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Today it finally arrives, the Draghi Report. The former ECB President and Italian Prime Minister has written about the problems of the EU single market and under what conditions it has a future. Draghi compiled the report on behalf of the Commission President. His diagnosis is clear: Europe is losing competitiveness on a massive scale, particularly in the areas where the most money can be earned in the future. In front of the EU ambassadors and the heads of the political groups in the European Parliament, he used clear words to emphasize his recommendations: “If we do not become competitive, the EU will go down.” By midday today, we will know what prescription Draghi is proposing for Europe’s recovery. His advice is likely to determine the single market agenda until 2029.
On Wednesday, von der Leyen wants to inform the heads of the parliamentary groups who the candidates are for the 26 positions in her second Commission and which portfolios they will be given. Then, the structure of the Commission, such as whether there will be senior vice-presidents again, will also be revealed. Meanwhile, von der Leyen is continuing the tough fight to ensure that women get the proportion of jobs they deserve in her Commission. Tomaž Vesel, for example, has now backed out – Slovenia had nominated the judge for her Commission. It has not yet been confirmed that Slovenia will nominate a woman instead, for example because a more important portfolio in Berlaymont has been promised. If this happens, gender parity will not be achieved, but eleven out of 27 Commission members will then be female. At the beginning of their efforts, there were reportedly just four women. Have a good start to this exciting EU week!
The appeal for donations on the website of Jarosław Kaczyński’s self-proclaimed Law and Justice Party (PiS) sounds ominous. “Today, more than ever, we need your help! The coalition of December 13 (red. PiS term for the government led by Donald Tusk) will do everything to destroy the rule of law and democracy in Poland. Only with your help will we be able to continue fighting for a dignified, sovereign and law-abiding Poland. Support our work.”
A few days ago, the state election commission accused the right-wing populist PiS of irregularities in its 2023 election campaign funding amounting to Zł3.6 million (€850,000). The party will be obliged to repay the money, including penalties, and could possibly no longer receive state subsidies until the end of the 2027 legislative period. Kaczynski intends to appeal the decision before the Supreme Court, which is controlled by PiS judges.
In order to prevent the party from going bankrupt, the opposition leader is appealing to his loyal voters and is also asking PiS parliamentarians to pay. Anyone who sits for PiS in the Sejm or Senate must now transfer Zł1000 (€235) per month, a PiS member of parliament in Strasbourg – Zł5000 (€1170). In just a few days, PiS supporters have donated over €700,000.
For the first time since the inauguration of Prime Minister Donald Tusk eight months ago, the government has succeeded in proving massive violations of the law by the PiS and also in holding it accountable. The Prime Minister promises that further PiS affairs worth billions will be brought to court in the fall. 62 people are to end up in the dock, 149 tips on further possible criminal offenses have been forwarded to the public prosecutor’s office. The financial administration is investigating a total of 90 state funds, agencies and authorities that are alleged to have illegally transferred taxpayers’ money to PiS profiteers. According to Tusk, the total loss amounts to up to €23 billion.
The future of the government depends on the success of this reappraisal. So far, the Democratic coalition has found it difficult to fulfill its many election promises. Before the summer break, it failed in its attempt to relax the almost complete abortion ban – due to opposition from within its own coalition. Above all, it is struggling to restore the rule of law. Every attempt at reform is being blocked by President Andrzej Duda, a loyal PiS servant. The Constitutional Court and the National Judicial Council also continue to be controlled by the right-wing populists.
Despite such defeats, no one is shaking the prime minister’s chair. There are sometimes complaints within the coalition that Tusk makes too many decisions by himself. But everyone knows that there is currently no alternative to him. The prime minister’s main goal is the presidential elections next summer, which a candidate from the citizens’ coalition must win in order for the PiS reform blockade to be lifted. The battle for office is likely to be fierce, as Kaczynski’s political survival is at stake.
