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By JAKOB HANKE VELA
with ZOYA SHEFTALOVICH
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DRIVING THE YEAR
WHAT WILL MATTER IN 2023? This week, Playbook brings you an exclusive peek into the topics that will dominate EU politics this year — as predicted by Brussels’ top officials. We’ll start today with European Commission President Ursula von der Leyen, some of her colleagues, the new Swedish Council presidency and its predecessors. We’ll have more predictions for 2023 from top officials later in the week, including from Spain’s EU ambassador, and, rather fittingly, from the Commission’s vice president for foresight, Maroš Šefčovič.
Looking into the crystal ball: Playbook asked everyone to list the three developments that will matter most in 2023. Unsurprisingly, most included Russia’s war on Ukraine as their first pick. The exceptions: Energy Commissioner Kadri Simson and Industry Commissioner Thierry Breton, who focused on key developments in their own portfolios — citing a worldwide renewable energy boom and the need for Europe to maintain its industrial base, respectively.
The other key priorities give a fascinating preview of what to expect this year — from a renewables boom and a worldwide scramble for the increasingly scarce materials needed to build them, to trade deals with South America and a stronger focus on inequality as the cost-of-living crisis continues to bite. Here’s the full write-up …
**A message from the United Nations World Food Programme: It’s 2023, and the world is still facing a food crisis of unprecedented proportions — the largest in modern history. That’s why WFP and the European Union are working together to reach everyone in need with the right support, no matter who or where they are.**
COMMISSION PRESIDENT URSULA VON DER LEYEN
Favorite book read in 2022: Yuval Harari’s “21 lessons for the 21st century.”
3 developments that will matter most in 2023: “Support for Ukraine in pushing back the aggressor. Speeding up the transition to renewable energies in Europe. Strengthening competitiveness in Europe and forging new strategic alliances globally.”
In 2020 EU leaders and the public were scrambling for masks, in 2021 for COVID vaccines and microchips, in 2022 it was natural gas. What will be the vital scarce good in 2023? “Clean energy.”
COMPETITION COMMISSIONER MARGRETHE VESTAGER
Favorite book: “Samlede værker” by Lydia Sandgren — “it gives you suspense and a lot of food for thought.”
3 developments in 2023: “The war in Ukraine is still defining the situation. So the energy crisis will remain in focus. Together with our ability and willingness to use our common strengths. Accelerating the fight against climate change is key — both for the planet, the war and human wellbeing. Social cohesion and belief in the strength of our European welfare model and our social market economy is essential and will be tested.”
Next scarce good: “Affordable input for European supply chains will be key — and our willingness to pay for security. What we should never be in short supply of in Europe is our ability to work together.”
BUDGET COMMISSIONER JOHANNES HAHN
Favorite book in 2022: “The Power of Geography” by Tim Marshall.
3 developments in 2023: “Continuation of Russia’s war against Ukraine but also continued strong support by Europe and international partners. New geopolitical order as an impact of the war. [It will be] most interesting to see positioning of China and rise of India. The EU has raised its political profile at the global level and will further strengthen its security and defense capacities (NATO accession Sweden and Finland; strategic compass). Race against climate change impacting also Europe heavily with extreme weather conditions. Climate change will also drive migration from exposed continents, especially Africa.”
Next scarce good: “Green energy (renewables, solar and wind power, hydrogen) will be the most vital source to drive the EU’s economy and protect the environment. The second, equally vital good, will be skilled labor force to implement the green and digital transition and to foster Europe’s innovation capacity.”
ENVIRONMENT COMMISSIONER VIRGINIJUS SINKEVIČIUS
Favorite book in 2022: Serhii Plokhy’s “The Gates of Europe: A History of Ukraine.”
3 developments in 2023: “Restoration of peace in Europe, reconstruction of Ukraine and the EU’s strategic autonomy, which at least in some areas, for example, energy and raw materials, could be achieved by speeding up the European Green Deal.”
Next scarce good: “Solar panels and wind turbines will be a key commodity. Last year we saw largely increased number of applications to develop new renewable energy parks. Once permissions to build them will be issued we will see an increased demand of [these] technologies.”
INTERNAL MARKET COMMISSIONER THIERRY BRETON
Favorite book in 2022: “Quantum mechanics of molecular structure” by Professor Kaoru Yamanouchi, on MOOC.
3 developments in 2023: “Maintaining a competitive European industrial base to ensure our security of supply, export ability and job creation. Keeping a fair level playing field both within the EU and with third countries. Ramping up production of clean tech needed for a decarbonized and largely electrified continent by 2050. Meeting these three challenges will require leadership, solidarity and unity.”
Next scarce good: “Cathode materials — lithium, but also cobalt or nickel — needed for battery electric vehicles, as well as rare earths and permanent magnets for wind turbines and batteries.”
ENERGY COMMISSIONER KADRI SIMSON
Favorite book in 2022: “The Expectation Effect” by David Robson.
