Monday, 7 March 2022

POLITICO

POLITICO

Ukraine slams Moscow’s humanitarian corridors to Russia as ‘absurd’

Posted: 07 Mar 2022 04:01 AM PST

Russia’s humanitarian corridors are “absurd, cynical and unacceptable,” a Ukrainian official said Monday, after Moscow announced a temporary ceasefire on Monday to allow Ukrainians to flee Russia’s attacks — as long as they head to Russia or its ally Belarus.

“The Russians are saying that they can open the corridors, but they want the civilians to leave for the Russian territory, which is absurd, cynical and unacceptable,” Iryna Vereshchuk, Ukraine’s deputy prime minister, said on her Telegram channel. She added that Russia had twice “blocked the launch of the humanitarian corridors by shelling the route of the humanitarian convoys.” A mother and two children were among those killed by Russian mortar fire at a civilian evacuation route in Irpin, near Kyiv, over the weekend.

Russia announced new “humanitarian corridors” on Monday to allow civilians trapped in some of the worst-hit cities in the country — Kyiv, Mariupol, Kharkiv and Sumy — to flee the fighting.

But according to maps published by the Kremlin-backed RIA news agency, the corridor from Kyiv would lead to Belarus or Russia, while civilians in Kharkiv would have to go to Russia.

Ukrainian press reported that the Ukrainians have suggested alternative routes, as shelling continues in Irpin and the southern city of Mykolaiv, according to the Ukrainian Armed Forces.

Russia’s invasion has already forced at least 1.5 million civilians to flee Ukraine, the UN Refugee Agency said Sunday.

The news comes as the U.N.’s International Court of Justice on Monday began hearings into Russia’s invasion of Ukraine. During the hearings, Kyiv will argue that Russia has falsely applied genocide law to justify its invasion, and will seek an emergency order for the war to stop. Moscow has not sent a legal representative to the hearings, Reuters reports.

A third round of ceasefire negotiations between Russia and Ukraine is expected to take place on Monday, with few expectations of a breakthrough.

Denmark to increase defense spending and phase out Russian natural gas

Posted: 07 Mar 2022 12:40 AM PST

Denmark will significantly increase its defense budget and aim to become independent of Russian natural gas in response to Moscow’s war on Ukraine, Danish Prime Minister Mette Frederiksen said in a press conference Sunday evening.

Copenhagen will also hold a referendum on June 1 on whether it should join the EU’s common defense policy.

Under an agreement between Denmark’s main parliamentary parties, the country will gradually increase its defense budget until it reaches 2 percent of GDP by 2033, in line with the NATO goal.

“Historical times also call for historical decisions,” Frederiksen said.

Party leaders also agreed to wean Denmark off Russian gas. While the timeframe isn’t clear, Frederiksen said it would happen “as soon as possible.”

“Energy policy is not just energy policy,” the prime minister said, adding that it was also a matter of “security policy.”

On June 1, Danes will vote in a referendum on whether they want their country to join up with the EU on defense, after 30 years of opting out of the bloc’s common security and defense policies. Currently, Denmark doesn’t take part in joint EU military operations.

The Danish parliamentary agreement comes while countries around the bloc are rethinking their defense strategies and their deep reliance on Russian gas. Germany has reversed its historic policy of not sending weapons to conflict zones and sharply increased its spending on defense to more than 2 percent of its GDP.

This article is part of POLITICO's premium policy service: Pro Energy and Climate. From climate change, emissions targets, alternative fuels and more, our specialized journalists keep you on top of the topics driving the Energy and Climate policy agenda. Email pro@politico.eu for a complimentary trial. 

Barcelona explains its new economic model for 2030

Posted: 06 Mar 2022 08:00 PM PST

A radical transformation of the economic model. Barcelona wants neighborhoods where people can reside, work and visit. This is one of Barcelona's main aims in launching the Green Deal: the economic roadmap for 2030. The government team has carried out an exhaustive analysis of how the city's reactivation has to be tackled after the pandemic. And it has identified elements that will be key to this journey now embarked upon: economic competitiveness; sustainability; social equity; green and digital transition; future jobs and more.

