Why the EU is moving to endorse a ‘humanitarian pause’ in Gaza

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Good morning. Today, I explain the importance of the EU call for a “humanitarian pause” in the war in Gaza, while our climate correspondent reveals the steps Brussels will propose to fight back against America’s big green subsidy wave.

Plus: As the Financial Times launches a newsletter on central banking, join Chris Giles and his international colleagues tomorrow at 1-2pm BST for a subscriber-exclusive webinar to unpick lessons from central banks’ battle against inflation. Register for your ticket now and send in your questions for the panel.

Convergence

EU capitals appear resolved to impose a “humanitarian pause” on the Israel-Hamas conflict, in a critical test of both the bloc’s unity and Israel’s respect for Brussels.

Context: Hamas, the Islamic militant group, attacked Israel on October 7, killing 1,400 people in a terrorist attack. Since then Israel has hit back against Gaza, the Palestinian territory from which Hamas launched its attack, killing more than 5,000 people.

According to a draft of the summit conclusions, EU leaders will call for a “humanitarian pause” in the conflict in order to provide food, water and medical supplies to the 2.3mn civilians trapped in Gaza, after Israel cut off supplies following Hamas’s attack.

That position was endorsed by EU foreign ministers at a meeting in Luxembourg yesterday, with a wide range of views that ranged from “pause” to full ceasefire, according to people present in the discussion.

The EU is a broad church, with traditionally pro-Palestinian states such as Ireland pressed to find consensus with more pro-Israeli countries such as Germany. But “humanitarian pause” was the point of convergence, those people said — a demand that Josep Borrell, the EU’s chief diplomat who chaired the ministerial, admitted was far short of the peace that some had demanded.

Borrell said he saw around the table “a basic consensus to understand that a pause, for humanitarian reasons, would be very necessary to ensure humanitarian assistance can enter [Gaza] without confronting the risks that continuous belligerent action poses”.

The final decision lies with EU leaders who gather in Brussels on Thursday. But the direction of travel is clear. A “pause” to provide Gaza’s most vulnerable with the means to survive will be the least that Brussels expects.

Chart du jour: Large but weak

Germany took a much bigger hit from last year’s surge in energy prices than many other large economies, partly because it has so many big gas-guzzling manufacturing companies. Faced with an economic downturn, business leaders are sounding the alarm.

Green shield

The EU is going on the defensive to protect its green technology sectors.

The European Commission will today present several documents aimed at showing the US Inflation Reduction Act is not necessarily the best game in town for clean tech, and that the bloc can protect its key industries, writes Alice Hancock.

Context: Until last year, the EU thought it was leading the world on clean energy investments and climate policy. But US president Joe Biden’s $369bn package to subsidise green industries prompted European companies to seriously consider investing across the Atlantic.

“The US pulled the carpet from under us,” a senior EU official said.

One of the reports to be presented today sets out to prove the EU can match the IRA. The EU budget is projected to put €578bn towards climate spending until 2027, according to a draft seen by the FT.

But, the commission warns, there is a medium term risk that “the sheer and uncapped amount of IRA incentives” could undermine EU efforts to develop an internationally competitive clean tech sector through other means than state aid — and divert investment more generally.

The other elements the commission will announce include a wind power plan, with criteria to ensure that wind farm auctions are better protected from developers that don’t meet EU standards (read: Chinese). It also sets out ways to speed up turbine permitting and gives details on support schemes by the European investment banks.

Whether such initiatives can soothe the industry’s concerns remains to be seen.

According to lobby group Cleantech for Europe, the scale-up of clean tech in Europe is “so difficult” because of an “unlevel playing field between newcomers and existing large industrials, lack of public and private funding, insufficient demand signals, fragmented markets and lagging regulation”.

What to watch today

1. French president Emmanuel Macron visits Israel.

2. Swedish premier Ulf Kristersson hosts Nato secretary-general Jens Stoltenberg in Stockholm, press conference at 1.20pm.

3. EU general affairs ministers meet in Luxembourg.

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