Brussels Playbook: Rome’s bread and circuses — Defense fund update — Holidays for Ukrainian children
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By JAKOB HANKE VELA
with ZOYA SHEFTALOVICH
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DRIVING THE DAY: COMMISSION’S WARNING TO ROME
ITALY GETS YELLOW CARD FOR FUNDING STADIUMS WITH EU CASH: It’s bread and circuses, but with EU funds. Not only is Italy one of the largest recipients of agricultural subsidies, but as my colleague Paola Tamma reports, the country plans to use NextGeneration EU money, meant to stimulate the digital and green transition, to build … sports stadiums.
Brussels slams the emergency brake: The European Commission is halting Italy’s third tranche of €19 billion in grants and loans. The cash won’t be transferred by the end of this month as planned, as a result of objections to the eligibility of some investments, including two sports stadiums (one to be built from scratch in Venice, the other to be refurbished in Florence).
Bridge too far: Rome’s efforts to qualify these as regeneration projects of “large degraded urban areas” is too much of a stretch, EU officials said, given Venice’s stadium would be built on a greenfield site and Florence’s is in one of the city’s wealthiest neighborhoods.
Long-term investment? Building stadiums in some of the EU’s wealthiest regions with money from the historic NextGenEU fund, which was justified by the need for post-COVID solidarity, is probably also not the best way to convince voters in the Netherlands, Germany or Austria that the Eurobonds their governments are backing are being invested wisely — let alone to talk them into backing another round of joint EU debt in the future.
Not giving up: Rome and Brussels extended the assessment until the end of April, with the Italian government promising to “provide further evidence to support the eligibility” of the proposed projects. Read Paola’s story in full here.
**A message from Meta: With the metaverse, students will be able to use virtual reality to visit woolly mammoths in the Ice Age, and gain a deeper, more immersive understanding of Earth’s natural history.**
WEAPONS FOR UKRAINE
MEPs CALL FOR STRICTER RULES TO ENSURE EQUAL USE OF DEFENSE FUNDS: Following Playbook’s reporting on claims that Estonia was (completely legally) renewing its army at the expense of its allies by shipping old military equipment to Ukraine and claiming back the price of brand-new replacements, MEPs are now calling for stricter rules and more transparency.
Reminder: As Playbook reported Tuesday, countries are taking differing approaches when it comes to expensing their Ukrainian arms donations to a fund known as the European Peace Facility, to which EU members contribute based on the size of their economies. Officially, all countries receive the same rate of reimbursement from the EPF, but there’s no set methodology for how countries ought to calculate the price of the equipment they send to Ukraine. And as Playbook revealed, some countries have calculated their reimbursement claims based on the cost of new materials, rather than the actual current value of what they’ve sent to Kyiv.
If it’s legal, what’s the issue? Estonia insists its claims for new weapons are in line with the rules on replacing vital kit and simply reflect its massive contributions to Ukraine’s defense — something Playbook has never questioned. But Tallinn’s critics note the refund scheme would be overwhelmed if every EU country, particularly the bigger ones, used Estonia’s accounting methodology — making it more difficult to continue arming Ukraine.
Let’s compare: Other countries, including other Baltics and Germany, have not claimed such values for donations of their Soviet-era equipment. Germany has not asked for any reimbursement for its old GDR material donated to Ukraine, a spokesperson confirmed. And while Lithuania and Latvia have made similar contributions to Ukraine’s arsenal as Estonia — valued about €400 million or more — their demands on the fund under the same conditions as Estonia (more on that below) are far lower than Tallinn’s.
LEVELING THE PLAYING FIELD: Now, MEPs from the S&D, Renew and the Greens are urging the EU to impose standard rules for how much countries can claim from the EPF. Margarida Marques, vice-chair of European Parliament’s budget committee, told Playbook that though the EPF is an off-budget instrument, it’s use should be bound by principles of “sound financial management and transparency.” Claims for reimbursement “should have one calculation methodology for the price to be claimed,” Marques, who is from the S&D argued, “in order to guarantee transparency of the rules and uniformity in its application.”
