Filed under: Fleishman-Hillard Blogs
The long-awaited announcement has finally arrived! We watched, not quite with popcorn, but at least with baited breath, as Commission President Juncker announced his new College of Commissioners and DG allocations for the next five years. Amid festive acclamations, some raised eyebrows, temper tantrums and maybe even a solitary tear, 5 former PMs, 11 financially-savvy candidates, 8 foreign affairs specialists and 7 incumbent ministers were chosen to join the Dream Team. In true Juncker style, he surprised and perhaps confused us all.
Selecting the perfect ingredients for a politically calibrated, yet functional College of Commissioners has been a careful balancing act, leading to more than a few controversial appointments. But Europeans, fear not! Guardians of the peace and right hand men to President Juncker are the newly appointed Vice Presidents, endowed with the duty of coordinating the works. The role of these watchdog VPs is yet to be defined, as a number of policy areas fall under multiple presidencies and seem to be affected by an ‘overcrowding phenomenon’ . Will too many cooks spoil the broth?
The ‘chef’ seems confident as he blends and stirs his employment-flavoured, growth-spiced ‘bouillon’. So it appears that only time will tell whether the internal decision making systems are robust enough to prevent a multi-directional sprawl of policy proposals. Will our chef – already called a ‘Spitzenkandidat’ by some – be able to satisfy the diverse group of political ‘gourmandes’ that is the Parliament.
And how will the restaurant owners react to this new, seemingly complex methodological approach, will the chef have more liberties in the kitchen or less? Analogies are all well and good, but the issues are real, and the question of whether the power of the Commission to will return to the golden age of the Delors years is lingering on everyone’s mind. Might the Council force its hand, should overly complex decision making procedures lead the delicate institutional machine to stall?
Some might say that the balance of power will shift according to themes and personalities; however the problems that lie ahead are all fairly controversial and newly instituted officials will be keen to prove their worth under the daunting stare of the European public. The Russian ban on food imports and the ambitious objectives of an Energy Union and Common Asylum System contrived by Juncker himself, are challenging hurdles on the horizon.
So what is the recipe for success? A masterful chef, cooperative cooks, a lenient clientèle? Possibly a homogeneous amalgamation of all the above, however the first major test of whether this start-up restaurant is of Michelin star quality will depend on the willingness of talented officials to set aside patriotic claims in order to work together to achieve the ambitiously conceived and masterfully crafted plate designed by Juncker.
Alessia Mortara, Aoife O’Halloran and the FH Institutional Research Unit
September 19, 2014
Unlike the hurley-burley of these first days of institutional activity, August was a fairly quiet month in Europe – far set from the troubles and tensions of previous summers and the frenzied preoccupations over economic collapse. This year, Brussels emptied itself of tired civil servants, who trudged, nostalgically back to their homelands, and European capitals were filled with an unusual sense of calm – a pause between political seasons.
However, not all states were blessed with calm and warming summer breezes. A tempest was slowly brewing in Portugal where, on 4th August, the crisis hit the second largest national bank (by total reported net assets) and the ship was sunk. Banco Espírito Santo (BES), with €80.2 billion in assets and €36.7 billion in customer deposit, disappeared almost overnight.
Leaping into action, the Central Bank of Portugal resolved the bank by separating BES’s sound business activities from toxic and dangerous assets thus creating a ‘bridge bank’. The “good bank” is now supported by €4.4bn from the Portuguese state, while the “bad bank” has kept the unfortunate, but appropriate, name of Espírito Santo (i.e. the Holy Spirit, but also the name of the proprietor family) and will be wound down in due course.
It seems inconceivable that only three months after Portugal’s victorious emergence from the bail-out troika (European Commission, ECB & IMF), with all that it entailed in the form of deeper scrutiny and attention, public money is still being used salvage the remnants of a banking disaster and to protect investors from ample losses. After years of Banking Union negotiations and reassurances to markets, policymakers and regular sunbathers, will all be lost?
Let’s take a look at the bigger picture – the who’s and the what’s.