In order not to alienate his voters, Tusk is shying away from the strict financial policy for which he was previously known. In the current year, the budget deficit will amount to 5.1 percent of economic output (GDP) and will even rise to 7.3 percent in 2025. Warsaw plans to spend Zł 87 billion (€44 billion) on defense, around 4.7 percent of GDP. Around Zł220 billion (€47 billion) are to flow into the healthcare system. That is 16 percent more than in 2024. Brussels initiated an excessive deficit procedure against Poland in June. The only good news: Poland’s total debt is still quite low at just over 50 percent of GDP (Germany’s is 65 percent).
Tusk is benefiting from quite good economic development. GDP is expected to grow by three percent this year and by as much as four percent in 2025. Unfortunately, the number of newly founded companies is falling, as labor costs are rising rapidly. This year, average Polish wages are rising by 13.6 percent, much faster than inflation. Foreign investors are warning that Poland could lose one of its greatest locational advantages. The average wage on the other side of the Oder is already just under €2,000.
While German Chancellor Olaf Scholz and French President Emmanuel Macron are battling with a strong, anti-European opposition, Tusk can count on a lot of support in Poland. In his speech on the 85th anniversary of the outbreak of the war, he clearly expressed Poland’s pro-European position: “We cannot afford to be isolated, we must act together, both within NATO and in a united Europe,” said the Prime Minister.
On Sept. 15, export controls come into force in China for the metal antimony, which is required for car batteries and solar panels, but also for weapons and military equipment such as ammunition and night vision devices. After gallium, germanium and high-purity graphite, it is the fourth metal for which Beijing regulates exports. It is therefore no wonder that the West is increasingly concerned about its dependence on China for critical minerals. The country is the world’s most important source of numerous important minerals or products processed from them.
The target countries are stepping up their efforts to diversify the procurement of critical minerals. The EU Critical Raw Materials Act, for example, sets a maximum of 65% of the demand for each critical raw material to be sourced from a single country by 2030. However, the changeover may take longer than the law envisages.
Beijing’s argument is always that the controls serve to protect “national security”. Many experts see them more as a reaction to US export restrictions or investigations and countervailing duties such as those imposed by the EU on EVs.
In December, Beijing also banned the export of technologies for the production of so-called permanent magnets made from rare earths, which are used for batteries, turbines and electronics. This is seen as a warning shot that the rare earths themselves could also be targeted.
“Of its small arsenal of possible retaliatory measures, imposing export restrictions on critical minerals is the most practical option“, says Cory Combs, Associate Director of Climate-Energy-Industrial Policy at the consulting agency Trivium China. This is because China’s mineral wealth “influences a large number of downstream consumers”. Combs was already expecting new controls for 2024 in the spring. “The big question is which mineral exports China will target next”, he wrote. Beijing has since given the answer: antimony.
The metal was one of nine minerals for which Combs and his team predicted controls after analyzing the likelihood of such controls for 73 critical commodities based on China’s strategic interests, according to a scoring system. Beijing will select minerals that meet these criteria for export controls:
Beijing, on the other hand, will avoid controls
The scoring system took all these aspects into account. In addition to antimony, the following eight minerals ended up on the Trivium list of minerals that could be affected by export controls:
According to Trivium, all of these minerals are listed as “critical minerals” in the USA, the EU and Japan – with the exception of bismuth, which is not on the list in Japan. The dependencies are similar for minerals that are already subject to export controls: China’s share of global graphite production is 78 percent. The figure for antimony production is 48 percent.
It remains to be seen whether the controls feared by Combs will actually take place. So far, the rules on the export of graphite, gallium and germanium are primarily a threat that serves as a deterrent. In fact, China has not yet banned any exports of these metals.
Nevertheless, the announcements had an impact on trade. According to Bloomberg, overseas sales of gallium, germanium and graphite jumped in the month before the export controls began as buyers stocked up – followed by a sharp drop and then a recovery. The same could now happen with antimony.
While gallium has largely recovered, germanium and graphite are lagging somewhat behind according to the Bloomberg report – which is partly due to the fact that buyers are already in the process of diversifying their sources. For example, the EU and the USA agreed to supply germanium to the Democratic Republic of Congo in April.
China’s exports of natural graphite in the first seven months of 2024 were 17 percent lower than in the same period last year, which, according to Xu Peng of Bloomberg NEF, is due to both an increase in graphite mining abroad and a decline in demand for electric cars. The situation is therefore more complex than it appears at first glance.
