THE EUROPEANS

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Making hydrogen from water by electrolysis is one of the worst energy-intensive ways to produce the fuel.

Energy and the Hydrogen Economy

Department of Energy (.gov)

POLITICO

"Biden’s hydrogen bombshell leaves Europe in the dust"

Story by Gabriel Gavin and Ben Lefebvre

5 JULY 2023

European leaders have devoted tens of billions of dollars toward encouraging production of hydrogen, a clean-burning fuel that advocates say will create jobs and help fight climate change.

But now, many of those jobs will be going to the United States instead.

The clean energy subsidies that undergird President Joe Biden’s climate agenda have just prompted one Norwegian manufacturer to choose Michigan, not Europe, as the site of a nearly $500 million factory that will produce the equipment needed to extract hydrogen from water.

And other European-based companies are being tempted to follow suit, people involved in the continent’s hydrogen efforts say — making the universe’s most abundant substance the latest focus of the transatlantic trade battle on green energy.

The Norwegian firm, Nel, announced its decision in May, nine months after Congress approved Biden’s flagship climate law, the Inflation Reduction Act.

The move takes 500 new jobs to the other side of the Atlantic, despite the European Union’s efforts to position itself as the obvious place for clean tech investment.

Gas grab riles Europeans

“There’s not one single driver behind the decision to put it in the U.S.,” Nel CEO Håkon Volldal told POLITICO, pointing to the benefit of being close to customers and partners like General Motors, as well as the financial benefits of the IRA, the Biden-era CHIPS and Science Act that provides funding for technology development, and Michigan’s own grants for green tech.

“If you take the IRA and the CHIPS Act together, we’re talking about more than $400 billion,” Volldal said.

“On top of that, you have subsidies for renewable power and so on."

"Europe is dwarfed by the numbers we see in the U.S.”

The global hydrogen industry was valued at more than $155 billion last year, and the EU plans to produce and import a total of 20 million tons of renewable hydrogen a year by 2030.

Supporters say this will help replace natural gas, powering vehicles and generating electricity.

Now, though, the U.S. has its sights set on overtaking Europe when it comes to both hydrogen and the electrolyzers that extract it.

The IRA introduced a $3-per-kilogram subsidy for green hydrogen and tens of billions of dollars in loans and other incentives for international investors to put money into the industry.

“A year ago, the EU clearly had the yellow jersey,” Volldal said, referring to the garment that the fastest cyclist wears in the Tour de France.

“Now the U.S. has it.”

Jorgo Chatzimarkakis agrees.

As the CEO of Hydrogen Europe, he’s one of the continent’s most influential lobbyists, having helped secure industry handouts worth billions of dollars.

“We have a very robust framework in the EU, but we fail to attract our own companies because it’s all too complex,” he said.

“We have ambitious targets, but we don’t have simple and efficient instruments to incentivize businesses."

“In their typical bureaucratic way, the Europeans will kill this business,” Chatzimarkakis said.

That leaves those who’ve helped launch the industry at risk of losing out, Chatzimarkakis added.

“Dung beetles spend hours rolling up balls of dung to attract females,” he said.

“But there are some very smart dung beetles that just sit by the side and watch while others do hard work."

"Then they shoot in, take the dung ball, take the girl and run away with everything."

"That’s Joe Biden.”

Revving up subsidies in Michigan

Michigan wants to cement its growing reputation as a home for the hydrogen industry, hoping that the U.S. Department of Energy will designate it as one of four hydrogen development hubs in the country.

That would make it eligible for even more money in the form of federal grants.

Luring Nel is a major early coup.

The company is one of Europe’s largest manufacturers of electrolyzers for hydrogen production, and its Michigan gigafactory will be one of the largest in the world.

“Hydrogen is one of the fuels for the future,” Rep. Debbie Dingell, a Michigan Democrat who has worked with Gov. Gretchen Whitmer to bring in green investment, said in an interview.

“We want to locate all kinds of different alternative technologies here.”

The White House has spent months responding to European criticism that its landmark energy policy is unfairly stealing business from U.S. allies on the continent.

The administration counters that flooding the market with U.S. government funding is increasing the odds of success for companies on both sides of the Atlantic.

The IRA “benefits both the United States and our partners and allies, contributing to the advancement of the clean energy sector globally and presenting significant opportunities for our partners,” a spokesperson for the White House National Security Council said in a statement.

“We continue to listen to our partners’ perspectives ... and are turning the IRA into a source of economic growth and partnership.”

The spokesperson was granted anonymity to comment candidly on diplomatic relations.

The scale of the competition is now becoming clear.

A senior European Commission official who has worked closely on the bloc’s hydrogen industry incentives policy, granted anonymity to speak openly, acknowledged that Michigan and other U.S. states are becoming an attractive prospect for firms.

“The IRA has a tool we don’t have — tax credits.”

In Europe, the official added, businesses have to go through a “tendering process” in which government agencies assess companies’ proposals on their merits, with separate pots of money available for national and EU-level funds.

But to get U.S. subsidies, “they just have to meet certain requirements."

"That’s attractive for industry.”

However, the official insisted Brussels isn’t worried about losing jobs to the U.S. just yet.

The EU is making €800 million in funding available for a pilot auction under its Hydrogen Bank scheme to help subsidize the cost of producing the gas, while a range of other incentives exists to kickstart the industry and more are still being planned, the official said.

“If the market is here, people will be here.”

America first

Mona Dajani, global head of the renewable energy deals at the law firm Shearman and Sterling, said that after the passage of the IRA, countries from Europe, Asia and the Middle East are investing in clean energy projects in the U.S. at a rate she’s not seen in her 25 years in the practice.

“The U.S. is now leading the way” in overall clean tech investment, she said in an interview, echoing the Nel CEO’s assessment.

On a recent business trip to Europe, she went on, it was apparent that “not everyone is happy” about that perception.

“There are certain areas they are determined to lead in the clean tech revolution,” Dajani said of European leaders.

“They’re very much ahead of us with hydrogen."

"... The problem is at the end of the day, the U.S. is offering massive subsidies to firms based in the U.S."

"These subsidies are spurring investments in the country, which will disadvantage companies based in Europe.”

