Good morning. A scoop to start: The European Commission has begun drafting plans to break up the EU’s diplomatic service and swallow up parts of it, in response to demands from France and Germany for a sweeping overhaul of Brussels’ foreign policy machinery by the end of the year.
Today, our climate correspondent reveals data suggesting Germany is losing its attractiveness for green industrial investments, and our migration correspondent reports on an extended loophole in the EU’s much-maligned electronic border control system.
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Green shift
Hungary and Spain are leading the race to attract clean technology investments in Europe, in a significant swing in the continent’s green race alongside Germany’s fading attractiveness for developing electric vehicles, renewables and other “clean tech” projects, writes Ian Johnston.
Context: The EU wants to grow manufacturing’s share of GDP from around 14 per cent to 20 per cent by 2035. Developing clean technologies such as electric vehicles, wind turbines, solar plants and cables is crucial to those ambitions.
New data from Bruegel, the Brussels think-tank, show that Germany has previously led the way with these investments, attracting almost €27.5bn of completed and ongoing investments since 2017, far ahead of France’s €6.1bn. This includes the major Tesla factory near Berlin and Chinese battery maker CATL’s first plant in Europe.
But since 2021, more capital has flowed to Hungary and Spain, whose €16.5bn and €10bn in completed and ongoing investments respectively have pushed Europe’s largest economy into third place.
One reason for this is the availability of abundant cheap, clean energy, while in Germany energy prices have surged since Russia’s full-scale invasion of Ukraine. Spain’s manufacturing sector has grown at three times the Eurozone average since 2018 and, in one telling example, Volkswagen subsidiary PowerCo has invested in a €3bn battery facility in Valencia rather than its home country.
“I think there is definitely a renewables pull,” said Ben McWilliams, an energy and climate expert at Bruegel, noting that government subsidies and other support to industry also play an important role.
The think-tank predicts that the redrawing of Europe’s “industrial landscape” will accelerate as the burden of carbon pricing increases. Other member states that stand to benefit from more clean tech investments are Sweden and Portugal.
But another determining factor is openness to Chinese capital. Hungary and Spain have both benefited from large CATL investments in Debrecen and Zaragoza.
The data comes as renewables generated 30 per cent of Europe’s electricity in 2025, surpassing fossil-fuel production for the first time.
Despite big advances in cutting emissions from power production, the EU needs to increase the use of electricity in heating, transport and industrial processes if it is to kick its fossil-fuel habit and meet a target to double its electrification rate from 23 to 46 per cent by 2040.
Chart du jour: 40-hour week?
Four decades after German metalworkers secured a 35-hour week, some of the country’s largest industrial employers are reviving the totemic debate over longer working hours to boost competitiveness.
Waved through
Brussels is set to turn a blind eye to EU countries that are not fully implementing the bloc’s new electronic border checks once a deadline runs out at the end of the week, writes Laura Dubois.
Context: The so-called entry/exit system was rolled out in April and requires non-EU travellers to register their personal details, fingerprints and photo when they first enter the bloc. Several countries suspended parts of the checks over the summer months amid long queues and technical glitches, but this flexibility is set to run out on Sunday.
In July, nine countries wrote to the European Commission asking for this to be possibly extended, but a change of the law would have been extremely difficult before the September 6 deadline.
Yesterday the Commission signalled it would let countries continue turning biometric checks off even after Sunday and potentially until the end of the year, even without a legal change.
“When it comes to the time after the summer we are in close and constructive contact with those few member states where some adjustments are needed at certain border crossing points,” said spokesperson Markus Lammert.
The Commission won’t start any procedures for legal breaches against countries that continue suspending some of the more time-consuming biometric checks, according to two EU officials.
“During an additional period of operation adjustment that is needed at these few operational voter crossing points, the Commission stands ready to provide additional support,” Lammert said, adding that “this support could include, for example, operation assistance and the deployment of additional front-extending core officers”.
He said the “remaining challenges” should be “fully addressed by the end of the year,” adding that “there is strong joint will to make the system work everywhere”.
What to watch today
- EU foreign affairs ministers meet in Wicklow, Ireland.
- Belgium’s Prime Minister Bart De Wever begins an official visit to India.
Now read these
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- Kyiv curfew: Ukrainian officials are weighing a relaxation of Kyiv’s curfew rules as continuous Russian attacks force a rethink of measures that have governed life in the capital for years.
- Russian ‘Trojan Horse’: Italian former general Roberto Vannacci is testing Giorgia Meloni by channelling pro-Moscow sympathies ahead of elections next year.
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