Brussels Playbook: Busting Putin’s balls — Bulgaria’s mafia state on fire — Free parking

May 31, 2023

POLITICO's must-read briefing on what's driving the day in Brussels, by Jakob Hanke Vela.

Press play to listen to this article

Voiced by artificial intelligence.

Presented by Amazon

By JAKOB HANKE VELA

with ZOYA SHEFTALOVICH

PRESENTED BY

Send tips here | Tweet @HankeVela | Listen to Playbook and view in your browser

BERLIN SEEKS TO TARGET COMPANIES, NOT COUNTRIES, TO STOP SANCTIONS CIRCUMVENTION: Germany has its own plan to stop sanctioned EU high-tech goods from ending up in Russia through middleman countries. But there are doubts in the Commission and from other countries about whether Berlin's proposal will work.

Hitting them where it hurts: The proposal comes as Brussels is discussing new coercive measures to prevent Russia from obtaining certain high-tech goods made in the West, which it needs for everything from guided missiles to planes. Rather than hitting the countries that are allowing sanctioned goods to be re-exported to Russia, Germany is proposing to focus on companies, my colleagues Jacopo Barigazzi and Barbara Moens write in to report.

What's Berlin's problem? Germany has been leading the charge against new anti-circumvention powers proposed by Brussels, which allow the EU to hit countries that re-export to Russia. Berlin is worried the new powers could hurt diplomatic — and economic — relations with China and Turkey, among others.

Germany's proposal: Instead of threatening those countries with sanctions, Berlin wants to force EU companies to include contractual "no Russia clauses" when they sell certain high-tech goods to some countries, according to the proposal laid out in a classified paper dated May 5 and seen by POLITICO.

**A message from Amazon: Across the European Union, we support hourly employees who want to learn new skills with up to €8,000 towards tuition and training, after just one year of service. It's just one of the benefits at Amazon. Discover more.**

Getting into the nuts and bolts: The contractual clause would commit buyers in non-EU countries to not export a select group of sanctioned products to Russia, and to pass on that same obligation to other potential buyers down the chain. "The list of goods should be very specific and focus on single goods or targeted categories of goods with high relevance for the Russian military machinery and which cannot easily be substituted by products which originate in countries outside the EU and the G7," the paper reads.

Busting Putin's balls: The German proposal seeks to include no-Russia clauses for exports of electronic integrated circuits — but also ball bearings, "which have been identified as a high-interest good in recent studies."

Germany also wants EU countries to be more vigilant. "We have information suggesting that companies export selectively via some EU-Member States to avoid export restrictions — we should intensify sharing sensitive information of our national authorities so that exports are prohibited," the paper reads. Berlin suggests an EU-wide internal database of companies suspected of flouting export bans to Russia.

But will it work? There are doubts. European Commission officials say the German proposal will be difficult to enforce. The buying company could resell to several shell firms before exporting goods to Russia, or pop up under a different company name, leading to a cat-and-mouse game.

The dilemma: Most countries are convinced that circumvention has become a big problem. At a closed-door meeting with experts last week, the Commission presented EU countries with precise data and figures showing that EU exports of certain products to countries bordering Russia, such as Kazakhstan, increased when Brussels introduced sanctions against Russia. And exports from those countries to Russia also jumped.

Tough task: But diplomats say that while most countries agree something must be done, there's no proposal yet that everyone is on board with. As we reported earlier, an updated version of the Commission's plan didn't do the trick, despite Brussels’ assurance that sanctions against third countries would be a last resort. The difficulty is finding a way to clamp down on circumvention while minimizing collateral damage, diplomats and officials say.

Next steps: Foreign affairs ministers will discuss the question on Monday, and their ambassadors to the EU will consider the proposal in more depth next week, aiming to reach a compromise.

RUSSIA PUTS FINLAND IN THE DEEP FREEZE: Moscow last month froze the bank accounts of Finland's diplomatic missions, the country's Foreign Minister Pekka Haavisto said at a press conference Wednesday. According to Helsingin Sanomat, Finland's Embassy in Moscow and the consulate general in St. Petersburg have had to pay their bills in various roundabout ways, such as in cash.

Why? "Russia has not yet given an official explanation why the accounts have been frozen," Haavisto said, adding that several other countries are facing similar problems, but restrictions on Finland are among the strictest. Finland formally joined NATO earlier in April, becoming the military alliance's 31st member — but Haavisto said he didn't think Russia's move was retaliation for that.

MEANWHILE, IN SWEDEN: After decades of cuts, Sweden's military is scrambling to reassure NATO that it can contribute to the alliance, as well as benefit from membership of it, my colleague Charlie Duxbury reports from the Baltic Sea island of Korsö.

AMMO PLAN SLOW TO RELOAD: Last month, at a meeting of EU foreign ministers, Ukraine's Dmytro Kuleba urged the EU to speed up ammo delivery. But when the EU foreign ministers meet again on Monday, they’ll have little progress to demonstrate: "Member states have submitted requests for reimbursement for the urgent delivery of ammunition and missiles for an amount of over €650 million," according to an EU spokesperson. That's just €50 million more than last month.

