SOTEU2022: Securing Europe’s green ideals

On 14 September, European Commission President Ursula von der Leyen delivered her third ‘State of the Union’ address during the plenary session of the European Parliament in Strasbourg.

With this blogpost, Dr2 Consultants aims to shed light on some of the main challenges and upcoming legislative files presented during the State of the European Union namely in the field of energy, sustainability and digital.

State of the Union 2022

Dressed in the colors of the Ukrainian flag, President von der Leyen began by looking back at the EU’s reaction to Russia’s invasion of Ukraine, stating that the EU should be proud of its united, determined and immediate response. Reference to the war was a reoccurring pattern in von der Leyen’s speech as she pledged continued European solidarity with Ukraine.

The President outlined the Commission’s priorities in response to the increasing energy prices and difficult economic situation for citizens and businesses. The Commission’s plans underline the EU’s commitment to move forward with the green and digital transition by means of new investments and legislative proposals.

The Commission President announced measures to reform the European electricity market and tackle soaring energy prices. The Commission aims to propose a cap on revenues of companies that produce electricity at a low cost, such as nuclear and renewable energy aimed to support vulnerable households. Moreover, President von der Leyen revealed actions to decouple gas and electricity prices and establish a more representative natural gas price benchmark that would reflect the switch to liquified natural gas (LNG).

We have to decouple the dominance of gas on the electricity market” to ensure consumers “reap the benefits of low-cost renewables” – President von der Leyen

Notably, the Commission has decided to continue the discussion on the price cap on gas due to diverging views amongst Member States. Moreover, a task force has been set up to negotiate deals with gas suppliers, such as Norway. At the same time, von der Leyen emphasized the need for an energy transition towards renewable energy. She announced new investments in hydrogen, which could be a “game changer for Europe”, through both the establishment of a European Hydrogen Bank supporting the purchase of hydrogen and investments up to €3 billion in the hydrogen market.

Furthermore, apart from Russia’s manipulation of the energy market, President von der Leyen highlighted the impact climate change has had on EU energy prices. Therefore, she emphasized the need to reach ambitious global deals for nature and the climate at the UN Biodiversity Conference in Montreal and COP27 in Sharm el-Sheikh.

While the 2021 State of the Union mainly focused on the COVID-19 pandemic, this year’s address put more emphasis on the recovery plan and announced more flexible economic policies and simpler tax rules for small and medium-sized enterprises (SMEs). In addition, to address companies’ liquidity issues, the Commission aims to amend rules on collateral and limit intra-day price volatility. In this regard, in October, the Commission will also amend the temporary state aid framework to allow for the provision of state guarantees. Moreover, von der Leyen acknowledged the reality of higher public debt. Therefore, new fiscal rules must allow for strategic investment. In October, the European Commission will present new ideas for sustainable economic governance. These proposals must ensure more freedom to invest, together with more scrutiny, and more ownership for Member States.

Von der Leyen emphasized the importance of European independence in raw materials, stating “Raw material will fuel our green and digital future.” To replicate the success of last year’s announcement of the Chips Act, von der Leyen announced that the Commission will invest in Important Projects of Common European Interest (IPCEI) by setting up a new European Sovereignty Fund (ESF).

Finally, she called for a new European Convention, following the Conference on the Future of Europe. She also expressed that 2023 should be the European Year of Skills since “the lack of staff is a major challenge for European companies”. Additionally, the Commission President showed support for Macron’s idea of a European Political Community to strengthen European democracy, which together with a new Defense for Democracy Pact should safeguard democracy from malign foreign threats.

Reactions by Members of the European Parliament

After the State of the European Union, Members of the European Parliament (MEPs) reacted to the Commission President’s speech.

Manfred Weber, Leader of the European People’s Party, welcomed the Commission’s response to tackle energy prices, but also stressed the need to include the European Parliament in the decision-making process. Furthermore, he criticized Germany’s decision to stop producing nuclear energy and called for better connection between Spain and the rest of the European gas grid. He also added that the EU must speed up trade deals with reliable partners, specifically calling on the ratification of the Canada-European Union Comprehensive Economic and Trade Agreement (CETA).

