Germany’s Scholz pushes for progress on EU asylum reforms

Good morning. Yesterday, we reported a push to relax laws on harmful methane emissions. But in a win for the climate (and last-minute backroom politics notwithstanding), the industry-friendly adjustments Failed in the European Union Parliament during the final vote.

Today, the head of our Berlin office and I dissect German Chancellor Olaf Scholz’s calls to move forward with EU asylum and migration reforms. Our Milan correspondent explains the politics behind the new leadership appointment of energy giant Enel.

Easier said than done

German Chancellor Olaf Scholz has called for progress on the EU’s controversial asylum and migration reforms – while facing intense criticism of his refugee policy at home, He writes Guy Chazan And Laura Dubois.

Context: The European Union is working frantically to reform its asylum and migration system, with the distribution of asylum seekers a major sticking point between countries. Asylum applications in Germany by 80 percent in the first four months of this year, compared to the same period in 2022.

“Of course, there is a need for a solution in the end that meets the demands of European solidarity,” Schulz said in a speech in the European Parliament yesterday. He called for “effective border protection at Europe’s external borders” and “common border procedures” for asylum seekers.

The current Swedish EU presidency aims for member states to agree to the reforms by June, before starting negotiations with Parliament on a final agreement.

“I very much hope . . . that we will succeed in this legislative period,” Schultz said in Eye on European Elections in the summer of next year.

Today, the chancellor hosts the prime ministers of Germany’s 16 federal states, which have been begging Berlin for more money to deal with the massive influx of refugees.

Scholz has pledged €2.75 billion to states and municipalities this year to help with the costs of accommodating and caring for new arrivals, a figure that includes €1.5 billion for Ukrainian refugees alone. But he resisted demands for more.

The stalling – and arguable lack of solidarity – has caused outcry across the states.

“The financial resources of the federal government should be directed towards the actual number of people who have come here as refugees,” said Stefan Weil, Premier of Lower Saxony. “One-time flat rate payments don’t work.”

Hendrik Fust, the premier of Germany’s most populous state of North Rhine-Westphalia, said the government was ignoring “cries for help from cities and municipalities”.

Even Ricarda Lang, co-leader of the Green Party — part of Schultz’s coalition — said many towns have reached a “breaking point.” However, she was convinced that the government did not want to let anyone down. “I am hopeful that together we can find a solution,” she said.

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Succession

The battle for control of Enel, Europe’s largest utility company, which has pitted Rome against a group of international investors, is coming to a head today, He writes Silvia Scurelli Borelli.

Context: The Italian government is Enel’s largest shareholder, holding 23 percent through the Ministry of Finance. Choices to run companies subject to public scrutiny are a traditional way for government coalition parties to exert influence. The right-wing government of Giorgia Meloni put forward two names.

The presidency of Paolo Scaroni, a longtime ally of former Prime Minister Silvio Berlusconi and the mastermind behind oil major Eni’s expansion into Russia, is likely to be confirmed at today’s shareholder meeting. Flavio Cattaneo, seen as close to Matteo Salvini, the skeptical European League leader, is expected to be voted chief executive.

Scaroni and Cattaneo were not the prime minister’s first choice, according to several officials in Rome, and instead appear to be compromise candidates. Berlusconi and Salvini’s parties are part of Meloni’s coalition government.

The outgoing CEO, Francesco Starace, has been unpopular with the current Italian government, including because of his focus on the green energy transition, which is seen as excessive in Rome.

But the government’s choice of new candidates did not satisfy investors. A small London hedge fund, Kovalis, decided to put forward an alternative list of candidates, causing unrest in Rome.

By law, three out of nine board seats go to minority investors. But Kovalis went further, offering an alternative candidate for the presidency – Marco Mazzuchelli. She openly criticized the “lack of transparency and mismanagement” that characterized appointments to Italian state-controlled companies.

The move received some unexpected support from other international investors. Let’s see if the gamble – however unlikely – pays off this afternoon.

What are you watching today

1. Giorgia Meloni meets with Czech Prime Minister Petr Fiala in Prague.

2. President of the European Union Parliament, Roberta Metsola hosts Portuguese President Marcelo Rebelo de Souza in Strasbourg.

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