Brussels Playbook: Qatargate — Getting serious on
Hungary — Russia sanctions latest
BY JAKOB
HANKE VELA
DECEMBER
13, 2022 7:07 AM CET
Brussels
Playbook
By JAKOB
HANKE VELA
DRIVING THE
WEEK: QATARGATE
CORRUPTION
ALLEGATIONS STIR HEART OF EU DEMOCRACY: Brussels police launched new raids
Monday in a corruption scandal centered on bribes allegedly paid by Qatar to EU
lawmakers, according to Belgian federal prosecutors.
Belgian
judge Michel Claise ordered the search of the Brussels seat of the Parliament
to retrieve IT data. Additional raids were carried out in Italy Sunday.
Parliament’s
Greek Vice President Eva Kaili — so far the highest-ranking politician accused
of corruption in the scandal — has been charged with corruption, money
laundering and criminal organization and is in a jail cell, awaiting a court
appearance Wednesday, as are three other people so far: her partner, Parliament
assistant Francesco Giorgi; former MEP Pier Antonio Panzeri; and a third,
unnamed Italian.
Luca
Visentini, the new sec gen of the International Trade Union Confederation (and
previous chief of the European Trade Union Confederation) was arrested for
questioning and released on Sunday.
The
prosecutors said Monday that they had now searched 19 residences and offices,
plus the myriad Parliament offices that have now been probed and cordoned off.
Greek
authorities on Monday froze the assets of Kaili’s family.
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Socialists
in storm’s eye: The main suspects — for now — were members of the Socialists
and Democrats group.
On Monday,
Kaili’s colleagues in Strasbourg expelled her from the S&D group as her MEP
colleagues prepared to strip her of the vice president title.
Several
other S&D members — not directly implicated but under scrutiny for their
connections to those charged and their advocacy on behalf of Qatar — also
agreed to step away from key assignments, including MEP Marie Arena as chair of
the Parliament’s human rights subcommittee.
“European
Democracy is under attack,” Parliament President Roberta Metsola told the
plenary on Monday as she vowed to open an internal probe.
The call
for an investigation was echoed across the bloc. “Europe’s credibility is at
stake,” said German Foreign Minister Annalena Baerbock.
At the last
minute: The scandal has derailed Qatar’s ambitions to secure visa-free travel
to the EU for its nationals. The proposal got a preliminary thumbs up in
committee — where Kaili voted in favor — and was also backed by the Commission.
It would mean that Qataris would no longer need a visa when traveling to the EU
for up to 90 days in any 180-day period — either for business, tourism or
family purposes.
Parliament
was supposed to sign off on the proposal for negotiations with the Council this
week. Instead, MEPs on Monday voted to return the file to committee.
EU’s
‘self-inflicted’ damage: The scandal is not an attack but “self inflicted
damage,” tweeted The Good Lobby founder Alberto Alemanno in response to
Metsola’s speech. “The EU Parliament and most of its members have historically
resisted stricter integrity rules and effective enforcement system.”
Fact-check:
There’s no escaping the fact that the European Parliament and EU institutions
failed at detecting and bringing to light the corruption allegations against
one of their most senior elected officials. Instead, it was uncovered by
Belgian authorities.
Parliament
spokespeople on Monday were working hard to spin the story, arguing the institution
had cooperated with Belgian authorities — as if it was a great achievement that
Parliament’s leaders did what police asked of them and did not actively thwart
the investigation.
The scandal
puts a spotlight on Parliament’s secretive ruling Bureau, an intransparent body
that decides behind closed doors on everything from how Parliament’s budget is
spent to who gets the top jobs in the administration, and of which Kaili was a
member.
Cleaning
up: Transparency International’s Nick Aiossa said proposals from MEPs to clean
up their own house — which range from including foreign governments in a
lobbying register to calling for an EU ethics body — were inadequate and showed
they had not yet appreciated the gravity of the situation.
“MEPs meet
to realize this is not a lobbying scandal but a bribery and corruption scandal
so they are going to need to think bigger,” Aiossa said.
However,
before the clean-up work starts, many are wondering whether we’ve only seen the
beginning of this one.
FOCUS ON
COMMISSION: Commission President Ursula von der Leyen declined to answer
questions about her Vice President Margaritis Schinas’ relations with Qatar at
a press briefing Monday, triggering fury from the Brussels press corps seeking
answers on arguably the biggest scandal to hit the EU in years.