According to Renault head Luca de Meo, the European car industry could face billions in fines due to falling demand for electric vehicles. “If electric vehicles remain at current levels, the European industry may have to pay €15 billion in fines or give up the production of more than 2.5 million vehicles,” said de Meo. Car manufacturers face stricter CO2 targets from 2025 as the cap on average emissions from new car sales falls from 116 grams per kilometer in 2024 to 94 grams per kilometer.
“The pace of conversion to electric vehicles is only half of what we would need to reach the targets that would allow us to avoid paying fines,” de Meo, who is also President of the European Automobile Manufacturers’ Association (ACEA), said of the sector. Exceeding the CO2 limits can lead to fines of €95 per CO2 gram exceeded per kilometer multiplied by the number of vehicles sold. This could result in fines of hundreds of millions of euros for large car manufacturers. “Everyone is talking about 2035, ten years from now, but we should be talking about 2025 because we already have problems now,” he said. “We need to get some flexibility. It’s very, very dangerous to set deadlines and fines without having the possibility to make this more flexible.” rtr
The cornerstone for a central new task of European social policy was placed in the Belgian city of Liège in March. Trade ministers and senior officials from 19 European countries signed the “Liège Declaration on Affordable Housing in the EU.” Commission President von der Leyen pledged the EU Commission’s commitment in her candidacy speech. The re-elected Commission President will present the areas of responsibility of the 27-member college in the next few days.
In order to achieve a pro-European majority for her new team, Ursula von der Leyen needs the votes of the Social Democrats in the European Parliament. The Social Democrats’ central demand is that housing must be one of the priorities for the next five years.
The problems in the EU are manifold. While the tenant nation of Germany is groaning under high burdens, homeowners in Eastern Europe are suffering in particular from increased energy costs and Dutch people from permanently rising property purchase prices. In Barcelona, protests against short-term rentals have turned into a hostile attitude towards tourists. Eurostat figures show that in 2022, 9.6 million full-time employees aged 25 to 34 were still living at home with their parents, which corresponds to a fifth of all people of this age in the EU. The EU will not be able to pay rents and mortgages or create housing – but action at the European level is essential to expand the framework for the Member States’ ability to act.
The following three pillars should guide the work of a housing department in the Commission. Firstly: a European Social Fund (ESF) program could co-finance national housing projects. It would make sense to improve coordination between EU policy and the measures of the Member States, municipalities and cities. There are different systems for housing promotion in Europe, which EU funding would have to take into account. For such EU funding programs to be successful, it is necessary for the member states to disregard EU co-financed projects when calculating their debt ratio. One of the innovations of the reformed EU fiscal rules is precisely to exclude co-financing funds from debt brakes. The requirements for accessing existing funding from the European Investment Bank (EIB) must be simplified.
Secondly: Hurdles in European competition law for national housing programs must be removed. Specifically, this means that the exemption of housing promotion as a so-called “service of general economic interest” (SGEI) must be extended. Currently, only social housing is exempt from having to be declared as aid to the EU Commission. However, the housing crisis is so dramatic that this must be extended to housing subsidies for middle-income households.
Thirdly: Von der Leyen’s man or woman for housing should work at high speed on existing EU legal requirements to facilitate housing construction and make existing housing available again. This includes, in particular, the limitation of short-term rentals in metropolitan areas. Another area in which the EU has clear competence for legislative regulations is legislation for banks and capital markets. Speculation in residential property is one of the drivers of the dramatic situation in which Europeans find themselves when searching for housing. We must put a stop to this because housing is in no way comparable to other speculative products.
The lack of affordable housing is a growing problem for the functioning of the internal market. All Member States should therefore have an interest in solving the challenges of their individual housing markets. In order for the EU to be able to make its contribution, it is necessary to bundle the above-mentioned influence in a single hand, including the associated Commission services and budgetary powers.
Probably the most important reason for joint European action is that housing must be affordable because housing is a fundamental right. Defending this is one of the EU’s core tasks.
René Repasi has headed the German group of Socialist MEPs in the European Parliament since March. He is a legal scholar and first entered the European Parliament in 2022.
