12. The Policy Watch

The Policy Watch is a weekly update which aims to provide concise insights into the current policy landscape. Tailored for our members and individuals interested in international affairs, this update offers a brief yet comprehensive summary of key developments affecting policy decisions and political trends in the UK, Sweden, and the EU.

SUNAK DISMISSES GENERAL ELECTIONS ON 2 MAY

In an interview with ITV News West Country, Prime Minister Rishi Sunak stated there will not be a general election on 2 May, when the local elections are scheduled.

UK GOVERNMENT DITCHES BOILER FINES

The Clean Heat Market Mechanism (CHMM) slated for next month has been shelved until April 2025, aiming to safeguard consumers, as declared by the Department for Energy Security and Net Zero. This initiative, pivotal in the UK’s path to decarbonise homes and meet the 2050 net zero carbon emissions target, aimed to incentivise heat pump adoption through fines on boiler manufacturers missing sales targets.

Despite previous considerations for a grace period without fines, the entire scheme’s suspension has been confirmed, eliciting criticism from both climate advisors for falling heat pump installations and relief from boiler manufacturers concerned about increased costs.

NATO HUNTS DOWN RUSSIAN CYBER HACKERS AFTER GPS ATTACK ON UK MINISTER’S JET

British-led NATO forces have launched a reconnaissance mission to track the Russian cyber hackers responsible for the recent GPS jamming attack on UK Defence Secretary Grant Shapps’ RAF aircraft. Collaborating with the US and Sweden, UK aircraft are deployed to identify and counter the Kremlin’s electronic warfare threat. British surveillance aircraft, including a Rivet Joint, are dispatched from RAF bases, with operations focusing on the Baltic region near the Russian enclave of Kaliningrad.

RISING UNEMPLOYMENT IN FEBRUARY SPARKS CONCERNS FOR LONG-TERM JOBLESSNESS SURGE

New unemployment data reveals a February rate of 6.8%, an increase from 6.5% in February 2023. The rise, reported by the Swedish Public Employment Service (Arbetsförmedlingen), indicates an additional 18,000 individuals are unemployed, bringing the total to 359,000. People previously in the manufacturing, construction, and retail sectors are most affected.

Concerns arise among analysts at the Public Employment Service regarding the growing trend of long-term unemployment, prompting widespread expectations of a significant worsening of unemployment in the future.

SWEDISH CPIF INFLATION FELL MORE THAN EXPECTED IN FEBRUARY AHEAD OF RIKSBANK DECISION

Sweden’s CPIF (Consumer Price Index with Fixed Interest rates) inflation dropped to 2.5% in February, marking a greater decrease than anticipated from January’s 3.3%. This decrease in inflation comes despite recent inflationary pressures from surging energy prices. This latest inflation figure is crucial due to the Riksbank’s upcoming decision on the policy rate at the end of March.

KRISTERSSON FIRMLY REJECTS SD’S ‘FIT FOR 55’ DEMANDS

Prime Minister Ulf Kristersson firmly rejects Sweden Democrats’ (SD) demand to negotiate the EU’s climate package Fit for 55, stating it’s “out of the question” during an interview with SVT’s 30 Minutes. Despite criticism from SD’s Charlie Weimers and Jimmie Åkesson, Kristersson shuts the door on new negotiations, highlighting a clear division within the government coalition on climate policy.

MAJOR HURDLES FOR ONSHORE WIND TURBINES IN SWEDEN

The Swedish Wind Energy Association (SWEA) reports significant challenges hindering the development of onshore wind turbines in Sweden, with a key focus on the substantial number of project vetoes by municipalities. In 2023, Swedish municipalities rejected a significant 66% (150 out of 229) of planned onshore wind turbines, reaching an alarming 86% rejections in municipalities located in southern electricity areas 3 and 4. The report underscores that prolonged permitting processes and the absence of clear timeframes for municipal decisions are major obstacles, proposing taxes collected from electricity production facilities to be directed to the local municipalities instead of the state as a potential solution

SWEA estimates that the vetoed projects between 2020-2023 amounted to 792 wind turbines and 16 terawatt hours of annual electricity production – almost 50% of Sweden’s wind power output 2022 (33 terawatt hours).

