Guten Morgen!

We hope you have had a good week! The end of 2020 is in sight, and we hope despite all the craziness of this year you can look forward to Christmas.

Until then, enjoy our newest episode of the Krautshell and have a nice weekend!

Anna                                Christian

Another Brexit Update or “When Even A Dinner Didn’t Help”

This week, EU Commission President Ursula von der Leyen hosted British Prime Minister Boris Johnson for another Brexit discussion – this time dinner was included. It was actually quite funny watching the Commission President telling the Prime Minister when to distance and when to wear his mask again (always). Johnson: “You run a tight ship here, Ursula, and quite right too.” Even though von der Leyen could set the tone regarding Corona rules, both parties are still stuck on the well-known issues: conditions for fair competition, control for a future agreement between both parties and fishing quotas EU fishermen in British waters. By the way: at dinner, von der Leyen served … FISH! Thankfully, it doesn’t seem like the deal will fall through over this fishing issue.

Not long ago, the EU and the UK were able to solve the North-Ireland issue (long story, mainly solved in the EU’s favor) which was an optimistic sign for some people. Sadly, that wasn’t the case. Brexit chief-negotiators David Frost and Michel Barnier have another deadline this Sunday and it seems unrealistic to assume they will reach an agreement by then. Furthermore, any deal would have to be approved by the EU Parliament before the end of the year. Also quite unrealistic. Or to put it in von der Leyen’s words after the meeting: “We gained a clear understanding of each other’s positions. They remain far apart.”

The End of the German EU Council Presidency

In July, when case numbers were low and life was certainly a bit better over here, Germany began its six-month term for the EU Council Presidency. Germany’s swan song came in the form of the EU summit on Thursday, which was meant to tackle some nagging tasks: EU budget negotiations (we reported about Poland and Hungary blocking it because of the rule of law-mechanism), increasing the CO2-reduction target from 40% to 55% (compared to 1990) by 2030, and, finally, agreeing on further sanctions against Turkey for illegal drilling in the eastern Mediterranean. Particularly important is agreement on the budget, as a failure to approve the funding would result in an emergency EU-budget starting in 2021. This would cut funding for various EU investment programs, many of which are meant to combat the Corona-caused economic crisis.

Already on Wednesday, with respect to the German Council Presidency Angela Merkel stated very diplomatically that many targets had been reached, but also looked visibly disappointed when admitting not enough progress had been made. Still, already on Thursday the EU summit reached an agreement on budget with a compromise on the rule-of-law mechanism, the CO2 reduction target is set at 55% and sanctions against several people from Turkey were agreed. There is a lot of “EU-compromise” in the air and surely not all agreements are optimal. However, the fact that we even have agreements at all on these controversial but important topics can certainly be credited to Angela Merkel who defused issues of dispute between the various hardened fronts. This can be booked as a success for the German Chancellor at the end of her second and last Council Presidency.

The EU Wants To Stop Child Abuse Online

This week, Ashton Kutcher is probably quite happy. You might remember his hour in the spotlight of EU politics when the US actor got in touch with SPD party leader Saskia Esken and EU Commission President von der Leyen to discuss preventing child abuse online. Quick recap: occasion was the ePrivacy Directive which would have effectively forbidden techniques like PhotoDNA or Hashing due to concerns about data protection. Problem is, these methods are currently used by internet companies to detect content like child pornography. Thing is, the EU actually did something to address this, but nobody knew about it. For instance, this week US Senator Tom Cotton (R-AR) introduced a resolution which urged the EU to protect children once again. What Senator Cotton probably didn’t (and maybe even couldn’t) know: the EU introduced an additional regulation the same day, providing legal framework for PhotoDNA and the like.

We admit, the ways of EU policy are sometimes unfathomable. Essentially: The EU caved to international pressure and introduced an exemption regulation as an interim solution. With this temporary fix, the EU doesn’t need to change the contents of the ePrivacy Directive, which will be introduced before Christmas. While we certainly share Mr. Kutcher’s and Senator Cotton’s concern for children, the exemption regulation does leave some question marks. In its current form, in terms of privacy, the regulation is essentially, as MEP Patrick Beyer put it, as if “the post was allowed to open every envelope to see if something illegal is written in the letter.” We expect some more discussion.

A Berlin Declaration

Although not physically present in Berlin, the EU ministers who are in charge of digitalization in their country’s administration, signed the “Berlin Declaration on Digital Society and Value-Based Digital Government” this week. The declaration contains common guidelines for the digital transformation in Europe and its impact on society and opportunities for the future. Dr Markus Richter, who is State Secretary in the Federal Ministry for the Interior and chaired the event during which the signing took place, believes that the Berlin Declaration would illustrate that digital transformation in Europe should be based on democratic values and ethical principles. The declaration would be the “answer to the question which kind of digital change we want in our society.”  Whoa! Sounds great, doesn’t it?