Today it finally arrives, the Draghi Report. The former ECB President and Italian Prime Minister has written about the problems of the EU single market and under what conditions it has a future. Draghi compiled the report on behalf of the Commission President. His diagnosis is clear: Europe is losing competitiveness on a massive scale, particularly in the areas where the most money can be earned in the future. In front of the EU ambassadors and the heads of the political groups in the European Parliament, he used clear words to emphasize his recommendations: “If we do not become competitive, the EU will go down.” By midday today, we will know what prescription Draghi is proposing for Europe’s recovery. His advice is likely to determine the single market agenda until 2029.
On Wednesday, von der Leyen wants to inform the heads of the parliamentary groups who the candidates are for the 26 positions in her second Commission and which portfolios they will be given. Then, the structure of the Commission, such as whether there will be senior vice-presidents again, will also be revealed. Meanwhile, von der Leyen is continuing the tough fight to ensure that women get the proportion of jobs they deserve in her Commission. Tomaž Vesel, for example, has now backed out – Slovenia had nominated the judge for her Commission. It has not yet been confirmed that Slovenia will nominate a woman instead, for example because a more important portfolio in Berlaymont has been promised. If this happens, gender parity will not be achieved, but eleven out of 27 Commission members will then be female. At the beginning of their efforts, there were reportedly just four women. Have a good start to this exciting EU week!
The appeal for donations on the website of Jarosław Kaczyński’s self-proclaimed Law and Justice Party (PiS) sounds ominous. “Today, more than ever, we need your help! The coalition of December 13 (red. PiS term for the government led by Donald Tusk) will do everything to destroy the rule of law and democracy in Poland. Only with your help will we be able to continue fighting for a dignified, sovereign and law-abiding Poland. Support our work.”
A few days ago, the state election commission accused the right-wing populist PiS of irregularities in its 2023 election campaign funding amounting to Zł3.6 million (€850,000). The party will be obliged to repay the money, including penalties, and could possibly no longer receive state subsidies until the end of the 2027 legislative period. Kaczynski intends to appeal the decision before the Supreme Court, which is controlled by PiS judges.
In order to prevent the party from going bankrupt, the opposition leader is appealing to his loyal voters and is also asking PiS parliamentarians to pay. Anyone who sits for PiS in the Sejm or Senate must now transfer Zł1000 (€235) per month, a PiS member of parliament in Strasbourg – Zł5000 (€1170). In just a few days, PiS supporters have donated over €700,000.
For the first time since the inauguration of Prime Minister Donald Tusk eight months ago, the government has succeeded in proving massive violations of the law by the PiS and also in holding it accountable. The Prime Minister promises that further PiS affairs worth billions will be brought to court in the fall. 62 people are to end up in the dock, 149 tips on further possible criminal offenses have been forwarded to the public prosecutor’s office. The financial administration is investigating a total of 90 state funds, agencies and authorities that are alleged to have illegally transferred taxpayers’ money to PiS profiteers. According to Tusk, the total loss amounts to up to €23 billion.
The future of the government depends on the success of this reappraisal. So far, the Democratic coalition has found it difficult to fulfill its many election promises. Before the summer break, it failed in its attempt to relax the almost complete abortion ban – due to opposition from within its own coalition. Above all, it is struggling to restore the rule of law. Every attempt at reform is being blocked by President Andrzej Duda, a loyal PiS servant. The Constitutional Court and the National Judicial Council also continue to be controlled by the right-wing populists.
Despite such defeats, no one is shaking the prime minister’s chair. There are sometimes complaints within the coalition that Tusk makes too many decisions by himself. But everyone knows that there is currently no alternative to him. The prime minister’s main goal is the presidential elections next summer, which a candidate from the citizens’ coalition must win in order for the PiS reform blockade to be lifted. The battle for office is likely to be fierce, as Kaczynski’s political survival is at stake.