Nel is “the first of many we are going to see,” said Brett Perlman, chief executive of the Center for Houston’s Future, a group focused on making the sunny Gulf Coast city a hub for green hydrogen production.

“The IRA set the bar higher for Europe to think about how they can up their own ambition."

"It’s having this effect where it’s the U.S. spurring Europe,” he said.

But David Hart, a professor of public policy at George Mason University, believes that the pressure to bring in businesses is good for industry as a whole.

“There is a competition between the U.S. and Europe for clean energy investment."

"Some people would view it as a race to the bottom."

"I view it as a race to the top.”

Hydrogen, he explains, is not as easy to transport as fossil gas, so there are limits to how much the U.S. can strengthen its hand as a future exporter.

That means there will always be a commercial case for the fuel to be made in Europe as well.

Complaints from Brussels that the U.S. is stealing the industry away with larger incentives than the EU can manage are “junk rhetoric,” insists Pavel Molchanov, a Houston-based managing director and equity research analyst for the investment bank Raymond James.

“If European governments want to have more green hydrogen, write more checks.”

That’s unfair to those who led the way in creating this industry, said Chatzimarkakis, the Hydrogen Europe CEO.

“As Europeans, we started it, and it was hard work,” he insisted.

https://www.msn.com/en-us/money/markets ... f0b1&ei=29

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The Telegraph

"Biden’s Anglophobia is now a threat to the West"

Story by Con Coughlin

6 JULY 2023

Joe Biden, the US president, makes little effort to conceal his visceral animosity towards the UK, as was evident from his insulting behaviour in Ireland when marking the anniversary of the Good Friday Accords and his no-show at the Coronation.

The idea, though, that he is prepared to block Ben Wallace’s perfectly respectable bid to become Nato’s next secretary-general in favour of appointing Ursula von der Leyen, the underwhelming president of the European Commission, takes his Anglophobia to an entirely new level, one where he seems intent on committing a grievous act of self-harm.

Von der Leyen has hardly covered herself in glory during her Brussels stint.

Her incompetence was brutally exposed in her handling of the pandemic in 2020 when, after reportedly taking “personal charge” of the EU’s response, she oversaw the implementation of a vaccination programme that lagged well behind much of the rest of the world.

Similarly, her inability to provide strong and effective leadership has been evident in her response to the Ukraine conflict, where she has failed to give a precise timetable for Kyiv’s long-term ambitions to join the European Union.

Her failings in Brussels, though, are modest by comparison with her record as Germany’s defence minister between 2013-19.

It was during this period, when Angela Merkel was chancellor, that Berlin almost seemed to take pride in the fact that it consistently failed to meet the minimum Nato spending requirement of 2 per cent of GDP.

With Germany’s close energy and trade ties with Moscow, Merkel and Von der Leyen apparently convinced themselves that Vladimir Putin posed no serious threat to European security, so there was no need to waste money on expensive military kit.

This resulted in the Bundeswehr becoming the laughing stock of Nato.

When on exercise, its soldiers had to resort to using their own mobile phones because the military communications kit lacked proper encryption.

The army’s standard-issue assault rifles were unable to shoot straight in high temperatures and, at one point, equipment shortages became so acute that soldiers were forced to conduct military exercises with broomsticks instead of guns.

Her track record at the German defence ministry makes Von der Leyen’s subsequent appointment as Brussels supremo all the more remarkable, even though it later emerged she got the job because the European Council simply wanted a weak commission leader who would be amenable to its demands.

Making her Nato secretary-general, though, at a time when the alliance is facing the greatest challenge in its 74-year history with the war in Ukraine, would be a promotion too far for someone with such an undistinguished career.

The fact, moreover, that the Biden administration could even contemplate such an inappropriate appointment demonstrates a fundamental lack of understanding at the White House of the major challenges Nato faces if it is to preserve Western security.

One of the key pillars that enabled Nato to maintain peace in Europe is the transatlantic alliance, where the US and Europe have worked in tandem to provide an effective military deterrent to any potential aggressor.

Washington’s dominant role in the alliance, particularly in the military sphere, has long been resented by European elites who would prefer the EU to develop its own defence capabilities.

For example, Emmanuel Macron, the French president, has made no secret of his desire to create what he calls a “true European Army” to protect its interests.

Appointing Von der Leyen to run Nato would not only place the West’s defence in the hands of a lightweight politician with questionable credentials: it would open the way for Euro-zealots to fulfil their dream of having a defence force focused on defending European interests at the expense of the wider Western alliance.

If the Biden administration was really interested in maintaining the strength and effectiveness of the Western alliance, it would understand that maintaining the distinction between Nato and the EU was paramount.

Yet, such is Biden’s antipathy towards Britain, that he seems willing to ignore this important distinction simply because he cannot tolerate the notion of a British defence secretary getting the position.

Fortunately, the prospect of an EU takeover of Nato has been averted for the immediate future, as Nato leaders have agreed to give a one-year extension to Jens Stoltenberg, the former Norwegian prime minister who has done sterling work encouraging member states to display a united front in confronting Russian aggression.

Norway, of course, enjoys Nato membership, but is not a part of the EU, a fact that will have helped Stoltenberg to keep his distance from Brussels’ efforts to increase its influence over the alliance.

When choosing the next Nato leader, therefore, alliance leaders should avoid picking a representative of Brussels’ ruling elite, and instead look for a candidate from somewhere like Poland or the Baltic states who can be guaranteed to safeguard the alliance’s independence from an EU power grab.

https://www.msn.com/en-us/news/world/bi ... 15d7&ei=41

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VOX.com

"Why Europe is so angry about Biden’s signature climate bill"

Story by Alex Yablon

24 JULY 2023

Joe Biden has made restoring America to its pre-Trump normalcy the animating force of his campaign and presidency.

One of the planks at the core of his agenda is the promise to get the proverbial band of highly developed democratic nations back together.

America’s relations with its traditional 20th-century allies in Europe had suffered following Trump’s blustery go-it-alone foreign policy and decades of unease over issues like the Iraq War and the 2008 financial crisis.

Biden would get back on board with internationalist priorities like meeting the climate crisis, increasing energy security, repairing supply chains fractured by Covid, and strengthening defense ties between democracies.