These are just a few of the main challenges the planet is facing — recently added to which are disruptive phenomena such as the pandemic — and the increasingly-fast speed of change of these challenges requires greater effort in planning, innovation and investment. It is in this context that Barcelona starts from an advantageous situation owing to its pioneering position in European-level investments and its geographical location, turning it into a hub with very diversified connections.

From culture to logistics, talent attraction and tourism investment, Barcelona is the ninth most-attractive city in the world for living in, travelling and visiting according to the latest World's Best Cities report — and the fifth best city on the entire planet for establishing startups (EU-Startups 2020). If we narrow our focus geographically, Barcelona takes third place as ideal city for creating a startup — according to the European body tasked with monitoring the ecosystems of such enterprises, Startup Heatmap Europe.

And that's because Barcelona city council has made a big commitment in establishing its International Welcome Desk, located strategically in the 22@ district, as a welcome gateway for attracting international talent, researchers, investors, entrepreneurs and highly-qualified professionals.  The 22@ district has been an economic driving force for the city over the past 10 years, even in times of crisis. And the city council is aiming, under the Green Deal, to give it a new impetus as a strategic point in the city's future.

As for the entrepreneurship ecosystem, the Catalan capital has risen to seventh place in the ranking for the whole of Europe in attracting investment in technology companies and has quadrupled the amount of investment received in 2021, reaching €1.5 billion according to data published by Atomico's State of European Tech.

Where is Barcelona's economic future heading? How does the city see itself as it approaches 2030?

But the advantages that need to be consolidated and the accelerating pace of our times requires constant reflection and revision of city assets. What are the main challenges and big opportunities? Where is Barcelona's economic future heading? How does the city see itself as it approaches 2030?

Barcelona will be creating over 120,000 jobs under the Green Deal roadmap between this year and 2030. And to do this, the city council has established five main economic poles of attraction and seven strategic sectors.

The Zona Franca, Montjuïc, Barcelona city center, the 22@ district, the Besòs hub and South Diagonal Scientific Node. It is on these six poles that Barcelona's economic diversification strategy will depend.  No other city in the Spanish state is in the position that the Catalan capital finds itself in for achieving this.

The commitment to digital enterprises, the culture sector and cultural industries, local commerce, quality tourism that is respectful and responsible towards the community, establishing electric cars as a mobility element and continued commitment to the green economy which, from this point on, also encompasses the sea, are the seven sectors covered by the Green Deal.

REACT 2022 will be an event open to the city's residents and sectors involved in Barcelona's development

And how will all this be done? With public-private partnerships as its spearhead. Barcelona city council aims to create a range of opportunities for private initiatives to lead to a natural growth from the point of view of investment and economy. Public-private partnerships must encourage investments and ensure that enterprises, universities, research centers, researchers, international talent and more, put Barcelona at the helm of Europe as a pioneering city in innovation.

Many of these issues are included in the summary of the second Barcelona REACT Conference 2022, an event taking place at Barcelona's Disseny Hub from March 30 to  April 1, bringing together hundreds of representatives from local, national and international economic sectors and featuring over 60 speakers, who will be reflecting on our city's economic promotion with a view to the 2030 Agenda.

All these projects covered in the Barcelona Green Deal aim to make the city more competitive, sustainable and fair

REACT Conference. The Green Deal up to 2030

Barcelona REACT 2022 will be an event open to the city's residents and sectors involved in Barcelona's development. It will include analyses of initiatives such as the economic restructuring of the city center, cultural connections with Latin America, the integration of creativity and design into industry, sportstech sector opportunities and the promotion of innovation and various strategic areas for economic development. All these projects covered in the Barcelona Green Deal aim to make the city more competitive, sustainable and fair over the coming years.

