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Good morning and thanks for reading.
Today, our competition correspondent reveals how the push to reduce (green?) red tape is good news for oil companies, and our Madrid bureau chief explains why there are essentially no trains in Spain.
Have a great long weekend, we’ll be back on Tuesday.
Some EU officials worry that pressure to cut red tape could let companies off the hook in their efforts to reach Paris climate targets.
Draft new rules seen by the Financial Times would make reporting on climate impacts voluntary rather than mandatory for EU companies. He writes Alice Hancock.
Context: This year, an update to the reporting standards for companies in the block went into effect, increasing the number of companies covered by the rules. It states that companies must report to a set of standards, which will be laid out in other legislation this year.
According to the draft of this legislation, companies will not have to disclose efforts to bring them in line with the Paris climate agreement unless they consider them to be “substantial” to their activities.
A specialist advisory group, EFRAG, has advised making climate impact reporting mandatory, while others, such as employment conditions, could be submitted according to an assessment of their importance by the company itself.
But the European Commission appears to have ignored that advice and wants to make all areas, including climate, subject to a “materiality assessment”.
The change sparked concern among the most environmentally conscious officials. They argue that it will be even more difficult to track the impact of corporate activities on the climate. Financial institutions will also have more difficulty monitoring the companies they invest in for their financial reporting.
It also means companies can set their own terms when it comes to decarbonization, said an EU official, as we saw at ExxonMobil’s annual meeting last week.
The move is part of Brussels’ broader efforts to cut red tape, after Commission President Ursula von der Leyen promised to reduce reporting requirements for companies by a quarter.
A document distributed this week by Denmark and Estonia showed that there is support among member states for anti-bureaucratic pressure.
But in an ironic twist, the changes mean the companies’ business may not actually be declining. An executive at a major multinational company said that while there may be fewer actual reports, “it will take just as much work for us because we need to do the assessment for everyone.”
The committee declined to comment on the change. It said the standards would “be published for public consultation as soon as possible”.
Chart for the day: Recession after all
The German economy shrank by 0.3 percent in the first three months of this year, performing worse than an initial estimate of zero growth. A second straight quarter of GDP contraction means that Europe’s largest economy is officially in recession.
Spain’s sunny coastal cities such as Barcelona, Valencia or Malaga make for a great vacation. But did you visit more than one of them on the same trip? Think twice about trying. He writes Barney Jobson.
Context: Spain has one of the best high-speed train networks in Europe, but most rail lines appear like talkers from the capital, Madrid. Despite the Mediterranean being a center for tourists, industry and agriculture, there is no fast train connection between its cities.
This is a source of great frustration for regional politicians who are in the spotlight ahead of Sunday’s provincial and local elections.
In Valencia, which is poised to be the hottest race, one thing the favorites agree on is the need to build a “Mediterranean corridor”. There has been a plan for the line to France for years, but progress has been very slow.
Zimo Puig, the regional president who heads a coalition led by the Socialists, blamed the “problem of Hispanic centralization” for the lack of high-speed linkage.
“Madrid is like a void that consumes resources,” he told the Financial Times. “Everything has to go through the centre, when the Mediterranean corridor produces more than 50 percent of all Spanish exports.”
This case is a reminder that the devolution of power that took place in the post-Franco constitution left a lot of things for the central government to decide only. Parts of the Mediterranean corridor have been built, but delays are rife.
Currently, road or sea is the best transportation option for goods ranging from cars to avocados. “It’s ridiculous,” Puig said.
Carlos Mazón, Puig’s opponent from the conservative People’s Party, said the railway “is an absolute priority from the infrastructure element”.
What are you watching today
German Chancellor Olaf Scholz meets with the leaders of Estonia, Lithuania and Latvia in Tallinn.
European Parliament President Roberta Metsola visits government officials in Austria.
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