National Security Adviser Jake Sullivan crystalized the administration’s thinking in a speech this spring at the Brookings Institution, dubbing the investment-heavy approach a “new Washington consensus.”

Yet something happened on the way to Biden’s restoration of America’s pre-Trump internationalism: Many of the US’s allies like Japan, Canada, and especially the European Union have not been all-in.

They see the Biden administration’s signature accomplishments — such as the Inflation Reduction Act (IRA) — less as long-awaited efforts to finally make good on promises of climate action and more as a threat to the ability of places like Europe to attract investment themselves.

At the moment Biden wanted the transatlantic democratic alliance to come together for a common purpose and approach, wonks on either side of the ocean are sniping at each other.

The brewing row between longtime allies is “mutually assured sanctimoniousness,” says macroeconomics commentator and self-described “globalization defender” Karthik Sankaran.

After decades of pleading with America to finally take action on issues such as climate, why are our closest partners so annoyed at us now that we’re actually doing what they asked?

The Biden administration’s “new Washington consensus” flies in the face of the market orthodoxy of the old “Washington Consensus” — something that was perhaps stronger in Europe than it ever was in America.

European political and economic institutions aren’t set up to foster national investment booms and tech drives.

In fact, the continent’s supranational governing structures were set up to restrain member countries from exactly the kind of national one-upmanship in which Biden and his team are cajoling allies to engage.

The family feud within the Atlantic alliance shows that debates over how to implement a green transition are also about negotiating the global balance of economic power.

In an era of more openly competitive international economic relations, obeying the rules in the European mold risks getting left behind, but playing to unique advantages as Biden wants America to do risks alienating allies.

Even though Biden’s administration has promised to use green investment to create a “new consensus” domestically and internationally, it’s not yet clear many strategic partners are willing or indeed able to follow suit.

The rise of the old Washington Consensus, explained

“Washington Consensus” is one of those jargony terms like “neoliberalism” or “polycrisis” that gets tossed around a lot by academics and wags on the international conference circuit.

Unlike those other buzzwords, though, the Washington Consensus refers to a very specific thing: a set of 10 policy principles for economic development first enumerated in 1989 by economist John Williamson.

The 10 bullet points of Williamson’s Washington Consensus will sound familiar to any student of a mainstream Econ 101 class:

* Keep government spending and fiscal deficits in check

* Avoid subsidizing or protecting local industry to focus on health and education

* Moderate taxes

* Let the market set interest rates

* Keep exchange rates steady through independent monetary policy

* Allow free trade

* Encourage foreign direct investment from private sources of capital

* Privatize publicly owned assets

* Deregulate the economy as much as possible

* And ensure rock-solid private property rights.

The principles were initially supposed to be guides for newly industrializing and developing markets, and were pioneered in places such as Latin America by local experts and bureaucrats, rather than in DC itself.

From the 1980s to the 2000s the Washington Consensus came to be more or less unquestioned economic common sense both in many peripheral developing nations and within the United States and Europe.

At the height of the Washington Consensus’s prestige, ostensibly left-leaning elected officials such as Bill Clinton in America and Tony Blair in Britain eagerly sold off public assets, encouraged the ever-freer flow of capital and goods across borders, and generally deferred to market actors when shaping the economy.

Leaders who tried to turn the policy tide back toward more direct state intervention, like Francois Mitterrand, France’s Socialist Party president through the 1980s and first half of the 1990s, were swiftly disciplined by market forces and reversed course.

At an international level, the old consensus was enforced by bodies like the International Monetary Fund, which made compliance with the principles a condition of financial aid to struggling countries, and the World Trade Organization, which resolved trade disputes and penalized countries whose governments tried to give domestic firms extra boosts.

The European Union, created by the 1993 Maastricht Treaty, was a product of the era of the Washington Consensus.

The EU was the fruit of decades of effort after World War II to bind together European economies (and especially perennial continental antagonists Germany and France) through ever-freer and denser trade connections, while cooling down national competition that for centuries had routinely escalated into cataclysmic war.

Notably, the EU constrained member states’ fiscal policy to prevent local governments from trying to give their firms a leg up over competitors elsewhere in the EU, restricted deficit spending, forbade the issuing of common government debt, and — with the launch of the Euro — totally eliminated Eurozone members’ ability to manage their currency as a means of boosting exports.

The fall of the Washington Consensus

But by the end of the 21st century’s first decade, the Washington Consensus appeared to be badly faltering.

Many of the Latin American countries that first adopted the Consensus’s policy portfolio saw massive disruption but not necessarily great economic outcomes.

Increased free trade provided much cheaper consumer goods, but at the cost of good manufacturing jobs in old industrial core regions like the Upper Midwest that were outsourced to lower-wage countries.

In Washington itself, the George W. Bush administration dispensed with deficit reduction in favor of massive tax cuts and a huge increase in military spending.

Crucially, the country with the most successful economy of the 21st century — China — largely threw Washington Consensus policies out the window.

Even as China joined international bodies such as the World Trade Organization that were supposed to enforce Washington Consensus rules, China did not really abide by those rules: It subsidized key industries and protected domestic firms from foreign competition.

Not only did China succeed in the world trading system without playing by its rules, it also successfully resisted the pull toward political liberalization and closer strategic alignment with a hegemonic United States that free trade and economic growth were supposed to facilitate.

As Chinese demand surged, it became a geopolitical rival for influence in crucial commodity-producing regions of the world like the Middle East and South America.

Moreover, once-developing smaller nations such as South Korea and Taiwan leap-frogged to the top of the global value chain in areas including semiconductor manufacturing, shipbuilding, and even entertainment through intensive industrial policy — subsidies, coordination, and active government planning in certain sectors deemed strategically important.

These countries’ historic success undermined the Washington Consensus dogma that industrial policy was a mistake.

At least in the immediate aftermath of the 2008 financial crisis, economic policymakers in the United States in both parties largely eschewed Washington Consensus recommendations: They approved the biggest fiscal stimulus in American history up to that point, used extraordinary central bank measures to hold interest rates close to zero and intervene in capital markets, and bailed out the privileged American auto industry.

But in many ways, Europe stuck to the script.

When the 2008 financial crisis spread to countries in the European periphery like Spain, Italy, Greece, Hungary, and Latvia, the EU imposed punishing Washington Consensus style reforms on some of the most recent additions to the union: Instead of offering stimulus, the EU compelled austerity, far beyond what the IMF itself recommended.

