Sector: Government Relations and Public Affairs

The Current Slovenian situation

July 1^st marks the official start of Slovenia’s second Presidency of the Council of the EU, which kicks off under the shadow of the current Prime Minister Janez Janša’s quarrels with Brussels over the rule of law, press freedom, and his autocratic style. A very different atmosphere to the one around Slovenia’s first Presidency in 2008, also during Janša’s reign, which was celebrated as a role model for new EU countries.

The key agenda of the Slovenian government is to use the Presidency to raise the country’s international exposure, but also to gain some political points at home by building up a positive image for the next general election coming up in May or June 2022.

The current political environment in Slovenia is unstable as Janša’s minority government is facing growing dissatisfaction from a majority of Slovenian citizens. According to the latest opinion polls, almost 70% of voters do not support or trust the current government. The administration has been criticised for denying financing of the Slovenian Press Agency (STA) and showing tendencies to reduce funding of several media outlets, many of which have reported critically on the government’s actions. On top of questionable media freedom policies, the government has been struggling to pass important legislation having lost their parliamentary majority (currently 38 out of 90 seats).

Internationally too, Janša’s administration has been battling allegations regarding media freedom. According to the International Press Institute’s report, “Slovenia has seen press freedom deteriorate ever since Janša returned to power in March 2020. Since then, the ruling SDS party has embarked on a multipronged campaign to reshape the media landscape in favour of a pro-government narrative, renewing tactics successfully during previous administrations and forging ahead with new forms of pressure.”

Hence, it is no surprise that there is growing concern about the tone of Slovenia’s leadership of the EU council over the next six months.  There is some speculation that Brussels has a Plan B, where the presidency could be run with limited engagement from Slovenia – in the event of an early election or further government instability.

Slovenia’s Presidency Programme

Together with Germany and Portugal, Slovenia has prepared an 18-month programme, which represents the priorities and key activities across the three Presidencies. In its separate agenda for the next six months, Slovenia has identified several important topics.  Though from a Slovenian citizen’s standpoint, the Programme could be perceived as overambitious and in contrast to the government’s actual intentions. While Slovenia wants to gain some exposure and importance in the EU arena, certain priorities in the Presidency plan diverge from the Slovenian government’s actions back home – particularly on rule of law, equal criteria for all and stability in the European neighbourhood.

Key priorities

1. The resilience, recovery, and strategic autonomy of the European Union

The Covid-19 pandemic has affected all EU member states and countries around the world. This requires a collective response at the EU level, since many countries are unable to appropriately respond on their own. Slovenia will try to enhance the role of the European Union and provide appropriate tools for intervention in crises such as the Covid-19 pandemic. Resilience will be strongly connected to national recovery plans and will be based on green and digital transitions, which will create new and secure jobs, and overall strengthen the resilience of the EU.

The autonomy of the EU plays an important role in the National Recovery & Resilience Plan. Slovenia wants to intensify the debate on ensuring European autonomy on medicine, food, and medical equipment supply. A Green and digital Europe will be achieved through sustainable and smart mobility and improved digital infrastructure, which includes changes in railroad infrastructure and reducing dependency on key raw materials.  Slovenia will take action to promote e-mobility using energy from low-emission sources, as well as take steps towards a circular economy. The goal is to use green technology to maintain and raise the competitive advantages of European companies.  It will be interesting to see how nuclear energy, which makes as much as 42% of Slovenia’s energy production, will be incorporated into this agenda.

To sum up, the Slovenian Recovery & Resilience Plan seems overambitious. The green and digital transition is far too big of an issue for Slovenia’s six month presidency. The main aim here is for Slovenia to make sure this agenda item does not go backwards during its presidency.

2. Future of Europe

The European Union has faced many challenges over the past few years, leading to the growing feeling of a need for a comprehensive debate on its common future. The Conference on the Future of Europe will provide a platform for a Europe-wide debate on the many and various views of the future of the EU. The purpose of the debate is to bring European issues closer to its citizens and get acquainted with their views on the main issues we are facing.  For this purpose, a series of events with international participation will be organised to ensure an inclusive debate on the main issues of the future EU development.

