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IN FOCUS
Ursula's State of the Union address: Focus on Ukraine, energy, and economy
By Padmashree Anandhan
What happened?
On 14 September, European Commission President Ursula von der Leyen in the “State of the Union” address briefed on the Commission’s plan for the upcoming year. Which were formed based on the recommendations made by the citizens in the Conference on the Future of Europe. In her address she said: “Democratic institutions must constantly gain and regain the citizens’ trust. We must live up to the new challenges that history always puts before us. Just like Europeans did when millions of Ukrainians came knocking on their door. This is Europe at its best. A Union of determination and solidarity.”
The major plans included, EU’s continued support to Ukraine by integrating into the “EU’s single market.” Protective measures for Europeans to deal the energy crisis, reducing EU’s dependency over Russian energy, increasing renewable energy investments such as hydrogen and EU’s stance on democracy and rule of law.
Three key takeaways
First, solidarity for Ukraine. Ursula emphasised on EU’s solidarity for Ukraine and announced EU’s future initiative to strengthen its domestic and economic scenario. Outlining the support given, starting from the financial aid of EUR 19 billion, education to Ukrainian children, removal of import duties, consistency in imposing sanctions, to connecting of Ukraine’s electricity grid. She announced EU’s plans to merge Ukraine’s into EU’s single market, inclusion into free roaming, and EUR 100 million to reconstruct the damaged schools.
Second, recovery measures for Europe’s energy crisis. The European Commission brought in measures such as REPowerEU Plan, setting minimum gas storage limits, investments in offshore wind power, green hydrogen, solar in Denmark, North Sea, Baltic Sea, Sicily and “demand reduction targets,” to address the electricity shortage, Russia’s gas supply cut, increasing energy prices. In the State of the Union 2022, the Commission proposed measures, first, to reduce the electricity demand by 10 per cent to bring down the prices to five per cent. Second, to impose a temporary revenue cap of EUR180/MWh on inframarginal electricity producers, where those who produce electricity at lower cost will not charge more. For example, production of electricity from renewables, nuclear, and lignite. According to the European Commission: “These inframarginal producers have been making exceptional revenues, with relatively stable operational costs, as expensive gas power plants have driven up the wholesale electricity price they receive.” Third, a temporary unified contribution from the profits of the oil, gas, coal and refinery sectors. The rule applies only to those firms which has seen 20 per cent increase in their average profits in last three years. Such excess profits will be collected by the member states and later distributed to energy consumers, “vulnerable households, hard-hit companies, and energy-intensive industries.” Overall, the European Commission aims to raise EUR 140 billion as a backup to deal the energy crisis.
Third, economic recovery plan. the NextGenerationEU which assures sustenance of investments, employment and growth. It has been boosting investment in digital, sustainability, net-zero economy but still lacks to focus on higher public debt. The European Commission plans to disclose new measure for economic governance to bring more flexibility in debt reduction, to boost confidence in financial markets and to ensure spontaneous sync between stability and growth. As a way to boost the economy, the Commission plans to boost through lifting its business, workforce and accessibility to raw materials to meet the industry needs. It proposed “SME Relief Package,” which will contain a single set of tax regulation for all businesses in Europe called as “BEFIT.” To deter the growing unemployment rate, the Commission plans to making 2023 as “European Year of Education,” to speed up the qualification and recognition process in Europe. This is to close the gap between the unemployment and rising vacancies.