For further information on Barcelona REACT 2022 and to register for the conference, please see the barcelona.cat/react website.

Let Ukrainians — not Ukraine — join the EU

Posted: 06 Mar 2022 07:00 PM PST

Florian Trauner is a professor of political science at the Vrije Universiteit Brussel and co-directs the VUB's Interdisciplinary Research Centre on Migration and Minorities (BIRMM).

As Russia’s war against Ukraine wages on, European Union nations have thus far opened their borders and welcomed Ukrainians with open arms. With more than one million people already fleeing the fighting, the sheer numbers will present Europe with a refugee challenge of unprecedented scale. But the crisis also presents a historic opportunity to rethink what it means to belong to the EU. 

In normal times, the EU's asylum system is based on the individual assessment of each migrant's claim to protection. But with so many people arriving in such a short space of time, this approach cannot work. According to the U.N.'s Refugee Agency, Russia's attack will likely create "Europe's largest refugee crisis this century." The European Commission estimates that up to 6.5 million Ukrainians could be forced to flee. 

The EU has already taken the historic decision to grant newly arrived Ukrainians with a temporary protection status, giving them temporary residence permits and access to medical treatment, employment and education in the EU. But we can still do more. 

Russia's invasion has accelerated the rapprochement between the EU and Ukraine. Kyiv has formally requested a fast-track procedure to become a candidate country for EU membership — a request that has been warmly received by the EU's leaders and the European Parliament.

This has raised expectations in Ukraine, but joining the EU is not an easy thing to do. The EU cannot throw away the basics of its enlargement policies. A candidate country must still meet a range of demanding conditions, which include becoming a stable democracy and functioning market economy, and incorporating all existing EU rules and regulations into the domestic legal framework. 

Weakening those conditions wouldn't be good for Ukraine or the EU. Doing so would also cause frustration and unrest in the Western Balkans, another group of nations keen to join the union, as well as countries like Turkey, where the accession process has been frozen. And if the EU were to accept both Ukraine and the Western Balkans into its fold, it would then overburden its institutional structures and decision-making procedures. 

Fortunately, there's a way to thread the needle. The EU could extend Ukrainians — but not Ukraine — some of the core benefits of membership before the country actually joins. Specifically, it could give Ukrainians the right of free movement and residence inside the EU, allowing them to look for jobs and live anywhere in the bloc.

Legally speaking, the EU member countries would have to liberalize their labor migration laws to do so, but it should still be framed as getting (de facto) access to "the right of free movement in the EU." And in practice, it would create a new way — for individuals, not states — to be a part of the EU.

During the enlargement process, this right of free movement for Ukrainians should also be linked to progress made in terms of democratic consolidation and rule of law reforms. If the reforms are unsatisfactory, the right to move and work freely inside the EU could then be phased out or withdrawn.  

This could be a game changer for the EU's enlargement policy. The EU has lacked tangible and credible incentives for a while now and has not managed to prevent some candidate countries from democratic backsliding. For example, Balkan strongmen, such as Serbia's Aleksandar Vučić, have undermined the separation of powers and flirted with rapprochement with Russia.  

If a free movement deal for Ukrainians succeeds, the EU could then apply it to the Western Balkans on a country-by-country basis. It could, for example, provide more serious reformers like North Macedonia with earlier access to the right of free movement inside the EU, while refraining from giving the same right to the citizens of more autocratic regimes in the neighborhood. Such a differentiation could likely increase electoral pressure to take EU-demanded reforms more seriously.

A large-scale influx of Ukrainians is already happening, and it's not being politicized or opposed by a majority of EU citizens. The EU now has an unforeseen window of opportunity for a new enlargement policy, one that could redraw its relationship with the people of its neighborhood.

Pandering to Putin comes back to bite Serbia’s Vučić

Posted: 06 Mar 2022 07:00 PM PST

BELGRADE — This time, even Aleksandar Vučić is struggling to have it both ways.

