Production: By Europod, in co-production with Sphera Network.

EUobserver is proud to have an editorial partnership with Europod to co-publish the podcast series “Briefed” hosted by Léa Marchal. The podcast is available on all major platforms.

Find the full transcript below: 

Chinese carmakers are taking an increasing share of the European car market, particularly when it comes to electric vehicles. Why are European carmakers now opening their factories to their Chinese competitors?

Until recently, the main concern in Europe was Chinese-made electric vehicles being imported into the EU. That’s why, two years ago, the EU imposed hefty tariffs on Chinese electric cars.

But Chinese manufacturers have found another way into the European market: they are setting up production here. Some are building factories of their own. Others are entering partnerships with European carmakers and using their existing production sites.

That’s the case with Stellantis and Chinese manufacturer Leapmotor. And now Dongfeng is also negotiating to produce cars at the French plant of Rennes La Janais. Because by moving production to Europe, Chinese manufacturers may be losing one of their main advantages, which is cheap labour.

But low labour costs are only one part of their competitive edge.

Chinese manufacturers also continue to benefit from state support. And setting up production in Europe doesn’t necessarily mean building brand-new factories.

In many cases, Chinese companies are looking to partner with European manufacturers and use factories that are already there — factories that are no longer operating at full capacity. That means they can save significantly on investment costs. And they can also rely on their European partners’ existing sales and distribution networks.

So how big is this Chinese presence in Europe becoming? For 2028, there are already 12 projects involving Chinese carmakers setting up production in Europe. Several are in Spain, with others in France, Belgium, Slovakia, Hungary, Sweden and Austria.

Now, why would European manufacturers allow their Chinese competitors to produce cars in their own factories? Part of the answer is that European carmakers are struggling to keep up in electric vehicles sells. And that is contributing to factory closures and job losses.

European manufacturers have to meet EU targets on average CO2 emissions each year. And producing more electric vehicles is necessary to meet those requirements.

So partnerships with Chinese manufacturers can serve two purposes: they can help European companies fulfilling their green cars objectives, while also keeping existing factories and jobs running.

Though there is a longer-term risk for European manufacturers. The more Chinese companies establish themselves in Europe, the more competitive pressure they could put on European brands — potentially even leading to takeovers. That has happened before: Volvo Cars, for example, was acquired by Chinese group Geely in 2010. 

In Germany, carmakers are for now refusing to open the doors of their production sites to the Chinese. But they do have partnerships with Chinese companies to produce vehicles in China, where they can benefit from lower production costs. That explains why they were very much opposed to imposing tariffs on Chinese electric vehicles.

But the situation is now changing. Volkswagen closed its Dresden factory last year, and other German plants are also facing closure risks. Germany’s car industry is therefore increasingly joining calls for stronger protection against Chinese competition.

And that brings us back to the Franco-German paper that is circulating in Brussels, which calls for measures to restrict Chinese access to the European market.

Because this debate goes well beyond cars. The EU is increasingly concerned about Chinese competition and dependence in a range of strategic industries. This will be discussed next week, when EU leaders meet in Brussels.

The European Commission could also present a new so-called “diversification” tool, either at the summit or around it. One possibility would be to require companies not to rely exclusively on China for certain critical materials. Something which could trigger what we call a trade war. I’ll be following that very closely!

Production: By Europod, in co-production with Sphera Network.

EUobserver is proud to have an editorial partnership with Europod to co-publish the podcast series “Briefed” hosted by Léa Marchal. The podcast is available on all major platforms.

Find the full transcript below: 

The EU wants to bring new countries on board faster. But after years of waiting, will the Commission’s new proposals actually make enlargement easier?

On Tuesday (6 October), the European Commission is expected to propose changes to the EU’s enlargement process. The goal is clear: speed things up. Some candidate countries have been waiting for more than a decade, without a single new member joining the EU.

And geopolitics is adding to the pressure. With Russia’s war against Ukraine and a changing global balance of power, EU leaders increasingly see enlargement as a way of strengthening Europe’s weight on the international stage.

But bringing one, two, or several new countries into the EU raises some very complicated questions. One of them is decision-making. Another is money. So, what is the Commission proposing?

First, it wants to change the way enlargement negotiations are approved. At the moment, EU countries have to agree unanimously on several key steps in the process — including granting candidate status and opening different chapters of negotiations.