What
questions? The Greek commissioner represented the EU at the opening ceremony of
the World Cup last month, and has been criticized by MEPs over his tweets in
recent months, lavishing praise on Qatar’s labor reforms.
Asked about
the Commission’s response to the Qatar corruption scandal engulfing the
Parliament, and in particular the stance of Schinas, von der Leyen was silent
on the Greek commissioner.
Schinas
also spearheaded the move by the Commission to recommend lifting visa
requirements for Qatar and Kuwait back in April.
FOCUS ON
QATAR: The scandal unfolding in Brussels will draw much more scrutiny to
Qatar’s highly sophisticated and sustained foreign lobbying and interlocking
influence campaigns, argues POLITICO’s opinion editor Jamie Dettmer.
“Belgian
prosecutors aren’t the only ones investigating whether the Qataris buy
influence and seek covertly to sway policy with gifts and money,” Jamie writes.
“U.S. federal prosecutors have launched multiple Qatar-linked probes in recent
years trying to establish whether pay-to-play lobbyists and former American
officials broke lobbying laws.”
Read more
by Sarah Wheaton
TUNE IN
LIVE: My colleagues Sarah Wheaton, Suzanne Lynch, Ali Walker and Joshua Posaner
will be discussing the snowballing scandal later today at 3:30 p.m. CET. Tune
in here on Twitter.
DRIVING THE
DAY: EU CUTS FUNDS FOR HUNGARY
SIX BILLION
NONE THE RICHER: EU countries overnight agreed to freeze some €6.35 billion in
funds from the regular EU budget for Hungary. The historic decision marks the
first time ever that the EU will use the new conditionality mechanism to fend
off rule of law “risks” linked to Prime Minister Viktor Orbán’s dismantling of
democratic checks and balances.
As it
happened: Czech Ambassador to the EU Edita Hrdá told Playbook that ambassadors
agreed to freeze 55 percent of three EU cohesion programs for Hungary, instead
of 65 percent proposed by von der Leyen. The slightly lower fine comes as part
of a package deal under which Hungary will lift its veto on aid to Ukraine and
on the minimum corporate tax.
“We’re all
exhausted, but we made it,” Hrdá said on the phone as she was leaving the
Europa building where the Coreper meeting wrapped up last night. Asked whether
the deal had been negotiated beforehand, she replied: “Of course. I wouldn’t
have attempted something like this unless I was sure it had a good chance of
succeeding.”
Hrdá said
the deal was finalized in private talks Monday ahead of the Coreper meeting,
with Orbán giving the final sign-off. “The work of diplomats is largely
invisible … you can only see it in the quality of the results,” she added.
If it’s a
deal, what does Orbán get? Hrdá denied that Hungary would receive some form of
compensation in the form of more money from other EU funds, such as the
RepowerEU program for investments in energy infrastructure, a rumor that has
been circulating among EU diplomats.
Instead,
Hrdá pointed to Hungary’s economic recovery plan, which EU countries will
greenlight as part of the package deal.
Damage
limitation: So maybe the question is not what Orbán will get but what he will
not lose for certain. If EU countries did not approve Hungary’s recovery plan
by year’s end, Hungary would automatically lose billions of euros (70 percent
of €5.8 billion in grants, to be precise). Now, Hungary still stands a chance
to receive those funds in 2023 and 2024, along with unblocking the €6.35
billion in structural funds — if Brussels decides the country has made
sufficient reforms.
Pressure
was high on Monday for the Council not to yield too much, both from Parliament
and member countries such as Germany, whose Foreign Minister Annalena Baerbock
said Berlin was in favor of cutting the funds as proposed by the Commission —
meaning €7.5 billion.
In the end,
accepting defeat and living to fight another day was the best Orbán could aim
for, diplomats from five EU countries suggested.
“It’s a humiliating
night for Orbán,” said a diplomat from another country, via text message. “He
had to swallow his vetoes and hardly got a reduction on the conditionality
mechanism. All to salvage his RRP [recovery plan] and thereby calm the markets
at least a little bit for now.”
Indeed,
Orbán’s government has been facing mounting pressure from financial markets,
which are demanding increasingly higher risk premiums for Hungarian debt.