Some scholars called this the “EU rescue of the Washington Consensus.”

The results were abysmal.

Europe emerged from the 2008 crisis poorer than the US, with much slower growth.

Austerity badly damaged popular trust in the European Union.

Peripheral countries like Latvia and Estonia saw some of the worst levels of unemployment in the world, leading to massive levels of emigration that arguably contributed to the rise of far-right xenophobic and EU-skeptical politics around the continent.

European “core” economies such as Germany couldn’t count on selling to stagnant peripheral nations in the Union and became increasingly dependent on demand from China as an export market for high-value-add manufactured goods like cars or machine tools.

That’s a decision that now looks risky as China’s state-incubated electric vehicle industry has emerged as an export powerhouse in its own right, threatening to capture the international and possibly even domestic market that European national champions like Volkswagen had assumed would be theirs.

The EU could have a hard time making the turn from old to new consensus

Biden and his supply-side progressives draw a direct line from the austerity of Washington Consensus policies to the rise of the far-right nativist politics and international tension.

The administration broke with economic orthodoxy and passed interventionist measures like the IRA to restore political calm.

When Jake Sullivan laid out his vision of a new Washington consensus for the world, based on legislation such as the IRA and CHIPS Act, with ample industrial subsidies, he said these policies would provide the foundation for a “fairer, more durable economic order.”

In contrast to the height of the old Washington Consensus years when DC-aligned development institutions preached the neoclassical economic gospel to restrain local industrial development efforts, Sullivan and other senior Biden administration officials have invited their allies to put serious effort into boosting their own local green manufacturing sectors.

But many in Europe are still pretty attached to the old way of doing economic policy, and feel threatened by Biden and company’s cajoling.

Emmanuel Macron called the IRA “super aggressive” last year.

The Europeans have good reason to take issue with Americans informing them that they have to change their entire approach to economics and trade: after all, the EU’s economy is much more enmeshed in global trade than America’s, with the continent’s exports accounting for half its GDP compared to just 11 percent of America’s GDP.

Europeans can’t afford to be so cavalier about changing up the program, as painful as their recent economic experience has been.

The IRA does a number of things that would be difficult for Europe to stomach.

While the EU has pursued carbon pricing for decades to penalize emissions, Biden’s bill takes an “all carrot, no sticks” approach to inducing green investment through open-ended tax credits rather than penalties on polluting behavior: Tim Sahay of the Green New Deal Network, one of the leading advocates informing the IRA’s drafting, has compared the bill to a “bottomless mimosas” brunch special.

While the EU’s climate trade policy, the Carbon Border Adjustment Mechanism, at least in theory would not privilege domestic products over imports from countries with equally muscular emission reduction policies, the IRA is nakedly protectionist.

Its Buy American provisions are aimed more at jumpstarting a green energy and electric vehicle sector within the US than completing a green transition as quickly as possible with cheap imported components from existing firms in Europe or Asia.

The IRA’s generosity rests on America’s uniquely enormous fiscal power as the issuer of the world’s most important reserve asset, the US Treasury; whereas Europe has been loath to issue common bonds beyond a Covid one-off.

The bill also follows in the long federal tradition of transferring money and resources from high-income areas to low-income ones with few strings attached, whereas attempts to do so in Europe are much more fraught: The post-2008 bailout of Greece nearly tore the Union apart as rich nations balked at helping their poorer fellow EU members, and the strings that come with more routine funds for newer members like Poland and Hungary have become tripwires for debates over rule of law and local autonomy.

Many in the EU fear that the European Union lacks the legal ability to offer incentives to firms as sweet or geographically focused as the IRA or CHIPS Act, and they believe firms will cancel European investments to instead put new facilities in North America.

Indeed, these fears may be playing out already: Volkswagen recently paused planned battery factories in Eastern Europe for lack of subsidies.

(It eventually settled on a Canadian location after receiving even more generous subsidies than the IRA affords.)

Americans often complain about gridlock in Congress stalling most meaningful legislation, but the European Union would have to revise its basic founding treaties to enact policy that matches the firehose of money unleashed by the IRA, an even more difficult process.

Policies like the IRA aren’t settling arguments among allies as much as they are provoking them.

But Europe cannot wish its way back to a pre-2008 reality of unquestioned faith in economic orthodoxy and globalization, either.

So even as Biden and his advisers seek to forge a “new Washington consensus,” the actual agreement at the heart of said consensus can be hard to see right now.

https://www.msn.com/en-us/money/markets ... 3ee7&ei=50

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REUTERS

"Worsening euro zone business downturn reignites recession fears"

By Jonathan Cable

July 24, 2023

LONDON, July 24 (Reuters) - Euro zone business activity shrank much more than expected in July as demand in the bloc's dominant services industry declined while factory output fell at the fastest pace since COVID-19 first took hold, a survey showed.

The decline was broad-based with the euro zone's two biggest economies - Germany and France - both in contractionary territory and will likely add to fears the bloc will slip back into recession.

The survey also indicated the European Central Bank's sustained campaign of interest rate rises is starting to take its toll on consumers and denting the services sector.

This will pose questions for the bank, which meets on Thursday, as it weighs its fight against record inflation against the economic damage it could cause.

HCOB's flash Composite Purchasing Managers' Index for the euro area, compiled by S&P Global and seen as a good gauge of overall economic health, dropped to an eight-month low of 48.9 in July from June's 49.9.

That was below the 50 mark separating growth from contraction and lower than all expectations in a Reuters poll which had predicted a modest dip to 49.7.

"The weakness was widespread across all sectors, but it was the manufacturing sector that posted another bad reading," said Paolo Grignani at Oxford Economics.

"Today's print confirms the deterioration in macroeconomic conditions is well underway and spreading from manufacturing to other sectors."

"In our baseline case we expect subdued growth for the second half of the year, but today's data suggest the risk of a small contraction in euro zone GDP in Q3 is increasing."

Activity in Germany, Europe's largest economy, contracted in July, increasing the likelihood of a recession in the second half.

In France a downturn extended into July as both the services and manufacturing sectors did worse than expected.