The Commission wants to make some of those decisions easier and faster, while keeping unanimity for the final decision on membership.

The other idea is gradual integration. In other words, candidate countries could take part in more EU programmes and benefit from certain forms of integration before actually becoming full members.

This is not exactly new. MEP’s think tankers, EU member states have been raising that idea for a while. And candidate countries already have access to a number of EU programmes and funding mechanisms. The idea is to give countries something concrete while they are still going through the accession process.

Now, there is an even bigger obstacle: money. The EU would have to finance enlargement at a time when its budget is already under pressure.

Because none of the countries currently considered likely to join in the nearer term would be expected to become a net contributor to the EU budget. In other words, they would likely receive more from the EU than they would contribute.

Ukraine is the obvious example. Despite being a big country with a solid economy, its current situation makes it fragile and unable to contribute largely to the EU budget. 

Its accession could have a significant impact on EU spending, particularly through the Common Agricultural Policy and cohesion funds.

So the Commission is considering a transition period during which new members would not immediately have full access to all EU programmes.

That could make enlargement financially easier in the short term. But it doesn’t solve the problem permanently. Once the transition period ends, the same question comes back.

And there is a broader issue too: would the EU itself be able to function as a union of more than 30 countries? What could prove difficult, is that many important decisions still require unanimity — including areas such as foreign policy, taxation and parts of the EU budget.

Changing that would require treaty reform, which is politically extremely sensitive because member states would have to give up some of their veto powers.

Andrew Duff, a former British liberal MEP who has written about enlargement for the European Policy Centre, argues that the EU should have started thinking about this much earlier — particularly after Brexit. In his view, the EU has not carried out the kind of institutional reform that would prepare it for a much larger membership.

So in the end, today’s proposals could make the accession process more flexible and give candidate countries more opportunities to integrate before membership.

But they don’t resolve two of the biggest questions: how to finance enlargement, and how to reform EU decision-making.

Before we wrap up, a quick word on the countries which are believed to become members next. The frontrunner is Montenegro. The most optimistic forecasts suggest it could potentially become an EU member as early as 2028. Then comes Albania, which is also well advanced in the process.

Production: By Europod, in co-production with Sphera Network.

EUobserver is proud to have an editorial partnership with Europod to co-publish the podcast series “Briefed” hosted by Léa Marchal. The podcast is available on all major platforms.

Find the full transcript below: 

Germany shut down its last nuclear power plants in 2023, bringing Angela Merkel’s nuclear exit policy to its conclusion. But now, nuclear power is making a strong comeback everywhere in Europe. Will Germany return to nuclear policy?

Until now, German chancellor Friedrich Merz had been reluctant to bring the nuclear topic on the table, partly because there was no agreement within his coalition. He has even said that Germany’s nuclear phase-out was irreversible. But that position is not shared by everyone in his own party.

And as support for the far-right AfD (Alternative for Germany) grows — a party that is strongly in favour of nuclear power — nuclear energy is becoming less politically taboo in Germany.

According to a non-public document sent by Berlin to other EU member states and reported by the media Euractiv (currently Rapporteur), the German government wants nuclear energy to be taken into account when the EU sets its climate targets for 2040.

For now, those discussions focus on renewable energy. Germany is not proposing to abandon renewable-energy targets, but rather to leave room for other low-carbon technologies, including nuclear power and carbon capture.

The logic is similar to the debate over the EU’s 2035 target for new cars: the overall objective remains, but countries could have more flexibility over how they achieve it.

And that proposal is likely to be welcomed in France. But could they convince a majority of EU countries? The picture across Europe is changing.

Many EU countries already operate nuclear power plants, while others are building new reactors or considering a return to nuclear. Italy, for example, is looking to revive a nuclear industry after abandoning nuclear power following the 1986 Chernobyl disaster.

Poland has never operated a nuclear power plant, but it is now developing its first one. And several other countries that currently have no reactors are seriously considering building them.

Only a small group of EU countries remain opposed to developing nuclear power, including Austria, Portugal, Luxembourg and Malta.

So why has nuclear power become more politically acceptable again? The legacy of Chernobyl and Fukushima still matters. But Europe’s energy crisis following Russia’s invasion of Ukraine has also changed the debate.

