4 ★ FINANCIAL TIMES Thursday 30 January 2020

A

t first sight, the sheer comprehensiveness of

the EU’s new green policy agenda makes quite

an impression, leaving some analysts to won-

der whether this could turn out to be as trans-

formative as earlier pushes to change Europe:

the single market and the euro.

Brussels has not just set ambitious climate goals — at

least halving emissions from 1990 levels in a decade, elimi-

nating them in three. It seeks to mobilise every tool at its

disposal to achieve them: budget, industrial strategy, trade

policy, fiscal rules, financial regulation and even poten-

tially its monetary policy.

Taking each area one by one, there are always reasons to

be sceptical.

The announcement on the funding allocated to the

green deal, which was outlined earlier this month, was eye-

catching. The European Commission pledged it would

“mobilise” an additional €1tn of public and private cli-

mate-related investment over the next decade.

But in true EU fashion, very little of the €1tn figure con-

sists of freshly raised public funds: only €7.5bn will seed a

“fair transition fund” for regions set to lose out from the

carbon transition. In addition, the EU budget share spent

on climate action-related purposes will go up from 20 to 25

per cent, redeploying €100bn or so over the decade, but

taking away from other possible uses.

The theory behind the €1tn claim is that EU funding will

“crowd in” new national and private investment spending

in large multiples of what the EU itself puts at stake,

through judicious targeting, incentives and guarantees.

But Bruegel think-tank

researchers Grégory

C l a eys a n d S i m o n e

Tagliapietra are unim-

pressed. The EU plan

“will mainly consist of

reshuffled funds from dif-

ferent existing pro-

grammes”, they con-

cluded in a report.

Daniela Gabor, economics professor at the University of

the West of England Bristol, is even more critical. She

accuses the EU of seeking a “green third way” and do no

more than “nudge the market in the right direction”.

That nudging, says Prof Gabor, “does not put in place the

kind of green industrial policies that are necessary... My

concern is that the transition plans will end up just like the

CAP [the EU’s farm subsidy programme], with funds

diverted to the clever local elites.”

Predictably the commission’s defenders will reject both

criticisms. The “crowding in” theory is based on the

“Juncker plan” — the commission, headed by Ursula von

der Leyen’s predecessor, Jean-Claude Juncker, tried to

boost private investment when the recovery was weak.

It remains hard to judge how successful this concept has

been. The commission can point out that investment went

up as the plan was implemented, to which critics can

object that investment remained below the long-term

average level as a share of the eurozone economy until last

year.

Prof Gabor’s concerns, meanwhile, are harder to dismiss

until the commission gets serious about financial misman-

agement in other areas.

That said, the across-the-board nature of the EU’s green

shift means it is more robust than each of the individual

policies taken in isolation. The likelihood of “crowding in”

of the commission’s modest spending, for example, will

grow if the commission’s ideas for greening EU fiscal rules

— which are to be outlined next week — gain traction.

The same can be expected from the bloc’s new taxon-

omy for what counts as green private investment, pro-

vided the yet-to-be-decided details avoid capture by cor-

porate interests.

“Subsidised greenwashing”, in Prof Gabor’s words, is a

risk. But it can also be true that a comprehensive policy

change is harder to defeat by lobbying than a piecemeal

one. With a challenge as big as climate change, the kitchen-

sink approach has a lot going for it.

[email protected]

GLOBAL INSIGHT

BRUSSELS

Martin

Sandbu

Bloc’s green deal offers

kitchen sink approach

to climate challenge

The EU plan ‘will

mainly consist of

reshuffled funds

from existing

programmes’

I N T E R N AT I O N A L

M I C H A E L P E E L A N D JAV I E R E S P I N OZ A
BRUSSELS
N I C F I L D E S— LONDON

Telecoms equipment suppliers judged
to be a security threat will be excluded
from critical parts of the EU’s 5G com-
munications networks under a bloc plan
drawn up in response to fears over
China’sHuawei.
The recommendations published yes-
terday stop well short of a blanket ban
on any company, and leave each of the
EU member states with ultimate
responsibility for devising their own
specific security measures.
It sets the stage for big decisions in
Berlin and other capitals over how to
deal with Huawei, after Britain angered
the US by allowing the Chinese com-

pany limited access to its 5G network.

