Page 30 - bne monthly magazine June 2024 Russian Despair Index

30 I Companies & Markets bne June 2024
from industry, energy and construction dropped by 1.5%. Industrial production was down 0.7% year on year, led by a 10.2% fall in production from energy-intensive sectors.
Highlighting the extent of deindustrialisation, German power consumption last year slumped to its lowest level since 1990 last year.
The International Monetary Fund (IMF) last week slashed
its growth forecast for Germany’s economy in 2024 to only 0.2%, having previously predicted 0.5% growth in January. It expects growth to pick up in 2025, at 1.3%. The EU economy will meanwhile grow by 1.4% this year.
Notably despite being heavily sanctioned, the Russian economy in contrast is expected to grow 3.2% this year – a faster rate than any other advanced economy in the world.
Growing backlash
Current polls predict that der Leyen’s conservative European People’s Party will likely win the parliamentary elections, but she may have to make concessions to far-right politicians, who are set to increase their number of seats. These concessions could mean watering down some climate plans.
More and more environmental rules and policies are already being challenging and made less strict, whether it be the Nature Restoration Law – a cornerstone of the European Green Deal that has already been weakened by EU lawmakers and governments and now looks set to collapse – or the environmental rules connected with EU farming subsidies,
the Net Zero Industry Act or the Stability and Growth Pact.
The European Green Deal faces criticism already from farmers, industrialists, public opinion and even national governments. While some of its laws have been adopted, such as an end to sales of internal combustion engine cars by 2035, a border carbon tax and rules against goods from deforested zones, progress slowed significantly last year on legislation to reduce the use of chemical pesticides and restore wilderness ecosystems, in light of opposition from farmers.
While the European manufacturing association AEGIS Europe said last September that it supported the Green Deal, it also said it was “extremely concerned about the noticeable deindustrialisation on the continent. And in March, business association BusinessEurope stressed that the next commission should “concentrate on essentials” by tying the deal with a solid policy plan to revive industry.
French President Emmanual Macron is among several leaders who have called for a pause on the introduction of more environmental regulation, and even von der Leyen – who is seeking another term as commission president – has said the Green Deal should enter a new phase, better factoring in the need to ensure the competitiveness of European agriculture and industry.
The election of a new parliament could hasten the backtracking on climate policy, causing progress on emissions to slow or even reverse. Some politicians will see this as necessary, though, for the sake of protecting economic prosperity.
The elections, due to take place on June 6-9, will be followed by negotiations by lawmakers over who should take the top positions in Brussels, including the presidency of the European Commission. / Creative Commons Attribution-Share Alike 3.0
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