The euro slid and the bloc's government bond yields fell after the softer than expected data.

The private sector in Britain, outside the euro zone, is growing at its weakest pace in six months in July as orders for businesses stagnate in the face of rising interest rates and still-high inflation.

A PRICE TO PAY

The euro zone services PMI fell to 51.1 from 52.0, its lowest since January and shy of the Reuters poll forecast for 51.5.

Indebted consumers feeling the pinch from rising borrowing costs and prices cut back on spending, and the services new business index went below breakeven for the first time in seven months.

A PMI covering the bloc's manufacturing sector dropped to 42.7 from 43.4.

The Reuters poll had forecast a slight rise to 43.5.

An index measuring output, which feeds into the composite PMI, fell to its lowest in over three years.

The decline came despite manufacturers running down backlogs of work and cutting their prices.

Factories benefited from a sharp drop in input costs due to falling demand for materials and improved supply.

"Input price pressures continued to ease, but this was almost entirely due to costs falling in the manufacturing sector, which in turn probably reflects lower energy prices as well as improved global supply conditions," said Jack Allen-Reynolds at Capital Economics.

While prices in services proved stickier, any sign of easing pressures will probably be welcomed by policymakers at the ECB who have failed to get inflation back to their 2% target despite implementing the most aggressive policy tightening schedule in the bank's history.

They will raise interest rates by 25 basis points on Thursday adding to the woes of consumers, according to all economists in a Reuters poll, a slight majority of whom expect another hike in September.

Reporting by Jonathan Cable; editing by John Stonestreet and Toby Chopra

https://www.reuters.com/markets/europe/ ... 023-07-24/

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The Washington Post

"Europe blinks in its commitment to a great green transition"

Story by William Booth, Anthony Faiola

6 AUGUST 2023

LONDON — Europe made big, bold promises to slash carbon emissions to slow global warming, but now the bill is coming due, and governments are starting to blink at the cost — political and economic — needed to power the great transition away from fossil fuels and toward renewables.

Once far-off goals are getting more real, as Europe wrestles with how to tell Germans which cars they can drive, Italians which stoves are acceptable, Polish miners why they must abandon coal, and Britons why they can’t keep exploiting their country’s massive oil and gas reserves.

Britain and the European Union have pledged to go “net zero” by 2050, with steep cuts by 2030.

But across Europe — where this summer has brought brutal heat waves and raging fires in the Mediterranean region — a backlash is simmering against some of the world’s most ambitious green targets.

Last week, British Prime Minister Rishi Sunak traveled to Scotland to announce with a big splash his decision to open the North Sea to more oil and gas drilling.

This got Sunak’s private mansion in the Yorkshire countryside draped in “oil-black fabric” by Greenpeace activists who warned that his plan to “max out” fossil fuel reserves could destroy Britain’s chance of meeting its emissions commitments and risk tipping the climate into a danger zone.

Climate activists drape British prime minister’s home in ‘oil-black’ fabric

Sunak’s gambit to commit to more domestic drilling was inspired in part by the results of a one-off parliamentary election in the London suburbs — for the seat that former prime minister Boris Johnson abandoned when he quit the House of Commons.

There, voters signaled they were opposed to the pollution charges ordered up by London Mayor Sadiq Khan, from the opposition Labour Party, to limit the number of petrol cars allowed into the central city.

The E.U., too, has been fighting about cars.

Last fall, the 27-nation bloc reached a world-leading political agreement to effectively end the sale of nonelectric cars by 2035.

But this year, a group of countries sought to water down the rules.

The regulations have remained largely intact, though Germany secured an exception for conventional vehicles that would run on carbon-neutral e-fuels.

Such fuels are not yet economically viable for mass use.

But the push suggested the rising discontent among auto industry executives and workers across the continent over a total switch to electric vehicles, and the end of cars using internal combustion engines — whose production is linked to tens of thousands of jobs in Germany, Italy and beyond.

As the world boils, a backlash to climate action gains strength

Italy and other E.U. nations are also taking aim at “Euro 7” regulations that, by 2025, are meant to tighten vehicle exhaust emissions.

“Italy, with France, Czech Republic, Romania, Portugal, Slovakia, Bulgaria, Poland and Hungary, have the numbers to block this leap in the dark,” Italy's hard right Transportation Minister Matteo Salvini told a May car dealer conference in Verona.

“We're now a blocking minority, we want to become a majority.”

Despite those claims, analysts say that rolling back already agreed-upon E.U. rules remains a long shot.

But new agreements are more vulnerable.

During a speech on how to revive French industry, President Emmanuel Macron in May called for “a European regulatory break.”

“We have already passed lots of environmental regulations at the European level, more than other countries,” Macron said.

“Now we should be implementing them, not making new changes in the rules or we are going to lose all our [industrial] players.”

When every day somewhere is a climate record

Macron said Europe was doing its part and is “ahead of the Americans, the Chinese and of any other power in the world.”

The E.U. has reduced its per capita emissions by 29 percent since 1990 but still has far to go.

Overall, the top emitters today are China, the United States, the E.U., India, Russia and Japan.

The prevailing notion of climate justice suggests that wealthy countries that grew their economies while spewing carbon for a century need to do more than poorer, less developed countries that are historically less responsible for climate change.

Surveys show strong support for reducing emissions in Britain and Europe.

But the zeal dampens when the pollsters ask more detailed questions about the people’s willingness to make lifestyle changes or spend a lot of money.

Simone Tagliapietra, a senior fellow at the Brussels-based think tank Bruegel, pointed to the new right-wing government of Italian Prime Minister Giorgia Meloni, which is pushing back on bloc-wide efficiency standards that could require mass renovation of buildings across Europe.

“Meloni and others say, ‘Look, why should we force our citizens to retrofit their buildings?'"

"'We cannot impose this on ordinary people,’” Tagliapietra said.

He said, “This is the kind of pushback you see when climate policy really enters the daily life of people."

"And it can be pretty successful.”

Italy’s Giorgia Meloni, rising far-right star, gets White House welcome

Meloni — who is rapidly emerging as a guiding light for the European right — has walked a cautious line on the environment.

She has artfully dodged the toxic label of “climate denier” — arguing instead for “pragmatic” solutions that don’t run Europe’s economies into the ground.