References
“Charting the course for the year ahead,” state-of-the-union.ec.europa.eu, 14 September 2022
“2022 State of the Union Address by President von der Leyen,” ec.europa.eu, 14 September 2022
“Energy prices: Commission proposes emergency market intervention to reduce bills for Europeans,” ec.europa.eu, 14 September 2022
IN BRIEF
By Rishma Banerjee and Sai Pranav
ESTONIA
Estonia’s energy production incapable of meeting domestic demand, says Eesti Energia
On 13 September, Estonia’s state-owned energy company Eesti Energia said that during peak hours, Estonia is incapable of producing enough electricity to meet its domestic demands. This contradicts electricity and gas system operator, Elering’s previous statement about how Estonia can cover its own needs. The Deputy Chancellor for energy at the Ministry of Economic Affairs and Communications had also previously guaranteed that Estonia can take care of its own energy requirements. Currently, Estonia needs approximately 1600 megawatts of energy, while its production capacity is 1700 megawatts. The chairman of Eesti Energia, Andres Vainola said that even if Estonia’s total production is greater than its consumption, all stations producing at maximum capacity is unrealistic. However, Vainola also mentioned that this shortage may not be a major concern for the country as they remain connected to the Nordic electricity market. (“Eesti Energia: Estonia cannot produce enough electricity during peak hours,” ERR, 14 September 2022)
ITALY
Giorgia Meloni to become the largest party in the upcoming elections
On 14 September, France24 reported that Brothers of Italy leader Giorgia Meloni is set to become Italy's first female Prime Minister in the coming elections. In a recent poll by pollsters, Meloni was found to be in the lead of two other right-wing contenders, Matteo Salvini and Silvio Berlusconi. She is said to be the favourite among all other candidates. Unlike the other two right-wing leaders, she appreciated her steadfast decision not to join Mario Draghi’s centre-left coalition. Right-wing in Italy is the most likely to win compared to the broken centre-left. (Benjamin Dodman, “‘We’ve tried them all, except Meloni’: Far-right leader tipped to become Italy’s first female PM,” France24, 14 September 2022)
LATVIA
Latvia installs border-fence with Belarus to prevent illegal crossings
On 14 September, the State Real Estate of Latvia announced the border fence being constructed on the Latvia-Belarus border to prevent the illegal border crossing. Till now, five kilometers of the fence has been erected and construction work in 28.1 kilometers of the 57 kilometers long deforested border has been completed. It is expected that as the deforested areas increase, the rate of building the fence will also increase to up to one kilometer per day. Additionally, four bridges have also been built over several shared rivers that run along the border and the technical specifications for the third phase called Daugava is being developed. (“Five kilometers of fence constructed on Latvia-Belarus border,” eng.lsm.lv, 14 September 2022)
SPAIN
Majority vote against creating windfall taxes on energy firms
On 13 September, Spain’s People’s Party, along with the Vox and Ciudadanos, voted in Congress against levying windfall taxes after the European Commission President, Ursula von der Leyen, announced that all EU countries must collect taxes from profiting energy companies and looking after the needs of low-income households with the same money. The left agreed with von der Leyen’s statement, whereas the People’s Party disagreed with her saying that it doubts the funds would go to the needy. The PP is against the idea of filling the pockets of Spain’s President Pedro Sanchez. Sanchez responded that the tax would only be levied on the large companies and said, “We govern for the majority, and when you did, you put all the institutions at the service of a powerful minority,”. The Spanish Congress is against creating new taxes and will follow the Iberian exception to meet the energy crisis. (Xose Hermida, “The European right amends the plan to the Feijóo PP for the tax on energy,” El Pais, 14 September 2022)
SWEDEN
Ulf Kristersson to become Sweden’s next Prime Minister
On 14 September, Sweden’s Prime Minister Magdalena Andersson accepted her party’s defeat in the recent general election. The coalition of the Moderates, Sweden Democrats, Christian Democrats and Liberals collectively won 176 out of 349 parliament seats, and the centre-left Social Democrats won 173 seats, according to the latest count from the election authority. Ulf Kristersson, head of the Moderates, said that he would begin creating a new cabinet as the victory of the right alliance seemed inevitable. The rise of far-right Sweden Democrats worries Prime Minister Andersson as their anti-immigration policy might change Sweden’s welcoming attitude. The small party of Kristersson will find difficulties in creating a cabinet or passing laws as there are rifts between the Sweden Democrats and Liberals. The final results of the election will be announced in the coming days, but they will not significantly impact the victory of the right. (Simon Johnson and Anna Ringstrom, “Swedish right prepares for power as PM accepts election defeat,” Reuters, 15 September 2022)