With a century and half of history at its shoulders, the group to which Banco Espírito Sancto belongs, has progressively grown to become a vast empire, held in majority by the descendants of its founder. In the process, the group has expanded across borders, covering different countries and various sectors from banking to tourism and construction, thus becoming a common name in Portuguese households, the local Rockefellers.
However, this wealth of historical heritage brought little wisdom with it. When a new executive team took over BES in July, it soon discovered that the former administration had hid from regulators and the world, a €1.5bn hole in its budget, generated in the first-half of the year (50% of what BES has lost in total) – a situation far from that expected for a bank held by Portugal’s richest family.
Advice given by BES’s external auditor, to counter over exposure to conflicts of interest within the group, was ignored and proved to be fatal. Today, it seems clear that the undetected operations were repackaged by a financial intermediary partly owned by BES, in order to keep them off the balance sheets.
Record losses meant that BES’s solvency ratios fell below the regulatory minimum required to receive ECB funds, and the Bank of Portugal was confronted with an urgent choice – whether to mount a rescue plan, protecting senior debt holders, or allow BES to orderly fail by applying soon to be implemented Banking Union rules.
Overnight, the Bank of Portugal decided to undertake a sort of hybrid rescue plan, mixing both bail-in and bail-out tools.
Bail-out tactics: In order to properly capitalise on the new bridge bank, the Portuguese Resolution Fund was given €4.9bn, of which €4.4bn deriving from the Portuguese State – an amount of money that tax payers will not recover if the selling price of the bank remains lower than the amount lent.
Bail-in tactics: The bridge bank system implied that all the junior bond holders and most shareholders whose assets had been isolated in the “bad bank” would endure severe losses.
If the procedure was completely legal, it was still in grey area. Had the Governor of the Bank of Portugal followed new EU rules on bail-in processes, senior debt holders and large depositors would have been part of the haircut too. As from the 1st January 2016, preserving them will no longer be possible.
Reasons for the choice of a hybrid system are varied and could be seen as a reluctance of regulators to go against the European conception of senior bond holders being implicitly backed by the state, but we’re getting ahead of ourselves and jumping to conclusions.
Let us now look at the “so what’s”.
All signs (or at least those we’ve chosen to look at for this blog) show that the whole operation was a success. And an admirable one at that! Less than a month after the bank was wound down, Portuguese 10 year bonds have reached their lowest point for debt emission in 2014 and Portugal is experiencing growth again for the first time in four years (EC figures).
Source : http://www.bloomberg.com/quote/GSPT10YR:IND/chart
Moreover, being attached to the new, “good” bank, senior bonds barely shifted, while junior bonds have plummeted, illustrating a sense of trust in the path chosen by the Bank of Portugal.
Data therefore suggests that financial markets have bought into the “ring-fencing” tactic, and the risks associated to BES senior bonds will not threaten other banks or the rest of the economy.
On that happy note, but in the slightly gloomier spirit of autumn, an underlying question remains – whether this well-orchestrated resolution and the resurrection of the BES banking group, would have complied with the soon-to-be rules and principles of the Banking Union.
Quite frankly, the answer is – not entirely – or at least, not as shown above. Contentious areas are capital requirements, supervision, bail-in vs bail-out systems (let alone question of whether funding in the Single Resolution Fund was or ever will be sufficient) and, the true moratorium – whether senior bond holders understand the need to adapt their behaviour as from 2016 when the EU-wide rules on bail-in kick-in.
But we’re not going to ask the big question – whether the Banking Union has really changed anything. We’re not! Because of course… it has! So don’t be so gloomy. Go catch the last sunlight, go chase rumours about the next Commission and let summer events be summer events and… have faith!
By Martin Bresson, Claire Bravard & Alessia Mortara
When a regulator decides to close down a bank that because it failed.
 Bond holders that will be will be paid back before junior bond holders and shareholders if the bank goes bankrupt (and if there is enough money left)
September 8, 2014
FleishmanHillard recently gathered representatives of the food & beverages, agriculture and retail industry to hear about the expectations of European consumers towards the food industry. To feed the debate, Nick Andrews presented the recent FleishmanHillard research called “Authenticity”. The research, undertaken in Germany, the Netherlands, and the UK with expert consumers revealed that the industry is falling short on people’s expectations to provide transparency around production methods and sources, more personalised and easier to use products and services.