(Her alliance partners in Italy have been far less careful. “I do not know how much climate change is manmade and how much of it is due to the Earth’s [natural] climate change,” her environmental minister Gilberto Pichetto Fratin told Britain’s Sky News last week.)

Britain’s prime minister, too, is careful to call his new North Sea oil policy “proportionate and pragmatic.”

As the U.K. transitions away from fossil fuels — toward wind, solar and nuclear power, which it is doing at pace — it will still need oil and gas for decades to come.

So why buy foreign oil, asks Sunak, who says he is still committed to achieving net-zero emissions by 2050.

To balance out his oil-and-gas play, he also announced billion-dollar bets on carbon capture technology.

But the right wing of Sunak’s Conservative Party is filled with climate skeptics, who argue that a warmer world will not be so bad for damp, cloudy Britain.

They deride climate activists as the “eco-woke” and warn that the costs of the transition to net zero are too high — especially when top polluters like China and Russia are not following the West’s lead.

David Frost, a former government minister and top Brexit negotiator, told the House of Lords last month that rising temperatures “are likely to be beneficial” for Britain, because more people in the United Kingdom die from cold than from heat.

Frost said rather than spend billions on renewable energy, the U.K. should adapt to the warming climate, “so we can adjust to the perfectly manageable consequences of slowly rising temperatures as they emerge.”

“We must put aside the current mood of hysteria and try to assess the choices logically,” he said.

Frost’s go-slow appeal comes against a dizzying streak of record-breaking heat waves in Europe, the United States and Asia, as well as shrinking sea ice at the poles and hot-tub ocean temperatures.

U.N. chief António Guterres pleaded for immediate radical action on climate change, saying that record-shattering July temperatures show the planet has passed from global warming to an “era of global boiling.”

He begged governments not to backslide.

“Leaders must lead."

"No more hesitancy."

"No more excuses."

"No more waiting for others to move first,” Guterres said.

But on a grass-roots level, Europeans are thinking about costs.

In Holland, Dutch farmers have staged strikes against government calls to dramatically slash heads of cattle and sell off land to help the country meet its goals to cut nitrogen and ammonia emissions by 2030.

It happens as the Dutch are feeling the impact of climate policy in deeply personal ways, including reductions in highway speeds and new building permits to meet climate goals.

“We’re not going to take it anymore,” said Jos Ubels, a young Dutch cattle farmer and vice president of the Farmers Defense Force, a group formed to promote farmers’ rights.

“We should teach the countries that pollute the most — the poorest countries — ways to reduce emissions,” Ubels said.

“You can’t expect a small country like the Netherlands to make such a difference,” he said.

“Here, it’s become some kind of joke, the way they keep using trial and error, and are not sure if any of it really helps.”

Faiola reported from Rome. Beatriz Rios in Brussels contributed to this report.

https://www.msn.com/en-us/news/world/eu ... ceb4&ei=42

[thelivyjr]

The Hill

"Germany’s capitulation to Russia puts Ukraine and all of Europe at risk"

Opinion by Stephen Blank, opinion contributor

17 AUGUST 2023

For some time, we have known that European weapons supplies to Ukraine have been insufficient for its task of surviving as an independent state.

But since Ukraine is, as one writer observed in 1997, the “Keystone in the Arch” of European security, this war is hardly only about Ukraine.

The delays and excuses about sending Ukraine high-performance aircraft, tanks, missiles and other weapons represent a major reason the Russians had the time and freedom to build formidable defensive lines, whose potency we are now seeing.

They also arguably facilitate Putin’s dreams of outlasting Kyiv, because they confirm his belief that the West is not solidly behind Ukraine and will eventually tire of supporting it.

This Western failure is pervasive, but Germany has been the most consistent equivocator of all.

Apart from earlier dramas about not sending Leopard 2 Tanks to Ukraine unless America sent its tanks first, Germany is playing the same dangerous game with regard to its Taurus missiles.

It now claims that it will not send those missiles to Ukraine unless they are programmed not to strike Russian territory.

This condition is an insulting reflection of a lack of intelligent thinking about this war and a manifestation of what increasingly looks like cowardice.

With Russia systematically and brutally trying to destroy every aspect of Ukrainian civil infrastructure, it is nonsensical to deny Ukraine the ability to retaliate in kind.

Certainly, this pettifogging approach also constitutes a dismissal of the fact that Ukraine is fighting not only for its existence but also for European security and international order more broadly.

Like the Polish Solidarity movement in the 1980s, it is fighting for ”your freedom and ours.”

Thus, to deny Ukraine the full possibility of self-defense shows a government that has unfortunately learned nothing since that movement emerged.

In similar fashion, the demand that the Taurus missiles and other weapons are not targeted at Russia betrays a shocking absence of strategic thinking in Berlin and an unmerited excessive fear of Russia.

This combination justifies Putin’s contempt for Europe and the belief that time is on his side.

It certainly speaks to the continuing success of Russian energy and influence operations in Germany that even now generate a cadre of so-called Putin-understanders, or “Putinversteher.”

Since Washington has provided considerably more to Ukraine than Europe in terms of military aid, one cannot describe American policy as harshly as German policy.

But it is clear that delays in providing Ukraine with sufficient air defense capabilities such as the F-16, to thwart Moscow’s attempts to destroy Ukraine’s infrastructure, have exacted a grievous toll both in fatalities and wounded and upon Ukraine’s economy.

The longer we go without helping Ukraine obtain a decisive victory — the only thing that will ensure Ukrainian and European security — the longer Putin will be able to preserve his murderous fantasies and sacrifice more Russians and Ukrainians to them.

Furthermore, the longer we go without giving Ukraine the tools to finish this job, the more likely Putin’s escalations, such as the new threats against Poland that we now are seeing, will unnerve some members of the coalition to the point where they seek the easy way out through a negotiated settlement on favorable terms to Putin.

German behavior calls to mind Churchill’s 1938 simile of Central and East European states that he said were appeasing a crocodile in the hope that it would eat their neighbors first and desist from eating them.

That outlook is no more feasible today than it was in 1938.

Indeed, German appeasement of Russia will only weaken its economic and political standing in Europe by proving that Germany’s government cannot assume the role called for by virtue of its economic power and capacities.