By the numbers: According to one diplomat, that amounts to around 62,000 pieces of ammunition — roughly 20,000 more than last month. Which leaves the EU well off track from its target of delivering 1 million shells to Ukraine in 12 months, as leaders pledged to do in March, Jacopo Barigazzi writes in to tell us.

Approaching deadline: The €650 million is for the so-called Track 1 of the ammunitions plan agreed by the EU, which pays for "the reimbursement of donated materiel from existing stocks or from reprioritisation of existing orders delivered before 31 May 2023." But an EU official said countries could just be dragging their feet when it comes to sending their invoices to Brussels, and that they have two months after the end of the deadline to put forward their reimbursement requests. Plus, officials stressed that Track 2 of the ammo plan (on joint procurement of supplies) is also under way, which will help the EU meet the target.

LET’S (NOT) TALK ABOUT IT OVER PASTRY: Given these low figures, some diplomats complained that a breakfast with defense industry representatives, expected on Tuesday morning, was called off — it could’ve been a good opportunity to address these issues, the diplomats said.

So why was the breakfast nixed? Some diplomats said it was postponed because not everyone could attend; others insisted it was canceled because the Commission doesn't want to risk public acknowledgement of the doubts swirling about the EU's ability to reach its 1-million-shell target.

It's not canceled if no one was invited! "Invitations for the breakfast were never sent, so it is not about cancelling or postponing," said a spokesperson.

NOW READ THIS: Yegor Firsov, a combat paramedic in Avdiivka, has this dispatch from the frontline about staying human in a time of war.

MAFIA STATE REACHES BREAKING POINT: The political tide in Bulgaria is turning against the country's chief prosecutor, in a crucial moment for the rule of law, POLITICO's Christian Oliver reports.

Bulgaria's politically protected mafia is ubiquitous and its interests include narcotics, arms, people smuggling and siphoning off EU funds. At the heart of the crisis is the chief prosecutor, Ivan Geshev, who has long been identified by anti-corruption and pro-democracy activists as one of the biggest obstacles to Bulgaria's convergence with EU norms.

Over the summer of 2020, Geshev was one of the main targets of massive anti-mafia street protests, where demonstrators unsuccessfully demanded his resignation.

Powerful friends: Since surviving the street protests of 2020, Geshev has looked almost impossible to dislodge, partly because he has enjoyed a close relationship with former PM Boyko Borissov, the king-maker of Bulgarian politics, whom he helped get out of jail last year. "But something has now snapped and triggered a civil war in the murky heart of the Bulgarian state, which might just offer a glimmer of hope to those hoping to clean the Augean stables of corruption," Christian writes.

Bombshell: Borissov narrowly won an election in April — the country's fifth in two years — and his nominee for prime minister, former EU Commissioner Mariya Gabriel, said on May 11 she wants Geshev out "due to the damage to the prestige of the judiciary."

Gabriel vs. Geshev: Even though Gabriel is unlikely to actually become prime minister, because Borissov's coalition talks are failing, Geshev lashed back wildly in a public presentation this week, hinting the political class is trying to kill him and his family. He is also suggesting he's willing to spill the beans on top-level corruption. Read all about it in Christian's must-read story.

**Would you like to know more about the Critical Raw Materials Act? Join POLITICO Live alongside António Costa Silva, Portuguese minister of the economy, Maive Rute, deputy director-general from DG GROW and Nicola Beer, EP vice-president for a chat at our Competitive Europe Summit on June 27-28. Only a limited number of spots available! Apply here**

TOP FRENCH COURT BACKS AI-POWERED SURVEILLANCE: France's top constitutional court on Wednesday backed the use of AI-powered surveillance cameras for the 2024 Paris Summer Olympics, also setting guidelines for their implementation, Laura Kayali reports. The decision came after the parliament in April approved a controversial bill that paves the way for large-scale, real-time camera systems supported by algorithms to spot suspicious behavior for the Olympics. The system is set to be in place until March 2025.

META FINE: Meta is expected to face a record privacy fine on Monday when Ireland's data protection watchdog confirms the social media platform mishandled people's data when shipping it to the U.S., my colleagues Mark Scott and Clothilde Goujard report.

HOW DO YOU DO FELLOW KIDS? With more than 430,000 Greek youths aged from 16 to 21 eligible to cast ballots for the first time in a national election on Sunday, politicians are courting the TikTok generation, reports POLITICO's Nektaria Stamouli.

NOT DOWN WITH THE TIKTOK GENERATION: Meanwhile, in Montana, Governor Greg Gianforte signed a bill banning TikTok, making it the first state to fully ban the app in the U.S.

EU ELECTION DATE — JUNE 6-9: Brussels confirmed Wednesday that the next European parliamentary election will be held from June 6 to June 9, as POLITICO has previously reported.