Thierry Breton, the EU commissioner

tasked with overseeing the digital econ-

omy, said the bloc would not “ban any-

one because of their name and national-

ity”, as long as they accepted measures

to manage security threats.

“And if they don’t, then they cannot

operate,” he said. “That’s it. It’s easy.”

EU member states have agreed to

action including certification require-

ments, diversification of suppliers and

controls on businesses deemed high-

risk.

The conclusions largely mimic the UK

strategy to exclude equipment provided

by high-risk vendors — with Huawei and

ZTElabelled as such by Britain — from

the sensitive “core” of a network, where

customer information is processed,

while allowing some use in the “non-

core” periphery.

The EU recommendations come after

growing concerns over the impact of

China and Huawei on critical infrastruc-

ture, although neither are named

explicitly as targets of the work.

The recommendations have been

produced by a security group compris-

ing all 28 member states — including the

UK, which leaves the bloc tomorrow —

and supported by the European Com-

mission.

The recommendations from the EU to

diversify suppliers will also push Euro-

pean telecoms companies not to

become too reliant on 5G suppliersEric-

ssonandNokiafor radio equipment,

while keeping high-risk vendors out of

the more sensitive areas.

Huawei, which denies it poses any

security threat, has welcomed the

EU’s “non-biased and fact-based

approach”.

EU countries warned in October that

non-EU businesses bidding to build 5G

systems could be “subject to interfer-

ence” when they have strong links to

their country’s government, were vul-

nerable to official pressure, or worked

under laws that lacked “democratic

checks and balances”.

According to ETNO, Europe’s tele-

coms trade body, 20 5G networks were

launched in the bloc last year with a fur-

ther 80 expected by the end of 2020.

Many operators have launched test and

commercial networks using Huawei

equipment.

Critics say the EU action has come too

late, with Huawei hired in some coun-

tries and member states such as Hun-

gary playing down the idea that the

company represents a risk.

Lindsay Gorman, a fellow at the Ger-

man Marshall Fund of the US, said: “It

boggles the mind that the EU can even

contemplate giving citizen data access

to a company that supplies China’s secu-

rity services,” Ms Gorman said, refer-

ring to Huawei. “The values part of this

seems to have been dropped.”

Telecoms

EU unveils plan to protect 5G network

Guidelines leave it up to

national capitals to decide

how they deal with Huawei

‘It boggles

the mind

that the EU

can even

contemplate

giving

access to a

company

that

supplies

China’s

security

services’

A N D R E S S C H I PA N I— LA PAZ

After becoming Bolivia’s caretaker pres-
ident, Jeanine Añez said it would
be “dishonest” to run for the office. Now
she has changed her mind.
In an interview with the Financial
Times, the conservative Ms Añez
explained why she might be the best
candidate for the opposition in a new
presidential vote in May as Bolivia seeks
tomove on from Evo Morales, whose 14
years of socialist rule ended last year,
leaving a deeply polarised country.
“I am here to continue the process and
to ensure that this vote is not dispersed
and to take care of democracy, take care
of everything that the Bolivian people
fought for,” she said in the presidential
palace in La Paz. “What I would like is
unity for Bolivians. And what I would
like is that all this effort is not in vain.
That’s why I’m going to fight, that’s why
I’m going to commit a lot to Bolivia
because I think it would be much easier,
in my case, to stay [as interim presi-
dent] in this transition stage.”
Bolivia is trying to move on from tur-
bulent months that left more than 30
people dead after Mr Morales claimed to
have won a fourth consecutive presi-
dential election in a poll in October. The
opposition alleged widespread electoral
fraud and the Organization of American
States found evidence of irregularities.
Under pressure from the military, the
main union federation and popular dis-
content, Mr Morales quit and fled, first
to Mexico and then Argentina.
Two days after Mr Morales left, Ms
Añez, a former backbench senator, took
over as president, based on her being
the highest-ranking official in the line of
succession following the resignation of
Mr Morales’s vice-president and the
head of the Senate. But her decision to
stand in the election, which she
announced late on Friday, has caused
division. Jorge Quiroga, a former presi-
dent who played a key role in her rise to
office and is a candidate himself, said Ms

