28th Oct 2016

Parliament sides with Berlin and Madrid on coal subsidies

  • The German government fiercely defends coal mine subsidies despite protests from the Greens (Photo: GrueneNRW)

The European Parliament on Tuesday voted in favour of extending until 2018 an EU deadline for closing heavily subsidised coal mines, in line with demands from the German and Spanish governments. The MEP's opinion is consultative, but increases pressure on the European Commission to change its stance.

With the two biggest groups – the centre-right European People's Party and the Socialists and Democrats – backing the extension until 2018, the resolution passed overwhelmingly with 465 votes in favour, 159 against and 39 abstentions.

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The vote marks a small victory for Germany and Spain, the two countries which have the most uncompetitive coal mines funded with public money, who in July had lost a battle within the European Commission. Back then, competition commissioner Joaquin Almunia, himself a Spanish politician, tabled 2018 as end date, but was out-numbered by a group of climate-friendly and competition wary commissioners who managed to impose 2014 as final deadline.

Speaking in the Strasbourg plenary on Tuesday, Mr Almunia tried to de-couple the climate-change debate from the coal mine subsidy system, arguing "there is a distinction between coal as a primary energy source and the regulation on state aid given to coal extraction in uncompetitive mines."

But he also admitted that the regime was already extended in 2002 for eight years and "instead of making mines competitive, it created a moral hasard."

"Now we have to extend the deadline because mines have not become competitive in this period and they didn't close either," he said.

The commission by no means would sustain an indefinite extension of the deadline, he said. While keeping his preference for 2018 aside, Mr Almunia insisted that among member states there is a "strong majority" in favour of this deadline. The Council of Ministers, representing the member states, however, needs to decide by unanimity if they want to change the 2014 deadline, which only puts more pressure on the progressists in the European Commission to change their view.

At a meeting of cabinet members last Friday, Mr Almunia's representatives tried to convince their colleagues "to soften the language" of the proposal, but they were met with "fierce opposition" from "seven or eight" other cabinets, an EU official speaking under condition of anonymity told EUobserver.

"They tried to pave the way for a change, but there was no agreement," which prompted a cabinet member of commission chief Jose Manuel Barroso to conclude that "the language should be kept as it is," the source said.

In an unexpected development, the cabinet of energy commissioner Guenther Oettinger, a German politician publicly speaking in favour of the 2018 deadline, in line with Berlin's demands, kept quiet during the Friday meeting.

Mr Oettinger reportedly irked German Chancellor Angela Merkel in July when he missed the crucial meeting when the coal-mine subsidy deadline was set for 2014. Last week, Mr Oettinger anticipated that the European Parliament would vote in favour of the 2018 deadline.

Speaking to a full sitting of the parliament, German and Spanish MEPs were broadly aligned along their government's stance.

German centre-left MEP Bernhard Rapkay, who drafted the Parliament's position, praised Mr Almunia for the impact assessment carried out and lashed out at commissioners who in his view "didn't understand" the matter.

He said that the climate-change argument was not valid, since "local coal would be simply replaced with imported coal" and defended the "modern, cutting-edge pits" which governments should invest in.

The Liberal group, represented by Dutch MEP Sophie in 't Veld, lambasted the "new romance" between the two main groups "that keep Europe firmly stuck in the past."

Ms in 't Veld pointed out that this was the seventh extension of the subsidy regime for a "19th century industry" and that Mr Rapkay was drafting a similar report in 2002, when the EU agreed to another eight years to phase-out these mines.

"If the arguments about the social impact and import of coal were valid then and are still valid now, who gives us a guarantee we won't have the same debate in 2018?" she asked.

EU ambassadors are likely to look at the matter next week, in the run-up to a competitiveness council on 10 December, when ministers are due to approve the final deadline and the phasing-out regime.

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