In order not to alienate his voters, Tusk is shying away from the strict financial policy for which he was previously known. In the current year, the budget deficit will amount to 5.1 percent of economic output (GDP) and will even rise to 7.3 percent in 2025. Warsaw plans to spend Zł 87 billion (€44 billion) on defense, around 4.7 percent of GDP. Around Zł220 billion (€47 billion) are to flow into the healthcare system. That is 16 percent more than in 2024. Brussels initiated an excessive deficit procedure against Poland in June. The only good news: Poland’s total debt is still quite low at just over 50 percent of GDP (Germany’s is 65 percent).
Tusk is benefiting from quite good economic development. GDP is expected to grow by three percent this year and by as much as four percent in 2025. Unfortunately, the number of newly founded companies is falling, as labor costs are rising rapidly. This year, average Polish wages are rising by 13.6 percent, much faster than inflation. Foreign investors are warning that Poland could lose one of its greatest locational advantages. The average wage on the other side of the Oder is already just under €2,000.
While German Chancellor Olaf Scholz and French President Emmanuel Macron are battling with a strong, anti-European opposition, Tusk can count on a lot of support in Poland. In his speech on the 85th anniversary of the outbreak of the war, he clearly expressed Poland’s pro-European position: “We cannot afford to be isolated, we must act together, both within NATO and in a united Europe,” said the Prime Minister.
On Sept. 15, export controls come into force in China for the metal antimony, which is required for car batteries and solar panels, but also for weapons and military equipment such as ammunition and night vision devices. After gallium, germanium and high-purity graphite, it is the fourth metal for which Beijing regulates exports. It is therefore no wonder that the West is increasingly concerned about its dependence on China for critical minerals. The country is the world’s most important source of numerous important minerals or products processed from them.
The target countries are stepping up their efforts to diversify the procurement of critical minerals. The EU Critical Raw Materials Act, for example, sets a maximum of 65% of the demand for each critical raw material to be sourced from a single country by 2030. However, the changeover may take longer than the law envisages.
Beijing’s argument is always that the controls serve to protect “national security”. Many experts see them more as a reaction to US export restrictions or investigations and countervailing duties such as those imposed by the EU on EVs.
In December, Beijing also banned the export of technologies for the production of so-called permanent magnets made from rare earths, which are used for batteries, turbines and electronics. This is seen as a warning shot that the rare earths themselves could also be targeted.
“Of its small arsenal of possible retaliatory measures, imposing export restrictions on critical minerals is the most practical option“, says Cory Combs, Associate Director of Climate-Energy-Industrial Policy at the consulting agency Trivium China. This is because China’s mineral wealth “influences a large number of downstream consumers”. Combs was already expecting new controls for 2024 in the spring. “The big question is which mineral exports China will target next”, he wrote. Beijing has since given the answer: antimony.
The metal was one of nine minerals for which Combs and his team predicted controls after analyzing the likelihood of such controls for 73 critical commodities based on China’s strategic interests, according to a scoring system. Beijing will select minerals that meet these criteria for export controls:
Beijing, on the other hand, will avoid controls
The scoring system took all these aspects into account. In addition to antimony, the following eight minerals ended up on the Trivium list of minerals that could be affected by export controls:
According to Trivium, all of these minerals are listed as “critical minerals” in the USA, the EU and Japan – with the exception of bismuth, which is not on the list in Japan. The dependencies are similar for minerals that are already subject to export controls: China’s share of global graphite production is 78 percent. The figure for antimony production is 48 percent.
It remains to be seen whether the controls feared by Combs will actually take place. So far, the rules on the export of graphite, gallium and germanium are primarily a threat that serves as a deterrent. In fact, China has not yet banned any exports of these metals.
Nevertheless, the announcements had an impact on trade. According to Bloomberg, overseas sales of gallium, germanium and graphite jumped in the month before the export controls began as buyers stocked up – followed by a sharp drop and then a recovery. The same could now happen with antimony.
While gallium has largely recovered, germanium and graphite are lagging somewhat behind according to the Bloomberg report – which is partly due to the fact that buyers are already in the process of diversifying their sources. For example, the EU and the USA agreed to supply germanium to the Democratic Republic of Congo in April.
China’s exports of natural graphite in the first seven months of 2024 were 17 percent lower than in the same period last year, which, according to Xu Peng of Bloomberg NEF, is due to both an increase in graphite mining abroad and a decline in demand for electric cars. The situation is therefore more complex than it appears at first glance.
