The Industrial Accelerator Act is out. On public procurement in strategic sectors, it tries to square the circle: keep trusted partners in and China out. A few thoughts on the Commission’s approach in the proposal and the problem of China's transnational footprint:
After months of wrangling and an epic list of delays, the Commission has finally released its Industrial Accelerator Act.
This could turn into one of the EU’s most consequential industrial policy files in years - and the proposal is honestly not a bad place to start.
Some quick thoughts:
What is the European Competitiveness Fund and how can it be improved so that it actually works? If you've had these questions on your mind for a long time but never dared to ask: Lucas and Anna have you covered with their new paper 👇
Unabhängig von den klimapolitischen Konsequenzen ist die Entkernung des Gebäudeenergiegesetzes industriepolitisch ein großer Fehler. Etienne erklärt, warum 👇
That was always the risk in going for the solution based on EU debt rather than using the Russian assets. The assets would have required QMV, the debt needs unanimity regardless of the fact that it would be carried out by enhanced cooperation. France et al knew that risk and went for it anyway.
New piece with former fellow ECB hand @thinicemacro.bsky.social.
At the Munich Security Conference, the ECB made its geopolitical move, opening repo lines to central banks globally.
It was probably the most consequential policy announcement at the conference.
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www.cer.eu/insights/ecb...
Nothing stops the European Council from appointing Lagarde‘s successor at the March 2027 European Council even of she serves out her term. So I find this line of thinking a bit weird.
Another middle power moment, but not groundbreaking: EU-CPTPP have a lot in common and there's scope for closer cooperation. Fundamental limitations are still there, and it certainly won't be an 'anti-Trump trade alliance'. Why and what still can be done 🧵
True, but: As far as I understand that part as a non-lawyer, the first one you cannot circumvent with enhanced cooperation, that’s just a harmonization stopper in whatever format. And taxation is indeed the big exception, but the experience with enhanced coop on the FTT was more than underwhelming.
Good points by @lucasguttenberg.bsky.social:
The Council can take single market decisions by qualified majority. If such a majority exists, why give the minority an opt-out? And if it doesn't, is it really worth deepening the "single" market when so many member states are not on board?
In the discussion on using Enhanced Cooperation for single market deepening seem to forget that the EU treaties put a clear limit on Enhanced Cooperation - that it shall not undermine the single market or the economic cohesion of the EU:
Exactly. Momentum is good, but Enhanced Cooperation and “One Market” don’t go together. QMV remains the way forward. Breaking deadlock in single market files requires everyone – leaders to officials – to abandon national regimes and commit to true European harmonisation. Still a way to go.
There are very few veto areas when it comes to the Single Markets.
Spot on - good that there's political momentum now, but there just isn't a ton of issues where smaller states drag their feet (and many where Germany would need to move).
And that means first and foremost for member states to rethink their long-held positions in key dossiers. That sounds very boring, but often progress comes from boring work, not from hypes.
A true "One Market" (I mean the name alone is a contradiction to multi-speed fantasies, but maybe that's just me) means deepening the Single Market with solid majorities in a way that applies to every firm and every consumer in the whole EU. That is Europe's strength in this crazy new world.
I am also skeptical of the argument that the "threat" of enhanced coop will focus the minds of those who are reluctant. Again, supervision is a good example where my sense is that it will do the opposite: The moment you no longer have to fear to be outvoted, you can happily go your own way.
But the biggest roadblock remains the biggest member state Germany, which again today circulated a 10-point plan on capital markets union that has one very loud omission: common supervision. What good would an enhanced coop do that does not include the biggest member and the biggest market places?
But much more importantly, the reality in the blocked Single Market dossiers is usually not a few recalcitrant loners but big member states or big blocks of member states undermining progress. Take capital markets supervision (the example in the article): Of course Ireland and Luxembourg hate it.
Hence enhanced cooperation in this case replaces fragmentation by inaction with fragmentation by design where either only a small fraction of member states apply new rules or where some countries get a free pass out of the system where the usual MO is vote-and-get-outvoted. Not sure what that helps.
"Small enough" does the work here: In almost all Single Market dossiers, majority voting rules. So once your gang of fellow harmonizers is big enough, you can just outvote the rest and drag them along. Using enhanced coop means either you don't have the numbers or you give the rest an opt-out.
Prime examples are capital markets, services, energy. Now, what does enhanced cooperation mean in the context of the Single Market? It means that a small enough group wants to harmonize rules only within their borders because they are fed up with the reluctance of the others.
First, it makes no sense in principle. The whole idea of the Single Market is that the same rules apply everywhere to everyone in the EU (and even beyond in many cases). That facilitates trade and has been a humungously successul driver of growth. Some areas however, remain fragmented.
The idea to unblock the Single Market deepening agenda with a multi-speed approach a.k.a. Enhanced Cooperation seems extremely weird to me both in principle and politically especially if the goal is "One Market".
Here is why:
Simplification will continue until morale improves
When EU leaders meet tomorrow to discuss the EU’s competitiveness agenda, they should stop chasing ghosts and confront the real problem Europe‘s economy is facing.
Our latest for @politico.eu with @nilsredeker.bsky.social and @sandertordoir.bsky.social 👇
Worth reading.
We want long lasting competitiveness and wealth creation.
We can get both, being truth to our goals and principles.
OPINION: As the current consensus goes, Europe has smothered itself in unnecessary regulation, and growth will return once red tape is cut.
This agenda is bound to disappoint.
Very good. I think the word for this is punchy. Also trenchant.
Bang on op-ed.