The shock of soaring fossil-fuel prices has encouraged governments to look for energy sources that can provide electricity without relying on fossil fuels — and nuclear power is increasingly being presented as one of them. Although there are major questions around that argument.

Nuclear power can provide large amounts of low-carbon electricity once a reactor is operating. But building and renovating reactors is extremely expensive and can take decades.

Take France’s Flamanville reactor: its final cost has been estimated at around €23bn , compared with an initial estimate of around €3bn.

There are also questions over nuclear waste, the risk of accidents, and the security of uranium supplies. European countries remain partly dependent on foreign suppliers, including Russia, for uranium.

Production: By Europod, in co-production with Sphera Network.

EUobserver is proud to have an editorial partnership with Europod to co-publish the podcast series “Briefed” hosted by Léa Marchal. The podcast is available on all major platforms.

Find the full transcript below: 

Italy brought back border controls with Spain in August, and has now extended them until at least 15 October. Giorgia Meloni’s government fears that migrants who arrived in Ceuta, reach the continent and Italy.

Are these restrictions legal in the Schengen area? What are the EU’s levies to avoid such controls?

Since 1 August, Italy has temporarily reintroduced controls at its air and sea borders with Spain. The measure has now been extended until 15 October. In return, Spain has also introduced controls at its air and sea borders with Italy.

“This is not against Spain” the Italian foreign affairs minister Antonio Tajani said, adding “we have a duty to protect our borders.”

The starting point was the arrival of tens of thousands of migrants in the Spanish enclave of Ceuta at the end of July. Italy said it was concerned about possible secondary movements towards the rest of Europe, and brought back controls at its borders with Spain.

But from a legal point of view, EU countries can’t simply reintroduce border controls whenever they want.

The Schengen area is based on the principle of free movement, meaning there should normally be no checks at internal borders. The Schengen Borders Code provides an exception. If a country faces a serious threat to public policy or internal security, it can temporarily reintroduce border controls, as a measure of last resort.

The controls can initially be introduced for up to 30 days, and can then be extended under certain conditions.

Italy has already extended its measure, which has now been in place for more than two months.

What does the European Commission say about Italy’s decision? The Commission has been asked about the Italian controls and says it is currently assessing the situation.

But the Brussels-based organisation The Good Lobby argues that Italy is violating the Schengen rules. It filed a complaint with the European Commission, asking it to open an infringement procedure against Italy.

According to Alberto Alemanno, who filed the complaint, there is no security threat that would justify bringing back the controls.

His argument is that none of the migrants who arrived in Ceuta were transferred to Italy. And, he says, people travelling between Ceuta and mainland Spain are already subject to identity checks.

So Italy’s justification, he argues, does not meet the conditions set out in the Schengen Borders Code.

Now, is Italy the only EU country bringing back border controls? No. If you look at the notifications sent by EU countries to the European Commission, around ten countries have reported temporary controls at some of their internal borders in recent months.

In response to the situation in Ceuta, Italy is the main example.

Austria also notified the Commission of controls in September, citing the situation in Ceuta among several reasons. But those controls concern its land borders with Slovakia, the Czech Republic, Hungary and Slovenia.

So Austria is not checking passengers arriving by air from Spain.

Germany, for example, has invoked the same exception in the Schengen rules to carry out controls at its land borders with all its neighbours.

That does not mean that every border crossing is closed, or that every traveller is systematically checked. It means German authorities can carry out checks at those borders, including spot checks.

Germany’s main justification is continued migratory pressure, alongside other security concerns. And for now, the Commission is kind of letting all of this happen. It did raise concerns at some point: in June, the Commission published an assessment of temporary border controls in nine EU countries, including Germany, Austria and Italy.

It did not formally declare these countries’ controls illegal. Instead, it called on them to work towards lifting the controls, arguing that the EU has put in place measures to address some of the risks being invoked to justify them.

Those measures include the new Migration and Asylum Pact and new rules on entry and border management. The bigger question, then, is how long temporary border controls can remain in place before they stop being an exception to Schengen and become the new normal.

Production: By Europod, in co-production with Sphera Network.

EUobserver is proud to have an editorial partnership with Europod to co-publish the podcast series “Briefed” hosted by Léa Marchal. The podcast is available on all major platforms.

