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BRUSSELS PLAYBOOK

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BRUSSELS PLAYBOOK: VERSAILLES SUMMIT — RUSSIAN INFLUENCE IN BRUSSELS — CHEMICAL
ALARM

By Jakob Hanke Vela and Suzanne Lynch
March 10, 2022 7:14 am
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Presented by the Red Cross EU Office.



By JAKOB HANKE VELA and SUZANNE LYNCH

with ZOYA SHEFTALOVICH

PRESENTED BY



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DRIVING THE DAY: VERSAILLES SUMMIT        10

EU LEADERS GATHER: French President Emmanuel Macron has invited his 26
counterparts from around the EU to meet in the famous Palace of Versailles just
outside Paris this afternoon for two days of meetings, with Russia’s invasion of
Ukraine dominating events. The salubrious location had long been in the diary,
but echoes of the famous peace settlement of 1919 when the allied victors in
World War I settled the terms of the post-war European order will definitely be
in the air, as Europe faces another war on the Continent.

DETAILS: The meeting kicks off at 4 p.m., with a dinner scheduled for 8:30 p.m.
The leaders intend to finalize two communiqués: a Versailles declaration, and a
separate statement on Ukraine. Friday will be dominated by economic and finance
affairs — the original purpose of this informal gathering — with ECB President
Christine Lagarde and Eurogroup head Paschal Donohoe in attendance. 

UKRAINE DOMINATES: But the ongoing war in Ukraine — which saw the bombing of a
maternity hospital in the besieged city of Mariupol on Wednesday — is dominating
events. “No one can see how this ends,” said one EU ambassador about Russian
President Vladimir Putin’s next move. “This is a very dangerous situation and a
big threat to the European Union.”

Latest in Ukraine: Britain’s ministry of defense said Russia had confirmed its
use of thermobaric weapons systems in Ukraine, posting a video showing the
effects the bombs have on internal organs. The White House said overnight that
it’s concerned Russia is preparing to launch chemical weapons attacks next.
Ukrainian President Volodymyr Zelenskyy said in an address late last night:
“What kind of country is this — the Russian Federation, which is afraid of
hospitals and maternity hospitals and destroys them? Did someone in the
maternity hospital abuse Russian-speakers?” Zelenskyy said the bombing of the
Mariupol maternity hospital was the “final proof” that Russia was committing a
“genocide of Ukrainians.”

**A message from the Red Cross EU Office: A devastating humanitarian crisis is
unfolding in Ukraine. Each day, humanitarian needs grow massively in the country
and wider region. Humanity must prevail. Support Red Cross to urgently scale up
assistance by donating here: BE70 0000 0000 2525 (BIC: BPOTBEB1), mentioning
"2408 – Ukraine + company name". Follow Red Cross activities via @RedCrossEU.**

BACK TO VERSAILLES — AND THE ENLARGEMENT ELEPHANT IN THE ROOM: Among the issues
EU leaders will discuss is the thorny one of enlargement, following Ukraine’s
call last week for Brussels to fast-track its accession procedure. While EU
officials were at pains on the eve of the summit to highlight that the Council
had instructed the Commission to prepare an opinion in less than a week
(compared to the months this step usually takes), there will be no firm
commitment to speed through the process. Instead, the communiqué contains vague
language promising to “further strengthen our bonds and deepen our
partnership.” As one senior Commission official told Playbook, “they are trying
to find a way to say ‘No.’” 

Eastern countries want more: Some eastern EU countries wanted a specific
reference to Article 49 of the Treaty, which sets out the procedure for
countries to join the EU — an issue leaders could discuss today. Denmark and the
Netherlands are among the strongest voices around the EU table opposed to
accelerating Ukraine’s membership talks. 

STRENGTHENING EU DEFENSES: Much of the focus of today’s discussion will be on
defense — a key priority for the French presidency of the Council even before
the war. Finland and Sweden have pushed for the inclusion of a reference
to Article 42.7, the mutual defense clause of the Treaty which says that “if a
Member State is the victim of armed aggression on its territory, the other
Member States shall have towards it an obligation of aid and assistance by all
the means in their power.” 

