No majority in sight for EU supply chain law for the time being
Published: Friday, Feb 9th 2024, 13:43
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A political agreement had actually already been reached, but concerns from the FDP have caused the project to falter again. A vote on the EU supply chain law planned for Friday has been postponed.
For the time being, there is no majority among the EU member states in favor of a European supply chain law. A vote on an agreement previously negotiated by negotiators was spontaneously postponed, as announced by the Belgian EU Council Presidency. This is also due to the fact that FDP-led ministries in the German government had announced shortly before the vote that they did not want to approve the project. FDP member of parliament Carl-Julius Cronenberg announced that other EU countries had also expressed criticism of the project.
The EU supply chain law is intended to hold large companies accountable if they profit from child or forced labor outside the EU, for example. Larger companies are also to be more strongly obliged to comply with the Paris climate targets to limit global warming. Germany already has a supply chain law, but the EU proposal also goes beyond the German requirements. It applies to more companies and provides for more opportunities to take legal action against companies that do not comply with the requirements.
A week ago, the FDP-led ministries of justice and finance opposed the plans, causing controversy within the coalition. Foreign Minister Annalena Baerbock (Greens) clearly criticized the FDP, saying that Germany's reliability in the EU was at stake. She said: "If we break our word once given in Brussels, we are gambling away trust."
Postponement a "tragedy"
MEP Anna Cavazzini described the postponement as a tragedy. "The FDP has not only forced Germany to abstain, but has also put pressure on other countries not to approve the EU supply chain law either," said the Green politician. The Federal Chancellor must now put his foot down.
The President of the German Institute for Economic Research spoke out strongly in favor of an EU supply chain law on Thursday. According to Marcel Fratzscher, Germany would suffer considerable economic damage and Europe would suffer irreparable political damage if the supply chain law did not find a majority. With regard to Germany's abstention, he said that this would "not only be a moral failure, but could above all damage the open German economy and its most important brand essence, the reputation of its products "Made in Germany", in the long term".
Business associations, on the other hand, recently spoke out against the EU supply chain law. In a letter to Federal Chancellor Olaf Scholz (SPD), they warned that companies could withdraw from Europe and be confronted with unfounded lawsuits and excessive penalties. The letter was signed by the presidents of the Federation of German Industries (BDI), the Confederation of German Employers' Associations (BDA), the German Chamber of Industry and Commerce (DIHK) and the German Confederation of Skilled Crafts (ZDH).
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