TURKEY
Opposition parties create coalition amidst search for charismatic leader
On 14 September, Deutsche Welle reported on the Turkey’s opposition forming a successful coalition ahead of the 2023 Presidential elections. The name of alliance, translates to "Table of Six" and consists of six political parties- Republican People's Party (CHP), the nationalist Good Party, the conservative Islamist Felicity Party, the Future Party, the Democracy and Progress Party and the Democrat Party. The coalition will aim to challenge the dominance of Recep Tayyip Erdogan’s Justice and Development (AKP) Party and to reverse the state’s presidential system, back to a parliamentary system. After the coalition, the Table of Six are the second-largest opposition in the country. CHP’s head, Kemal Kilicdaroglu and two of CHP’s winning mayors, Ekrem Imamoglu and Mansur Yavas are being nominated as the presidential candidates. However, against the wide popularity of Erdogan, the charisma and influence of these leaders are not enough to shift the electoral mandate. ( Burak Ünveren, “ Turkey's opposition desperately seeks an electable leader,” Deutsche Welle, 14 September 2022)
SCIENCE AND TECHNOLOGY
The General Court fines Google EUR 4.125 billion for violating antitrust laws
On 14 September, the General Court in Luxembourg ruled against google for the forceful and unlawful imposition of their software in Android. Google was slammed with an antitrust violation by the European Commission for dominating android devices and illegally restricting competition in the market. It was asked to pay a fine of EUR 4.125 billion by the General Court for the violation. The Commission imposed EUR 4.34 billion fine on Google in 2018, which the General Court reduced. Google wants to challenge the General Court’s rulings. (“Google: EU court confirms record €4 billion antitrust fine,” Deutsche Welle, 14 September 2022)
REGIONAL
The EU’s leaked policy on forced labour receives criticisms
On 14 September, a new policy proposal was leaked on banning forced labour in the EU. The policy focuses on finding proof of the existence of forced labour and thereby prohibits the goods resulting from the labour. Experts have found that the policy has a major flaw with the ban on goods involving forced labour in the market. Goods are banned only after the existence of forced labour is established with enough proof and not when they are suspected. The EU wants a high standard of evidence which makes banning a suspected firm that practices forced labour very difficult. (Sonya Angelica 0Diehn, “EU ban too feeble to fight forced labor, groups say,” Deutsche Welle, 14 September 2022)
France to look into the case of two women who joined IS
On 14 September, the European Court of Human Rights asked France’s government to reconsider the case of the entry of two women who had joined the Islamic State (IS) in Syria on security grounds. France had denied access to the two women returning to France from Syria. The ECHR told France to view their case unbiased and allow them to enter the country. The French court, which ruled against the two women, said that the crimes they had committed while being a part of IS should be taken care of by the local authorities. The families of the two women had taken to court, demanding the French government should allow them entry as the IS is dissolved now. (Matt Murphy, “France must reconsider ban on IS members' return,” BBC, 14 September 2022)
INTERNATIONAL
The West raised concerns over traces of Uranium found in Iran
On 14 September, The US, The UK, France and Germany demanded Iran explain the existence of traces of Uranium in three undeclared sites in the Board of Governors quarterly meeting of the UN’s International Atomic Energy Agency. The West asked IAEA to act immediately on Iran’s possession of Uranium. They made a joint statement with the support of 23 out of 35, asking Iran to fulfil its legal responsibility and adhere to IAEA’s guidelines. After clearing western sanctions, the incident had put a dent in Iran’s nuclear revival talks. (“Two-thirds of IAEA board backs Western statement pressuring Iran,” Reuters, 15 September 2022)
War in Ukraine: Day 203
By Rishma Banerjee
War on the Ground
On 13 September, President Volodymyr Zelenskyy visited Izyum in Kharkiv region. He raised Ukraine’s flag and congratulated the soldiers. The Deputy Defense Minister Hanna Maliar and commanders of forces who captured Izyum back took part in the ceremony. Referring to other occupied territories, he said that Ukraine will aim to regain control over all the temporarily occupied territories, including Crimea. He recalled the people in Crimea as Ukraine’s own, called Russia’s 2014 occupation a “terrible tragedy” and promised to free the region.
