory law.
Renew Europe’s Pierre Karleskind said he had also requested the European Parliament as a whole to intervene in the case.
NGO IN QATARGATE PROBE GOT €6M FROM EU BUDGET: No Peace Without Justice, a human rights advocacy group that has been caught up in the Qatargate scandal, has received a total of €6 million from the EU budget since 2006 for work in places like Syria and Libya, the European Commission told MEPs in a letter seen by POLITICO’s Eddy Wax and Gian Volpicelli.
Blocked: EU budget chief Johannes Hahn sent the letter Tuesday to EPP lawmaker Monika Hohlmeier, chair of the Parliament’s budgetary control committee. Hahn said that an additional €1.37 million of partial funding for two projects was currently suspended “as a precautionary measure, pending an internal evaluation.”
A spokesperson for No Peace Without Justice said: “All funds were received through open grants for the various projects implemented by NPWJ and they have always been spent in conformity with EC rules. I can also confirm that NPWJ did not receive any inquiry by the EC and has not been contacted regarding these internal investigations.”
No cash for Panzeri: Fight Impunity, perhaps the better-known NGO implicated in Qatargate, established by former MEP Pier Antonio Panzeri, received no EU funding, Hahn said in the letter. POLITICO has previously reported that the bulk of its money came from the U.S.-based Human Rights Foundation.
NGOs under the spotlight: Hohlmeier and her EPP colleagues have been probing NGO funding and pushed for the Parliament debate Monday. The debate largely did not offer many specifics about the two NGOs and instead descended into a political brawl over who was attacking NGOs and whether it was legitimate to do so in some cases. MEPs in the S&D, Greens and Left groups especially have decried what they allege is an EPP witch hunt aimed at weakening all NGOs.
Claudio Francavilla from Human Rights Watch said of the NGO debate Monday: “Instead of debating reported state corruption and what it might have achieved, a majority of MEPs secured a debate whose only purpose was to feed further into their baseless witch-hunt against civil society. If they are serious about fighting corruption, those same MEPs should question and demand transparency about far more powerful and influential government and corporate lobbying groups, whose side they often seem to take.”
NFT, not that kind: No Peace Without Justice chief Niccolò Figà-Talamanca, who was arrested, charged and detained as part of the probe, was released from prison without conditions on February 3 but remains formally charged as the investigation is ongoing, according to a family member.
In a statement last weekend, Figà-Talamanca said: “It will take some time to repair the harm done, both to me and my family.” He added: “I am eager to dedicate myself again to justice and human rights around the world, maybe now even close to home.”
FOREIGN INTERFERENCE COMMITTEE TO INVESTIGATE QATARGATE: Parliament on Tuesday decided to give the foreign interference committee new powers to investigate “shortcomings in Parliament’s rules on transparency, integrity, accountability and anti-corruption” and propose reforms.
EU LAWMAKERS AGREE TO BAN PETROL AND DIESEL CARS: Parliament also gave its final approval Tuesday to ban sales of new cars powered with internal combustion engines (as opposed to electric motors and batteries or hydrogen fuel cells) from 2035. Refresher here.
IN OTHER NEWS
THREE LESSONS FROM BERLIN’S ELECTION: Berlin’s regional election results are keeping the German political class busy. Yes, the Christian Democrats (CDU) celebrated a clear victory, winning votes from Chancellor Olaf Scholz’s center-left SPD. But the incumbent governing coalition in Berlin — composed of the SPD, the Greens and the Left — continues to hold a majority. Both the SPD and Greens will hold talks with the CDU on Friday, but seem to prefer keeping the status quo.
Still, behind the scenes, discussions are heating up and new strife looms within the federal coalition, my colleague Gabriel Rinaldi writes in to report.
It’s getting tight in the progressive camp. In Berlin, the SPD is currently ahead of the Greens by only 105 votes. But that could still change. On Tuesday, news broke that 466 postal votes had mistakenly not yet been counted and would have to be added to the results.
All that tension will only amplify divisions between the two main forces in the German progressive scene, at a time when the SPD and Greens are clashing on a regular basis at the federal level.
FDP soul-seeking: For the liberal FDP (short for “Free Democratic Party,” not the French insult), Berlin was a fiasco again, as it failed to reach the minimum threshold to enter the regional parliament.
This too could bring new tensions at the federal level. Party leader and German Finance Minister Christian Lindner pointed to federal politics as an explanation for the poor showing on Sunday, saying it was necessary for the party to assert itself more with liberal positions in the federal government.
Mind the CDU: The Christian Democrats are feeling confident after winning more votes in a regional ballot than the SPD in the post-Merkel era. However, with the FDP out of the game, the CDU’s only coalition options are the SPD or the Greens — a scenario that could also play out in future German elections.
MACRON’S FAILURE TO TAKE THE LEAD IN EUROPE: With the German government sparring internally and blundering through initial communications on the war in Ukraine, now would be a prime opportunity for French President Emmanuel Macron to take the lead in Europe.
But his lukewarm support for Ukraine — with France’s military aid failing to match Macron’s rhetoric — and domestic troubles mean the lame-duck president is punching below his weight.
“The irony is that in geopolitical terms, Paris has rarely had a better chance to lead Europe,” writes my colleague Nicholas Vinocur. Read more here.
TURKEY-SYRIA EARTHQUAKE DEATH TOLL STILL RISING: More than 35,000 people have died from the devastating earthquakes in Turkey and more than 105,000 are injured, Turkish President Recep Tayyip Erdoğan said Tuesday, making it the deadliest disaster since the country’s founding 100 years ago. Around 3,700 deaths have been confirmed in neighboring Syria.
