Welcome to Better Europe’s weekly update on EU Affairs.
DON’T TOUCH MY SCHENGEN
Ah, Schengen. Who hasn’t visited the sleepy village on the Moselle river, with its German-French-Luxembourgish border tripoint, the Columns of Nations and the brand-new Schengen museum? For most of us, the treaty named after the village represents something bigger – free unbothered travel across the borders between European countries. Even if the Brussels bubble thinks the word “border” refers to the outside of the EU and prefers to refer to “Member States”, the reality is that freedom of movement hasn’t been the most accessible of the four freedoms we were promised. From the full-scale shutdowns during Covid to the recurring deadly traffic incidents due to symbolic attempts to stop migrant flows at the non-borders, the measures come with a significant economic and human cost. But things are moving – in April, a German local court ruled the country’s endless application of the Schengen exceptions to control migration flows “unlawful”, in a case brought by a professor returning from a celebration of 40 years of free movement… in Schengen. And this week, after more than a decade, the Commission finally decided to use its right to issue an opinion on the “temporary” internal border controls. But instead of starting infringement procedures, the Commission nudges nine Member States to “work towards phasing out and gradually lifting” the border checks. Well, we still have the museum.
TRUMP SAVES EU FORCED LABOUR RULES
In other news, Donald Trump has a beef with those who do not respect human rights and forced labour. Or perhaps not really, but it makes for a great excuse to impose some new tariffs on trade partners. Especially the evil European Union, which does not have rules to keep products made with forced labour off their markets. Well, to a certain extent they had those, amongst others by rules going under the cryptic name of Corporate Sustainability Due Diligence Directive. But then the evil Europeans got on the Omnibus, under lobby pressure from a few big American firms… oh wait. Once again, the targeted tariffs seem to be just an excuse to U.S. supreme court objections against accords-the-board tariffs, with Trump looking for tools that can force trading partners to dance when he wants them to. It does mean that the discussions two weeks ago between the Parliament and Council negotiators on the EU-U.S. trade agreement were not so academic – in fact, with hindsight, the Parliament was right to call for an automatic suspension clause, correctly predicting that we’d soon see another Trump transatlantic trade tantrum. Nevertheless, we have to thank Trump here. He might have just saved the EU’s Forced Labour Regulation, which only applies as of the end of next year, from being thrown in front of the Omnibus.
PARLIAMENT PREPARES FOR TOTAL WAR ON GREENWASHING
It’s “institutionalised greenwashing”. That’s how a key politician once described the Sustainable Finance Disclosure Regulation, one of EU’s the first sustainable finance files aimed at preventing greenwashed products being offered to investors with a conscience. If you’ve bought financial investment products over the last years, you must be familiar with the “light green”, “dark green” and “brown” shortcuts that were never meant to be labels. But now that they are, better make sure those categories are well-defined so they do not actually encourage greenwashing, the Commission figured. Enter the fossil fuel and tobacco lobbyists. Their firms argue they should feel the incentive to decarbonise, and excluding them by default from labels that help attract cheaper funding from investors who value long-term sustainability performance would make that very difficult. The logic is that fossil fuel companies also invest in renewables, and that cigar manufacturers have discovered there is a market for premium organic climate-neutral cigars made from tobacco harvested by people who are paid a living income. Without SFDR labels, they will lose that incentive. As Member States wrap up their position Totally aligned to certain industrial interests, the question is what red lines the Parliament will put on the table ahead of trilogues – is disclosure enough because it is just consumer protection legislation, or is it totally clear that the law should be used to nudge investments to more sustainable causes?