Losing €4.1 billion in recovery funds, which amount roughly to 2.1 percent of
Hungarian GDP and are already planned for in the budget, would have blown a
hole in Hungary’s finances.
“But wait
till they figure out he doesn’t get ANY of the recovery fund money until he
does ALL the rule of law reforms,” the same diplomat added.
What’s
next? The package still needs to be rubberstamped by ministers — which they
plan to do Wednesday via a so-called written procedure.
And next
year? The EU cash for Hungary is frozen, but not lost. In other words, the
incoming Swedish and then Spanish Council of the EU presidencies better get
ready for more Hungarian veto threats next year as Orbán tries to get that
sweet EU cash.
Vetocracy’s
limits: Does that mean that the EU is irreparably broken and a slave to Orbán’s
vetocracy, as the doomsayers argue? Not so much. Orbán’s constant vetoes have
cost him goodwill even among what used to be his closest allies, which allowed
Brussels to up the ante. Biting the hand that feeds you is not a winning
strategy, Budapest is learning the hard way.
Orbán
started the year fearing for €5.8 billion in EU funds and will begin the next
fearing for €12.15 billion. Unless he changes his strategy, maybe the great
dealmaker can get Brussels to double that fine again.
RUSSIA
SANCTIONS
NINTH
PACKAGE STILL NOT OVER THE FINISH LINE: Discussions will continue today on the
ninth sanctions package against Russia, which EU ambassadors have still yet to
approve. The package targets more industries supporting Russia’s military
capabilities and more Russian television channels.
According
to four EU diplomats, a group of countries (France, Germany, Belgium, Spain,
the Netherlands and Portugal) had been pushing to get more clarity on the rules
for the exemption to unblock food and fertilizer shipments, which they say is
key for the functioning of their ports and for addressing global food
insecurity. But the group of hawkish countries — Poland, Lithuania, Estonia and
Latvia — are against too many exemptions, which they argue plays in the cards
of Russian propaganda and Russian oligarchs.
What’s
next? Unclear. While some diplomats remained optimistic to get approval at
another meeting of EU ambassadors tonight and a written procedure done before
EU leaders meet, others did not see an immediate way out of the stalemate. The
EU’s foreign affairs chief Josep Borrell said Monday he hopes the agreement
will be approved “in the coming hours or the latest during this week.”
IN OTHER
NEWS Share on Twitter Share on Facebook Share on Linkedin Share on Handclap1
NOT PUTIN
ON A SPEECH: Russian President Vladimir Putin won’t hold his traditional
year-end press conference for the first time in at least a decade as Russian
troops continue to lose ground in Ukraine.
“As for the
annual news conference, yes, there won’t be one before the New Year,” Kremlin
spokesman Dmitry Peskov said Monday, adding that the president was still
expected to talk to reporters, also during foreign visits.
No date has
yet been set for Putin’s New Year address to the nation, Peskov added.
Wilhelmine Preussen has more.
GAS PRICE
CAP DRAMA: Energy ministers meeting today will attempt to agree on a gas price
cap. The Czech Council presidency is planning to put forward a compromise
proposal this morning that will seek to strike a balance between countries that
want a strong intervention — such as Spain and Belgium — and those who want
none, such as Germany. “There will have to be a balance to keep everybody
equally unhappy,” said one diplomat.
But another
senior diplomat said that talks were “absolutely not there yet.”
BREAKING
OVERNIGHT — INITIAL CBAM DEAL: EU negotiators reached a provisional agreement
in the early hours of this morning on the carbon border adjustment mechanism,
aka CBAM. POLITICO Pro subscribers can read more here.
ALSO
BREAKING — FTX FOUNDER ARRESTED: FTX founder Sam Bankman-Fried has been
arrested by authorities in the Bahamas, the latest dramatic turn in a
spectacular scandal that has rocked the crypto world, our U.S. colleague Sam
Sutton reports.
Timing:
Bankman-Fried’s arrest came the night before he was scheduled to testify today
remotely in front of the U.S. House Financial Services Committee, which is
investigating the collapse of his multibillion-dollar crypto empire.
Bankman-Fried — who until early November was the toast of Washington policy
circles — has faced mounting allegations that he misused FTX customer assets to
prop up his investment firm Alameda Research.
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