But Ankara is already thinking of the election: As anger over the government’s slow initial response grows in the country, Turkish officials have informally indicated that they may seek to postpone country-wide elections, slated for June 18, my colleague Nektaria Stamouli reports.
Former Deputy PM Bülent Arınç, a founder of the ruling AKP party, called on Monday for a vote postponement “immediately so that the state bureaucracy can focus on helping our citizens heal wounds. This is not a choice but a necessity,” adding that constitutions are not “sacred texts.”
Anti-Syrian sentiment: The earthquake has fanned the flames of xenophobia in Turkey, with Syrian migrants being blamed by locals for looting and resentment flooding social media, Nektaria also reports.
Hundreds of thousands of Syrians, who fled their country’s civil war, have been living in the cities flattened by the devastating earthquakes.
Turkish Foreign Minister Mevlüt Çavuşoğlu underlined that the country will not allow a new influx of refugees from Syria. “Claims that there is a new influx of refugees from Syria to Turkey are not true. We will not allow that, it is out of the question,” he said.
— Europea Parliament plenary session continues, with a key debate on one year since Russia’s invasion of Ukraine at 9 a.m. … A Green Deal Industrial Plan for the Net-Zero Age at 10:30 a.m. … Voting session at 12 a.m. … Access to strategic critical raw materials at 4 p.m … The further repressions against the people of Belarus at 6:15 p.m. … Debates on cases of breaches of human rights, democracy and the rule of law at 8:30 p.m. … Developing an EU Cycling Strategy at 9:30 p.m. Full agenda. Watch.
— European Council President Charles Michel meets President of Niger Mohamed Bazoum at 12 a.m.; meets Bosnia and Herzegovina presidency at 3:30 p.m.
— European Parliament President Roberta Metsola meets the President of the European Central Bank Christine Lagarde at 1 p.m.
— Court of the Justice of the EU set to rule in a case related to Belarus authorities’ diversion of flight FR4978 at 11 a.m.
— EMA press briefing on public health emergencies at 2 p.m. Watch.
— Press conference on raising awareness and donations for Ukrainian efforts, by the chair of the European Parliament’s Committee on Culture and Education, Sabine Verheyen, and Kalush Orchestra, the Ukrainian rap group that won the 2022 Eurovision Song Contest, 2:30 p.m. Watch.
— Commission Vice-President Maroš Šefčovič is in Washington; attends an event hosted by the Center for Strategic and International Studies (CSIS) on “Energy Security: Inter-European and Transatlantic Collaboration” at 3 p.m. Watch.
— Press conference on the anniversary of the Russian invasion of Ukraine by Renew Europe group leader Stéphane Séjourné and MEP Petras Auštrevičius at 4 p.m.
— Press conference by Transport Committee Chair Karima Delli on “Developing EU cycling strategy” at 4.30 p.m.
CEE UNDERREPRESENTED IN EU APPOINTMENTS: Citizens from Central and Eastern Europe are still underrepresented in the EU’s top jobs, an annual report confirmed. In 2022 alone, Western and Southern European citizens secured 88 percent of new appointments, according to the new edition of the Geographical Representation in EU Leadership report by European Democracy Consulting. Meanwhile, only one citizen from Central and from Eastern Europe was appointed in 2022, the report said.
Since the last major enlargement of the EU in 2004, some 89 percent of appointments went to Western and Southern Europeans, according to the report.
MICHEL HITS BACK AT BRUSSELS OFFICIAL WHO ALLEGED EUROCRATS ARE DRUG USERS: European Council President Charles Michel on Tuesday slammed Brussels planning chief Pascal Smet for alleging that Eurocrats routinely take drugs.
The remarks by Smet, the Brussels state secretary for urbanism, “are unacceptable,” Barend Leyts, Michel’s spokesperson, told POLITICO’s Aitor Hernández-Morales: “President Michel asks for respect for all the men and women in the service of the European Union, especially in these very challenging international times.”
Background: POLITICO last week revealed that Smet had alleged “a lot of people working for the European institutions take drugs” during a closed-door meeting with the European Commission’s Office for Infrastructure and Logistics in Brussels in January.
FORMER BRUSSELS COUNCILLOR DETAINED ON CHILD ABUSE SUSPICION: Brussels’ federal police confirmed Tuesday that Schaerbeek’s former education councilor, Michel De Herde, was detained last week over suspicions of child rape and possession of child pornography. He was previously accused of sexual harassment and arrested by police in November over the alleged attempted rape of a student, the Brussels Times reports. His party DéFI is now debating his expulsion amid accusations that the municipality was too slow to react and ignored warnings.
SCULPTURA FESTIVAL: The largest indoor exhibition of sculptures and statues in Belgium recently kicked off in the exhibition hall of Gare Maritime in Brussels. The exhibition is open every day from 11 a.m.-6 p.m. until March 12. Details here.
BIRTHDAYS: MEP Lucia Vuolo; former U.K. Ambassador to the EU Tim Barrow, now a national security adviser to the British government; POLITICO’s Madalina Ciulin; former MEP Syed Kamall; European Parliament’s Pieter Baert. Sovereignty Day in Serbia.
THANKS TO: Nektaria Stamouli, Eddy Wax, Gabriel Rinaldi, Suzanne Lynch, Nicholas Vinocur, Freddie Martyn, Playbook reporter Ketrin Jochecová, editor Emma Anderson and producer Grace Stranger.
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