Commenting on the consumer’s expectations, the Deputy Director General for the Food Chain at DG SANCO, Mr. Ladislav Miko, shared with the participants his views on how the European Commission’s current and future initiatives will support the industry meet these expectations.
The Authenticity Gap research is available on our Center On Reputation website and will give you insights into what consumers expect from your industry! Reputation matters when it comes to policy-making and regulation too!
How is your company doing reputation wise and how much does it support or hinder your public affairs objectives?
July 15, 2014
This year’s edition of Brussels Forum, hosted three interesting speakers: EEAS’s Lady Ashton, Council’s Mr Van Rompuy and NATO’s Rasmussen. All three of them will step down from their positions this year, which inspires for a reflection about their key challenges, successes and failures over the past years.
Since Van Rompuy became a President of the Council five years ago, we have seen a transformation of the Council into one of the most important EU institutions. A little joke made by President Van Rompuy during Brussels Forum actually contains a bit of truth about why the Council became so influential: “I took this job now almost five years ago, and some are saying that the European Council became the most important institution in the European Union. There are two reasons for this. I don’t know if it is true, but there are two reasons. The first reason, of course, is they had a brilliant President of the Council. The second reason is that we had a crisis, and a crisis helps a lot to put people together. We can’t have a meeting with the 28 leaders and then after the meeting I had to confront the president, say we had an excellent meeting, but we just didn’t agree on anything. That’s impossible. We had to agree. We had to converge. We had to take decisions otherwise we were punished by the markets the day after.”
*Photo: Ewa Abramiuk Lété
Lady Ashton also presented a few reflections about her achievements: “(…) success for me is about making sure there’s a second high representative, which there will be. And I said that for my time in office, there were three things that mattered. One, I had to build a service because when I started, we had lots of fabulous people, but they were scattered in eight buildings in Brussels and across the world doing things that were not what we do now. We now have 140 delegations that are EU operating across the world who are a real network of impressive people who can deliver the range of what the EU does”.
Indeed, it must have been a difficult job to create this machine, one which requires a skilful diplomat and negotiator, which Lady Ashton is. However, while the first part of the work has been done – creating a network of delegations around the world – it will be interesting to observe how this peculiar machine will develop under new leadership.
Strong words came from NATO Secretary General Rasmussen, who will be leaving his position this year but, according to the Brussels rumour mill, might remain in town in a different role. Rasmussen said “We cannot continue to disarm while the rest of the world is re-arming and some are rattling their arms on our borders. NATO’s greatest responsibility is to protect and defend our populations and our territories. To do that we must insure that we have the full range of capabilities to deter and defend against any threat. To back off diplomatic softpower with military hard power. Now we need real power.” Norwegian Jens Stoltenberg has just been announced as his successor and while congratulations to the new Secretary General are flowing in and the excitement around this new appointment is still high, it will be interesting to observe if his rhetoric will stay as strong.
Three strong individuals will leave Brussels, however I am looking forward to seeing which opportunities this change will bring for Europe and NATO.
Ewa Abramiuk Lété
March 28, 2014
Earlier this week I attended the Berlin Energy Forum, previously known as the “Berlin Fossil Fuels Forum”. Beyond the valuable networking opportunity, the event came with a reaffirmation of Germany’s central place for EU energy policy and some questions about the role and status of fossil fuels in policy discussions.
Germany: not just one amongst others
In Brussels we want to believe that large Member States have equal chances of influencing EU policy discussions. When it comes to energy policy, it is however hard not to notice the huge impact that Germany has over the policy debate.
In 2011 Germany launched the most radical energy reform with its Energiewende. On Monday Sigmar Gabriel, the new Vice-Chancellor in charge of economic and energy policy, set out the reasons behind this truly bold political decision. And he is convinced that other countries will follow. Of course this ‘Energy Turn’ is first known as the complete phase-out of nuclear by 2022 but it is also more generally the complete change in power sources, with a large and rapid boost for renewable energies. Three issues have emerged as a result and are now at the heart of EU energy policy discussions:
1) Energy Costs: Germany’s push for renewable energies led to what was described by the Commission in Berlin as ‘overcompensation’, especially for solar. Does it not seem strange that, of all sunny places in the world, 35% of global solar capacity is now located in Germany? As a result of this massive increase in renewable subsidies, a German household pays an extra €260 a year on its electricity bill.