Trust but verify: Renew Europe leader Stéphane Séjourné told Playbook he was also “in favor of harmonization” of the rules on reimbursement so that each country values its donations to Ukraine based on the same method. “There should also be a supervision of this.”
‘Urgent’ need for action: “There is an urgent need for internal readjustment,” Greens budget committee member Rasmus Andresen told Playbook. “I call on the member states to establish the current value as a binding basis for calculation. Brand new equipment must be financed via other instruments.”
No question about support for Ukraine: Andresen stressed that the EPF has successfully facilitated fast joint EU military support for Ukraine. But he also pointed out that the body lacked European Parliament oversight because it had been set up as an intergovernmental, rather than a supranational body. In the absence of this, he argued, “thorough parliamentary oversight by national parliaments is urgently needed.”
UPDATE FROM TALLINN: Estonia’s defense ministry shot back furiously at our reporting, saying it contained “lies.” Estonian officials zeroed in on an example given by one of the diplomats in Playbook’s report to illustrate Estonia’s practices, arguing that Tallinn had never sent Strelas to Ukraine or bought Stinger missiles to replace them.
But upon Playbook’s follow-up, the defense ministry confirmed this: Under the first tranche of the EPF, Estonia donated 122 millimeter D-30 howitzers to Ukraine — a model that entered service in 1960, and which Estonia had already decided to replace. “The decision to swap the 122mm Howitzers for [new Korean-made] K9s was made well before the start of the war,” said a spokesperson for the defense ministry. Indeed, the country had already ordered replacements before Russia’s full-scale invasion. After the war, Estonia nevertheless claimed the price for a new “comparable piece of towed artillery,” for the old Soviet-era howitzers it sent to Ukraine and that it was phasing out anyway, as the spokesperson acknowledged.
Which confirms the substance of our reporting. Estonia has been claiming the “recovery value” for its donations to Ukraine, including for old Soviet-era material it had already decided to replace even before Russia’s full-scale invasion of Ukraine.
QUESTIONS OF MALICE: The Estonian defense ministry also claimed Playbook’s report was a “malicious attempt to undermine aid to Ukraine and the unity of allies.”
Wait a minute. None of the officials quoted in Playbook’s report ever questioned sending military aid to Ukraine (and, for the record, neither does Playbook — quite the opposite). What they did have concerns about is Estonia’s approach, and whether it was as exemplary as Tallinn portrays it to be. As other EU diplomats pointed out, if every country used Estonia’s methodology, the EPF fund would be drained in no time — now that really would undermine aid to Ukraine.
WHAT ABOUT THE REST? As we reported on Tuesday, there were six countries that calculated their refund claims for the first tranche of the EPF based on the price of new weapons: Finland claimed 100 percent of the reimbursement based on new purchase prices, Latvia claimed 99 percent under those terms, Lithuania 93 percent, Estonia 91 percent, France 71 percent and Sweden 26 percent.
But in absolute numbers, Estonia put in a claim for €160.5 million of new weapons under the first EPF tranche, for which it was then reimbursed €134.2 million under the standard 84 percent pay-back rate. Sweden, meanwhile, claimed back €7 million, Finland €4.7 million, Latvia €59 million, Lithuania €31 million and France €28 million.
Updates from Finland and Lithuania: A spokesperson for Finland’s foreign affairs ministry said Helsinki did not dispute the figures quoted in Playbook’s report, and stressed it had always adhered to the rules. Lithuania’s ministry of defense similarly said Vilnius “strictly” follows the rules agreed by EU countries on how to assess the value of the support transferred to Ukraine.