Find the full transcript below: 

Donald Trump is betting on voluntary commitments from AI companies. On Tuesday (29 September), he unveiled a self-regulatory agreement drawn up with some of the biggest names in the AI industry.

What does it mean, and how does it differ from the EU’s Code of Practice for general-purpose AI?

On Tuesday, September 29, Trump brought together the CEOs of some of the biggest AI companies. Together, they signed what could be described as a self-regulation pact: a short list of non-binding commitments called the White House Accord on Super Intelligence.

That’s the other novelty: Trump no longer wants to talk about artificial intelligence, but about “super intelligence”. The term AI apparently has negative connotations.

So, what exactly have these companies committed to? The CEOs of OpenAI, Anthropic, Google, Meta, SpaceX and Nvidia have pledged to put safeguards in place, quickly detect and fix problems, and have their systems checked by independent auditors.

The principle of voluntary commitments may sound familiar to Europeans: They echo the EU’s Code of Practice for general-purpose AI — which, like the White House agreement, is not legally binding.

So what’s the difference? First of all, OpenAI, Anthropic and Google have also signed the EU code, while Meta, SpaceX and Nvidia have not.

And, more importantly, the EU does have binding rules in place: the AI Act, which is already in force. As part of this regulation, the European Commission developed the Code of Practice to help companies comply with the rules.

You could think of it as a checklist for AI companies, to help them make sure they are complying with the law.

Another difference is the sheer volume of recommendations. The document published by Trump is just one page long. The European Code of Practice runs to more than 60 pages and was prepared with the help of dozens of independent experts.

It is also more comprehensive, covering not only safety, but also transparency and copyright. But this raises another question: if both documents are voluntary,  how effective can they actually be?

When the European Code of Practice was published, some civil society organisations criticised it, arguing that voluntary commitments are not enough and that concrete obligations are needed.

There are binding obligations under the AI Act. But they are not as precise as what is in the code of conduct.

Similar criticisms have emerged since the White House agreement was published on Tuesday. And it is worse in the US case, since companies are absolutely not legally bound by the commitments they have made.

The United States has generally been less inclined towards binding regulation of the sector. Trump has argued that rules can hinder the development of companies, and has promoted a national framework that is as minimally restrictive as possible.

The White House document does leave the door open to legislation in the future. It says that, over time, it may make sense to codify these steps into lows or regulations.

But for now, they remain voluntary commitments. If you are interested in this topic, there will be a live event on Tuesday next week about AI and its safeguards, organised by VoxEurope.

 It will be online and you can find all information on Vox Europe website. 

Production: By Europod, in co-production with Sphera Network.

EUobserver is proud to have an editorial partnership with Europod to co-publish the podcast series “Briefed” hosted by Léa Marchal. The podcast is available on all major platforms.

Find the full transcript below:

Hundreds of people were still camping yesterday at Puerta del Sol in Madrid. They were demanding action on housing, as rents and property prices continue to rise.

Following an outcry triggered by the eviction of an 83-year-old woman from her home, and the mobilization of thousands of people across Spain, the government adopted two housing decrees.

Did they take the protesters’ demands into account?

MariCarmen Abascal had lived in her apartment since the 1950s, having inherited the lease from her parents. But the property was bought by an investment fund, which then challenged the validity of her lease and quadrupled her rent.

Last week, MariCarmen was evicted from her home. The eviction sparked widespread outrage and led hundreds of protesters to camp in central Madrid, calling for action.

Yesterday, she was finally allowed to return home after reaching an agreement with the owners.

Aside from MariCarmen’s case, the demonstrations are largely driven by young people who are fed up with rising rents and property prices, especially in major cities such as Madrid and Barcelona.

In Madrid, property prices have risen by around 87 percent over the past ten years. That’s less than in Portugal or the Netherlands, where prices have increased even more. But it’s still a significant rise, especially as wages have grown much more slowly over the same period.

Rents are taking up a huge share of people’s incomes. In Madrid, they account for almost half of tenants’ net income on average. So, how did the Spanish government respond?

Yesterday, it adopted two housing decree-laws. The first decree would suspend evictions until 2030 and automatically extend existing rental contracts by two years.

It would also introduce tighter rules on seasonal rentals and prevent speculative investment funds from acquiring housing until 2028.