3. A union of the European way of life, the rule of law and equal criteria for all

The Slovenian programme focuses on nurturing the European common values, way of life and the rule of law. In line with the European Commission’s annual report, the Slovenian Presidency will lead the annual dialogue on the rule of law at both EU and individual Member State level. The aim is to promote a culture of the rule of law and to learn from each other’s experiences. Slovenia’s presidency also aims to show how the law can be fully connected to the national constitutional system and different traditions.

On this issue Slovenia faces a potential credibility issue, as it was one of the countries refused to support the motion at the EU level to punish countries which do not respect the rule of law.  On the contrary, Slovenia supported Hungary, as Janša is one of the rare allies of Viktor Orban. Recently, Slovenia sided with those countries that kept quiet on Hungary’s discriminating law against the LGBTQ+ community. Even though the slogan of the EU says “united in diversity”, it seems Janša and his administration have a narrower definition of the concept in practice.

4. A credible and secure European Union, capable of ensuring security and stability in its neighbourhood

Slovenia supports the work of the EU’s Common Foreign and Security Policy and wishes to strengthen the EU’s transatlantic relations and strategic alliances. In April, media reported about a so-called non-paper which was linked to the Slovenian government, containing border changes or efforts to undermine Bosnia-Herzegovina’s territorial integrity and offer a solution for Kosovo. During its Presidency, Slovenia will try to cooperate with Western Balkan countries, improving their communication and connectivity with the European Union.

Slovenia will prioritise improving the EU’s territorial security by building a stronger, more united, and expanded Schengen area, as in the past few years it has not been possible to fully implement due to illegal migrations and Covid-19 restrictions. Slovenia will lead negotiations to develop rules which will allow the EU institutions to implement procedures and legislation pertaining to the financial burden of migration more easily. Slovenia will focus on strengthening the EU’s common foreign and security policies. Regarding the issue of migration, Slovenia will focus on the protection of the external EU border and establishing a functioning policy of returning persons who have not been granted international protection to their country of origin.

Key topics and sectors

1. Green and digital transformation

One of the most important topics Slovenia has pledged to cover in its Presidency is sustainability. In this respect, the Slovenian Presidency will strive for the prompt and ambitious implementation of the Green Deal agenda and the new European Climate law aimed at making Europe the first climate neutral continent by 2050. In line with the objectives of the Recovery and Resilience Facility on green investments, the Presidency will focus its efforts on the areas of climate change, biodiversity and the circular economy. Some of the key files it will be looking to move forward relate to carbon pricing (Carbon Border Adjustment Mechanism, revision of the EU Emissions Trading Scheme), energy (revision of the Renewable Energy Directive, the Energy Efficiency Directive, the Energy Taxation directive) and sustainable mobility (fuels standards for maritime and air transport, revision of emission standards for road transport).

Since digital technologies have become essential for doing business, working, and even socialising, it is now even more important to accelerate the process of digitalisation. Slovenia’s Presidency has prioritised regulating artificial intelligence (AI), aiming to kick-start a wider discussion on rules and definitions during its Presidency. They will also organise debates and lead negotiations on further regulations on limiting the potential risks which AI can bring. Slovenia is also keen on making good progress on two major EU digital files, the Digital Services Act (DSA) and the Digital Markets Act (DMA), and has set a highly ambitious aim of reaching an agreement in the Council within its term. However, this is highly unlikely to happen due to the complexity of the texts and vying interest between the EU Member States, EU institutions and other stakeholders.

The last digital priority of Slovenia lies in the areas of re-use, processing and exchange of data and the data economy, where the Slovenian Presidency will continue considerations of the Data Governance Act (DGA) and launch discussions on the Data Act. It aims to enter the final decision-making procedures on the DGA and reach a general approach or begin negotiations with the European Parliament by the end of the year.