2) State Aid: DG Competition recently brought a case against Germany and the exemptions from the EEG (Renewable Energy Act) for energy-intensive industries. Should they stop being exempted, German energy-intensives could face a net increase in electricity price of up to 50€/MWh. Exemptions from renewable surcharges are also a major topic of the draft State Aid Guidelines for Energy and Environment, open to consultation until tonight.
3) Coal vs. Gas: To provide stability and back up intermittent renewables, Germany is burning more cheap coal (lignite), whilst German gas power plants are being mothballed. Experts argue that Germany will miss its 40% GHG reduction target by 2030 because of this ‘coal renaissance’ in the country.
Due to the issues described above, the Energiewende is considered from abroad with a degree of scepticism. The future will tell us if the German energy revolution delivers on its promises. One thing is sure: it will continue to set the energy policy agenda in Brussels.
Fossil Fuels: In or Out?
This year, the Commission considered that the previous focus on Fossil Fuels was no longer relevant or appropriate and decided to focus instead on more horizontal topics, roughly corresponding to the inevitable energy triangle: sustainability, security of supply and competitiveness. It doesn’t mean that fossil fuels were kept out of the programme. Nuclear, coal and natural gas representatives were largely involved in discussions. However, the Berlin Energy Forum didn’t address the challenges of primary energy supply, largely focusing instead on the power market. This led to some confusion, especially as the Commission had planned an additional session outside of the official programme to discuss oil and gas supply.
Clearly the Commission wants to send a signal that Europe needs to move away from fossil fuels. This is part of a broader story of progress, of Europe reducing emissions and declaring its “energy independence” (as quite provocatively described recently on the Commission’s Twitter account). Some may argue that this story also needs to be grounded in reality. And the reality today is that, as Fatih Birol pointed out during the debate, fossil fuels still represent 82% of the global energy mix, only expected to fall to 76% by 2035.
Whilst the Commission should more clearly acknowledge that fossil fuels cannot simply be dismissed from discussions, it is also the fossil fuels industry’s role to demonstrate they can be a part of this story of progress, by emphasising their immense innovation and technological expertise and by demonstrating they can be used in more energy-efficient ways in the future. They may not have their own separate forum anymore, but this gives them a great opportunity to show to the Commission that they can contribute to discussions in a constructive manner.
February 14, 2014
The EU Emissions Trading Scheme (ETS) is here to stay and stakeholders share a common vision on how to fix it, that was the basic takeaway from a roundtable on carbon market reforms FleishmanHillard hosted along with SSE and Oxera last Friday.
For those whose full time job is not in the EU Energy or Climate field, the ETS is the largest multi-country, multi-sector greenhouse gas emissions trading scheme in the world and the chief instrument for the EU in meeting its emissions reduction targets. However, a huge surplus in allowances has seen prices fall from €20 a tonne in 2011 to €5 a tonne today, reducing incentives to switch from heavily polluting fuels such as coal to cleaner alternatives such as natural gas or renewables, like wind and solar power.
Given the timely nature of the event (At the time of writing, the famous backloading dossier which through the tempera removal of allowances would prop up the carbon price has just received the backing of MEPs in Plenary) it was little surprise that over 40 participants came to FH’s offices to exchange views with the Commission, industry and NGO’s on how best to get the EU’s principal GHG reduction instrument back on track.
What was perhaps a little more surprising was how aligned participants – EU policymakers, NGOs and industry types alike — seemed to be in their thinking on what should be the next steps to fixing the ETS and getting the EU carbon market back in order.