MORE RUSSIAN WAR FALLOUT
SANCTIONS TALKS KICKS OFF, AGAIN: EU ambassadors are expected to discuss sanctions and oil price caps today — but multiple EU diplomats have warned my colleagues Leonie Kijewski and Barbara Moens not to expect much movement.
Oil price review: Poland and the Baltics have been pushing for a review of the oil price cap, something that was supposed to happen in March. But so far, there seems to be little appetite: “The U.S. doesn’t want to do it. Estonia, Poland and Lithuania are pushing too far, especially given the reluctance from the U.S. This is not going to happen,” an EU diplomat said.
Belarus, where art thou? The ambassadors will likely also touch upon the issue of aligning sanctions against Belarus with those against Russia to avoid evasion. But that’s a tough nut to crack. Lithuania is fiercely against carving out exemptions for Belarusian fertilizers, arguing that would only benefit Minsk rather than address world hunger. So far, there has been no movement to unblock the issue, three EU diplomats said.
ORTHODOX SCHISM: Today is the deadline for the 1,000 inhabitants of the Pechersk Lavra, an 11th-century Orthodox cave monastery complex in Kyiv, to leave what was their home amid heightened political concerns that some of them are too close to Moscow. The high-profile eviction is the latest installment in the bitter schism dividing Orthodox believers in Ukraine, report my colleagues Veronika Melkozerova and Jamie Dettmer.
RUSSIAN DAD ON THE RUN: Alexei Moskalyov, the man sentenced to two years in prison after his daughter drew an anti-war picture at school, is on the run from the authorities, a spokeswoman for a provincial court told journalists. Masha, Moskalyov daughter, remains in what the authorities call “a social rehabilitation center,” and has been denied any communication with the outside world. Read more.
S&D’S GARCÍA PROPOSES ‘SOLIDARITY HOLIDAYS’ FOR UKRAINIAN KIDS: Parliament’s Socialists and Democrats group leader Iratxe García is calling for the EU to sponsor holidays for Ukrainian children — an idea García told Playbook she had discussed during a meeting in Kyiv with Ombudsman Dmytro Lubinets. “I could hear first hand from the ombudsman about the horrors of the war, particularly children’s suffering. So we want to promote an initiative for ‘solidarity holidays’ of Ukrainian children in the EU,” García said in a message from Ukraine.
S&D trip: García, who traveled to Kyiv with fellow S&D MEPs Pedro Marques, Tonino Picula, Sven Mikser and Włodzimierz Cimoszewicz, also met with PM Denys Shmyhal, Foreign Minister Dmytro Kuleba and Vice-Speaker of Rada Oleksandr Korniienko.
NOW READ THIS: Western nations want Africa and Asia to choose sides in Russia’s war on Ukraine. But Jérémy Lissouba, a member of parliament for the main opposition party in the Republic of Congo, writes in this op-ed that Moscow understands that they cannot easily be made to choose, while the West doesn’t.
**The Commission will finally unveil the first update of the EU’s pharma legislation in twenty years. And the shakeup promises to be major. Do you want to know more? Tune in on April 25 at POLITICO Live’s event “Breaking barriers in innovation and access: can the pharma legislation do it all?”. Register now! **
IN OTHER NEWS
HONORING PEACE: The heads of the three main EU institutions will get together today to mark the 25th anniversary of the Good Friday Agreement, which helped bring peace to Northern Ireland. Parliament President Roberta Metsola, Commission chief Ursula von der Leyen and Council President Charles Michel will deliver speeches at the opening of the EU Parliament’s plenary session at 3 p.m., Suzanne Lynch writes in to report.
Not coming: Heavy hitters Bertie Ahern, the former Irish Taoiseach, and Tony Blair, the former British prime minister, who helped spearhead the peace process, have pulled out of the event, as RTE first reported.