On behalf of the Socialists & Democrats, MEP Iratxe García Pérez called for reinforcement of social policies, reform of the energy market, reform of taxation and economic governance, and acceleration of the green transition. She also expressed support for a price cap on gas and a tax on windfall profits of energy companies to help families and businesses pay their bill.

Renew Europe President, MEP Stéphane Séjourné expressed his support for a cap on gas import prices and the energy shield. In addition, he called for joint purchase of energy, investment in renewables and renovation of buildings. Furthermore, MEP Séjourné stressed the need to reduce the EU’s dependence on other countries for food, raw materials, health, digital technology and infrastructure.

Speaking on behalf of the Greens/EFA, MEP Ska Keller called for measures to tackle skyrocketing food and energy prices, especially to protect the most vulnerable households. She welcomed the Commission’s proposal to redistribute windfall profits, while also stating that the only way to end the EU’s energy dependency is to accelerate the transition towards renewable energy.

What’s next?

On 18 October, the Commission will present its work program for 2023, outlining upcoming priorities and both legislative as well as non-legislative proposals.

These upcoming policies present an opportunity for your organization to get involved in EU decision making and to make sure your voice is heard. Want to know more? Don’t hesitate to contact Dr2 Consultants’ team of policy experts who will continue to monitor these legislative proposals!

Public Affairs in an economic downturn: how to recession-proof your Public Affairs activities

Crisis preparedness and management are essential parts of a successful Public Affairs strategy. Whether it is a pandemic, global conflict or economic downturn, being adaptable and flexible is a must. As companies and organizations eye a potential recession, what can you do to prepare your Public Affairs activities for an economic downturn?

Cutting costs is among the first things managements decide about when the economic outlook becomes worrying and Public Affairs tend to be among the most vulnerable functionalities of organizations that become victims of downsizing. However, a well-functioning Public Affairs department is critical when bracing for an economic downturn to ensure your company can withstand a recession. Staying in the frontline of EU policymaking allow organizations to better position themselves and be ahead of the crowd, be prepared for new legislation and benefit from new opportunities.

New challenges for Public Affairs

The recent example of the COVID-19 pandemic showed that those companies who remained visible and active in Brussels despite the insecurities and the strict working from home policies benefited the most from the changing legislative landscape as they managed to stay connected and maintain their access to key policymakers (e.g. successfully conveying messaging on keeping borders open for goods, review of state aid rules for companies that were hit by the pandemic). 

Recession-proofing is all about being as efficient and streamlined as possible: one way to achieve this is to consolidate and visualize the upcoming policy and market trends that impact your organization, map stakeholders and track engagements. Creating and maintaining an online repository for your co-workers where you can keep track of your activities can create a culture of seamless collaboration and transparency. Doing this will drive alignment and improve institutional knowledge as well as make your Public Affairs activities relevant and visible towards your management. 

More than ever, during an economic downturn it is vital to be aware of potential risks and threats that can be detrimental to your organization. Tracking key legislation can be a challenge for any company, so it is important to arm yourself with solutions that meet your needs, power your decisions and evolve with your priorities. 

What to expect from the EU? 

As the EU is bracing for the biggest economic recession of the past decades, the EU institutions are working hard to coordinate measures in view of mitigating its impact. It is yet unclear what extent and how long the downturn will last but learning from previous crises, the EU will use the momentum to build upon a more sustainable and energy-efficient and -independent policy for the EU27. Therefore, we can expect that in the wake of the crisis, the European Parliamentary elections of 2024 as well as the policy agenda of the new European Commission will further embrace the twin priorities (sustainability and digitalization) of the Von der Leyen Commission and taxonomy will be also in the heart of the new institutional work programme. 

Therefore, in order to stay up-to-date, remain relevant and able to influence policy making in the months ahead, continuous investment in Public Affairs and presence in Brussels is a key for success. Dr2 Consultants has already helped companies to effectively streamline their activities during the COVID-19 pandemic. Reach out to us if you want to learn more about our track record and approach of providing efficient Public Affairs support. 

This is an opinion article by Viktoria Vajnai, Managing Partner Dr2 Consultants