Añez had provoked “pain and disap-

pointment” by deciding to run.

Carlos Mesa, a former president who

challenged Mr Morales in October and is

also running again in May, said Ms Añez

would “delegitimise” her reason for

being in office and feed the narrative of

those who called Mr Morales’s fall, and

her ascent to power, a coup d’état.

Mr Morales’s leftist MAS party leads

opinion polls with 26 per cent support

and Ms Añez — Latin America’s only sit-

ting female leader — paints her decision

as the best way to guarantee that a splin-

tered opposition does not allow the

return of the former president’s allies.

Luis Arce, Mr Morales’s former finance

minister, will take on Ms Añez and at

least three other candidates.

“There is much concern that a return

of the Movement to Socialism [MAS]

would be a return of violence, a return of

hatred, and of revenge for us not allow-

ing them to extend their power. So we

are exhausting all efforts so the vote

against them is not dispersed,” said Ms

Añez, a lawyer and former television

presenter.

“I am... going to do everything on

[my] part for this process to continue

and [to try to make sure that] the situa-

tion of violence and all that terror we

have lived does not happen again in

Bolivia.” A devout Catholic, Ms Añez

slammed Mr Morales as an “atheist”

and a “machista”.

“I didn’t like when in my identity card

it said ‘occupation: housewife’,” she said,

painting her leadership as a sign of more

equality in a traditionally male-domi-

nated country. “I have always fought for

women’s rights... now women sud-

denly have the right to an opportunity.”

Since taking office in November she

has shown a taste for exercising power.

In foreign relations she has renegotiated

gas contracts with Brazil and hardened

Bolivia’s line against Cuba and Vene-

zuela while moving her country closer

to the US. At home she has obliterated

Mr Morales’s name and image from

state institutions and established an

electoral tribunal that is called into

question even by María Galindo, a fiery

feminist and longtime Morales critic

who mocked the blonde president as “a

Barbiefied girl”. Many observers feel

that she has been pushed to run by her

close advisers including Arturo Murillo,

her hardline interior minister.

Observers also fear Ms Añez may be

overstepping her mandate. A European

diplomat described the arrest and probe

of former members of Mr Morales’s gov-

ernment — nine of them remain at the

Mexican residence in La Paz — as a “sav-

age persecution, not something an

interim government does”.

Ms Añez rejects the notion. “The

truth is that we are trying to respect the

judicial processes. Wherever we look at,

we find there was corruption. In fact, the

people who were in charge of the gov-

ernment were violent and in a difficult

moment for the country they encour-

aged violence, terror, looting,” she said,

adding that Bolivians want “justice to be

done” and “precedents to be set”.

Interview.Jeanine Añez

Interim leader’s candidacy divides Bolivia

Former senator opts to run

for presidency in bid to stop

Morales allies gaining power

Jeanine Añez,

interim

president:

‘What I would

like is unity for

Bolivians’

Marcelo Perez Del Carpio

DAN I E L D O M B E Y— MADRID

Cataloniaistoholdearlyelectionsinan

attempt by the leader of the Spanish

regiontobreakitspoliticaldeadlock.

Quim Torra, head of the Catalan govern-

ment, announced the poll after months

of tension within his pro-independence

coalition and court rulings that have put

his future in doubt.

If an election reshapes regional poli-

tics it could also benefit Spain’s prime

minister, Pedro Sánchez, who took

office at the head of a leftwing coalition

this month. He will hope that voters will

unseat Mr Torra’s party, which it sees as

obstructionist and confrontational, as

Catalonia’s biggest separatist force.

