Welcome to Better Europe’s weekly update on EU Affairs.
THE LAST EP PLENARY SESSION: FINAL VOTES, GOODBYES, AND FLYING DOVES
MEPs gathered for a final time in Strasbourg before the European elections in June, with a record-breaking agenda of 90 final votes. All files where an agreement with Member States was reached in trilogues were approved as planned. MEPs approved the deal on the CSDDD, ending the seemingly never-ending saga of unexpected twists and turns and additional political trilogues. They also endorsed the packaging rules in the PPWR, the AI Act, and rules on ESG Ratings. On initiatives where negotiations with the Council have not started or have not advanced enough, the Parliament closed its position at first reading, including on genomic techniques and plant reproductive material rules. Some initiatives, however, have, completely fallen in between the cracks, including the Digital Euro Regulation on which work will have to continue in the autumn. Despite the extremely busy agenda, MEPs found the time to say their goodbyes. Green Belgian MEP Philippe Lamberts gave a tear-shedding speech as he will not come back for the next mandate. Other MEPs decided to deliver a more unusual goodbye, with Slovak independent MEP Miroslav Radačovský thinking it was a good idea to release a white dove in the plenary chamber to wish Europe peace.
PARLIAMENT GIVES GREEN LIGHT TO EU EXIT FROM ENERGY CHARTER TREATY
Following a vote during the last plenary session of the mandate, the EU as a whole can join some of its Member States in exiting the Energy Charter Treaty. The coordinated withdrawal, initiated by a Commission proposal in July 2023, also has the support of a qualified majority of Member States, some has already left the treaty unilaterally. The EU’s exit will halve the current 50 signatories of the Energy Charter Treaty, an international agreement that aims to encourage energy investments by giving energy companies the right to sue governments over policies that damage their investment, a practice that has led to a regulatory chill in the field of climate change. While easier than checking out of Hotel California, it does take 20 years to shut the door thanks to a “zombie” clause that allows companies to sue governments for another 20 years after leaving. Italy is a great example – the government left the treaty in 2016 but was sued by a UK investor in 2022.
EUROPEAN COMMISSION ACCELERATES FOCUS ON TRANSITION FINANCE
With the EU’s taxonomy for sustainable finance mostly in place and no expansion to social indicators expected soon, policymakers are accelerating their discussions on how to finance industries and activities in transition to a more sustainable economy. At a technical conference on transition finance, financial industry participants had to be reminded that they were actually the ones asking for a sustainable finance framework to know what is sustainable, and that they wanted to move fast. However, as the focus has mostly been on what is green rather than what could be green, transition finance continues to suffer from low transparency and low stakeholder engagement. It is clear that the political appetite for a taxonomy reform in the next mandate is low; however, Commission staff does confirm that targeted changes to specific indicators and reporting requirements remain possible. There is also some synchronisation work needed once the Commission reviews the Sustainable Finance Disclosure Regulation, the law that created the (in)famous and often misinterpreted Article 8 and Article 9 investment products for consumers.