For years, the Serbian president has tried to maintain cozy relations with Vladimir Putin’s Russia while also cultivating ties with the European Union, which his country seeks to join, and with the West more broadly.

But Russia’s invasion of Ukraine has placed Vučić in an acute dilemma and already put the Balkan country at odds with the EU, the United States and other powers as it refuses to impose sanctions on Moscow.

In response to Putin’s war, Vučić has tried to take his balancing act to a new level. He declared “support for the territorial integrity of Ukraine” and his government backed the U.N. resolution that deplored Russia’s aggression. But he has rejected calls to toe the EU line on sanctions, citing Russia’s refusal to impose such measures on Serbia during the Balkan wars of the 1990s.

Even if Vučić, who is standing for re-election next month, now wanted to turn decisively toward the West, it would be hard to do so — in large part due to policies he has pursued. Serbia is heavily dependent on Russian energy. And Moscow enjoys strong support among a swath of the Serbian population, fueled by rampant pro-Putin propaganda pedaled for years by tabloid media outlets loyal to Vučić.

That support was on full display on Friday night, when thousands of protesters — some of them waving Russian flags and carrying pictures of Putin — marched through the center of Belgrade to demonstrate their backing for Moscow.

The rally contrasted sharply with mass protests across Europe condemning Russia’s war on Ukraine. And Belgrade is also jarringly out of step with the EU on the economic front. As the bloc cut ties with Russia and closed its skies to flights from the country, Air Serbia ramped up its service to Moscow.

"Vučić finds himself in a difficult and unpleasant situation, one that is largely of his making," said Aleksandra Tomanić, executive director of the European Fund for the Balkans, an NGO that works to strengthen democracy and foster European integration in the region.

The relationship between Serbia and Russia has been close ever since the disintegration of Yugoslavia in the 1990s. Russia opposed NATO’s bombing of Serbia in 1999 over Belgrade’s repression of ethnic Albanians in Kosovo.

Putin has complained bitterly about the NATO bombing, which did not have U.N. Security Council approval, while also citing it in attempting to justify his invasion of Ukraine.

Moscow has also been a powerful and vocal ally of Belgrade in rejecting Kosovo’s 2008 declaration of independence from Serbia and blocking Kosovo from joining international organizations.

Putin has visited Serbia several times and was warmly welcomed as a friend of the country by both the political leadership and large sections of the population.

‘Incredible’ deal

In November last year, Vučić visited Putin in the Russian city of Sochi and the two presidents sealed what the Serbian leader hailed as an “incredible” deal on gas, keeping prices the same and increasing supply even as the rest of the Balkan region faces an electricity crisis.

As fellow Slavs and Orthodox Christians, many Russians and Serbs see themselves as traditional allies and culturally close. Some analysts have argued the two countries are not such natural political partners but the narrative has nonetheless taken hold in large sections of the Serbian population, partly because it is pushed by political leaders.

"Putin's and Russia's popularity have reached surreal levels among the Serbian public. Every single politician is afraid that if they do anything that is considered to be anti-Russian, it would anger a significant portion of their constituents," said Vuk Vuksanović, an analyst at the Belgrade Center for Security Policy think tank.

A survey published last year showed Russia was by far the most popular choice when Serbs were asked which power they should rely on most for their national security. The same polling, conducted for the Balkans in Europe Policy Advisory Group research organization, also showed two-thirds of Serbs held a “very positive” view of Putin.

Against that backdrop, any major break with Moscow could trigger turmoil just as Serbia faces both parliamentary and presidential elections on April 3.

"It would literally suffice for the Russian ambassador to come out with a statement accusing the Serbian government of betraying the Serbian-Russian friendship in favor of those who bombed Serbia and took away Kosovo, and unimaginable political chaos would ensue," predicted Vuksanović.

Serbia’s refusal to impose sanctions on Russia also raises uncomfortable questions for the EU.

The bloc has made clear that it expects membership candidates to follow EU foreign policy. A European Parliament resolution condemning Russia’s war in Ukraine singled out Serbia for criticism on sanctions.