2. Rule of law and neighbourhood stability

The rule of law plays an important role in Slovenia’s Presidency programme, and is strongly connected to policies regarding neighbourhood countries as well as European common values and way of life. The Slovenian government disagrees with the EU regarding the rejection of the nomination of the Slovenian prosecutors to a newly founded EU Prosecutor’s Office (it is worth mentioning here is that membership is voluntary). This led to the resignation of the Justice Minister mag. Lilijana Kozlovič and again raised the question of Prime Minister Janša’s respect for the rule of law. Media reports suggested that Janša refused to accept the two proposed prosecutors because they were involved in his criminal proceeding that later led to a prison sentence in 2014.

In its Presidency programme, Slovenia states it will strive to improve Western Balkan resilience, which is why Slovenia will host the EU-Western Balkans Summit on October 6^th. There is a risk this will be perceived as controversial since European and local media have been reporting on the so called “non-paper” that the Slovenian government allegedly sent to the EU. The “non-paper” contains extremely controversial proposals such as border changes, especially as relations between countries in the Western Balkan region have been historically poor. Interfering with countries’ borders could adversely affect the stability of the region.

3. Cyber security

It is extremely important that cyber security is given greater priority.  The Slovenian Presidency will focus on strengthening Europe’s cyber resilience and security. They believe more needs to be done in this field, so that in case of a large cyberattack, the EU can respond in a collective and coordinated manner. The most needed improvement in this field is the exchange of information about cyber-attacks at the national and EU level. Centres for monitoring such information exchanges already exist, but the level of exchange is still too low. In particular, the smaller EU member states lack sufficient capacity for the essential clear-cut protocols of information exchange.

Slovenia will take action to boost cooperation in the field of defence and NATO, which will include dealing with cybersecurity and hybrid threats. Special attention will be devoted to disinformation and fake news, which can be solved with strategic communication. Slovenia plans to establish an EU-wide Joint Cyber Unit which will connect all member states and focus on implementing the new EU Cybersecurity Strategy. This means establishing The European Cybersecurity Competence Centre and a network of national centres that will be taking care of the issue.

Closing remarks

Although led by the same Prime Minister, Janez Janša, the two Slovenia’s Presidencies – the first in 2008 and the current one – are two different stories. Back in 2008, Slovenia was labelled as a role model student for other new EU member states to follow and former Yugoslav countries to aspire to.

Now, 13 years later, the situation is fundamentally different, not least economically. Slovenia’s 2008 EU presidency marked the last presidency before the global financial crisis spread to the whole world. Today the global and EU economy is still weighed down by the effects of the pandemic.

Politically, under Janša’s leadership, Slovenia is drifting closer to Hungary and Poland, the two EU members which are facing the biggest criticism from Brussels.

However, there is one positive: Slovenia’s EU presidency should be a turning point in the return to normal functioning – most meetings are expected to be held live and onsite!

A view from Brussels

From the EU-Brussels perspective, the Slovenian Presidency arrives at a strategically significant time – with several high-profile environmental dossiers coming out in the context of the European Green Deal, implementing economic and social recovery, and steering the European Union’s democracy project aiming to (re-)connect the EU with its citizens. Hence the anticipation, and the need, for the Slovenian Presidency to get it right – no pressure!

When it comes to Brussels’ opinion and expectations from the Presidency, the critical perception of the Slovenian Prime Minister cannot be ignored. The start of a Council presidency is typically a moment for the member state in question to showcase its priorities and perspectives. While Portugal placed social issues at the forefront of its priorities from the start, the Slovenian’s Prime Minister, Janša, used the opening days of his presidency to reiterate his defence of the controversial Hungarian legislation that has been widely denounced as anti-LGBTQ. The Hungarian law led to an emotional debate at a European Council summit in Brussels at the end of June.

Regarding green policy files, the Presidency will oversee publication of the highly anticipated ‘Fit for 55’ package which aims to bring various policy areas, such as energy taxation, energy efficiency, transportation, mobility, buildings, CO² and methane emissions, in line with the EU’s ambitious goal of cutting net emissions by 55% by 2030.

The EU’s green transition and sustainable growth agenda represents an important driver for the post-pandemic world, making its climate action particularly powerful in a global context. For this reason, the Slovenian Presidency’s leverage and green diplomacy efforts will be crucial in global negotiations, such as the UN Climate change Conference (COP26), Conference of the Parties to the Convention on Biological Diversity (COP15), and the G20 Summit taking place later this year. Some in Brussels are asking themselves whether the Slovenian Presidency are capable of taking this on?