On 14 September, the Ukraine's Armed Forces General Staff said that 5000 servicemen from the Ukrainian military had completed their training in the UK. The training was provided by instructors from Canada, the Netherlands, New Zealand, Ukraine and the UK. The General Staff said that basic military knowledge, skills, engineering, live-fire, psychological and tactical training, running basic offensive and defensive missions and knowledge about tactical medicine remained the key aspects of the training. The combined military training was given under the program launched by British government called Operation INTERFLEX. The operation is expected to expand in terms of training course, intake capacity and the duration.
The Moscow View
Claims by Russia
On 14 September, Russia’s spokesperson, Dmitry Peskov spoke on the publication of the Kyiv Security Compact in collaboration with former NATO chief, Anders Fogh Rasmussen. Peskov said that the document made it more important for Russia to carry on its “special military operation,” as it further asks for security guarantee from the US and its allies. Russia’s Foreign Ministry spokeswoman Maria Zakharova suggested that as per the terms of the Compact, EU countries will “end up hellishly enslaved.” According to her the expensive sponsorship of Ukraine’s war efforts will affect their economies, making it difficult for them to recover in the long-term.
On 13 September, Peskov reiterated President Vladimir Putin’s earlier comments on how the unipolar world order will become obsolete and a new world order will be established. He addressed Russia’s growing friendship with China and said that both the states agree that a “new reality” will be established, instead of a unipolar world.
On the same day, the Chairman of Russia’s State Duma, Vyacheslav Volodin addressed the parliament said that Ukraine is pushing the world to the “brink of a nuclear catastrophe” by their continuous attacks on the Zaporizhzhia Nuclear Power Plant (ZNPP). He also mentioned how unlike the West, Russia is concerned about preventing a disaster at the plant, which can cause irreversible damage to Ukraine and other European NATO countries. According to Volodin, the UK and the US should speak up about the possible threat and take action against the same. On the same issues, the International Atomic Energy Agency (IAEA) mission, headed by Director-General Rafael Grossi said that both Ukraine and Russia were “interested” in a ceasefire and establishing a security zone around ZNPP.
The West View
Responses from the US and Europe
On 14 September, European Commission President Ursula von der Leyen delivered her annual State of the Union speech, which outlines the main political priorities of the EU in the coming year. Von der Leyen reiterated the EU’s support for Ukraine’s war efforts and said that international sanctions imposed on Russia would be continued. She highlighted the EU's need to de-couple from Russian energy and also reduce EU’s dependence on fossil fuels.
On 13 September, Germany’s Chancellor Olaf Scholz in phone call with President Vladimir Putin urged to withdraw his troops from Ukraine given the widespread military losses and far-reaching consequences of the war. He appealed for the treatment of the prisoners of war as per the Geneva Conventions, for cessation of attacks around the ZNPP and for better implementation of the Black Sea grain deal.
On 13 September, Reuters reported on US’s grant on visas to Russia’s foreign minister and his delegation to attend the upcoming UN annual gathering of world leaders. However, applications for 56 visas, submitted by Russia, only 24 stand approved. Lavrov’s flight crew were amongst the ones who have not received visas; thus, Lavrov and his delegation might avail commercial airlines to reach New York.
A Senior Research Associate at the Vienna Center for Disarmament and Non-Proliferation, Hanna Notte spoke about how Azerbaijan is using Russia’s preoccupation with the invasion of Ukraine to provoke conflict with Armenia over the Nagorno-Karabakh region. She said that testing how much a conflict can be escalated, while Russia dedicates its military diplomatic and political bandwidth to Ukraine, is in line with the strategy generally adopted by Azerbaijan.