In November 2012, the European Commission, in its ‘”State of the Carbon Market in 2012″ document, presented 6 potential options to reform the EU ETS. At the roundtable it became apparent that a loose consensus was emerging around the following three-step approach, which includes elements of the Commission’s thinking but also a number of new elements that have been introduced by stakeholders in recent months;
Step 1 – Backloading: The backloading of 900 million EUA would be a necessary but far from sufficient first step. The backloading of allowances should prop up prices temporarily above the current €5 a tonne number but will not increases prices to the €25-30 a tonne figure original envisaged by the Commission to stimulate low carbon investment and new technologies. With MEPs having given their support to backloading in a full European Parliamentary vote Tuesday, Member States should do likewise in coming weeks, by approving backloading. The first allowances to be backloaded in 2014 or 2015 depending on what timetable the Climate Change Committee decides Dec. 16.
Step 2 -Early reduction of annual linear factor: This tool is effectively an annual decrease in the amount of allowances in the system and is in line with one of the six options laid out by the Commission. Reducing the supply would push up the ETS price. Participants at the FH event suggested revising the annual linear reduction factor by -1.74% as soon as possible, most likely in 2016 or 2017. Some participants noted that it was possible to even go beyond 1.74% to a more ambitious 2.5% reduction.
Step 3 – Supply adjustment mechanism (SAM): A supply adjustment mechanism would automatically, based on pre-determined rules, adjust the supply of allowances in case of significant deviations in the economic development. The idea of having a supply adjustment mechanism to act as a ‘shock absorber’, independent of political interventions, was first floated by IETA in reaction to the Commission’s stakeholder consultation. Support for this measure has been growing consistently since with DG CLIMA Commission also seemingly supportive.
The main difficulty with the SAM remains how the adjustment mechanism should kick in. It could be a) Emissions-based – simply identify a lower and upper threshold; b) GDP-based – reliant on economic activity and c) ETS allowance Price-triggered – seen by many participants as the simplest option to implement but more politically challenging.
Looking ahead, the Commission will most likely come forward with a proposal on structural reforms of the ETS in January, most likely as part of the large package of policy proposals to be released on January 22; this package is also expected to include a 2030 Climate and Energy framework, a study on the various factors that drive energy prices and a formal Commission view on shale gas (A Commission policy proposal on shale gas also remains a possibility).
Given the legislative timeline, the proposal introduced in January will not be finalized in this Parliament, but will rather seek the endorsement from Member States at the European Council summit in March.
As one participant noted at the FH roundtable: given the huge oversupply of allowances in the ETS today, without the possibility of reform, the price of ETS allowances would actually be closer to zero rather than the current €5 a tonne level. The €5 a tonne price represents investors’ confidence, however thin, that policymakers can introduce meaningful reform to a collapsing market.
After the Commission shows its hand in January, all eyes will be looking at the Council in March to demonstrate that the political will exists at the highest level to reform the ETS.
December 12, 2013
Party hats out.
The European Commission informed the world Wednesday that at least 20% of the European Union’s budget for the next 2014-2020 funding period will be spent on climate-related projects and policies.
Says Connie Hedegaard, the EU’s climate watchdog honcho, in the Commission press release: ”Today is an incredibly important day for Europe and for the fight against climate change….This is a major step forward for our efforts to handle the climate crisis…”
And: “This underscores yet again Europe’s leadership in the fight against this crucial challenge. I believe the EU is the first region in the world to mainstream climate action into its whole budget.”
Hedegaard’s gushy tendencies and legacy-craving aside, there a few points here to consider.
First, the tone-deaf question: With European and Eurozone unemployment, take your pick, still at record levels, economic growth still limping along and deflation in Europe now a creeping threat because of the aforementioned, is the Commission’s, Hedegaard’s, chest-beating on EU climate change ‘leadership’ something people in Europe really care about right now?
Secondly, sentient beings are generally already aware that climate change abatement is a high EU policy priority – the only one actually where alignment exists between Member States — and that the EU and European nations have enviably produced all sorts of meaningful and important policies to decarbonize Europe. But chest-beating on an almost daily basis about it, as Hedegaard does, is desperate.
Worse for Hedegaard and Company is that the ritual of telling the world how the EU, representing a mere 10% of global emissions, ‘leads’ on climate change is often a quiet picture, with a self-designated leader with no one following from behind.
Third, what matters most actually, though, comes down to outcomes, not inputs of how much cash your throwing at the important problem, and the chest-beating.