The Slovenian Presidency will also host two European citizens’ events in October and December as part of the EU’s ‘New Push for Democracy’ asking the views of citizens on climate change, health policy, social justice and the future of EU democracy. While this provides a great opportunity for the Slovenian presidency to lead the EU towards its future architecture, without defined expectations, it also runs the risk of opening a Pandora’s box and leaving the voice of EU citizens unheard, again.

Overall, Brussels is getting ready for heated political discussions and bitter disputes over EU values and democracy, all while navigating external challenges, and delivering on a number of policy files. The EU institutions fear that Janša will use the Slovenian Presidency to promote aspects associated with Viktor Orban’s “illiberal democracy vision”.

Conversely, France, which is going to take over the EU Presidency in 2022, has already placed “belonging” and the promotion of European citizenship in the middle of its roadmap. The success of these two largely different paths is yet to be seen.

If we look back at previous Presidencies, the Slovenian Presidency in many ways is perceived as potentially one of the most polemic, and Brussels is already gearing up to what one commentator has said is likely to be “a very rocky, politically-charged 6-months…so we will be glad to be in January under the French”. This is a clear sign that the EU is not politically unified – but one could argue that this is the very essence of democracy: being able to discuss different opinions openly.  Nevertheless, EU leaders will be watching very closely how these 6 months unfold. It is certainly one to watch!

Grayling Brussels explores the new package of legislation put forward by the European Commission to reduce emissions by 55% by 2030. What are the main challenges ahead? What should businesses prepare for?

The EU’s legislative green makeover is finally here. As the name implies, the Fit for 55 package intends to bring the EU’s regulatory framework in line with the intermediate emissions reduction target of 55% by 2030 on the path to climate neutrality by mid-century. The targets themselves were made binding by the European Climate Law earlier this year.

The first instalment of the legislative behemoth comes with 12 proposals on both new legislation and revisions of existing rules, covering carbon pricing, renewables, and transport infrastructure, among others. These will be further complemented by the second instalment, including proposals on methane emissions and gas markets, this autumn.

How disruptive is the Fit for 55 package?

The legislative package will have far reaching implications for sectors throughout the EU economy – including on energy, transport, and manufacturing.

Energy

The revised Renewable Energy Directive will boost the use of renewables in all sectors by strengthening the targets (from 32% to 40% of renewables in the EU’s energy consumption by 2030) and sustainability criteria for their use and production. The new rules equally support the use of renewables-based hydrogen. With the Energy Efficiency Directive, the Commission will also enshrine the ‘Energy Efficiency First’ principle and set a binding energy efficiency target at the EU level.

Transport

To curb emissions from road transport, the Commission proposes to strengthen emissions standards for cars and vans and ramp up low and zero-emission mobility by rolling out approximately 3.5 million recharging points by 2030 through the Alternative Fuel Infrastructure Directive. To reach substantial emissions reductions in the aviation and maritime sectors, the Commission is setting up new fuel standards. It is also relying on the revised Renewable Energy Directive to support the uptake of renewable fuels and on the Energy Taxation Directive to repeal exemptions on conventional fuels.

Manufacturing

The Commission puts forward a revision of EU’s Emissions Trading System (ETS) to adjust the cap of total emissions and remove tradeable allowances from the market. Apart from increasing the cost of carbon emissions, the revision brings new sectors under the ETS, such as maritime, road transport and buildings. To avoid “carbon leakage”, the Commission is also proposing a Carbon Border Adjustment Mechanism (CBAM) to put a price on carbon for energy-intensive imports of cement, iron and steel, aluminium, fertilisers and electricity from 2023.

Challenges ahead

Three key challenges surround the proposals launched under the Fit for 55 package: level of ambition, regulatory uncertainty, and international reaction.

First, its level of climate ambition. Previous negotiations on the Climate Law and the EU Taxonomy have demonstrated the high level of politicisation associated with climate files, and work around the new proposals will not be any different. An intensely political tug-of-war on the means of climate action from preferred technologies to sustainability thresholds is expected between the member states, European Parliament groups, and even the Commission’s Directorates. As a result, businesses in Europe and beyond need to prepare for a crucial 24 months ahead that will determine the outcomes of the legislative package for their specific industries.