The resolution, passed overwhelmingly last week, "strongly regrets Serbia's non-alignment with EU sanctions against Russia, which damages its EU accession process." 

But analysts and pro-democracy activists have long complained that the EU has been too soft on Vučić when it comes to both his attitude to Russia and authoritarian tendencies at home. They have accused the bloc of being too willing to look the other way as long as he stuck with an EU-backed dialogue on Kosovo.

"The EU bears a lot of responsibility too. For 10 years, they naively believed that as long as there are positive developments with regard to Kosovo, everything else is less important and purely internal politics," said Tomanić.

Why Britain’s Tories are addicted to Russian money

Posted: 06 Mar 2022 03:48 PM PST

LONDON — For years, Britain’s Conservatives have promised to rid the country of dirty Russian money, but their own politics kept tripping them up.

With Russian troops now unleashing terror on Ukraine, the U.K. government is under pressure to show the world “Londongrad” is no longer a cozy place for dodgy billionaires to launder their money and their reputations via lavish properties and expensive schools for their children.

But while Boris Johnson’s administration is keen to explain they have imposed sanctions against individuals and companies connected to Vladimir Putin and accelerated the Economic Crime Bill, intended to target money laundering, some within his own party worry the government has left it too late.

Previous stop-start attempts to grasp the problem were hindered, insiders say, by a commitment to an economy in which money could wash through unchecked — a stance that suited both the party’s ideology and the need to buoy the British economy.

A key sticking point, one former No. 10 Downing Street adviser explained, is "this kind of Tory orthodoxy, which is also a Treasury orthodoxy, that the economy needs to be completely open."

The Conservatives took a similar approach to their own finances, accepting donations from people who have ties to the Kremlin or made their millions in Russia and the former Soviet Union. While such gifts to the party were legitimate insofar as they had been properly declared, critics frequently drew lines between senior Tories and some pretty unsavory characters.

The politics driving the first two problems was then fueled by a divided political environment in which the legitimacy of the Brexit referendum was bitterly debated. Keen to push Brexit through, Johnson’s electorally victorious Conservatives resisted any suggestion of undue Russian pressure on British political life and questions about dirty money were, once more, brushed aside.

Hiding in plain sight

It's not as though nobody has ever tried to grapple with these questions.

In 2016, David Cameron vowed at a U.K.-hosted anti-corruption summit that foreign companies owning property would be forced to make public who really owns them, a measure that if implemented would have closed one of the key routes into the economy for those looking to clean their money. 

In 2017, the U.K. brought in "unexplained wealth orders" and in 2018 the Sanctions and Anti-Money Laundering Act, along with the so-called Magnitsky amendment, which allowed sanctions on the grounds of gross human rights abuses. 

Although these measures represented progress, they have ultimately failed to deal with the full extent of the U.K.'s vulnerability as a clearinghouse for dirty money — detailed at length by various think tanks, journalists and even by a major report by the British parliament’s Intelligence and Security Committee in 2020.

That report found Russian influence in the U.K. is "the new normal" and "there are a lot of Russians with very close links to Putin who are well integrated into the U.K. business and social scene, and accepted because of their wealth."

"This level of integration," the report added, "means that any measures now being taken by the government are not preventative but rather constitute damage limitation."

Publication of the report itself was repeatedly stymied and was, in the end, met with something of a shrug by the government, as ministers underlined their commitment to tackling illicit money while brushing off the suggestion of Russian actors playing a role in Brexit.

The legislation now being paraded as the solution — the Economic Crime Bill — has languished for some time. When a minister recently quit over the government's record on tackling fraud, he went on to claim his former colleagues wanted to delay the bill for at least another year.

Transparency International has identified a number of weak points in the government’s plan, including an 18-month lead-in time, inadequate penalties for those who break the rules, and the absence of an accurate record of who holds what assets.

