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Economy

EU ramps up efforts in offshore renewable energy

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The European Commission presented its EU Strategy on Offshore Renewable Energy today (19 November). The Strategy proposes to increase Europe's offshore wind capacity from its current level of 12 GW to at least 60 GW by 2030 and to 300 GW by 2050. The new push on offshore energy is to help the EU to reach its goal of climate neutrality by 2050.

Executive Vice-President for the European Green Deal, Frans Timmermans said: “Today's strategy shows the urgency and opportunity of ramping up our investment in offshore renewables. With our vast sea basins and industrial leadership, the European Union has all that it needs to rise up to the challenge. Already, offshore renewable energy is a true European success story. We aim to turn it into an even greater opportunity for clean energy, high-quality jobs, sustainable growth, and international competitiveness.”

Commissioner for Energy, Kadri Simson, said: “Europe is a world leader in offshore renewable energy and can become a powerhouse for its global development. We must step up our game by harnessing all the potential of offshore wind and by advancing other technologies such as wave, tidal and floating solar. This Strategy sets a clear direction and establishes a stable framework, which are crucial for public authorities, investors and developers in this sector. We need to boost the EU's domestic production to achieve our climate targets, feed the growing electricity demand and support the economy in its post-Covid recovery.”

EU

Transport MEPs list main steps to make EU roads safer

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The goal of zero deaths on European roads by 2050 calls for more robust measures on road safety, such as, 30 km/h speed limit or zero-tolerance for drink-driving, Transport MEPs say, TRAN.

Speeding is a key factor in around 30% of fatal road crashes, Transport MEPs note. They call on the Commission to come up with a recommendation to apply safe speed limits, such as maximum speed of 30km/h in residential areas and areas where there are high numbers of cyclists and pedestrians. To further promote safe road use, they also urge to set a zero-tolerance drink-driving limit, highlighting that alcohol is involved in around 25% of all road fatalities.

The draft resolution also welcomes the recent revision of the General Safety Regulation, which will make new advanced safety features in vehicles such as intelligent speed assistance and emergency lane keeping systems mandatory in the EU as from 2022, with the potential to save around 7 300 lives and avoid 38 900 serious injuries by 2030. Moreover, MEPs ask the Commission to consider the incorporation of a “driving safe mode” for mobile and electronic devices of drivers in order to inhibit distractions while driving.

Tax incentives and attractive motor insurance schemes for the purchase and use of vehicles with the highest safety standards should be pursued, MEPs add.

European road transport agency

To properly implement the next steps in the EU road safety policy, new capacities are needed in the field of road safety, says the draft text. Therefore, Transport MEPs call on the Commission to establish a European road transport agency to support sustainable, safe and smart road transport.

EP Rapporteur Elena Kountoura (The Left, EL) said: “Strong political will by the national governments and the European Commission is essential to do what it takes to halve road fatalities by 2030 and move decisively towards Vision Zero by 2050. We must mobilise more investments towards safer road infrastructure, make sure that cars are equipped with the best life-saving technologies, establish speed limits of 30 km/h in cities across Europe, adopt zero tolerance on drink-driving and ensure strict enforcement of road traffic rules.”

Next steps

The resolution on EU Road Safety Policy Framework now needs to be voted by the full house of the Parliament, possibly during the September session.

Background

This report serves as Parliament’s formal response to the Commission’s new approach to EU road safety for the years 2021-2030, and its EU Road Safety Policy Framework 2021-2030.

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Economy

NextGenerationEU €20 billion bond issuance seven times oversubscribed

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The European Commission reached a key milestone in the implementation of its recovery plan, by issuing €20 billion of debt to fund NextGenerationEU. The bonds were seven times oversubscribed despite the very modest level of interest at 0.1%. All in all, the EU will raise €800bn on the capital markets to fund what is hoped will be a transformative programme of investment across the continent. 

Commission President von der Leyen said: “This is the largest ever institutional bond issuance in Europe and I'm very pleased that it has  attracted very strong interest by a wide range of investors.”

Some have described Europe’s decision to issue bonds in this was as a ‘Hamiltonian moment’, Commissioner Hahns said: “I want to be a little bit more modest, concrete and self-confident by rather saying: this is a truly European moment, as it demonstrates the EU's innovation and transformative power.”

How green does your garden grow?

Commissioner Hahn said that the EU would be issuing green bonds in the autumn. The EU will launch them once it has settled on its EU Green Bond Standard, this will double the current volume of green bonds in the market. Hahn compared it to the way the SURE bonds have tripled the social bond market. Green bonds will account for around 30% of the EU’s overall borrowing amounting to around €270bn in current prices.  

Persona non grata

Asked about the decision of the European Commission to exclude certain banks from this round of issuance, Hahns said that though many of the banks had met the criteria to participate in the primary dealer network, there were outstanding legal issues that needed to be resolved. He said: “Banks have to demonstrate and to prove that they have taken all the necessary remedial action that has been demanded by the Commission,” but added: “We have a way interest to include all the key players and banks, which have qualified themselves for the primary dealer network but of course, the sort of the the legal aspects have to be respected.”

In May 2021, the European Commission found that several banks had breached EU antitrust rules through the participation of a group of traders in a cartel in the primary and secondary market for European Government Bonds (‘EGB'). Some of the banks involved were not fined because their infringement fell outside the limitation period for the imposition of fines. The fines on the others totalled €371 million.

Fund managers lead the table

The demand was dominated by fund managers (37%), and bank treasuries (25%) followed by central banks / official institutions (23%). In terms of region, 87% of the deal was distributed to European investors, including the UK (24%), 10% to Asian investors and 3% Investors from the Americas, the Middle East and Africa.

Background

NextGenerationEU will raise up to around €800bn between now and  the end of 2026. This translates as borrowing of roughly €150bn per year, which will be repaid by 2058.

With the SURE programme the Commission issued bonds and transferred the proceeds directly to the beneficiary country on the same terms that it received (in terms of interest rate and maturity). This worked for small funding needs, but the size and complexity of the NextGenerationEU programme requires a diversified funding strategy. 

Multiple funding instruments (EU bonds with different maturities, some of which will be issued as NextGenerationEU green bonds, and EU-Bills - securities with a shorter maturity) and techniques (synidcation - usually preferred by supranational issuers, and auctions - usually preferred by nation states) wil be used to maintain flexibility in terms of market access and to manage liquidity needs and the maturity profile. 

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Greece

Greek strike against labour reform bill disrupts Athens transport

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Public transport staff in Athens went on strike for the second time in a week on Wednesday (16 June) before a parliamentary vote on a law the government says will revamp outdated labour rules but which unions fear will bring longer hours and weaker rights, writes Angeliki Koutantou, Reuters.

Ships remained docked at ports, and many bus, subway and railway services were suspended as transport staff walked off the job. Workers from other sectors also held work stoppages and were expected to join several protest rallies in central Athens before the vote on the bill later on Wednesday.

Prime Minister Kyriakos Mitsotakis' conservative government, which took office in 2019, said the reform would modernise "antiquated" laws dating back decades to a pre-internet time when most workers clocked into offices and factories at the same set hours.

Trade unions have described the draft law as a "monstrosity". They want the government to withdraw the bill, which they say will reverse long-established workers' rights and allow companies to bring in longer hours through the back door.

The most disputed part of the bill allows employees to work up to 10 hours on one day and less time on another. Unions fear that will enable employers to force workers to accept longer hours.

The bill would also give workers the right to disconnect outside office hours and introduce a "digital work card" from next year to monitor employees working hours in real time, as well as increase legal overtime to 150 hours a year.

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