Background: The timing of today’s event comes weeks after von der Leyen and U.K. Prime Minister Rishi Sunak agreed the “Windsor Framework,” breaking the impasse over post-Brexit arrangements for Northern Ireland. But the DUP, the main unionist party which favors union with Great Britain, opposes the deal and refuses to enter government in Belfast. Underling the fragility of the situation, on Tuesday, MI5 raised the terrorist threat level in Northern Ireland to severe.
Also today: A cross-party group of Irish MEPs — Barry Andrews, Ciarán Cuffe, Seán Kelly and Chris MacManus — hosts a conference on the European perspective on the Good Friday Agreement, which kicks off at 4:30 p.m.
ALSO HAPPENING TODAY — CLIMATE CHANGE LAWSUITS: The European Court of Human Rights hears two climate lawsuits today. The first was brought by a group of Swiss pensioners, who argue their government is failing to protect them from dangerous heat waves, while the second, brought against France, asks whether government inaction on climate amounts to a breach of human rights. More here.
GRETA WOULDN’T BE AMUSED: Charles Michel and Ursula von der Leyen flew to last year’s U.N. climate talks in Egypt aboard a private jet, according to data seen by POLITICO. The choice of transportation highlights a long-standing dilemma for global leaders: how to practice what they preach on greenhouse gas emissions while also facing a demanding travel schedule. My colleagues Giovanna Coi, Karl Mathiesen and Mari Eccles have the story.
PARLIAMENT’S SPYWARE RAPPORTEUR CALLS FOR EU TO FOLLOW BIDEN’S LEAD: MEP Sophie in ‘t Veld, the European Parliament’s point-person for the PEGA report on the use of commercial spyware in Europe, on Tuesday called for Brussels to follow Washington’s lead when it comes to banning the tech if it poses a risk to national security or is used by other governments to violate human rights.
Too slow: U.S. President Joe Biden’s executive order, which he signed Monday, “is the correct response to the imminent threat from unimpeded proliferation of commercial spyware,” in ‘t Veld said in a statement. “Two years after the Pegasus spyware scandal broke, however, Europe is still dithering and ducking, while the US is showing leadership and determination.”
Let’s team up: In ‘t Veld said she was recommending similar measures in her draft report and draft recommendations. The EU should answer the White House’s call for the development of an “international ecosystem” for these kinds of technologies. “It is about time Europe teams up with the US to set common standards and rules, as I have proposed in my draft report,” she said.
MEPs BACK TIGHTER SCREENING OF MIGRANTS: European lawmakers on Tuesday voted for tighter screening of asylum seekers as they gave the green light to a central plank of the EU’s flagship migration package. The new rules seek to speed up the return of migrants who enter Europe without permission and to prevent them from traveling to other countries in the EU. The approved text, seen by my colleague Gregorio Sorgi, includes fast-track processing of asylum-seekers who are unlikely to be successful — yet leaves the Dublin Treaty untouched.
DID GERMANY SAVE DAS AUTO? NOT REALLY. Weeks of threats and bluster that saw Berlin go head to head with Brussels ended Tuesday with EU energy ministers approving an agreement that sets a zero emissions limit on the sale of new cars and vans from 2035. And as my colleagues Joshua Posaner, Giorgio Leali and Hans von der Burchard write in their analysis, that’s exactly the same deal that Germany and a small group of allies refused to accept unless the European Commission changed the rules to make room for cars running on so-called e-fuels.
By the way, Germany’s e-fuel fetish ain’t new, writes Matt Karnitschnig in this dispatch from the history department — just ask the Führer.
GREEK ELECTION TO BE HELD ON MAY 21.
PARIS PICKS UP THE TRASH: Parisians can expect some relief for their noses today when garbage collectors are set to resume work after weeks of striking. But unions vowed to continue demonstrations next week. More here.
**All the latest news about yesterday’s Energy Council Meeting in one place, from shifting away from natural gas to how changes will affect the EU’s promise of climate neutrality. Find out what was discussed at yesterday’s Transport, Telecommunications and Energy Meeting with POLITICO Pro Energy and Climate. Learn more here. **
— Weekly European Commission College meeting at 10:30 a.m., followed by a readout and press conference. Watch.