A couple of examples are instructive: Despite being the engine of the continent’s renewable energy spending, Germany is still expected to see carbon emissions rise this year by 2%, while carbon emissions in the U.S. are falling (from a high base, of course) and near a 20-year low.
Electricity from the dirtiest fossil fuel, coal, is filling the gap in Germany for the series of natural gas power plants closed the past two years from the unintended consequences of Germany’s uber spending on solar and wind power; meanwhile, the long-told story of America’s jackpot with shale gas has resulted in the shuttering of dozens of coal plants and falling emissions there and tanker-loads of of cheap coal exports to Europe, among other places.
If Europe wasn’t mired in recession, its emissions would be higher by any measure. And many Europeans probably would hope, quietly, that carbon emissions actually begin to rise again in the continent as a bloc as an indication that economic conditions are improving.
To paraphrase the tired saying: speak lightly, Hedegaard and Company, but carry a big stick.
By Spencer Swartz
November 20, 2013
Who said Brussels is boring?
We talked about the vote in the Parliament earlier this week already and we were waiting for the European Council conclusions. Well, Heads of States and Government have just declared that “the timely adoption of a strong EU General Data Protection framework is essential for the completion of the Digital Single Market by 2015.”
As some of us know, a draft text prepared by the Council was suggesting the adoption next year of the regulation. While the wording “next year” was already quite vague as a deadline (before or after the EP elections?), the text officially adopted today removes a deadline entirely thus showing the reluctance amongst member states to commit to a firm timeline.
And now, what’s next? The Parliament wants to enter negotiations with Council and Commission to wrap up the text next year. I feel that besides Poland and France there is no other member state that really wants to rush the legislation. We know that industry has been calling for a deeper discussion given the complexity of this dossier. This week I saw a few reactions from civil society groups and activists and, funnily enough, they now somehow agree with industry by saying that the legislation should not be rushed (they complain about the secrete tripartite negotiation that could allow to adopt the text).
The final interesting bit of info is that the rapporteur Albrecht stated during this week’s press conference that the European Parliament will hold a plenary vote in April (TBC) on the regulation, either on the text adopted in committee or on the compromise text emerging from the trialogue (if they reach a deal). To me this means the following: if Albrecht is reelected during next year’s EP elections he might regain the role of rapporteur on the data protection dossier. This means that, should the EU Institutions have to start looking at the dossier again in 2014, the European Parliament will already have its official report that then the Council will have to deal with. Stakeholders’ reactions to the LIBE text have not been that positive so this means that we will stick to the text we have seen adopted.
October 25, 2013
Any regular reader of this blog knows that we tend to take ourselves pretty seriously. I mean, we’re serious consultants with serious work to do and serious policy areas to ponder! We’re passionate about the issues of the day that will affect our work, our clients, and life in general out there in the wild blue yonder; whether it be how the German elections could impact the direction of energy policy, or how the twittersphere is chiming in on Europe.
We’re also passionate about cake. Yes, you read that correctly, cake: the edible foodstuff that is sweet and moist and can be blamed for ever-expanding waistlines of office workers, worldwide.
Now it seems, as the resident baking enthusiast here at FleishmanHillard (and instigator of semi-regular, now infamous ‘cake competitions’), I’ve begun to get a bit of a reputation. So when colleagues spotted an opportunity to form a team to participate in the BritCham Great Brussels Charity Bake Off competition, they knew exactly who to call. We pulled together a team of bakers (me, Jane, Sandrine, & Maria Chiara), gave ourselves a name “FHun in the Oven” (apparently makes Brits chuckle – thanks James), and decided to bake a good ol’ fashioned Hummingbird Cake – a specialty of this famous London bakery (Like a carrot cake, but not. See the recipe below).
After some fun Sunday-evening adventures (Batter tasting! Bowl licking! Icing-testing!), and one happily-averted mishap that almost ended with the top layer of our cake on the pavement of Rue Goffart, we were feeling pretty good (read: in a sugar-induced coma) about our handiwork…
…Until we started checking out the twitter feed #BxlBakeOff and saw the seriousness with which our competitors clearly take themselves.