The second decree is more ambitious. It would allow tenants to extend their future rental contracts indefinitely. This is what the tenants’ union has been calling for.

Landlords would no longer be able to end a lease simply because it had reached its expiry date. Tenants who pay their rent and respect their legal obligations could remain in their homes for as long as they wish.

This would also limit rent increases, since rents can only be raised moderately during an existing contract.

So, the government has taken the protesters’ demands into account. But there is still a major obstacle: as our Spanish partner El Salto reports, the tenants’ union fears that this second measure may not pass through Parliament.

That could explain why the government adopted two separate decrees. The first is considered easier to get through Parliament.

Now, what about the EU’s proposals to tackle rising rents? We discussed them earlier this month.

One of the main proposals concerns short-term rentals. The idea is to introduce restrictions, particularly in tourist areas where housing is under strong pressure. By bringing more homes back onto the long-term rental market, the Commission hopes to ease pressure on prices.

But these proposals have not yet been adopted, so we’ll have to wait and see what impact they have. And in any case, more will need to be done at national level.

Even if prices stop rising, they are already so high that many workers can no longer afford to live in major cities.

More social housing is needed, as well as more renovation. Increasing the supply of decent, affordable homes could help ease pressure on rents and property prices.

Production: By Europod, in co-production with Sphera Network.

EUobserver is proud to have an editorial partnership with Europod to co-publish the podcast series “Briefed” hosted by Léa Marchal. The podcast is available on all major platforms.

Find the full transcript below:

The EU is negotiating its next long-term budget, worth 2 trillion euros. But reaching an agreement among the 27 member states is proving difficult. The deadline is approaching, and the stakes are high.

Will the EU member states be able to agree on the budget? And what are the different options?

The bloc’s next long-term budget covers the period from 2028 to 2032.

The aim is to reach an agreement by the end of this year. Then, in 2027, the European Parliament will have to give its consent, and the political agreement will need to be translated into legislation, with funding allocated to the different programmes.

But with just three months left before the end of the year, reaching a deal on time is proving difficult. A meeting of EU ministers dedicated to the budget last week led nowhere. Countries stuck to their positions.

On one side are the so-called frugals: Germany, Austria, Denmark, Finland, the Netherlands and Sweden. But they prefer to call themselves “modernisers”. They want to limit spending and are reluctant to increase their contributions to the EU budget.

On the other side are countries worried about receiving less European funding in the years to come.

The European Commission argues that the next budget needs to be bigger than the previous one to address new challenges, including European competitiveness and defence.

And it’s not just the Commission’s view. The European Parliament and many observers share it.

But the countries calling for spending cuts say the EU cannot simply add new priorities to existing ones. They argue that choices have to be made.

So the Commission has proposed another option: increasing the EU’s own resources.

These are revenues that go directly into the European budget, rather than relying entirely on contributions from member states. The idea is to raise additional money without asking national governments to pay more.

But this proposal is also facing opposition from countries calling for spending restraint. They argue that the bloc should not simply look for more money to fund all its priorities.

So how can the 27 countries break the deadlock?

When ministers cannot reach an agreement, the issue is taken up by EU leaders themselves. And that is exactly what is expected to happen in the coming months.

The president of the European Council is planning several meetings of EU leaders before the end of the year, in an attempt to bring countries closer together.

He is even said to be considering a summit lasting three to four days at the end of November, to give leaders enough time to reach an agreement and avoid a difficult December.

But what happens if the 27 countries still fail to agree before the end of the year? There is some room for manoeuvre in 2027. According to media reports, several dates have already been set aside early next year for last-minute negotiations, should an agreement not be reached in time.

But this leaves very little room for delay.

The European Parliament will still need several months to give its consent, and the EU will then have to finalise the legislation and prepare the different programmes.

That brings us very close to 2028, when the new budget is supposed to take effect.

And if everything is not ready by then, the EU does have a mechanism to keep things running.

It can continue covering certain ongoing expenses and payments that have already been committed, even without a new long-term budget in place.

Unlike in the United States, where a budget deadlock can lead to a government shutdown and some public employees being temporarily sent home without pay, the EU has a system designed to avoid such a complete halt.

But this would only be a temporary solution.

It would not provide the certainty needed to launch new programmes or guarantee that all European funding will be available as planned.