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Italian government faces backlash over possible Starlink deal

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Local and EU legislators have warned that the Italian government’s acceptance of Elon Musk’s Starlink satellite communication system would be a “political and economic mistake.” This criticism emerged after the government insisted on its decision and Musk entered the discussions.

If the agreement is signed, Italy will become the first EU country to officially establish a relationship with SpaceX. However, this raises questions about the country’s alignment with Europe’s strategic priorities, including the deployment of the EU’s Starlink-like “IRIS2” system.

The communications deal has now become a talking point in Italian politics. MPs such as Antonio Nicita of the Democratic Party told Euractiv that the deal is politically rather than economically motivated. According to Nicita, Musk may be trying to outdo the IRIS2 system by securing a large EU member state as a customer, which could jeopardize its financial sustainability.

IRIS2, a multi-orbit satellite internet constellation, aims to gradually provide secure connectivity from 2025 to 2030 and reduce dependence on non-European systems. According to the Italian MEP, the Italian government’s deal with Starlink raises antitrust concerns, as an exclusive contract between the Italian government and Starlink could lead to market seizure or blocking.

What about Europe’s own satellite communications system, IRIS2?

According to Bloomberg, the five-year deal will cost €1.5 billion. However, Italy is already a financier and future customer of the EU’s IRIS2 program, which is 12 years old and costs all 27 EU member states €10.6 billion. Nicita warned that the entire IRIS2 program would become less reliable and economically viable if a dominant competitor locked up most of the demand by signing medium-term contracts with other EU governments.

MEP and former IRIS2 rapporteur Christophe Grudler told Euractiv that a deal with Italy would be a “strategic mistake,” with Italian taxpayers paying twice for two systems. Grudler also noted that from 2025, the EU’s GovSatCom program will provide most of the services Italy is trying to access through the Starlink deal. He warned that Musk’s venture would displace Italian industry and cost jobs, sovereignty, and strategic autonomy.

Salvini’s support for the deal and Musk

On the other hand, Italian Deputy Prime Minister and Lega leader Matteo Salvini wrote on X that the deal is an opportunity, not a risk. Salvini argued that access to Starlink services would modernize Italy by providing secure and reliable connectivity across the country. He described the SpaceX CEO as “one of the leading figures in global innovation.”

Musk responded to Salvini, calling the prospect “fantastic” and saying he thought other European countries would follow in Italy’s footsteps. A European Commission spokesperson said on 7 January that Italy, as a sovereign state, has full discretion to pursue its sovereign decisions and actions, explaining that access to SpaceX services is compatible with the IRIS2 project. The spokesperson added that Italy’s participation in IRIS2 also means that the upcoming constellation is expected to host three control centers.

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American LNG faces challenges as Europe eyes Russian gas

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American liquefied natural gas (LNG) has helped European Union (EU) countries replace a significant portion of Russian gas.

However, the trade war initiated by Donald Trump has also brought about distrust towards the US.

While the EU administration currently intends to use the US’s 90-day suspension of tariffs to agree on large-scale LNG purchases, some major European companies have begun to discuss the return of Russian gas to the market.

Didier Hollo, Vice President of the French company Engie, which is partly state-owned and was one of Gazprom’s largest customers before the war, told Reuters, “If an acceptable peace is achieved in Ukraine, it may be possible to return to supplying 60, perhaps 70 billion cubic meters per year, including LNG.”

In 2021, Russian gas supplies exceeded 150 billion cubic meters, accounting for approximately 40% of the EU’s gas imports. This was largely Gazprom’s product, and LNG purchases were not significant in the total volume at that time.

However, during the war, Gazprom lost more than two-thirds of its exports to the EU, and its share in the union’s imports fell below 10% this year, while Novatek’s LNG supply increased.

Patrick Pouyanné, CEO of French TotalEnergies, warned Europe against over-reliance on American gas, telling Reuters: “We need diversification; we need many routes instead of relying too much on one or two sources.”

Pouyanné added, “Europe will never return to importing 150 billion cubic meters from Russia as before the war… but I would bet on 70 billion cubic meters.”

TotalEnergies supplies a large amount of American LNG while also being a shareholder in Novatek and selling LNG from the Yamal LNG project, which is not under sanctions.

According to the European Commission and LSEG data, in 2024, Russian gas provided 18.8% of the EU’s imports; 11.4% came via pipelines, and 7.4% came in liquefied form.

This total share was higher than the share of LNG coming from the US (16.7%).

However, according to the Bruegel analysis center, the situation changed radically in the first quarter of 2025.

Total Russian supply decreased from 14.1 billion cubic meters in the previous quarter to 10.1 billion cubic meters.

This decrease resulted from the cessation of transit through Ukraine and LNG imports falling to their lowest level since the first quarter of 2021.

Meanwhile, purchases from the US reached an “unprecedented” level, hitting a record 18.4 billion cubic meters.

European companies have filed a total of 18 billion euros in claims against Gazprom because it stopped supplies in 2022.

The courts have already ruled that German Uniper should be paid 14 billion euros and Austrian OMV 230 million euros in compensation.