Catalonia has been in virtual stasis

since an October 2017 illegal referen-

dum and declaration of independence,

which led to a brief period of direct rule

by Madrid and prison sentences for nine

pro-independence politicians.

“The [regional] government cannot

function without unity, and a shared

strategy and loyalty between its part-

ners,” Mr Torra said yesterday, adding

that he would call the election once the

regional budget had been passed. That

could mean a poll in May or June.

“The big unknowns are whether the

pro-independence parties will keep the

majority in the regional parliament, and

which of them will be the leading force,”

said Astrid Barrio, a political scientist at

the University of Valencia who is setting

up an anti-separatist party.

The conflict over independence, fav-

oured by just under half of the region’s

voters, is Spain’s most divisive issue.

Catalan separatists also wield poten-

tially decisive votes in Spain’s parlia-

ment and could help decide whether the

Sánchez government can pass a budget

on its tax and spending plans.

Any co-operation between Madrid

and Catalan politicians is sensitive. A

backlash in the rest of Spain to the 2017

independence bid fuelled the rise of

hard right Vox, now the third biggest

party. The junior party in the regional

coalition, the Catalan Republican Left,

wants to work with Mr Sánchez.

Spain

Catalan leader Torra calls snap

poll to ease regional impasse

G U Y C H A Z A N— BERLIN

The German economy is experiencing

atentativerevivalafterbarelyescaping

recession last year, with the govern-

ment raising its forecast to 1.1 per cent

growth this year as international trade

tensionsease.

Peter Altmaier, economy minister, said

the recovery had reached a “turning

point”. “After two difficult years when

we had to revise down our forecasts, and

growth rates were very low, we are now

seeing a silver lining on the horizon.”

The government is also stepping up

investment to €162.4bn over the next

four years, one-third more than in the

previous parliament, the economics

ministry said. Germany’s economy has

been growing for the past 10 years, the

longest growth phase since the mid-

1960s, amid surging exports.

Unemployment is at its lowest level

since German reunification in 1990.

But the pace of expansion has slowed

significantly in recent years, falling from

1.5 per cent in 2018 to 0.6 per cent last

year, the slowest rate in six years.

Germany narrowly avoided a techni-

cal recession last year as gross domestic

product fell in the second quarter and

grew just 0.1 per cent in the third.

Industry has been hit by the US-China

trade conflict and fears of a hard Brexit.

The structural transformation of the

German car sector, which is in the midst

of an expensive shift to electric vehicles,

has also been a drag on the broader

economy. A recent report said the

change could cost Germany 400,

jobs over the next decade.

Mr Altmaier, whose ministry had

forecast growth of just 1 per cent this

year, said the economy had “two faces”,

with growth rates of between 2 and 5 per

cent for construction and services while

industrial companies, particularly auto-

makers and their suppliers, were strug-

gling. Growth will be pushed higher this

year because Germany has more work-

ing days. On an adjusted basis, growth is

forecast to be 0.7 per cent.

FT Big Readpage 9

Inside Businesspage 14

Forecast upgrade

Germany reaches turning

point after ‘two difficult years’

STOCK MARKETSMar 30prev %chgWorldMarkets

S&P 500Nasdaq CompositeFTSEurorst 300Dow Jones IndEuro Stoxx 505902.741500.7220703.38 20659.32 0.213481.672365.935897.551493.752361.133475.270.090.470.200.

FTSE 100FTSE All-ShareCAC 40Xetra DaxNikkei 12256.43 12203.00 0.4419063.22 19217.48 -0.807369.524011.015089.645069.044011.80 -0.027373.72 -0.060.

Hang SengFTSE All World $24301.09 24392.05 -0.37297.99297.730.

CURRENCIES$ per €$ per £Mar 301.0741.249prev1.0751.

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THE RISE OF ECO-GLAM

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