MORE MONEY: As part of the defense discussion, diplomats expect some vigorous
debate on increasing money for the European Peace Facility — the fund which is
being used for the first time to send lethal defensive weapons to a third
country. Germany is among the countries that’s lukewarm on the idea, with some
arguing it is too early to talk about topping up a fund that has yet to be fully
utilized. 

ENERGY: With Europe’s dependence on Russian energy firmly in focus, some
countries are already calling for the Council to go further than the Commission
communiqué published on Tuesday, which aims to reduce European demand for
imports of Russian gas by two-thirds this year. Among the points of contention
is whether a firm timeframe should be agreed. Some countries are arguing for a
2030 cut-off, others 2027. But Council officials say they oppose implementing a
strict date, noting that some countries may get there sooner than others. 

Immediate measures: As flagged in Wednesday’s Playbook, a group of southern
countries are vocal about the need for more immediate measures. Spain, Italy,
Greece and possibly France want more action to deal with the surge in energy
prices. 

EUROBONDS 2: While France — with the support of some parts of the Commission —
is pushing hard for a discussion on mutual debt issuance as a way of financing
the multiple crises sparked by Russia’s war, no concrete decisions are expected.
Dutch Prime Minister Mark Rutte during a visit to Paris on Wednesday said the EU
should first use existing resources, pointing out that funding still exists in
the NextGenerationEU (NGEU) fund (more here). Another possible source is the
SURE program established to deal with unemployment during the COVID crisis,
officials said. 


THE STATE MAKES A COMEBACK        6

WAR IN UKRAINE BLOWS WIND IN MACRON’S STRATEGIC AUTONOMY SAILS: Emmanuel Macron
is seizing on the two-day informal leaders’ meeting to make Europe less
dependent on the rest of the world — a direction Paris has been pushing for for
years and which Russia has now strengthened, on top of the pandemic.

Read the room: The EU’s more liberal countries — and many inside the Commission
— previously pushed back against this French idea. For them, strategic autonomy
is just code for “Buy French,” our colleague Barbara Moens writes in to report.
But with a war at the gates of Europe, leading to energy prices skyrocketing,
supply chain disruptions and rising food production costs, Macron’s push is
gaining momentum.

Small countries change course: Even longstanding critics of the idea, such as
the Netherlands, are jumping on board. “We have to enhance our open strategic
autonomy, something France has been urging for a long time,” Rutte said
Wednesday. For the Netherlands, with its cutting-edge semiconductor industry,
Macron’s push to invest in the EU’s industrial base also has some advantages. 

Painful irony: Those who’ve been around Brussels long enough will remember it
was the Commission, with its drive to liberalize gas markets two decades ago,
that pushed gas traders to move away from long-term gas contracts (which were
linked to the price of oil) and to instead trust the wisdom of spot
markets. Read more on how the French push for strategic autonomy is gaining
momentum here, by Giorgio Leali and Barbara Moens.

VESTED INTERESTS: With a stronger role for state interventionism, savvy
lobbyists are also smelling new opportunities — first and foremost industrial
farmers, already the biggest beneficiaries from the EU budget.

While no one’s looking: Big farm groups are seizing on Putin’s war to argue the
EU should dismantle its green rules and grant them more money. In particular,
they want Brussels to allow them to grow crops and spray pesticides on land
protected for biodiversity.

Some success: The lobbies have already secured the backing of the European
Parliament’s agricultural committee. In a letter obtained by Playbook and our
POLITICO Agri Pro team, sent to Agri Commissioner Janusz Wojciechowski and dated
Wednesday, committee Chair Norbert Lins writes that “to prevent the risk of
protein shortage, the Commission should promptly take all necessary steps to
temporarily allow the use of plant protection products where effective on those
ecological focus areas which are suitable for growing protein crops.”

Lins also calls for measures to “reduce our dependence on imports and increase
domestic production,” and writes that these proposals are backed by “a majority
of coordinators” across the political groups. Farm lobbies have also secured
backing from the French Council presidency for their proposal to plaster
biodiversity areas with crops for animal feed, POLITICO Pro Agriculture’s Eddy
Wax reports.