On 13 September, Defence Minister of Denmark, Morten Bodskov in his visit to Kyiv spoke to the Danish news agency Ritzau. He said that Ukraine’s soldiers will also receive training in Denmark. Similar to the UK’s INTERFLEX programme, Denmark will be training inexperienced military recruits.
The Global Fallouts
Implications of the Ukraine war
On the same day, the International Organization of Migration (IOM) Director General António Vitorino met Zelenskyy in Kyiv. In the statement released after his meeting, he spoke about how “deeply affected” he was by the unimaginable conditions in Ukraine as more than 5700 civilian deaths have been recorded and over 8200 people have been grievously injured. The leaders discussed the ways in which the IOM could provide humanitarian assistance, “support sustainable livelihoods” and “promote community stabilization.” Vitorino also applauded the on-ground workers of coordinating the IOM efforts in Ukraine.
On 14 September, ahead of the Shanghai Cooperation Organization meeting is scheduled to be held between 15-16 September, Russia’s presidential aide, Yuri Ushakov addressed the issue of trade with India. He reiterated Indian Ambassador to Moscow Pavan Kapoor’s earlier statement about growing India-Russia trade. Ushakov said: “Our relations are actively developing, the trade has also increased significantly with supplies of Russian oil, coal and fertilizers increasing.” He mentioned that the trade turnover between the two states have increased by 120 per cent in 2022. India and Russia are currently deliberating on approving each other’s interbank systems and Russia’s Mir and India’s RuPay payment cards.
On the same day, Financial Times reported on how the UN is attempting to pressurize Russia into resuming their ammonia exports through Ukraine. Before Russia’s invasion of Ukraine, a pipeline from Russia’s Volga region pumped ammonia to Odessa port in Ukraine. The UN official in charge of the task force, Rebeca Grynspan said that they are trying for Russia and Ukraine to agree on a suitable deal. She said: “Talks are moving in the right direction and every effort is being made by all parties at every level to ensure a positive outcome.” The talks are being conducted to ease the fertilizer prices as ammonia is a major ingredient in nitrate fertilisers.
References
“Zelensky raises Ukrainian flag in liberated Izium,” Ukrinform, 14 September 2022
“Almost 5,000 Ukrainian recruits complete training in Britain,” Ukrinform, 14 September 2022
“Volodymyr Zelenskyy: After the return of Ukraine to Crimea, life will return there as to the Kharkiv region,” president.gov.ua, 14 September 2022
“The Kremlin commented on the publication of the Kiev project of "security guarantees," TASS, 14 September 2022
“Russian Foreign Ministry spokeswoman Maria Zakharova,” TASS, 14 September 2022
“Russia and China agree over ‘new reality’ – Kremlin,” RT, 13 September 2022
“Ukraine has put world on brink of ‘nuclear catastrophe’ – Moscow,” RT, 13 September 2022
“2022 State of the Union Address by President von der Leyen,” ec.europa.eu, 14 September 2022
“IOM Chief Statement Following Meeting with President Zelenskyy and Visit to Ukraine,” ion.int, 14 September 2022
Hans von der Burchard, “Scholz tells Putin to withdraw as Germany faces calls to send Ukraine tanks,” POLITICO, 13 September 2022
Michelle Nichols, “U.S. allows Russia's Lavrov to travel to United Nations,” Reuters, 13 September 2022
Mikhail Bushuev, “Azerbaijan has used Russia's weakness in Ukraine, expert says,” Deutsche Welle, 14 September 2022
“Copenhagen To Train Ukrainian Soldiers In Denmark,” BARRON’S, 13 September 2022
“Russia-India trade more than doubles – Kremlin,” RT, 14 September 2022
Laura Pitel and Henry Foy, “UN presses Kyiv and Moscow to agree fertiliser deal in Black Sea,” Financial Times, 13 September 2022