3 developments in 2023: “On the energy front, 2023 will be the year where the whole world will get serious about renewables. More broadly, 2023 will be shaped by reinforced solidarity in the EU and with its allies (including but not limited to continuing support to Ukraine), but also by increasing global economic instability.”
Next scarce good: “Heat pumps and solar panels.”
INTERNAL PARTNERSHIPS COMMISSIONER JUTTA URPILAINEN
Favorite book in 2022: Peter Frankopan’s “The New Silk Roads — The Present and Future of the World.”
3 developments in 2023: “First, how Russia’s war of aggression and the consequences of the war will progress. Will, for example, an economic crisis follow the energy crisis? Second, strategic autonomy will become even more important for both us Europeans and our partners around the world. We all want to be more ready for the next crisis, than we were for the pandemic or the war with its consequences. Third, the increasing competition between partners will shape the geopolitics of 2023. In addition to our rivalry on values with China and Russia, we will also compete with our friends to help our industries lead the twin transition in green and digital.”
Next scarce good: “Due to the globally essential role of Ukraine as food and agricultural producer, I fear that more people in the world will face scarcity of food and therefore suffer from hunger.”
CZECH PERM REP EDITA HRDÁ
Favorite book in 2022: “I read ‘The Road to Unfreedom: Russia, Europe, America‘ by Timothy Snyder again and I thought it was an impressive book.”
3 developments in 2023: “In the short term, it will be the results of the Russian war in Ukraine, and whether the current will for unity in the EU will last, as well as whether, in the long term, it will be proved that the EU is capable of assuming the role of a global player.”
Next scarce good: “If we knew, we probably already would have purchased it. In the autumn, it seemed there might be a shortage of ammunition in the first half of the year, but now it seems there will be enough of it.”
SWEDEN’S PERM REP LARS DANIELSSON (who will lead negotiations on EU laws as Sweden holds the presidency of the Council for the first six months of 2023.)
Favorite book in 2022: Timothy Snyder’s “The road to unfreedom.”
3 developments in 2023: “If and how the aggression against Ukraine will end. If energy prices will start to come down. If the rule of law will be fully respected in all EU member states.”
Next scarce good: “Raw materials.”
ICYMI — my colleague Clothilde Goujard brings you the Swedes that Europe needs to know.
Stay tuned for Part 2 of our 2023 predictions later in the week.
THE YEAR OF DEMOCRACY
2022 MAY HAVE SEEMED LIKE THE YEAR OF PERPETUAL CRISIS. With the world still reeling from the coronavirus pandemic, Russia launched a fully fledged invasion of Ukraine in a failed attempt to topple the government in Kyiv. Inflation soared and the euro fell to parity with the dollar, hurting the Continent’s poorest, with European Central Bank chief Christine Lagarde insisting on the need to keep wages low while many big companies raked in record profits. Greenhouse gas emissions picked up amid the economic recovery, and as countries temporarily turned to coal to replace gas power plants.
But take a step back, and 2022 may well go down in history as the year democracy proved its resilience, while autocracy sputtered …
China’s screeching U-turn from overreaction to total inaction on COVID dispelled the myth that it is flourishing due to a more efficient or rational governance. Three years after failing to contain the coronavirus pandemic, Beijing was still unable to avoid mass deaths as it pumped money and energy into controlling the population rather than into effective vaccines.
Russia’s miscalculated, catastrophic attack on Ukraine shattered the facade of an invincible army and President Vladimir Putin’s image as some sort of genius/mastermind. EU leaders such as France’s Emmanuel Macron may worry what Putin might do if Ukraine and the West try to humiliate him — but the truth is, Putin’s Russia has already humiliated itself.
Sticking together: The EU, the U.S. and their partners proved stronger and more united than most predicted — both in imposing massive sanctions and economic decoupling on Russia, as well as in supporting Ukraine. EU countries and populations weathered an unprecedented energy assault at the hands of Moscow, faring much better than many feared and Putin hoped they would.
Still, the picture isn’t all rosy: EU leaders were less united when it came to building up Europe’s defense capabilities and tackling high energy prices. And there were other unexpected developments in 2022: While EU sanctions cut exports of high-tech goods to Russia, the value of imports, especially energy and other raw materials, increased markedly, notably due to higher prices and the pandemic recovery. The monthly value of imports peaked in March and declined steadily, reaching pre-crisis levels in October.
EU businesses stuck with Russia: Even more damning, EU investment in Russia remained much higher than public announcements may have suggested. While companies pulled some of their big brands out of Russia, overall, euro area holdings of Russian assets declined by a mere 10 percent between the end of the fourth quarter of 2021 and the end of the second quarter of 2022, according to a European Central Bank report. The drop in EU holdings of Russian assets was not so much due to companies leaving the country, as “mainly due to a reduction in the value of euro area holdings of Russian portfolio investment securities,” the ECB said. Overall, “FDI positions remained broadly unchanged” after Russia’s war.