The competition was fierce and I mean fierce. 24 cakes. There were cakes with squirrels and acorns fashioned out of chocolate-covered macadamia nuts…
There were orange-frosted Halloween themed cakes that tasted like my childhood and were adorned with creepy little edible marzipan bats & rats!
There was even a cake depicting an EU legislative timeline! I mean, these people really do EAT, breathe and sleep their work! Needless to say, our humble little hummingbird cake, despite its deliciousness, found itself a little out of its league amongst the worthy competitors.
The winner was a 3-layered cake, with each layer representing a color of the Belgian flag. It was wrapped in a Belgian flag banner, covered in what I think was chocolate ganache, and had a 3D edible version of The Grand Place atop its chocolate & edible-flower be-carpeted self. Hmpf. I know it’s hard to believe. I didn’t get a picture, so recommend checking out Judge Emma Beddington’s instagram’d capture for photographic evidence. She has also written, in hilarious fashion, about her experience as a judge in a post on her own blog, Belgian Waffle – and it’s well worth a read (plus there are more pictures!)
Ok, so we didn’t win this time. And we’re not sore losers. (No really, we’re not!) But now that we know what we’re up against, well let’s just say: challenge accepted!
Roll on November, where ‘Pie’ features as the next competition category….and watch this space for further tales of our competitive baking adventures!
*All pictures shown in this post were taken by me, Lindsay Hammes, with handy-dandy blackberry
The Hummingbird Bakery’s eponymous cake
What you’ll need:
300 g caster sugar
300 ml sunflower oil
270 g peeled bananas, mashed
1 teaspoon ground cinnamon, plus extra to decorate
300 g plain flour
1 tsp bicarbonate of soda
½ tsp salt
½ tsp vanilla extract
100g tinned pineapple, cut into small pieces
100 g shelled pecan nuts (or walnuts) chopped, and whole, to decorate* (we used both, pecans in the cake, walnuts on top)
3 20cm cake tins, base-lined with greaseproof paper
250g cream cheese
100g unsalted butter
600g icing sugar, sifted
Preheat the oven to 170 C/325 F/Gas 3.
Put sugar, eggs, oil, banana and cinnamon in a freestanding electric mixer with a paddle attachment (or use a handheld electric whisk) and beat until all the ingredients are well incorporated (don’t worry if the mixture looks lightly split.) Slowly add the flour, bicarb soda, salt and vanilla extract and continue to beat until everything is well mixed.
Stir in the chopped pineapple and pecan nuts by hand until evenly dispersed.
Pour the mixture into the prepared cake tins and smooth over with a palette knife. Bake in the preheated oven for 20-25 minutes, or until golden brown and the sponge bounces back when touched. Leave the cakes to cool slightly in the tins before turning out onto a wire cooling rack to cool completely.
In a separate bowl, beat icing sugar & bitter together in a freestanding electric mixer with paddle attachment (or use a handheld electric whisk) on a medium slow speed until the mixture comes together and is wel mixed. Add the cream cheese in one go and beat until it is completely incorporated. Turn the mixer up to medium-high speed. Continue beating until the frosting is light and fluffy, at least 5 minutes. Do not overbeat, as it can quickly become runny.
When the cakes are cold, put one on a cake stand and spread about one quarter of the cream cheese frosting over it with a palette knife. Place a second cake on top and spread another quarter of the frosting over it. Top with the last cake and spread the remaining frosting over the top and sides. Finish with pecan nuts and a light sprinkling of cinnamon.
October 16, 2013
Frau Merkel won big in Germany’s federal elections on Sunday, but not big enough; and that has negative implications for German energy policy.
Merkel’s third time around as German Chancellor will require a grand coalition that produces the typical lowest common denominator style decision-making that such coalitions bring. That doesn’t bode well for the decisive action required to address Germany’s outstanding energy issues, namely, runaway electricity costs and the future of shale gas development.
Merkel personally won commandingly, of course, with her Christian Democrat conservatives increasing their share of the vote by eight percentage points to around 42 percent, as Der Spiegel reported, but not enough for an absolute majority.
