Week Ahead: When the chips are down

European Chips Act – ‘The moment is now!’ 

This week (8 February) we should be able to set our eyes on the European Chips Act. The worldwide shortage in semiconductors has slowed production of cars and many other devices. Countries are increasingly realizing the central role played by chips and the dangers of being dependent on other countries. The EU sees it as part of its sovereignty agenda and Von der Leyen announced it at her State of the European Union address: “While global demand has exploded, Europe’s share across the entire value chain, from design to manufacturing capacity has shrunk. We depend on state-of-the-art chips manufactured in Asia. So this is not just a matter of our competitiveness. This is also a matter of tech sovereignty. So let’s put all of our focus on it.”

Recently at Davos, von der Leyen said: “Europe’s global semiconductor market share is only 10% today, most supplies come from a handful of producers outside the continent. By 2030, 20% of the world’s microchips production should be in Europe. This means quadrupling today’s European production.”

She outlined 5 key areas for progress: Strengthened research and innovation capacity in Europe; ensure European leadership in design and manufacturing; adaption of state aid rules to allow public support – for the first time – for European, first-of-a-kind production facilities; improved ability to anticipate and respond to shortages and supply issues in the area; and, support for smaller, innovative companies.

Happy birthday Maastricht Treaty!

Signed 30 years ago today. President Juncker used to remind us that he was one of the only people still in government who was there for Maastricht. 

Pushed through by Europe’s most determined leaders, Kohl and Mitterand, the agreement may have also paved the wave for the UK’s departure from the EU. The treaty went well beyond popular support and established the goal of Economic and Monetary Union that set the rules that would, to some minds, lead to poor growth and almost complete disintegration during the financial crisis. The debate on the appropriate balance between promoting growth and ensuring low deficits and public debt remain current.

EU/US energy security

Diplomatic talks around Russia/Ukraine continue this week. Macron will be in Moscow for talks with Putin on Wednesday, with a view to de-escalation. New German Chancellor Olaf Scholz will be in Washington to meet with President Biden – where Russia’s aggressive manoeuvres towards Ukraine are likely to be top of the agenda. 

At the same time the EU High Representative Josep Borrell and Energy Commissioner Kadri Simson will also be paying a visit to the US, with energy security top of their agenda. Should the EU and US take a tough line on sanctions, further disruption to energy supplies would present Europe with some additional hardship. Hardship that Putin would be happy to provide if swingeing sanctions were imposed. 

European Parliament’s summary of the week ahead

Committee and political groups’ meetings, Brussels

ECB/Lagarde: MEPs in the Economic and Monetary Affairs Committee will meet with ECB President Christine Lagarde for their regular monetary dialogue. They are set to discuss inflation expectations in the euro area, post-pandemic trends and policy implications, as well as the ECB’s monetary policy communication strategy (Monday).

Migration/Belarus/Polish border: The Civil Liberties Committee will discuss the situation of migrants in Poland and at the border with Belarus, with Poland’s Deputy Commissioner for Human Rights Hanna Machińska (Monday).

Fiscal Package: The Economic and Monetary Affairs Committee will debate with Commission Executive Vice-President Valdis Dombrovskis and Economy Commissioner Paolo Gentiloni the fiscal part of the 2022 Autumn Package. They will discuss how member states should reduce their debts and how to use the experience of the Recovery Fund’s management to improve EU economic policy coordination (Monday).

Batteries and waste batteries: The Environment and Public Health Committee will adopt its position on proposed rules to govern the entire battery product life cycle, from design to end-of-life. MEPs will vote on amendments on sustainability and safety criteria (e.g. recycled content and carbon footprint), labelling, due diligence as well as waste management, and other issues (Thursday).

Plenary preparations: Political groups will prepare for the 14-17 February plenary session, where MEPs will debate and vote on a new European strategy to fight cancer, EU-Russia relations and the EU’s common foreign, security and defence policy, strengthening rules on toy safety, and boosting offshore renewable energy.

Council: Agriculture, health and trade

Informal meeting of Agriculture Ministers (7-8 February), takes place in Strasbourg, ministers will have general discussions on the developments and future of agriculture. More specifically the minsters will look at how forestry and agriculture can reduce their emissions and contribute to carbon storage.

Informal meeting of Health Ministers (9-10 February), ministers will discuss access to healthcare, the European Health Union announced by von der Leyen, with a focus on crisis preparedness & response measures, HERA, pharmaceutical measures and Europe’s Beating Cancer Plan.

Informal meeting of Trade Ministers (13-14 February), will be an opportunity to discuss trade issues and the main priorities of trade policy in advance of the formal meeting of the Foreign Affairs Council (Trade), which will take place in the second part of the French presidency.

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