Meanwhile, in Belgium: The country will hold its federal and regional elections on the same day as the EU ballot — June 9, 2024. And for the first time ever, Belgian 16 and 17-year-olds will be allowed to vote in the European parliamentary ballot. Read this postcard on Belgium's "post-pubescent, angsty, opinionated" first-timers — whose No. 1 concern is climate change — by my colleague Sonya Diehn.

SARKOZY LOSES: A Paris court on Wednesday upheld a three-year prison sentence for former French President Nicolas Sarkozy over corruption charges. More here.

TALKING TURKEY: The West may have to learn how to live with President Recep Tayyip Erdoğan, writes Nathalie Tocci, director of the Istituto Affari Internazionali, in a piece for POLITICO.

EU LAWMAKERS SAY HUNGARY NOT READY TO RECEIVE EU FUNDS: A cross-party mission of EU parliamentarians to Hungary concluded the country was still not complying with standards to ensure EU funds are not misspent. The MEPs criticized Hungary's audit body as unfit for purpose and accused the government of using public tenders to "enrich the family and friends" of Prime Minister Viktor Orbán. Read more by Gregorio Sorgi.

COMMISSION DELAYS PART OF GREEN DEAL PACKAGE: The European Commission has delayed four key pieces of Green Deal legislation, according to the new Commission program seen by POLITICO. Given the next EU election is right around the corner, the clock is ticking for Ursula von der Leyen's Commission to finalize the package before the end of its mandate, write Susannah Savage and Bartosz Brzeziński.

Meanwhile: Anger at France boiled over on Wednesday as EU countries accused Paris of taking a key piece of EU climate legislation "hostage" at the last minute to extract further concessions in the text, reports Victor Jack.

**Seismic shifts in monetary policy continue to shape Europe's economy. Follow every twist and turn with POLITICO Pro Central Banker, launching soon. Claim your three-week free trial of its daily newsletter, Morning Money Base, today!**

— Ascension Day public holiday in Belgium.

— Commission Executive Vice President Frans Timmermans in Łódź, Poland; meets with Polish mayors; gives an opening speech at the Łódź Climate Congress 2023.

— Commission Vice President for Democracy and Demography Dubravka Šuica in Zagreb, Croatia; participates in the LEAP Summit.

— Internal Market Commissioner Thierry Breton in Cannes; meets with French Minister for Culture Rima Abdul Malak; meets with CEO of France TV and President of the European Broadcasting Union Delphine Ernotte Cunci; delivers speech at the European Film Forum; participates in opening event of "Immersive Installation Murals: Banksy in Ukraine."

— Energy Commissioner Kadri Simson in Valletta, Malta; participates in the EU/MED9 Ministerial Meeting.

— Justice Commissioner Didier Reynders in Lisbon; meets with members of parliament.

— NATO chief Jens Stoltenberg travels to Portugal; meets with Prime Minister António Costa. Joint press conference at 5:45 p.m. Watch.

QATARGATE UPDATE: Italian judges gave the go-ahead to MEP Andrea Cozzolino's extradition to Belgium on Tuesday night. More here.

TRANSPORT UPDATE: A reminder that Brussels’ metro line 5 and tram 82 aren't running from today until Sunday. For other STIB lines, public holiday schedules apply today and Friday.

FREE PARKING: Throughout June, Brussels will distribute 180,000 one-hour parking tickets to support merchants in the city center. The aim is to help retailers hit hard by the pandemic and other crises — and to change motorists’ behavior by shepherding them to the city's various parking facilities. You can get your free parking ticket from participating merchants.

SPOTTED … NATO Secretary-General Jens Stoltenberg at the International Day Against Homophobia, Biphobia, Interphobia, and Transphobia reception hosted by U.K. Ambassador to NATO David Quarrey. Stoltenberg delivered a speech about the importance of diversity in the Alliance and spoke about the impact of his mother pioneering Norway's same-sex marriage law, Playbook's mole writes in to report.

BIRTHDAYS: MEPs Alexander Bernhuber, Abir Al-Sahlani and Jens Gieseke; Kris Peeters, a vice president of the European Investment Bank; former MEP Bogdan Zdrojewski; Former Commission President Jacques Santer; Marco Belforti of MUST & Partners; Spiegel's Melanie Amann.

THANKS to Barbara Moens, Jacopo Barigazzi, Laura Kayali, Gregorio Sorgi, Playbook editor Joe Stanley-Smith, reporter Ketrin Jochecová and producer Grace Stranger.

**A message from Amazon: We believe that every job should have benefits that work around life. That's why we offer career opportunities for all employees as well as competitive salaries across Europe and a comprehensive benefits package from day one. Discover more at aboutamazon.eu. Available in Germany, Spain, France, Ireland, Italy, Poland, Czech Republic, Slovakia.**

SUBSCRIBE to the POLITICO newsletter family: Brussels Playbook | London Playbook | London Playbook PM | Playbook Paris | POLITICO Confidential | Sunday Crunch | EU Influence | London Influence | Digital Bridge | China Watcher | Berlin Bulletin | D.C. Playbook | D.C. Influence | Global Insider | All our POLITICO Pro policy morning newsletters