Second, adding to the prospect of political unpredictability is the regulatory uncertainty caused by the full reopening of the energy policy files, most of which were recently revised as a part of the Clean Energy Package in 2016-2019. For example, the full national implementation of the 2018 Renewable Energy Directive recast was finalised only two weeks ago. It is also unclear to what extent the tightened climate rules will be retroactively applied to existing investments and assets in the different policy proposals.

Third, there will also be international ramifications from the regulatory overhaul of the world’s largest trading bloc. This is particularly true when it comes to the extension of the emissions trading system (ETS) and the establishment of a carbon border adjustment mechanism (CBAM). Reactions from the EU’s trading partners are likely to influence and complicate the internal legislative negotiations on the package.

The European Commission will also want to leverage Fit for 55 during the upcoming COP 26. It remains to be seen if the package can effectively become a stepping stone to secure an agreement ensuring global net-zero by mid-century and keeping the 1.5°C target within reach.

Managing stakeholders’ expectations, a balancing act

The ‘Fit for 55’ hype has created huge expectations. The EU institutions will have to find ways to reconcile competing interests without watering down the green transition, amid intense scrutiny from stakeholders. European Commission Executive Vice-President, Frans Timmermans, recognised that “there’s good and bad for everyone in these proposals, so we need to create a balance”.

BusinessEurope Director General Markus Beyrer presented the European Business community’s wish list requesting “that the package support large scale industrial projects, reinforce measures against carbon and investment leakage and give space for all low carbon and transitional energy sources”.

Along the same lines, civil society actors such as CAN Europe have called for a “Fit for 1.5°C package”. The NGO coalition requested that “the revised legislation go for their maximum of ambition when it comes to reducing emissions” to reach 65% emissions reductions by 2030.

Considering the pressure that handling so many key initiatives at the same time puts on the institutions, policymakers will have to rely on the sectoral expertise of industry stakeholders to determine the best way to foster cost-efficient decarbonisation.

Once the threats and opportunities of the package have been accounted for, it is up to businesses to demonstrate credible transition pathways and the necessity of their sector to a European economy that is fit for 55.

Get in touch with us (EU.energy@grayling.com) and follow the conversation on the Fit for 55 package on Twitter @TheEULobby

Grayling has announced the appointment of three new team members in its EU Public Affairs Team in Brussels: Hannah Thominet, Dorottya Meszner and Ruth Artiles Valero.

Hannah joins Grayling with a background in the non-profit and government sectors, having worked pre-Brexit for the UK Permanent Representation to the EU. At Public Libraries 2030, she helped the sector re-ignite a European spirit of collaboration and profile its role to promote a democratic, socially engaged and digitally inclusive Europe. At Grayling, she will build on this advocacy expertise to help clients push their own goals around issues as diverse as health prevention, self-care, climate, and sustainable development.

Grayling Brussels is also onboarding two additional recruits from the EU institutions: Dorottya Meszner, joining from the European Parliament’s Communications DG, successfully converted her internship into a permanent position; and Ruth Artiles Valero joining from a Blue Book position in the Taxation and Customs Union DG of the European Commission.

Russell Patten, CEO of Grayling in Belgium, said: “We are delighted to welcome Hannah, Dorottya and Ruth, our new British, Hungarian and Spanish colleagues to our EU Public Affairs Team. Their combined insider experience across the three EU institutions and knowledge of how to navigate the EU landscape will add great value to the client accounts they will be supporting across our health, consumer, trade and energy practices.”

Hannah Thominet added: “It is an exciting moment to join the Grayling Brussels team at a time of fast expansion. I am looking forward to working across such a diverse range of exciting clients and with a group of young, multinational, talented Public Affairs professionals.”

For further information on the appointments please contact russell.patten@grayling.com.

Hannah Thominet, Dorottya Meszner and Ruth Artiles Valero are the latest additions to Grayling’s PA team in Brussels.