Welcome to Better Europe’s weekly update on EU Affairs.
SIMPLIFICATION SEASON CONTINUES
Christmas comes early this year for Europe’s businesses, as the Commission this week presented its delayed Environmental Omnibus as a bold crusade against ‘administrative burden’ and, depending on whom you ask, a somewhat bolder crusade against environmental oversight. Brussels promises to save another billion euros a year by eliminating ‘unnecessary’ reporting obligations, primarily by no longer requiring companies to disclose sensitive information about chemicals, pollution or resource use. Highlights include: the deletion of the Substances of Concern in Products database, which would spare industry the inconvenience of reporting hazardous chemicals, over 38,000 livestock farms would be exempt from water and energy reporting, and environmental assessments for industrial sites, water discharges and chemical residues could be eliminated. While Commission leaders insist that environmental standards will remain ‘fully intact’, NGOs point out that standards are difficult to uphold once monitoring is removed. Climate Action Network Europe and the European Environmental Bureau are warning of rising legal uncertainty and a regulatory philosophy – essentially “don’t look, don’t find”. Another package lands without an impact assessment, because removing protection of nature, citizens and workers is very urgent.
CYPRUS SEEKS TO LEVERAGE ITS GEOPOLITICAL ROLE
Support for Ukraine, continuing the enlargement agenda, and simplification to improve competitiveness: these are the main priorities of the Cyprus Presidency starting in January. For the second time, the most remote Member State seen from Brussels is holding its Presidency, again relocating staff to Brussels to largely run it from there. But the relative physical distance to the power-centre of the EU is also a strength: a better understanding of what happens in the Middle East due to its proximity to migration hotspots such as Syria, close historic links to a friendly former member state (the UK), and experience in dealing with Turkey, a key ally for the EU and NATO in geopolitics. Speaking at an event this week, the Cyprus ambassador to the EU was reluctant to single out individual priorities, even if the “simplification” trend means that most legislation passes through a single group of experts reporting directly to ambassadors, rather than issue experts. And this group does have to prioritise. Defence will certainly be a priority, but Cyprus will not be able to close all the Omnibus initiatives and other presidencies will also have to deliver, including Green Claims which was put in the fridge by the Danes. In the field of finance, pensions policy and the digital euro could be low-hanging fruit to help establish the Savings and Investment Union. In other words: as often, the Presidency agenda (to presented on 22 December) is in reality simply muddling through the Commission’s shopping list.
A GREAT DAY FOR COMPETITIVENESS
European lawmakers struck a provisional deal on the Omnibus I package this week, turning the Corporate Sustainability Due Diligence Directive (CSDDD) and Corporate Sustainability Reporting Directive (CSRD) into a premium product (aka: only the largest companies will be affected). The new thresholds mean that around 70% of firms originally covered by the CSDDD and up to 90% under the CSRD will simply drop out of scope – including many firms covered by the landmark Non-Financial Reporting Directive from 2014… meanwhile, climate transition plans and an EU-wide civil liability regime have quietly disappeared from the text. Parliament rapporteur Warborn at a press conference hailed the ‘historic cost reductions’, claiming €4.5 billion in annual savings – in his view, a ‘great day for competitiveness’. However, civil society has a different view: human rights and environmental groups warn that workers, communities, and ecosystems will be left with weaker protections, fewer avenues for redress, and an even harder path to holding companies accountable. For defenders of a fairer, greener Europe, the deal leaves a distinctly bitter aftertaste – a Pyrrhic victory that will inevitably stain the second von der Leyen mandate.