KRISTERSSON CALLS FOR STRONGER INTERNATIONAL ACTION ON GAZA CRISIS

Prime Minister Ulf Kristersson criticises Israel for insufficient action on the humanitarian situation in Gaza, urging joint US-EU efforts to increase pressure on Israel. He emphasises the urgent need for unconditional release of hostages and significant improvement in humanitarian access to Gaza, asserting that EU and USA collaboration could be pivotal in addressing the crisis.

SWEDEN REJECTS EU BUDGET DISCHARGE AGAIN

Sweden has once again declined to approve the EU’s annual budget, citing a significant increase in error rates, with 4.2% errors reported for 2022. Minister for Finance Elisabeth Svantesson expressed surprise at the lack of reaction from other countries, though noting favourably an uptick in countries voting against the budget this year.

EUROPEAN COUNCIL GREENLIGHTS CORPORATE SUSTAINABILITY DUE DILIGENCE DIRECTIVE DESPITE DILUTION CONCERNS

After weeks of delays, the European Council has approved the Corporate Sustainability Due Diligence Directive (CSDDD), marking a significant step towards holding companies accountable for environmental and human rights violations within their supply chains. Despite its intentions, the approved CSDDD has been notably watered down from its original proposal to secure an agreement, resulting in frustration among sustainability advocates. With the directive now set for review by the European Parliament, attention shifts to the potential implications for both EU-based companies and non-EU entities engaged in substantial business within the EU, as they face heightened responsibility for the actions of their suppliers under the new due diligence standards.

EU AGRICULTURAL POLICY OVERHAUL TO SATISFY FARMERS SPARKS ENVIRONMENTAL CONTROVERSY

The European Commission has proposed revisions to the Common Agricultural Policy (CAP) to alleviate administrative burdens for EU farmers. These revisions aim for simplification while maintaining a robust agricultural policy. These revisions target conditionality and CAP Strategic Plans, offering flexibility for farmers to comply with environmental standards. The proposals respond directly to requests from farmers’ representatives and Member States, aiming to balance the sustainability of European agriculture, farmers’ expectations, and quick agreement among EU institutions.

However, these changes have sparked controversy, especially in light of warnings from EU scientists regarding urgent environmental action needed in the agriculture sector.

WILDERS STEPS BACK FROM DUTCH PM BID AMID COALITION TURMOIL

Freedom Party leader Geert Wilders, known for his far-right and anti-Islamic views, has abandoned his ambition to become the next prime minister of the Netherlands amidst troubled coalition negotiations. This may mark the first time since 1982 that the winning party’s leader has not been elected PM. The decision follows demands from other party leaders involved in talks, including outgoing PM Mark Rutte’s People’s Party for Freedom and Democracy, for Wilders to withdraw his candidacy.

Wilders cited the necessity of unanimous coalition support for his candidacy and expressed a continued commitment to enabling the formation of a right-wing government.

EU COUNCIL AND PARLIAMENT REACH DEAL ON EUROPEAN HEALTH DATA SPACE LEGISLATION

The Council of the EU and the European Parliament have reached a provisional agreement on legislation to facilitate the exchange of health data within the EU, pending endorsement. This agreement modifies the Commission’s original proposal in several key areas, including provisions for patient opt-outs, restricted information access, governance of sensitive data, and the establishment of trusted data holders. The legislation aims to establish a European Health Data Space (EHDS), enhancing individuals’ control over their electronic health records and enabling data reuse for public interest and research. Notably, the EHDS will ensure interoperability among electronic health record systems across member states, addressing the current disparity in digital health data management.

PROVISIONAL AGREEMENT ON STREAMLINING COMPANY LAW WITH DIGITAL TOOLS

The Council of the EU and the European Parliament have reached a provisional agreement on amending directives to bolster the use of digital tools in company law. The proposed legislation aims to make company data more accessible, foster trust, and streamline administrative processes across member states. The agreement enhances the EU Company Certificate by including the company’s object and standardises the Digital EU Power of Attorney, reducing formalities in cross-border procedures.

Crucially, the agreement facilitates the disclosure of limited partners’ details via the Business Registers Interconnection System while offering electronic EU Company Certificates for certain company types. It also includes a provision for considering cooperatives in future revisions.