The raft of sanctions introduced since the invasion of Ukraine has also got off to an uncertain start, trickling out in a process that the Times reported could take months. Downing Street has stressed the need to meet all the proper legal requirements for what it describes as an unprecedented package of measures.

A No. 10 spokesman said last week that “we’re doing everything we can to crack down on illicit money” and “we shouldn't just focus on individuals but what places most pressure on the Putin regime.”

Two former Cabinet ministers who have criticized the government on other issues said a gradual “ratchet” of sanctions was the right approach.

Many Conservatives, even those who want to see reform, complain that the whole debate around donations takes place in an atmosphere of hysteria. They defend the need for the party to attract donations, contend that their political impact has been wildly exaggerated and point out that it is not only a Tory issue.

Others attribute the lack of action over the 2020 Russia report to, at least in part, what it had to say about Brexit. Dominic Grieve, former chairman of the Intelligence and Security Committee, said there was an “embarrassment” that the outcome might have been influenced by hostile actors, which fed into an unwillingness to look too closely at it.

No. 10 Downing Street and the Conservative Party did not respond to a request to comment.

Political change

While it may have taken Russian boots on the ground to spur the government into action, the sands were already shifting in the Conservative Party. Individual Tory MPs are increasingly willing to question the pure free-market ideology associated with former Prime Minister Cameron and his then-Chancellor George Osborne, mainly in the direction of China but with an eye on Russia too. 

Bob Seely and Tom Tugendhat, both former soldiers with an interest in foreign affairs, are among the MPs who've called for the government to go faster with the clampdown. Seely last week used the legal immunity afforded to him as a member of the House of Commons to name lawyers who have defended oligarchs with links to Putin.

Nigel Mills, a Conservative MP and co-chairman of a parliamentary grouping on anti-corruption, said the government's past ambivalence had left it weakened at precisely the point when it needed to move quickly. 

"We needed a war for the government to decide this was the ethical and moral thing to do," he told a seminar hosted by the All-Party Parliamentary Grouping on Anti-Corruption and Responsible Tax. "Just think how much better a position we'd have been in last Thursday if we’d have these measures in place and we’d known where all these kleptocrats have their wealth and been able to move much faster."

Although they might not say so publicly, some in the party agree with the opposition's hammering of the government on this matter, which may have been a factor in Johnson's unusual offer to work cross-party to make improvements to the Economic Crime Bill.

And while many previous attempts to set out Britain’s role in the world post-Brexit have fallen short, the effort to ostracize the Kremlin provides the prime minister an opportunity to show that the U.K. really can act in concert with allies when it counts.

Johnson’s domestic woes over the Partygate scandal, which has seen police investigating whether coronavirus lockdown-busting parties broke the law, may also have made tough action against dirty money more likely. A former government official noted that “this comes at a time when [the prime minister’s] been under a lot of pressure" and "while nobody would wish for something like this to happen, it's kind of a helpful way of a prime minister showing that there are other parts of his job that are really important.”

While the system that supports Londongrad faces an overdue reckoning, the Conservative Party is likewise expected to look more closely at its own inner workings. 

Many in the party are privately uncomfortable with some of CCHQ's money-raising antics, particularly the efforts of party co-chairman Ben Elliot, who was revealed to have set up an "advisory group" allowing donors access to the prime minister's top team.  

"That’s all about servicing a pretty grim group of people," said a senior Tory, who predicted those practices would begin to change.

However, this is of little comfort to the staunchest critics of Russian influence in British life, who fear that failure over many years to grip the problem has left a lasting stain both on the country and its custodians in government. 

As one former adviser to the party observed: "It’s all very well saying that we've changed, but it’s just ridiculous. It’s too late."

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Netflix suspends all Russian services

Posted: 06 Mar 2022 01:10 PM PST

U.S. streaming giant Netflix has decided to put the brakes on its services in Russia, amid international concern over Moscow’s aggression in Ukraine, the company confirmed Sunday.

