As voters move right, von der Leyen hits the brakes on EU climate efforts
The EU president's "Competitiveness Compass" is a first step in dismantling her signature Green Deal from her first term. EU elections have consequences.
Yesterday European Commission President Ursula von der Leyen unveiled the “Competitiveness Compass” which she says will boost the union’s economic performance. It is, on its face, a policy response to the recommendations of the competitiveness report delivered the the Commission by former European Central Bank chief Mario Draghi in September. But, conspicuously, von der Leyen has chosen to act on the parts of the report which are the most politically popular, and ignored the elements that would involve political difficulty.
Promising to “drastically reduce the regulatory and administrative burden on firms”, von der Leyen has almost exclusively chosen to focus on those burdens supposedly being caused by environment and climate legislation - particularly that passed as part of her own EU Green Deal during her first term. The plan does not contain any plan for funding innovation, because that would involve acting on Draghi’s recommendation to issue common European debt, which is politically unpopular with Northern European governments. Nor does it contain any real actions for dealing with Europe’s dependencies and lack of resilience, as recommended in the report, because that would involve acknowledging the current threat posed by the United States.
Instead the focus has been on “cutting red tape”. I’ve been covering the EU in Brussels for 15 years, and I can tell you this is the perennial supposed problem that every Commission says it’s going to make an unprecedented effort to reduce but then finds that it can’t because the supposed problem is so ill-defined. In truth, the EU doesn’t impose much more red tape than continental European countries would be imposing themselves at national level even if the EU didn’t exist. What companies and right-wing politicians really mean when they complain about red tape is actually just that they want corporations to face less regulation. Businesses have in particular bristled against the requirements that will be placed upon them as a result of the new EU legislation to combat climate change. Somehow, even though most of that regulation hasn’t even taken effect yet, it is already causing a horrible bureaucratic burden. And so, the effort to roll it back is launched. First up is the auto industry - which will likely be spared from having to meet the CO2 reduction targets for their fleets which were scheduled to apply soon. Next up is new requirements for corporate sustainability reporting, which will likely be tossed out the window. And this is only the opening salvo. The real hit to EU climate legislation will come at the end of next month, when von der Leyen unveils her “Clean Industrial Deal”. The only question is how much climate regulation it will throw in the bonfire - and this remains very much an unknown at the moment. Unwinding already-passed legislation in the EU (or in any country, for that matter) is much easier said than done.
Unveiling the compass, von der Leyen said she had received “a very clear signal from the industry” that they are facing too much bureaucracy. “There are many good reasons to fight climate change” but “we need to be flexible and pragmatic.” She insisted that the EU is staying the course on fighting climate change but that because “this transition has never been done before” the EU needs to adjust and be flexible as it does along. But it begs the question: is the adjustment being proposed now (just a few years or months after this legislation has been passed and before much of it has taken effect) because of real hardship faced by businesses, or because of the political pressure coming from a public that punished the left and Greens in the last election and rewarded the center and far right?