“EU faces "find out" music”, IRINA SLAV
“The biggest problem that makes me choke is that my biggest competitor is the European Commission,” one such developer, the chief executive of energy trading platform Enmacc, told the FT.
EU faces "find out" music
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Remember when the European Union, to much fanfare, announced a centralised platform for buying natural gas in order to secure supply at reasonable prices? Right, so apparently, it has been expanding the plan to include metals and critical minerals, and also hydrogen for some reason. In that, it has stepped on the wrong toes.
Per the FT: “Leading industry software suppliers have warned that the EU’s plans, which would require the companies to build a new trading system and then transfer ownership to Brussels, would also undermine European efforts to foster local tech champions. They also warned that the plans were not fit for purpose for how the target commodities were traded.”
That the European Commission has been trying to centralise as much power as it can is not news, at least to some. Others would probably be surprised that software companies are crying foul — and then they’ll try to rationalise it along the lines of “Mummy knows best”. The software companies themselves, however, are in no danger of such rationalisations. The software companies are sounding the alarm. It’s high time someone did.
“The biggest problem that makes me choke is that my biggest competitor is the European Commission,” one such developer, the chief executive of energy trading platform Enmacc, told the FT. “Why should the EU operate a platform if European companies already operate similar infrastructure?” he also asked.
This is an extremely good question, and a timely one. Why should the EU seek to compete with private enterprises, essentially take over their product, when it is, at least on the face of it, trying to tackle the bloc’s falling behind in the tech sphere.
This from a March report in Euronews: “Europe is now at risk of missing out on the Deep Tech Revolution, falling behind the US and China when it comes to innovation in various technologies.”
The author of the report is one Francis de Vericourt, professor of management science at the European School of Management and Technology in Berlin. “The innovation lag in Europe comes from complacency, believing scientific achievements would inevitably result in innovation and foster economic growth,” Professor de Vericourt also wrote in that report.
This complacency is likely not on the part of the researchers. It is complacency on the part of politicians — those responsible for helping researchers bring their technology from the lab to the market. Add all the red tape everyone except wind and solar developers need to deal with and a picture emerges of a rather challenging environment for tech innovators.
So, the European Commission wants to basically take over the products and services that some tech companies in the commodity trading industry have developed despite all the challenges, put in their path by that same Commission — and become the competitor of these companies. This is beyond cruel irony.
“Does the European Commission want to become a competitor to leading private companies in the EU? We don’t have a huge amount of tech companies in Europe as global leaders,” the managing director of MetalsHub, Frank Jackel, told the FT, also noting that his company was “not happy” with the idea of the EC taking over their platform.
But there’s more. The EU apparently wants to bundle all energy commodities, from gas to critical minerals, into one trading platform because that makes such massive sense — if you have no idea about any of these commodities and how they are traded.
Commodity trading platform operators are only too happy to help remedy this. Gas, they told the FT, is traded globally on a well developed, mature market. Critical minerals are a niche market because of their nature as “highly specialised raw materials made to customer specifications.” And hydrogen… Well, “hydrogen remains a nascent market traded exclusively on long-term contracts,” the FT obligingly tells us.
You have got to admire the sheer amount of determination that resulted in this attempt to first, centralise energy commodity trading, second, turn on the private sector that you are supposed to be fostering to catch up with the U.S. and China, and third, mix unmixable ingredients because it seems so much easier to trade lithium and LNG in the same place.
Enmacc and MetalsHub are nevertheless bidding jointly for the EU’s commodity trading platform, possibly in hopes they could make Brussels revise its plans in such a way as to make actual, real-world sense. I wouldn’t hold my breath if I were them, however. Centralisation has been a mark of European politics, especially in energy, but elsewhere, too, for years now.
Yet trying to centralise energy commodity trading of all things might be going a step too far. A giant stride too far, even. Because what this would essentially amount to is an attempt at state monopoly. Even in Europe, the business sector is going to express certain misgivings as suggested by the reactions of those two trading platforms. Indeed, MetalsHub and Enmacc are not the only ones unhappy with the whole thing.
Per the FT again: “One European automotive executive said joint purchasing could strengthen the supply chain for smaller suppliers but warned that the EU might use its control over market infrastructure to introduce mandatory stockpiling or requirements to reduce dependency on China.”
That same unnamed executive said “If the infrastructure is built by the European Commission, then we don’t want policymakers or European governments to have too much force about raw material market exchange trading platforms. We don’t want to have mandatory stockpiling for industry.”
Well, well, well. It seems that someone is waking up from a deep slumber of complacency where they dreamed that the EU has the business world’s best interests at heart because of course they would, since it is businesses that give people jobs, produce goods and services, and pay the taxes, on which the Euro-bureaucracy machine feeds. Okay, the EU is quite a sizeable employer, too, but you get the point.
Instead, the EU is turning into a despot with a growing appetite for more power and control over those same businesses that nurture it. Mandatory stockpiling may just be the beginning of something quite different from a beautiful friendship. It could be the beginning of the end of the free market as we know it in Europe. If the business world lets it happen.
Executives may be forgiven for their assumption that the state wants them to do well. The state also believes it wants businesses to do well — and that’s why it wants to control them more completely. Because “Mummy knows best”, even when “Mummy” is clinically insane and dangerous in its belief that it really does know best, under all and any circumstances, and even when “Mummy” has a fixation on climate change and is prepared to risk everything to feed that fixation.
The EU has been stepping on business toes forever but it has been kind of delicate about it, and not causing too much lasting harm. This has now changed, with the bloc’s leadership directly seeking to undermine businesses in industries it says are key for its prosperity. We’re talking broken toes here. Only someone who has experienced the pain of a broken toe knows how angry it can make you. Hopefully, the EU won’t rush to offer painkillers to dull the anger. Anger can be a force for good.