"Given the circumstances on the ground, we have decided to suspend our service in Russia,” a Netflix spokesperson told POLITICO.

In practice, this means people in the country will no longer be able to sign up for a new subscription starting on Monday, March 7, and current Russian subscribers will have access to their accounts only until the end of their current billing cycle. After this time, accounts belonging to Russian users will be temporarily suspended, until the situation in Ukraine changes, and Netflix may consider restarting their services in Russia.

The move comes after a series of gradual withdrawals from the Russian market for Netflix, as President Vladimir Putin’s army escalates its violent invasion and assault on Ukraine.

Last week, the company decided to put an immediate "pause" on its Russian TV and film productions. The company also said it would refuse to comply with Russian laws that stipulate certain audiovisual outlets are obliged to carry at least 20 state-supported channels.

There had previously been concerns that the Kremlin would use the U.S. streaming service as a platform for the dissemination of state propaganda, amid the battle for the airwaves as part of the war in Ukraine.

Dutch finance chief open to changing EU fiscal rules — but not the fundamentals

Posted: 06 Mar 2022 11:00 AM PST

The Dutch government wants to reform the EU’s fiscal architecture — but don’t ask the Hague to go too far.

“I’m neither a hawk nor a dove,” Sigrid Kaag, Dutch deputy prime minister, finance minister and leader of social liberal party D66, told POLITICO on Sunday.  

“We believe that reform and modernization of the [Stability and Growth Pact] is necessary,” she said. “The system has become so complex with so many other mini escape routes and adaptations that ultimately, it’s very hard to actually align or comply with this system itself, the way it’s evolved over time.”

“We’re looking to establish the way in which the system could be made to work,” she added.

Kaag outlined her government’s approach to the ongoing review of EU fiscal rules in a letter to Parliament on Friday, in which she wrote that existing rules on debt reduction were ineffective and seldom enforced. Instead, she proposed that countries set up their own debt-reduction trajectories over multiple years, which would then be enforced by an independent body such as the European Fiscal Board.

“We’d like a realistic pace in debt reduction; we’d like to see debt reduction actually happen because it’s important, but [also] space for investments and space for reforms that are so much needed,” she said.

“So this is a more open and constructive approach with no firm fixtures other than the 3 percent and the 60 percent. But no one feels the need to debate those, fortunately, because that’s just beside the point,” she said, referring to the deficit and debt-to-GDP threshold at the heart of the bloc’s fiscal governance.

At the same time, she expressed doubts about a proposal by high-debt countries, most notably France and Italy, to prevent certain investments from counting against deficit and debt calculations, such as those to do with climate protection or defense. The Commission itself has been warming to that approach.

“There are risks attached to an approach whereby you basically sort of place investments under a special category. Because ultimately, we do need to work towards debt reduction, we need to be transparent, we need to be able to establish effective oversight,” she said.

Kaag and her counterparts in EU capitals are exchanging ideas on how to reform the bloc’s rules and ensure more consistent enforcement. The Commission is in listening mode and will present proposals this summer, with a view to reaching consensus by the end of the year.

It may be possible that negotiations will stretch beyond that, but as Kaag said, “if you plan for a delay, you will get a delay.”

This article is part of POLITICO's premium policy service: Pro Financial Services. From the eurozone, banking union, CMU, and more, our specialized journalists keep you on top of the topics driving the Financial Services policy agenda. Email pro@politico.eu for a complimentary trial.

Macron urges securing nuclear plants in call with Putin

Posted: 06 Mar 2022 10:00 AM PST

PARIS — French President Emmanuel Macron called on his Russian counterpart Vladimir Putin to ensure Ukrainian nuclear plants are secured amid Russia’s invasion of Ukraine, a senior French official said Sunday.

“It is necessary that we obtain commitments … under the International Atomic Energy Agency’s auspices to ensure the safety of these plants and that they are excluded from the conflict,” the official from the Elysée Palace told reporters after Macron and Putin spoke for an hour and 45 minutes.

