Mon. Jul 15th, 2024
Brussels, 13 January 2023

Dear Prime Minister, dear Ulf,

Thank you so much for welcoming us here in Sweden in this very beautiful city of Kiruna. Yesterday – we have said this already – typically, the Presidencies show what they have and bring us to amazing places. But you really set the bar high with the ice hotel in Kiruna, it was fascinating. But today, the Esrange Space Centre was fantastic as well. So thank you very much for receiving us here. Indeed, the agenda was packed. Because Sweden is taking over at a very crucial time. It is now ten months since the start of the atrocious Russian war against Ukraine. The Ukrainians are fighting with the same ardour as on day one. And we are supporting them as firmly as on day one, and as long as it takes.

Thank you, dear Ulf, that you have made Ukraine the first priority of your Presidency. Your leadership will be vital to preserve the amazing European unity and determination. We need to keep increasing the pressure on Russia. And we will of course continue our unwavering support for Ukraine. We will start still in January to disburse the first tranche of the EUR-18-billion support package for Ukraine. This is the largest macro-financial assistance package that the European Union has ever delivered to a partner country. And we are preparing for Ukraine’s reconstruction. The international donors’ platform that we set up with our G7 partners will be up and running this month. It will help coordinate the different support for Ukraine today. It will also be an important tool to ensure that the reconstruction combines reform and investment because this paves the way towards membership of the European Union.

My second point is on energy. Without any question, before the war, we were too dependant on Russian fossil fuels. Russia has exploited this dependency and weaponised energy. Russia has tried to blackmail us but failed thanks to our unity. Russia has cut 80% of our gas supplies in only eight months. But we mastered this unprecedented energy crisis. We compensated the cuts of the Russian gas by diversifying to other reliable suppliers. We were able to compensate without any blackouts. We were successful in energy savings – 20% by now. We are skimming off the super profits of energy-producing companies, which is money that the Member States can then invest for vulnerable households and vulnerable businesses. We introduced a price cap. And we considerably accelerated the permitting for renewable energy.

Today, we can say: This hard work paid off. Gas prices today are now lower than they were before Russia’s invasion. The gas prices for the Dutch futures contracts have dropped over 80% since August. Our storage levels are filled with 83%. This is among the highest levels ever at this time of year. And we deployed twice as much renewable energy capacity as expected last year. But we also know that we are not out of the woods right now. We have to continue our work to make energy more affordable for Europeans. We will propose a reform of the electricity market design, this spring, and I look forward to making swift progress under the Swedish Presidency. We will operationalise the joint purchasing mechanism. We already had the first meeting of stakeholders in December – that is mobilising companies and Member States via our Energy Platform. Because we want to use our collective market power to have a joint purchasing of gas. And of course, we need to further scale up the deployment of renewables. We should aim to also double this year, once more, the additional capacity of renewable energy that is added to the market. Because we all know home-grown renewables are indispensable for our energy independence. And they are of course key for our green transition.

That is my third point. I commend your ambition to conclude the negotiations on the landmark legislation for the European Green Deal, that is the Fit for 55 Package. We have already made good progress last year. We have agreed on half of the proposals that are needed to reduce our CO2 emissions by at least 55% by 2030. Now it is the second half that has to be delivered. I am confident that the Swedish Presidency can lead us through this last stretch. This is so important for us because we need to reach our climate goals, but it is also important for us because of our competitiveness.

And that is my fourth and final point. We have a thriving clean-tech industry and we need a thriving prosperous clean-tech industry. We need it to maintain our leadership on decarbonisation but also to maintain our prosperity. Europe is a pioneer and front-runner in clean tech. But we all know that competition is increasing. First of all, this is very good for our net-zero ambition. It is very good for our climate goals. But unless a level playing field is preserved, it could have a negative effect on our competitiveness and investments in Europe. We need that global level playing field. And there is of course the impact of the US Inflation Reduction Act – that we indeed did discuss. We are currently working with the United States intensively to reduce the negative side effects of the Inflation Reduction Act on Europe. However, even more significantly, we are facing unfair competition in the clean-tech sector from China. Think of their massive and hidden subsidies in the production of wind turbines, for example, or solar panels. So we want to discuss with you, the Swedish Presidency, – and we have started already – how we can send a signal to businesses in Europe. We want to reassure the businesses in Europe about our determination to preserve and enhance economic attractiveness of Europe. And here, I see several work strands that we have discussed.

The first one is new legislation to reduce our dependencies, for example on raw materials – there, yesterday’s news on the finding of rare earth here in the region were great –, but also to focus on specific sensitive sectors – such as the clean-tech sector, like hydrogen. This new legislation would also include revisiting some of the permitting requirements that we have. Because I hear over and over again that in these renewable projects it is always the permitting question that is pressing.

Second, we will update our state aid framework. We need to facilitate public investment into the transition as a bridge. We are currently consulting Member States on targeted and temporary changes to our state aid framework to make it more predictable and simpler. And we are revisiting the existing framework for our IPCEIs, the so-called Important Projects of Common European Interest. You know them all. They are very attractive but we have to be fast.

The third point is that, with the state aid, we also have to look how we make sure that there is investment across the European Union to preserve the Single Market. So as a complementary element, or the other side of the coin on state aid, we need to create credible and ambitious financing tools. Such funding should be available in the short term and in the mid-term to allow for an adequate European answer. We are working right now on a needs assessment to have the facts and the figures to take the increased competition into account and then develop the three work strands I was just discussing.

Lastly, as you said, we need an ambitious trade agenda. This of course includes ensuring diversification through concluding trade agreements, for example between the European Union and Mexico, Chile, New Zealand and Australia.

So there is a lot on our table. We have discussed a lot today but I am very much looking forward to the next six months of Swedish Presidency. Let us make Europe greener, safer and freer.

Source – EU Commission

 

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