Speaking of which: A threat from Ukraine to punish European pharmaceutical companies still operating in Russia is driving a wedge between allies, report Carlo Martuscelli and Paola Tamma.
CLIMATE CHANGED: Meanwhile, the U.S. passed historical climate legislation in 2022 — not a second too soon, climate scientists said, warning that despite a rare triple-dip cooling La Niña, the year was the fourth-hottest since records began. In Europe, massive public investments in renewables paid off with a record-high surge in green energy.
By the numbers: The EU installed 41GW of new solar panels in 2022, up 47 percent compared to 2021, led by Germany, Spain and Poland, according to lobby group SolarPowerEurope. Wind energy also picked up, with the Netherlands, France and Spain leading the pack in new installed capacity. Check out these charts by Giovanna Coi and Arnau Busquets Guàrdia for the full picture.
Caveat: The pace of new investments is still below the annual speed needed to meet 2030 targets. The good news is, countries passed a number of laws to fast-track permitting, which they hope will accelerate investment further in 2023.
Now read this: Europe’s energy price emergency is hitting the Continent’s vulnerable people the hardest — and some of the most at-risk are its 12 million Roma, reports Victor Jack.
WHAT YOU’LL NO LONGER BE ABLE TO DO IN 2023: Send a telegram in Germany (no, not the blue WhatsApp alternative). The country was among the last in Europe to still use those short messages dictated via telephone and printed out and delivered by the post office. But Deutsche Post said it will discontinue the service as of January, due to a lack of demand — though it’s still online for now.
IN OTHER NEWS
UKRAINE’S OLIGARCH INDEX: Russia’s war has played havoc with Ukrainian oligarchs’ fortunes, and the political influence of the super-rich has also taken a tumble, reports Sergei Kuznetsov in this analysis of who is up and who is down.
CROATIA JOINS EURO AND SCHENGEN: The boom gates at Croatian border posts swung up at midnight Sunday as the country joined Europe’s free movement area. Croatia also adopted the euro, which is now the official single currency of 20 EU nations and 347 million Europeans. Ursula von der Leyen hailed “two immense achievements,” speaking alongside Croatian Prime Minister Andrej Plenković and Slovenian President Nataša Pirc Musar at a border post in the town of Bregana. Details here.
LULA’S DREAM TEAM TO SAVE THE AMAZON RAINFOREST: Luiz Inácio Lula da Silva was sworn in as president of Brazil on Sunday — 20 years after his first stint. Lula has vowed to reverse the devastating deforestation of the Amazon. To help restore green policies, he has named Amazon activist Marina Silva as environment and climate change minister and tapped Sônia Guajajara, an indigenous woman, to be Brazil’s first minister of indigenous peoples. POLITICO’s Climate correspondent Karl Mathiesen has more.
SWEDEN’S TREE CHANGE: Sweden is a vocal proponent of the EU’s green ambitions — except when it’s asked to chop fewer trees, writes Louise Guillot.
PUTIN-XI AXIS: Vladimir Putin spoke with his Chinese counterpart Xi Jinping over videoconference on Friday. In introductory remarks that were broadcast, Putin said Russia would seek to boost military ties with China. Xi said China has “noted that Russia has said it has never refused to resolve the conflict through diplomatic negotiations, for which it [China] expresses its appreciation,” Chinese state broadcaster CCTV reported of the call.
State visit in spring? “We are expecting you, dear Mr. Chairman, dear friend, we are expecting you next spring on a state visit to Moscow,” Putin said.
Headline of the day: “Two strongmen in a weak moment.”
MEANWHILE, IN TURKEY: Having crashed the economy and impoverished the middle class, Turkish President Recep Tayyip Erdoğan is now dragging his country toward an unnecessary war and manipulating the courts against his rivals in a ruthless bid to cling to power in 2023, writes Paul Taylor.
ALAIN BERSET ASSUMES SWISS PRESIDENCY: On January 1, Alain Berset took over as Swiss president — a role that rotates between government ministers every year.
NEWS FROM POLITICO TOWERS: My brilliant colleague Eddy Wax has taken over the European Parliament beat for POLITICO. Get in touch via Twitter or email.
NEW JOB: Leticia Zuleta de Reales Ansaldo is the new head of Cabinet of European Parliament President Roberta Metsola.
BIRTHDAYS: MEP Joanna Kopcińska; Dutch finance ministry’s Ruud Mikkers.
THANKS to Karl Mathiesen and our producer Giulia Poloni.
**A message from the United Nations World Food Programme: There’s no single reason for today’s unprecedented food crisis. It’s driven by conflict, climate shocks, and the threat of global recession. As life continues to get harder each day for the world’s most vulnerable, WFP has scaled up to reach a record number of people with vital assistance, while continuing our focus on smallholder agriculture and resilient food systems. Thanks to the generosity of partners like the European Union, we are holding back famine as we save and change lives.**
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