As it is, this war has already validated the proposition that America leads Europe in major matters of international security.

But what does it say about Europe when its richest and possibly strongest power publicly displays its fear and incapacity to conduct a foreign and defense policy that conforms to its national security interests and those of Europe?

Today, Germany is trying to hide in plain sight, and Europe may soon pay a high price for it.

Stephen Blank, Ph.D., is a senior fellow at the Foreign Policy Research Institute. He is a former professor of Russian national security studies and national security affairs at the Strategic Studies Institute of the U.S. Army War College and a former MacArthur fellow at the U.S. Army War College. Blank is an independent consultant focused on the geopolitics and geostrategy of the former Soviet Union, Russia and Eurasia.

https://www.msn.com/en-us/news/politics ... 2d78&ei=24

[thelivyjr]

REUTERS

"EU's von der Leyen pledges more support for wind industry"

Story by By Kate Abnett

14 SEPTEMBER 2023

BRUSSELS (Reuters) -The European Union will put forward a package of measures to support its wind power industry as renewable energy companies struggle with challenges including inflation, European Commission President Ursula von der Leyen said on Wednesday.

"We will fast-track permitting even more."

"We will improve the auction systems across the EU."

"We will focus on skills, access to finance and stable supply chains," von der Leyen said in a speech to the European Parliament.

Shares in wind turbine makers Siemens Energy, Vestas and Nordex, which have all suffered losses in relation to the wind industry's flawed market design, were up between 1.6% and 4.4% on the news.

The 27-country EU has among the world's most ambitious targets to expand renewable energy and is finalising a legally binding goal to produce 42.5% of EU energy from renewable sources by 2030.

But Europe's offshore wind power industry has warned governments it is not big enough to deliver green power goals and requires a jump in policy support to get on track - particularly if new wind farms are to be manufactured in Europe.

"The future of our clean tech industry has to be made in Europe," von der Leyen said.

Final investment decisions in European offshore wind farms hit a 10-year low in 2022, as developers faced record-high inflation, soaring interest rates, increased seabed leasing fees and volatile energy markets.

Energy industry lobby Eurelectric welcomed the EU announcement, but called for urgent support to upgrade Europe's power grids to handle a large influx of renewable energy.

The European Commission has said power grid investments of 584 billion euros ($627 billion) are needed from 2020 to 2030 to meet green goals.

Europe's efforts to curb climate change are facing increasing political pressure ahead of EU elections next year, including from von der Leyen's own political group, which has opposed new EU nature laws that would affect farmers.

Von der Leyen vowed to "stay the course" on Europe's green agenda, promising talks with industries - including agriculture - concerned about their role in the green transition.

(Reporting by Kate Abnett; Additional reporting by Christoph Steitz; Editing by Louise Heavens and Mark Potter)

https://www.msn.com/en-us/money/markets ... 9127&ei=24

[thelivyjr]

The Telegraph

"Europe’s Green Deal is something between a mirage and almighty mess"

Story by Ambrose Evans-Pritchard

16 SEPTEMBER 2023

Ursula von der Leyen’s Green Deal has run into the immovable obstacles of the EU governing structure.

Her clean-tech strategy is exhausting political consent and risks ending in failure, relegating Europe to a marginal bystander in the central economic contest of the 21st century.

The EU cannot respond to the vast incentives of Joe Biden’s Inflation Reduction Act because it has no government, no treasury, no taxing-raising powers beyond a cut of VAT, no licence to raise serious debt, and therefore no real money.

It cannot overwhelm the net zero backlash with buckets of investment stimulus.

The nation states of America, China, Japan, and Korea are able to mobilise the decisive resources required to hold their own in this economic war.

The EU is hamstrung by austerity rules written into Treaty law, and by the perennial headache of who pays for what in a monetary union without a fiscal union.

“The EU tries to act like a nation but it can’t."

"The Green Deal has exposed the structural problem,” said Tom Burke, co-founder of the environmental think-tank E3G.

“It does not have enough money so it is all aspirational.”

Member states have gutted the EU sovereignty fund proposed by Brussels a year ago.

They have refused to ratify anything like a joint debt fund for decarbonisation.

The Commission president does her best to talk up large Green Deal numbers but the figures invariably mix up EU, national, and private money, which may or may not exist.

The actual EU funding each year for the green transition is running at €50bn or 0.3pc of total GDP.

That is a macroeconomic pittance.

The task falls to national governments: fine for AAA Germany, but not for BBB Club Med with debts double the Maastricht ceiling.

EU treaty law compels these states to pursue contractionary budget policies every year until debt reaches the limit of 60pc of GDP, and Berlin demands enforcement.

Nor are the poorer EU states of central and eastern Europe remotely able to conjure up the sort of sums needed to match Biden’s galactic IRA on a pro-rata basis.

If the EU’s rich states lavish green subsidies on their own national economies, while poor relations cannot keep up, the intra-EMU disputes make the eurozone even more unmanageable.

The result is that the EU’s green plan is something between a mirage and almighty mess.

Yanis Varoufakis had a taste of the EU’s inglorious procrastination during the water-boarding of Greece, a 26pc fall in GDP from peak to trough that was almost entirely caused by the “rescue” itself – a prologue to the broader errors of the eurozone banking crisis and the lost decade.

“The EU is about to repeat this self-harming act,” he said.

The reason is the same as it was a decade ago: the EU has not sorted out the primordial question of tax and spend, because that goes to the heart of parliamentary democracy, so it has to resort to destructive contortions.

“They can’t spend money because they don’t have a treasury."

"Rather than invest in technology they are going protectionist and doing stupid things, like trying to keep out Chinese EVs and clean-tech, or resorting to carbon border taxes that don’t work,” he said.

Mr Varoufakis, whose new book Technofeudalism comes out in London next week, said the die is now cast.

“The EU has no chance of catching up with either US or China.”

Mrs von der Leyen gamely reeled off green successes in her state of the union address this week.

“In the last five years, the number of clean steel factories in the EU has grown from zero to 38."

"We are now attracting more investment in clean hydrogen than the US and China combined,” she said.

The harsh truth is that 115 hydrogen projects have been announced in the US since the IRA kicked off.

This is already sucking much of Europe’s nascent hydrogen industry across the Atlantic, where subsidies amount to $3 a kilo and entirely change the commercial calculus.

