Welcome to Better Europe’s weekly update on EU Affairs.
MERCOSUR: CHEAP BEEF, EXPENSIVE FOR THE PLANET
The Commission has finally unveiled the legal texts for the long-delayed -and much dreaded-Mercosur trade pact, setting the stage for a ratification battle that could prove damaging for the EU’s reputation. The agreement with Argentina, Brazil, Paraguay and Uruguay promises to increase EU exports by 39% and provide cheaper access to critical raw materials, such as lithium and niobium. However, there is fierce opposition: NGOs warn that the deal with four of the Mercosur countries will lead to increased deforestation and undermine EU climate goals. They also regret the Commission’s strategy to sneak the deal through by taking the political part out, so that the “interim trade agreement” can be adopted without a unanimity vote by EU Member States. Farmers’ lobbies, meanwhile, warn of devastating blows to beef and poultry markets, and dismiss the Commission’s one billion euro “safety net” and safeguard clauses as little more than window dressing. In the Commission’s eyes, the agreement is the only shield against Donald Trump and Xi Jinping… but at what price?
A SLOW RIDE ON THE SUSTAINABILITY OMNIBUS
Summer is over, so the omnibus is back! Which one? Well, there might be six of them by now with a few more coming this year, but our minds are on THE omnibus, the OG on corporate sustainability. The one that was so urgent that the Commission broke the world record for inter-service consultation, rushing it through over a Saturday instead of the usual two or three weeks. But as you would expect from a process named after a local train that stops everywhere, more than half a year later there is still no law. Parliament needs a bit more time to make up its mind, and guess what – pretty much everything that the Commission is proposing to cut on the due diligence part was back on the table at a meeting this week. MEPs are ready to reconsider the scope of companies covered, mandatory transition plans, standards for limited assurance, and the limitation of due diligence to immediate suppliers. Even if MEPs agree to a deal by October, trilogue negotiations starting afterwards could become an ugly protracted game of horse-trading. So much for legal certainty, and sorry to all those hundreds of companies and member states who were ready to comply with the law. Next time, take the intercity!
DIGITAL EURO STILL NOT MEANT TO REPLACE CASH
ECB board member Piero Cipollone appeared in the Parliament’s ECON Committee once again to discuss the digital euro. In what is becoming a routine briefing (the 14th ECB appearance before ECON already!), Cipollone outlined the central bank’s vision for the digital euro. He reiterated his intention of having a digital currency that would complement cash, strengthen payment security and ensure financial resilience across the EU. MEPs questioned Cipollone about inclusion, privacy and the potential impact on banks and citizens. As we have heard 13 times before, he emphasized that the digital euro is designed to coexist with -not replace- private payment systems and stressed the ECB’s commitment to data protection and accessibility. He also addressed the technical side, explaining the steps toward testing and eventual implementation while acknowledging the need for continued dialogue with lawmakers and stakeholders. While several MEPs recognized and regretted the slow pace of the legislative process, the general consensus was to move forward as quickly as possible, from both the parliamentarians and the ECB. Now it remains to be seen whether these promises will be kept.