— European Parliament plenary in Brussels from 3 p.m. Highlights: Ceremony on the 25th anniversary of the Good Friday Agreement (Parliament President Roberta Metsola, European Council President Charles Michel and European Commission boss Ursula von der Leyen to deliver statements) … Debate on Council conclusions of March 23-24 meeting, with opening statements by von der Leyen and Michel. Watch.
— Summit for Democracy, co-hosted by U.S. President Joe Biden, and the leaders of Costa Rica, the Netherlands, South Korea and Zambia from 11:30 a.m. Ursula von der Leyen, Belarus opposition leader in exile Sviatlana Tsikhanouskaya and U.N. chief Antonio Guterres among those to participate. Program. Watch.
— Kenyan President William Ruto in town. Meets with Charles Michel at noon … Ursula von der Leyen at 2 p.m. … and Trade Commissioner Valdis Dombrovskis.
— Valdis Dombrovskis meets via videoconference U.K. Business and Trade Secretary Kemi Badenoch.
— Commission Vice President Frans Timmermans speaks via videoconference with UEFA President Aleksander Čeferin.
— Commission Vice President Margrethe Vestager in Washington D.C.; meets with U.S. Secretary of Commerce Gina Raimondo.
— Commission VP Věra Jourová speaks via video conference at “Media Freedom Rapid Response” online summit.
— European Court of Human Rights Grand Chamber hears two landmark climate change cases.
SPANISH JUDGE RELEASES SEPARATIST MEP: MEP Clara Ponsatí, a Catalan separatist, was released after being detained for several hours on Tuesday in Barcelona, following years of evading an arrest warrant from the Spanish Supreme Court over a failed independence push. Eddy Wax has more.
TERROR ATTACK FOILED: Belgian police arrested eight people Monday evening, at least five of whom were suspected of preparing a terrorist attack in Belgium. More here.
OPERATION SILK ROAD: The European Public Prosecutor Office, Europol and Belgian authorities on Tuesday carried out multiple raids across Belgium to dismantle a customs fraud ring suspected of mass tax and customs duty evasion, after a year-long operation code-named “Silk Road.” The suspects allegedly evaded import tax on electronics, toys and other goods by using Belgian private customs agencies and fake companies in France, Germany, Hungary, Italy, Poland and Spain, Playbook’s Ketrin Jochecová reports. Press release explaining the scheme further here.
ACTIVISTS DISRUPT AGRI FORUM: Around 60 activists from the No Future For Agrobusiness group on Tuesday blocked the entrance to the Square convention center in Brussels, where the Forum for the Future of Agriculture was supposed to take place. The activists accused participants of greenwashing and delaying EU Green Deal and Farm to Form regulations. Pics here.
ONE FOR THE ELECTRONIC MUSIC FANS: House, techno, hip hop and other musicians will head to several Brussels spots this week for the Listen Festival. Artists will play at locations like Brussels Central Station, Brussels Congrès Station, C12, Fuse or La Cabane. Program.
BIRTHDAYS: Former Eurogroup chief Jeroen Dijsselbloem, now mayor of Eindhoven; EU Agency for Asylum’s Thomas Jézéquel; CEO of Veritas Carl Haglund, a former MEP; European Parliament’s Jure Tanko; Fran Mullaney of Portland; Nana Akufo-Addo, president of Ghana; Former U.K. Prime Minister John Major; Former U.K. Home Secretary Priti Patel.
And belated birthday wishes to Paul Moley of Commissioner Mairead McGuinness’ Cabinet, who turned the big 4-0 last Thursday.
THANKS to Paola Tamma, Barbara Moens, Leonie Kijewski, Suzanne Lynch, Playbook reporter Ketrin Jochecová and producer Grace Stranger.
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