Brussels Behind the Scenes: Unsafe Christmas

Unsafe Christmas

Big holidays like the summer break and the festive season are normally a convenient time for the European Commission to unveil something unpalatable or eyebrow-raising, safe in the knowledge that not many people will be paying attention. It is not the case this year.

It is usually known as something like a Friday afternoon newsdump or a sneaky late-July proposal. The Commission will attempt to throw something out into the world for scrutiny, but at a point when focus is either elsewhere or greatly diminished.

Just before August, when the EU institutions go into a coma for the summer, is a choice time to slide something past watchful eyes. Late December, just as journalistic minds are starting to drift into thinking about yuletide meals and festive booze, is another.

But the pandemic has put paid to those ‘safe zones’ for the Commission, as everybody is online all the time now. Journalists do not always have to turn up at briefings to get the inside scoop, political delegations do not have to send teams to Brussels to stay on top of matters.

BRUSSELS BEHIND THE SCENES is a weekly newsletter which brings the untold stories about the characters driving the policies affecting our lives. Analysis not found anywhere else, The Brussels Times’ Sam Morgan helps you make sense of what is happening in Brussels. If you want to receive Brussels behind the scenes straight to your inbox every week, subscribe to the newsletter here.

This week’s European Council, which by most accounts was a waste of time as prime ministers and presidents bickered over issues ranging from travel restrictions to energy prices, was not really a must-visit for reporters.

Council protocols did their best to make it difficult for the intrepid journalists that did want to attend, imposing a mandatory negative test requirement. Some reporters that did pay for the PCR said that their result was not even checked when they turned up at the venue.

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In any case, this 24/7 scrutiny that has been part created by our online work-from-home way-of-life and part created by the inflated-political nature of this Commission - which requires extra scrutiny - has created a bit of a problem for the EU executive.

Two upcoming bits of rule-making and legislation would arguably have been prime candidates for a quiet late-afternoon Christmas press release, but now will not enjoy that perk. The fact that they are extremely politically-divisive only adds to the intrigue.

Taxonomy watch

The first is the EU’s sustainable finance rulebook, known in classic Brussels jargon as the taxonomy. This set of criteria essentially tells investors what is a safe, future-proof green place to put their money, which will not be regulated into the ground.

Fossil gas and nuclear power have made the taxonomy a problem for the Commission, as it is obligated to publish delegated acts that say if the two energy sources are eligible and, if so, what criteria will apply to them.

Several member states want gas included, several want nuclear included. Some want both to be given the label, others want one or the other and a handful say that neither are a safe bet for investors.

The issue even derailed this week’s Council summit as some leaders insisted on including the taxonomy in the meeting’s conclusions. Romania’s president even tweeted that it was a priority for his country.

Despite the fact that delegated acts are exactly what they say they are: delegated. It is the Commission’s job to take everything into account and spell out the rulebook clearly to member states, not the other way around.

Backroom deals and horse-trading are still going on. Germany’s government is reportedly cooking up some sort of compromise that might see both energies included, under strict conditions.

The text is supposed to drop by Christmas but could be delayed until the New Year. There is no solution that will make everyone happy, to be fair to the Commission. But there is a danger that it will create more problems than it solves.

Interest in the taxonomy has escalated in recent weeks, fanned partly by the EU executive’s delaying. The longer it goes on, the more ammunition is given to those that say it is being lobbied into the ground. Time will only tell in that regard.

Paying for Covid

Another extremely important decision that is also long-delayed but which has flown under the radar to some extent is the Commission’s own resources decision. This could prove to be a crucial text for a number of reasons.

The EU does not really raise taxes, despite what tabloid newspapers have said over the years, and what revenues it does collect are grouped under own resources. They have until recently been limited to some custom duties and charges related to sugar, of all things.

At the beginning of 2021, the newest own resource came into play: national contributions based on non-recycled plastics were implemented. The scheme will be updated in 2023 when more data is available about who is paying what.

This new own resources decision has been expected ever since the Commission engineered the €800 billion Covid recovery fund, which will be split between the member states over the next few years and spent on intiatives to help get over the pandemic.

But that money has to be paid back. According to the agreement signed by all the member states, the full amount must be cleared off of the Union’s books by 2058. Repayments are due to begin before 2027, but the cash has to come from somewhere.

Under its initial plan, the Commission suggested a smorgasbord of options that would cover the debt in full, with cash left over.

The instruments it included in its workings include a tax on big corporations, a digital tax, siphoning off emissions trading profits and revenues from the planned carbon border tax.

Back in 2020, the Commission calculated that each of those options could net billions of euros a year. It seems simple, then. Not so fast.

Each of those options has its shortcomings: whether it is internal opposition to the money being used for anything other than national spending or external criticism to how the EU will spend taxes it levies on non-EU actors.

Again, there have been delays after delays, as external and internal pressures tell on the Commission’s decision-making process. It was at one point supposed to be included with the EU executive’s summer tranche of climate rules, but it was pulled time after time.

President Ursula von der Leyen and her team may decide to publish both of these problematic and divisive texts at the same time, in the hope that the more explosive taxonomy draws all the ire and criticism.

However, given the number of eyes on everything the Commission does and, again, the constantly switched-on journalistic profession, that may simply not be possible.

Your correspondent would humbly suggest that everyone just enjoy their Christmas break to the full extent possible whatever happens in any case. These matters are very important but that importance has its limits. Doesn’t it…?

BRUSSELS BEHIND THE SCENES is a weekly newsletter which brings the untold stories about the characters driving the policies affecting our lives. Analysis not found anywhere else, The Brussels Times’ Sam Morgan helps you make sense of what is happening in Brussels. If you want to receive Brussels behind the scenes straight to your inbox every week, subscribe to the newsletter here.