The official said Putin told Macron it was “not in his intention to carry out attacks on these plants” and that “he was ready to comply with IAEA standards.”

In a statement, the Kremlin confirmed it would agree to trilateral talks between the IAEA, Russia and Ukraine to agree on measures to secure Ukrainian nuclear facilities, as long as the meeting is either held via videoconference or in a third country.

The call between Macron and Putin comes only days after Russia’s attack on the Zaporizhzhia nuclear power plant, the largest in Europe. Ukraine has the seventh-largest installed nuclear capacity in the world and the second in Europe, after France.

IAEA Director General Rafael Grossi said this week that the "ongoing military conflict taking place in a country that has a vast nuclear program" had put the organization on high alert. He is expected to give a press conference Monday.

The Elysée Palace is hoping the agency will “make proposals on the security of nuclear facilities in Ukraine.”

During his call with Macron, Putin reiterated his goals in Ukraine, showing no change in tone, the official also told reporters. “Putin said that he is determined to achieve all his objectives by negotiation or war. This is a serious time,” the official said.

On Saturday, the Russian president said the sanctions imposed against Russia since its invasion of Ukraine were "akin to a declaration of war" and warned that Ukraine's statehood is at stake.

Earlier Saturday, Ukraine and Russia announced that citizens in the besieged city of Mariupol would temporarily be allowed to evacuate through a humanitarian corridor, but within hours, the city of Mariupol said that Russian forces were violating the agreement.

Macron told Putin that international humanitarian law needed to be respected, civilians protected and humanitarian access allowed, according to the Elysée. The Russian president replied that his army is not targeting civilians or civilian facilities and that it’s up to the Ukrainians to let civilians go or not.

The Elysée official was lukewarm about reports that the U.S. is working with Poland on plans to supply Ukraine with Russian-made fighter jets. “The objectives must remain the same: to increase the costs of the war for Putin while recalling that we are not at war with Russia,” the official said, urging “some caution on those issues.”

“Things need to be done in order, and in the right one,” the official added. U.S. Secretary of State Antony Blinken and Macron will talk Tuesday evening.

Macron is expected to speak later Sunday with Ukrainian President Volodymyr Zelenskyy and Israeli Prime Minister Naftali Bennett, who traveled to Russia over the weekend to speak with Putin.

Von der Leyen noncommital on Ukrainian EU membership, banning Russian energy imports

Posted: 06 Mar 2022 07:53 AM PST

European Commission President Ursula von der Leyen on Sunday declined to say whether and when Ukraine would be given European Union membership, and refused to answer whether the EU would contemplate a total ban on imports of oil and gas from Russia.

She said the Ukrainian people “belong in the European family,” but added that “this would take time,” in an interview with CNN. Asked when the earliest possible date for accession would be, she said, “This is hard to say … Reforms have to be done, processes have to be set up.”

Ukrainian President Volodymyr Zelenskyy on Monday filed a symbolic application to the EU, asking for his country’s membership to be fast-tracked. Georgia and Moldova have also filed applications.

EU membership is a years-long process that requires countries to comply with both legislative and practical changes. Other countries whose membership bids have been pending — such as Montenegro and North Macedonia — could potentially be resentful if other applications get fast-tracked.

Von der Leyen also refused to say whether a ban on imports of Russian oil and gas — on which the bloc heavily relies for its energy supply — would be an option the EU is prepared to take.

Instead, she said that “we have to get rid of the dependency [on] fossil fuels from Russia. We're just discussing in the European Union a strategic approach, a plan on how to accelerate investments into renewables, how to diversify our energy supply for example with you, our friends in the U.S. for LNG gas … and other friends around the world, how to invest heavily in biogas and in hydrogen that is homegrown. This is not only a strategic investment into our energy security but it is also good for the climate.”

The Commission will next week outline a list of actions for discussion by EU leaders on how to reduce the bloc’s energy dependency on Russia.
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