Further, her pro-business, junior coalition partner, the Free Democrats, failed to garner the necessary 5% share of the vote threshold needed to stay in parliament. Absent an absolute majority, that leaves Merkel dependent once again facing the need to join forces with the Left: the Social Democrats, whom she depended for her coalition in her first chancellorship in 2005, or(however remote the chances) the Green Party.
The SPD and its Green Party partners have a majority in the Bundesrat, the second house of parliament where the 16 federal states are represented, as the Financial Times reported Monday, meaning, all major legislative items will have be taken on the basis of compromise.
So how might decision making-by-grand-committee translate for German energy policy? Expect big changes to correct the country’s unwieldy renewable energy policy? Expect shale gas exploration to be given a clean go ahead (without a raft of new regulatory requirements)? I wouldn’t bet on either.
RISING POWER COSTS AND SHALE
Beset with some of Europe’s highest power costs, Germany’s ambitions for a quick and big shift to wind and solar power has become economically unsustainable, as we’ve heard in spades in recent months. High energy prices are not, intrinsically, a bad thing altogether if they occur over time. They help reduce wasteful consumption, which is good both for ultimately keeping a lid on prices and for environmental stewardship, and incentivize investment.
But because of overly generous subsidies to wind and solar generators, German residential power prices have spiked some 70% since 1998, making them among the highest in Europe, behind only Cyprus and Denmark, according to EU data Bloomberg cited in a story last week; in 2014 alone, the renewable surcharge that will be added to consumer power bills is projected to rise 20%.
Last week, Germany’s BDI, which represents the country’s biggest companies who are worried about Germany’s competitive position in Europe and against the U.S. because of high energy costs, called on Merkel to eliminate the costly feed-in tariff subsidy that guarantees wind and solar generators above-market payments for 20 years under Germany’s renewable law.
Thus, what Germans are becoming loathe to realize is that the process of switching off all of the country’s nuclear reactors by 2022 and leaning heavily on wind and solar power to plug the gap is not actually a short term, low-cost endeavor. Ripping up energy infrastructure that took decades to put into place actually requires decades to replace in order to make the switching and transition costs palatable and acceptable across society.
It will also take decades and many multiple billions of euros to build all the needed transmission infrastructure to wheel power from Germany’s north, where all the country’s wind and solar generators have been built, to Germany’s industrial south where the demand is. Ambition requires real-world pragmatism.
Killing the feed-in tariff seems unlikely for various political and economic reasons. For starters, the SDP loves it and so do the Greens, even if they acknowledge costs need to be contained somehow. The Christian Democrats and Social Democrats agree that Germany’s feed-in tariff law needs to be reformed, but they differ sizably on how to do it, as online German solar portal, SolarServer, recently observed.
With the election behind her, Merkel will come off the fence on shale gas, an issue she’s generally been silent on. But even if her pragmatic ways lead to a thumbs up for shale gas, her coalition partners and the German people are bound to have other thoughts. An absolute majority for Merkel and the Christian Democrats would have presented her with a mandate to make the case for shale gas to the German public, without having to placate Leftist coalition partners.
Hydraulic fracturing, the method employed to extract shale gas, has been used in Germany to initiate extraction of conventional but very tough to tap oil deposits since the 1960s – without incident. Yet, despite shale gas risks being obviously manageable based on the industry’s long track record, German public and political opinion on the Left (and even for some on the Right)has been staunchly opposed to shale gas development because of environmental concerns. And the post German election period is unlikely to change that sentiment, at least in the short term.
Squaring those energy issues through the inherent consenusal nature of the grand coalition that emerges in Germany, whatever its composition, will be a very tall task. Lowest common denominator decision-making poses a natural barrier against the type of decisive political actions required to meaningfully iron out Germany’s renewable energy fiasco and to open up a new avenue for energy supply security in shale gas.
Thus, the fortunes of the dirtiest of all fuel sources, coal, will continue to flourish in Germany. Coal remains abundant and cheap — especially as weak wholesale power prices, triggered by subsidized renewables, push more and more pricier gas-fired power generation out of operation. That is why coal’s share in the German power mix is expected to stay above 50%, more than any other source, in the forseeable future, according to industry analysts.
September 23, 2013