According to Renault head Luca de Meo, the European car industry could face billions in fines due to falling demand for electric vehicles. “If electric vehicles remain at current levels, the European industry may have to pay €15 billion in fines or give up the production of more than 2.5 million vehicles,” said de Meo. Car manufacturers face stricter CO2 targets from 2025 as the cap on average emissions from new car sales falls from 116 grams per kilometer in 2024 to 94 grams per kilometer.
“The pace of conversion to electric vehicles is only half of what we would need to reach the targets that would allow us to avoid paying fines,” de Meo, who is also President of the European Automobile Manufacturers’ Association (ACEA), said of the sector. Exceeding the CO2 limits can lead to fines of €95 per CO2 gram exceeded per kilometer multiplied by the number of vehicles sold. This could result in fines of hundreds of millions of euros for large car manufacturers. “Everyone is talking about 2035, ten years from now, but we should be talking about 2025 because we already have problems now,” he said. “We need to get some flexibility. It’s very, very dangerous to set deadlines and fines without having the possibility to make this more flexible.” rtr
The cornerstone for a central new task of European social policy was placed in the Belgian city of Liège in March. Trade ministers and senior officials from 19 European countries signed the “Liège Declaration on Affordable Housing in the EU.” Commission President von der Leyen pledged the EU Commission’s commitment in her candidacy speech. The re-elected Commission President will present the areas of responsibility of the 27-member college in the next few days.
In order to achieve a pro-European majority for her new team, Ursula von der Leyen needs the votes of the Social Democrats in the European Parliament. The Social Democrats’ central demand is that housing must be one of the priorities for the next five years.
The problems in the EU are manifold. While the tenant nation of Germany is groaning under high burdens, homeowners in Eastern Europe are suffering in particular from increased energy costs and Dutch people from permanently rising property purchase prices. In Barcelona, protests against short-term rentals have turned into a hostile attitude towards tourists. Eurostat figures show that in 2022, 9.6 million full-time employees aged 25 to 34 were still living at home with their parents, which corresponds to a fifth of all people of this age in the EU. The EU will not be able to pay rents and mortgages or create housing – but action at the European level is essential to expand the framework for the Member States’ ability to act.
The following three pillars should guide the work of a housing department in the Commission. Firstly: a European Social Fund (ESF) program could co-finance national housing projects. It would make sense to improve coordination between EU policy and the measures of the Member States, municipalities and cities. There are different systems for housing promotion in Europe, which EU funding would have to take into account. For such EU funding programs to be successful, it is necessary for the member states to disregard EU co-financed projects when calculating their debt ratio. One of the innovations of the reformed EU fiscal rules is precisely to exclude co-financing funds from debt brakes. The requirements for accessing existing funding from the European Investment Bank (EIB) must be simplified.
Secondly: Hurdles in European competition law for national housing programs must be removed. Specifically, this means that the exemption of housing promotion as a so-called “service of general economic interest” (SGEI) must be extended. Currently, only social housing is exempt from having to be declared as aid to the EU Commission. However, the housing crisis is so dramatic that this must be extended to housing subsidies for middle-income households.
Thirdly: Von der Leyen’s man or woman for housing should work at high speed on existing EU legal requirements to facilitate housing construction and make existing housing available again. This includes, in particular, the limitation of short-term rentals in metropolitan areas. Another area in which the EU has clear competence for legislative regulations is legislation for banks and capital markets. Speculation in residential property is one of the drivers of the dramatic situation in which Europeans find themselves when searching for housing. We must put a stop to this because housing is in no way comparable to other speculative products.
The lack of affordable housing is a growing problem for the functioning of the internal market. All Member States should therefore have an interest in solving the challenges of their individual housing markets. In order for the EU to be able to make its contribution, it is necessary to bundle the above-mentioned influence in a single hand, including the associated Commission services and budgetary powers.
Probably the most important reason for joint European action is that housing must be affordable because housing is a fundamental right. Defending this is one of the EU’s core tasks.
René Repasi has headed the German group of Socialist MEPs in the European Parliament since March. He is a legal scholar and first entered the European Parliament in 2022.