Europe’s most effective lobby: If you’re wondering how it’s possible that MEPs
want to subsidize meat production while also calling on Europeans to reduce
their meat consumption: there’s a relatively small number of macro-farms in the
EU, yet they wield immense influence in Brussels, particularly thanks to France
(which is, as a reminder, currently the holder of the Council presidency). Farm
lobbies have convinced the public subsidies are needed to help small-scale
farmers survive — despite the fact 25 percent of EU farms receive 85 percent of
subsidies (of more than €40 billion per year).

So what should leaders do instead: If you’re worried about inflation and the
social impact of high food prices, drop the EU’s import tariffs of 30-50 percent
on things like dairy, sugar and meat — as almost every economist will tell you.
And if you really need to subsidize food production, prop up edible crops and
vegetables to avoid famines in Africa in the Middle East, which are the regions
that do actually depend on Ukrainian exports — not more feed for European
livestock.

SPEAKING OF WHICH — REPORT SAYS BEIJING PRESSURING FAO TO BURY FAMINE WARNING:
Spiegel reports that the U.N.’s food and agriculture organization is withholding
a report warning of the impact of Putin’s war on food supplies to Africa and the
Middle East, which import large amounts of wheat from Ukraine. According to
Spiegel, the Chinese head of the organization is burying the report on Beijing’s
orders.




RUSSIAN INFLUENCE        2

MOSCOW’S BUSINESS VOICE IN BRUSSELS: MEP Daniel Freund, who co-chairs the
European Parliament Intergroup on Anti-Corruption, has written to Parliament
President Roberta Metsola and Commission President Ursula von der Leyen, asking
them to ban lobbyists from 11 Russian companies from accessing Parliament and
Commission premises. The companies spend some €3 million to €4 million a year on
lobbying activities, according to the EU’s transparency register. 

Roll call: In the emails seen by Playbook, Freund names these companies:
Rusatom, Rusal (the aluminum giant founded by oligarch Oleg Deripaska),
Novolipetsk Steel (whose main shareholder is billionaire Vladimir Lisin), energy
giant Lukoil, cybersecurity firm Kaspersky, majority state-owned energy giant
Gazprom, chemical firm PJSC PhosAgro, state oil company Rosneft, LetterOne
Investment Holdings S.A., Nord Stream 2 and Aughinish Alumina.

Close the door: The Commission and Parliament should “ban all access to the EP’s
premises for individuals linked to these registrants,” Freund writes.
“Furthermore, accreditation for their employees who currently hold lobby badges
for the EP’s premises should be revoked.” Asked for comment, Freund told
Playbook: “Russian state-owned and pro-Kremlin companies spend more than €3
million a year on lobbying in Brussels. It would be ridiculous to have those who
finance Putin’s war influence European politics. Those who are making money from
the Russian invasion of Ukraine should not be allowed to lobby in Brussels.”

WELCOME TO BUDAPEST, CAPITAL OF RUSSIAN DISINFORMATION: Hungary has become the
EU home of Kremlin talking points, writes Lili Bayer in this must-read
piece from the Hungarian capital.

WHAT’S MACRON PLAYING AT WITH PUTIN? No other leader spends as much time talking
to Putin as Macron — or has as little to show for it. “Macron may have managed
to keep a line of communication open. What he hasn’t been able to do is
demonstrate any sign of having influenced Putin’s behavior,” writes POLITICO’s
Clea Caulcutt.

HAVE YOU GOT TELEGRAM? Western pundits may flock to Twitter and Facebook for the
latest news; but the one infosphere that really matters in Russia’s war against
Ukraine is Telegram, writes Darren Loucaides in an interesting read on the
platform that has played a central role in the conflict.

**Save the date - POLITICO Live's virtual event "Making greener products the
norm in the EU?" will take place on April 4 at 4:30 p.m. Tune in to this timely
event with our stellar line up of speakers for a high-level debate a few days
after the Commission is planning to publish its Sustainable Products Initiative.
Register now!**


IN OTHER NEWS        37

PARLIAMENT GROUPS STRIKE DEAL ON TRANSNATIONAL LISTS: Negotiators from the
European Parliament’s main political groups — the center-right EPP, center-left
Socialists and Democrats, liberal Renew and the Greens — have struck a
preliminary deal to allow Europeans to vote for candidates on transnational
lists at the next parliamentary election in 2024, officials from all the groups
confirmed to Playbook.

