As the EU navigates a critical period for its economic and environmental future, recent developments expose a troubling disconnect between political promises and policy action. What should we expect from our elected leaders when the foundations of sustainable competitiveness are being dismantled?
A lot has been shared on the details of the Council decision on Omnibus 1 this Monday (see our summary of the changes in the table below!) But what does this tell us in terms of competitiveness and sustainability in the EU?
Let’s look back at the Commissioner’s hearings last autumn: Commissioner Albuquerque declared that the EU is leading the commitment for a sustainable future and Commissioner Dombrovskis repeatedly said that “the objective is to simplify while preserving other objectives and social and environmental high standards”. These have been empty promises.
Instead the Commission is responsible for opening Pandora’s box and seems perfectly content with the Council and EU Parliament pushing far beyond their own proposals for simplification.
Now - there is no impact assessment of what these newly discussed scopes would imply in practice and whether they will lead to the effects these laws are meant to deliver. The discussion only focuses on costs for companies, but does not take into account the economic benefits for EU companies, nor the financial burden of inaction for States and citizens in the next 20 years.
And this is the saddest lesson learnt over the last months: there is no evidence-based decision-making in the three EU institutions at the moment. The Council simply took the lowest common denominator between all Member States and that’s it.
No leadership on sustainable competitiveness in the EU. The far-right in the EU is getting what they asked for: A dismantling of the EU Green Deal.
But the story doesn't end there...
Yesterday, MEP Jörgen Warborn, the EPP lead for this file, focussed on “costs for companies” during his presentation of the draft report on June 24. Besides ignoring the economic benefits proven in the medium and long-term, he does not answer the question of who shouldered the 18.2 billions in losses due to extreme weather events in Europe in 2024 (and over €145 billion in economic losses in the EU over the past decade)?
In terms of competitiveness, the independent think tank Bruegel shed interesting light in a study published in 2023: “...one frequently cited claim is wrong: in terms of output growth, the EU has not fallen significantly behind the US. In fact it has converged to the US in terms of per-capita output, per-worker output and, especially, output per hours worked”. The opening remarks from the EPP rapporteur pointed to the EU lagging behind and the need to focus on progress, but recent data published by Accountancy Europe shows how 1/3 Member States could end up with less than 10 companies subject to the CSRD under his scope proposals. This leads us to ask: how do we move forward with the digital and green transition without scaling up availability of decision-useful ESG data? These are not proposals aimed at simplification, but blatantly disregarding the need to improve businesses’ resilience.
Furthermore, the representative from the European Commission present during the exchange in the EU Parliament, warned against specific wording changes suggested by the EPP rapporteur regarding the value chain, with a knock on effect on investor protection and the good functioning of EU markets.
All the groups that voted to confirm Ursula Von der Leyen’s second presidency expressed their openness and willingness to work together and compromise, while the MEP in charge of these negotiations for the S&D warned about the costs of climate denial and feeding populism.
July and September will show if the EPP group, governing in many Member States thanks to coalitions with other progressive parties, will rely on a centrist majority, or risk an institutional crisis in the EU.
Don’t miss the latest episodes of our Frankly Speaking podcast discussing the implications of the Omnibus proposals with leading experts and business voices.
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As part of the reform of the EU Non-Financial Reporting Directive, the European Commission plans to develop mandatory EU sustainability reporting standards. The analysis of the non-financial reports of 1000 European companies by the Alliance for Corporate Transparency has proven how companies fail to report relevant, specific and comparable information. While this is true for all sustainability matters, it is particularly exacerbated in the case of corporate impacts and risks along the supply chain.
The European Court of Justice has ruled that mining at Poland’s sprawling Turów coal mine must cease while the court processes a Czech government lawsuit against Poland for illegally operating the mine. The Polish mine pushes right up to the Czech and German borders and is depleting people’s water supplies and undercutting houses in nearby communities.
Local groups and NGOs including Frank Bold, that is very active in the process, welcomed the Czech government’s decision to file a lawsuit at the European Court of Justice against the Polish government for the illegal operation of the Turów lignite coal mine, which has been dug right up to the Czech and German borders, damaging local water supplies for nearby communities. This is the first such legal case for the Czech Republic and the first in EU’s history where one member state sues another for environmental reasons.