Norway’s Nel is building a $400m electrolyser plant in Michigan.

France’s Air Liquide is building a $250m hydrogen plant in Nevada.

Germany’s Thyssenkrupp Nucera is looking at multiple hydrogen sites in the US.

The newcomers will make green hydrogen from cheap wind in West Texas, or cheap solar in New Mexico; or make blue hydrogen from cheap shale gas with carbon capture.

Biden does not care about the colour.

Let the market decide, so long as it all happens in America.

Nobody knows the final scale of his hydra-headed IRA, which follows a $1 trillion infrastructure act packed with bungs for clean-tech.

The tax credits have no limit.

Estimates stretch from €500bn to €1.2 trillion.

“It’s open-ended."

"It’s perfect,” said Aditya Mittal, head of Europe’s biggest steel company.

The American Clean Power Association says $270bn has been committed to 83 new solar, wind, and storage projects since the IRA was passed.

Manufacturing capex has hit the highest level in sixty years.

The EU has tried to respond with a beefed up Green Deal Industry Plan but this too is thin on real money.

“A rebranding exercise,” said the bloc of Socialist MEPs.

The conservative bloc (EPP) said it is too little, too late, and accused Brussels of “strangling industry to near-death” with prescriptive regulations.

“The Commission has reached its intellectual and political limits,” it said.

The IRA uses tax credits to let a thousand flowers bloom, from nuclear to carbon capture to EV batteries.

It aims to drive down the cost of clean-tech until it undercuts old energy.

“While the EU holds a binding, bureaucratic grip on the regulation of climate technology, the IRA harnesses creative market power,” said Friedbert Pflüger, a former German minister now at the Atlantic Council.

The IRA does not pick winners and losers.

It does not micromanage.

It does not narrow America’s energy base.

It is technologically neutral and has the primary goal of beating China and restoring American industrial primacy.

For that reason, says Dr Pflüger, “the US could achieve climate neutrality before Europe,” he said.

While America dangles carrots to assuage foes – 80pc of clean-tech projects are in Republican districts – the EU brandishes the stick.

It likes to ban things (so does Westminster), and it likes to set restrictive targets.

Its latest law mandates a rise in the renewable share of total energy from 22pc to 42.5pc by 2030.

Much of this is to be achieved by rolling out 20 gigawatts (GW) of offshore wind each year, but the wind industry says it can only produce seven GW, and it too is being lured away by the IRA.

The result of Europe’s Green Deal methods is a convulsive revolt against net zero and potentially the EU itself.

France’s Emmanuel Macron has called for a “pause environnementale” to head off Marine le Pen.

Germany’s finance minister has called for a halt to the EU’s “enormously dangerous” green plans.

Germany’s Christian Democrats are accusing Brussels of pursuing policies that are hollowing out the country’s economic core.

They fear a leakage of votes to the pro-fossil AfD party, now at 22pc in the polls.

Poland has sued the Commission at the European Court over everything green, arguing (probably correctly) that Brussels has illegally circumvented the national veto on taxation matters.

Poland may win the case.

It will then delight in hacking down the Green Deal Acquis.

The EPP, the European Parliament’s largest group, has switched sides, turning against three green laws in hot succession.

There is no longer a clear legislative majority in Strasbourg for anything to do with clean-tech or climate policy.

The writing is on the wall.

Brussels cannot hold the line against a revolt of this breadth.

It will be forced to water down its plans and to retreat.

China will not retreat.

Nor will America, whoever is elected.

They will run away with the riches of the clean-tech era.

https://www.msn.com/en-us/money/markets ... 4fe8&ei=22

[thelivyjr]

REUTERS

"Dutch lawmakers question new US export restrictions on ASML chip machine"

Reuters

October 24, 2023

AMSTERDAM, Oct 25 (Reuters) - Several Dutch lawmakers on Tuesday challenged the Netherlands' Trade Minister over whether the U.S. has acted correctly in unilaterally imposing new rules regulating the export to China of another chipmaking machine made by ASML Holding.

Trade Minister Liesje Schreinemacher said during a parliamentary debate the Cabinet was not opposed to the new U.S. rules affecting Europe's largest tech firm but "this should be tackled in a much more European way."

The U.S. last week announced new rules giving Washington the right to restrict the export of Veldhoven-headquartered ASML's Twinscan NXT1930Di machine if it contains any U.S. parts at all.

The deep ultraviolet (DUV) lithography machine can be used to help make both relatively advanced computer chips as well as mid-range and older chips.

U.S. policy is aimed at slowing China's technological and military advances.

ASML said it would abide by the U.S. rules, and it believed in practice the new restrictions would apply only to a tools for a small number of Chinese plants capable of making "advanced semiconductors."

The U.S. has pressured the Dutch government not to export any of its most advanced machines to China since 2019, and in June the Dutch government introduced its own licensing requirement for slightly less advanced machines.
Those do not cover the 1980di tool.

ASML dominates the market for lithography equipment, used by chipmakers such as TSMC, Samsung and Intel to help create the circuitry of chips.

China is historically ASML's third-largest market after Taiwan and South Korea.

Schreienmacher said that the Netherlands has so far negotiated with the U.S. alone over restrictions but "naturally it's better to do that in coordination with other (EU) member states."

"I've had several conversations with my colleagues in other countries about this," she said, including with European Trade Commissioner Valdis Dombrovskis and Internal Market Commissioner Theirry Breton.

Reporting by Toby Sterling; Editing by Jamie Freed

https://www.reuters.com/technology/dutc ... 023-10-24/

[thelivyjr]

REUTERS

"French told to stay indoors as storm Ciaran nears"

Reuters

November 1, 2023

BOULOGNE-SUR-MER, France, Nov 1 (Reuters) - France's weather service put some northern and western regions, including Brittany, under high alert and authorities urged people to stay indoors, saying storm Ciaran was set to hit overnight with heavy rain and winds of up to 170 kph.

"To all those concerned, be careful ... and avoid moving around overnight," Interior Minister Gerald Darmanin said.

Reporting by Pascal Rossignol; Writing by Ingrid Melander; Editing by Andrew Heavens

https://www.reuters.com/world/europe/fr ... 023-11-01/