Some might say that this could be the 30,000^th EU document listing the values on which digitalization should be based on. And this is not wrong. Still, this document is of particular importance as it is a sequel for the “Tallinn Declaration”. The Tallinn Declaration defines the EU framework and targets regarding E-Government practices – an area in which some EU countries are outstanding (Estonia), and some are not-really-outstanding (Germany – we just love the fax machine). If you are active in digital services in general and in gov-tech in particular you should certainly not miss this document. Ping us if you want to know more.

Turf Wars

“Digital Europe” is the name of the investment program that shall support innovation in digitalization under the next EU budget. The program was meant to have an investment volume of €9.2 billion initially which was already decreased to €7.6 billion in July (we reported). Now, as the EU could solve all other budget problems (read above) old questions come up again. How will the decrease be distributed between the priority areas supercomputing, AI, cybersecurity, digital skills and spread of digital technologies? Answer: horizontally – every area has to suffer in the same way. Well, now that this is clear, we can finally innovate, right?

Not really. The other remaining issue is about how the program is designed. There are basically two options: one, where the EU Parliament has a say about which projects will be facilitated and one where only the Council can stop an EU Commission decision. Turf war is ongoing – or as we call it in the EU: trialogue negotiations. The Parliament was already angry about the decrease of the funds. If the Commission now also decides to run the program in a way the Parliament cannot influence, this could become ugly again before Christmas. We will let you know how it advances – with the trialogue and with digitalization in Europe.

Will We Have A Law At Last?

One part of the coalition agreement between SPD and CDU/CSU is a supply chain law which shall require companies to be responsible for the adherence of human rights in their supply chain (we mentioned it quite some time ago). The SPD of Labor Minister Heil and the CSU of Development Minister Müller want the law and want it to pass before Christmas. The CSU-sister party CDU of Economics Minister Altmaier doesn’t want the law in its current form as it objects burdening companies with extra bureaucracy during Corona (if we were cynical, we would ask: “What weighs more? Human rights or bureaucratic hurdles?” Luckily, we aren’t cynical). One major point at stake is whether companies should only be responsible for their direct supplier or also for the suppliers of their suppliers and so on. The rest is classic politics: human rights organizations like Oxfam demand that the law should come, industry associations warn off the crash of the whole economy because of regulation. As a famous New Year’s Eve TV sketch in Germany would say: “Same procedure as every year!”

The supply chain law is of strategic importance. And it is of course of importance for humans whose rights are not respected properly. Finding an agreement might also be advisable for the opposing CDU and Minister Altmaier because otherwise the law will become a campaign topic for the 2021 federal elections. And if we were the SPD, we would go crazy about how we wanted to protect humans all over the world and how the CDU prevented it. Even if it is – and, of course, you know that – not that easy. We are excited if we are about to see a solution until Christmas.

• Show me your algorithms, Baby: The Commission released criteria on Monday based on which companies that operate online marketplaces have to tell customers about the way they operate algorithms. This means, consumers shall be informed about how for instance search results emerge. Small step of success on the way to a more transparent digital capitalism.

• Postponed: The Munich Security Conference is probably one of the most important political and economic events when it comes to cybersecurity for instance. Germany loves to host prominent guests from all over the world like President-elect Joe Biden a few years ago. This year’s conference which would normally have taken place at the beginning of the year is postponed. Date of postponement: unknown, probably when we are all vaccinated.

• Fast charging stations: When you have an electric car, you need to charge it. And it is even better when you can charge it fast. Therefore, fast charging stations are a political priority and according to the Federal Minister of Transport, Andreas Scheuer (CSU) 1,000 of them are about to come. At least, something of a start.

The Glory of Federalism

There was a wonderful meme in German social media last week: Chancellor Merkel, explaining how in Saarland you are allowed to meet with other people, but only if a unicorn is present, while no unicorn is needed in North Rhine-Westphalia, but meetings are only allowed from 11.54 am till 11.58 am and laying out special rules for everyone named Chantal: no leaving the house on odd-numbered days, except if it’s raining or if they live in Hesse.

For all the German speakers among you:

For everyone else:

I was LMAO. But, as in every good comedy, there is an element of truth: Corona numbers are not declining enough in Germany, and while everyone agrees that we need to do something, once again the Federal Government and 16 State Governments seem unable to come to a unified solution.

I know, it is a challenge to get 17 people to agree on ANYTHING. But the outcome is not only highly confusing, it is plain nonsense: Now I have to drive for a whole hour each Saturday (one direction!), because playing tennis is allowed in Brandenburg, but not in Berlin. And while Berliners are scratching their heads about the rationale behind closing tennis courts (where two people on 260,83 sq ft are keeping a safe distance BY PURE DEFINITION OF THE GAME), the courts in Brandenburg are completely overbooked for months to come.

Federalism has its benefits. But in this particular case, (democratic…) centralism just seems to make way more sense.