Timid beginnings: Under the deal, EU citizens will have a second vote, which
they can give to someone from EU-wide parties and leading candidates, filling 28
new seats. This would be in addition to the existing 705 seats, which will
continue to be filled via national or regional constituencies.

Spitzenkandidaten: Domènec Ruiz Devesa, the negotiator for the S&D, told
Playbook this “will transform the EU political system, by making real the lead
candidates process, strengthening EU political parties … and making the election
campaign to the EP more transnational.”

Uphill battle ahead: The Parliament now needs to vote on the deal — and then
faces the herculean task of convincing EU countries to go along with it, as
unanimity in the Council is needed. 

EU COUNTRIES STRIKE DEAL TO TAX CARBON IMPORTS: EU countries on Wednesday backed
a compromise text on the Commission’s proposal for a levy on the CO2 content of
selected imports arriving at the EU’s border, known as the Carbon Border
Adjustment Mechanism, or CBAM. The file is a political priority for the French
Council presidency, and Paris managed to swiftly get a deal without much
significant change to the Commission’s proposal.

The French compromise text, obtained by POLITICO’s Paola Tamma and backed by the
Council, centralizes the administration of the levy, which will be set at an
equivalent price to the cost borne by EU producers on steel, iron, aluminum,
fertilizers, cement and electricity.

**What is the potential of carbon farming to reduce emissions? Discover this and
much more at POLITICO Live’s event “Buzzword or green business model: how can
carbon farming contribute to Europe’s climate goals?” on April 6. Register
now!**


AGENDA       

— Informal summit of heads of state and government begins in Versailles at 4
p.m.

— Ukrainian Foreign Minister Dmytro Kuleba and his Russian counterpart Sergey
Lavrov meet in Antalya, Turkey.

— European Parliament plenary session concludes in Strasbourg. Agenda.

— European Central Bank Governing Council monetary policy meeting. Press
conference at 2:30 p.m. Primer.

— Commissioner Thierry Breton meets NATO Supreme Allied Commander Transformation
Philippe Lavigne.

— Also on commissioners’ agendas: Kadri Simson participates online in the
extraordinary G7 ministerial meeting … Dubravka Šuica visits Poland … Janez
Lenarčič in Romania … Jutta Urpilainen participates virtually in the 10th
African Fiscal Forum.

— 6th Annual EU-UNRWA strategic dialogue at 2 p.m.


BRUSSELS CORNER        3

UKRAINE EVENT: Some of the best-known names from the Brussels underground and
club scene are hosting an open-air party today at the Atomium. Tickets cost €16
and the event kicks off a 4 p.m. All proceeds go to Underground4Ukraine. 

BIRTHDAYS: MEPs Özlem Demirel and Benoît Lutgen; Former MEP Pervenche Berès and
Anna Maria Corazza Bildt; POLITICO’s Sonia Romano; Former Canadian Prime
Minister Kim Campbell; Britain’s Prince Edward.

THANKS TO: Eddy Wax, Aitor Hernández-Morales, Barbara Moens, Camille Gijs and
our producer Grace Stranger.

**A message from the Red Cross EU Office: For the Red Cross to be able to
deliver essential assistance in Ukraine, space for neutral, impartial and
independent humanitarian action must be ensured, protecting civilians and
humanitarian workers. Critical infrastructure that people depend on must be
spared and safe and voluntary passage to people who want to leave must be
allowed. Over 2 million people have already fled Ukraine to neighbouring
countries and other countries in the region. National Red Cross Societies are
working tirelessly to assist those fleeing. In this difficult moment in history,
Europe can reinforce its commitments to solidarity and extend it to everyone
fleeing Ukraine in need of protection. Learn about the work of Red Cross teams
in Ukraine and surrounding countries to help people affected and on the move
here.**

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