According to Hollo, as a first step towards resuming Gazprom’s contractual obligations, it could start supplying gas via pipeline through Ukraine with Kyiv’s approval to pay the compensations determined by the court: “Do you [Gazprom] want to return to the [European] market? Very well, but we will not sign a new contract until you pay the compensations [as per the court decision].”

The return of Russian gas is also advocated at the Leuna Chemical Park, one of Germany’s largest chemical production centers, where companies like Dow Chemical and Shell have facilities.

Previously, Russia covered 60% of the park residents’ needs, mostly via the Nord Stream pipeline, which was sabotaged in 2022.

Christoph Günther, General Manager of InfraLeuna, the park’s operator, stated, “We are in a severe crisis, and we cannot wait.”

Günther noted that the return of Russian gas is a “taboo” subject, but many of his colleagues agree that they need it.

Employment in Germany’s chemical industry has been declining for five consecutive quarters, an unprecedented situation in decades.

Meanwhile, according to three European officials speaking to Politico, the EU plans to start negotiations with the US to increase American LNG purchases to end the tariff war.

Brussels had tried this before, even before Trump announced he would impose comprehensive import tariffs, but according to diplomats, it faced bureaucratic obstacles and a lack of interest from Washington.

Now that Trump has postponed the implementation of increased tariffs (which would have been 20% for the EU) by three months, the European Commission will try to make an additional effort to reach an agreement on LNG.

In particular, a “collective demand” plan is being developed, under which the EU could place larger, pan-European orders at more favorable prices.

However, Politico notes that it is unclear how this will work. Ultimately, companies, not governments, make the deals, and some European companies state that they are already buying enough American gas.

Additionally, insufficient export capacity in the US currently limits the increase in supply.

New terminals are expected to become operational in 2026-2027, according to plans.

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Germany to reduce annual refugee intake below 100,000

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Friedrich Merz, leader of the Christian Democratic Union (CDU) and Germany’s prime minister-designate, has announced that the number of new asylum seekers admitted into the country will be reduced to below 100,000 per year.

According to Zeit, Merz stated on ARD television’s political talk show, Caren Miosga, “Our idea is to significantly reduce this number now. The number of accepted refugees should no longer be in six-figure digits. Our cities, municipalities, schools, hospitals, and infrastructure are overburdened.”

Merz indicated that the new government, in accordance with the coalition agreement among the main parties, will deport “more people” and suspend family reunifications to decrease the number of asylum applications in Germany.

Referring to the goal of turning back asylum seekers at the country’s borders, Merz said, “This will happen.”

Merz noted that officials are already coordinating with neighboring countries, adding that the Austrian government, in particular, is “as interested as we are in solving this problem.”

According to the coalition agreement between the CDU, the Christian Social Union (CSU), and the Social Democratic Party (SPD), there are plans to turn back asylum seekers from Germany’s borders.

However, this practice must not violate the constitutional framework.

Merz’s five-point plan in January stated that the new government intends to introduce “permanent border controls.”

Last week, Merz said that Germany might reconsider its approach to granting citizenship and strengthen immigration control.

Specifically, the possibility of “accelerated citizenship” after three years of residence in Germany will be abolished.

In 2024, the number of first-time asylum applications in Germany exceeded 229,700.

This figure represents a decrease of approximately 100,000 compared to 2023.

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EU revives offer for US gas after tariff pause

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The European Union will revive an offer to buy more American gas, believing that US President Donald Trump is more open to negotiation after pausing the tariffs that have shaken the economy.

The EU plans to reopen talks to increase liquefied natural gas (LNG) purchases from the US and offer specific proposals to address Trump’s anger over transatlantic trade, according to three European officials familiar with the discussions who spoke to POLITICO.

Specifically, the officials said that the EU is looking for ways to aggregate demand to allow the continent to place larger, Europe-wide orders—but ideally at more competitive prices—to meet the White House’s demands.

The EU has been trying to make contact with the Trump administration on this issue for months, but diplomats claim they have encountered confusion and disinterest in Washington.

But allegedly, the situation has now changed: markets are collapsing, and business leaders are begging Trump to change tactics.

“These proposals have been on the table for some time, but we hope there is now an opportunity to make progress,” one of the officials said.

Since his election last November, Trump has repeatedly insisted that the EU buy more American oil and gas to avoid a trade war.

The President has also said that the EU needs to spend an additional $350 billion on American energy to offset what he sees as a “persistent trade deficit.”

Late Wednesday, Trump announced a 90-day pause on most global tariffs, insisting that America’s partners now negotiate to eliminate trade barriers.

The EU sees this as another opportunity to promote its LNG offer. Officials have openly expressed their desire to consume more American fuel, viewing it as a way to finally break all energy ties with Russia.

“In the future, we will buy more gas from the US,” said EU Energy Commissioner Dan Jørgensen at an industry event on Tuesday, stressing that these purchases must be in line with the bloc’s “green transformation” goals.

On the other hand, it is unclear how well a demand aggregation plan will work because, ultimately, companies, not governments, will make these purchases. The EU launched a similar system after the war in Ukraine, hoping to lower very high prices, but ultimately, very few companies participated.

Still, pooling orders from private suppliers and matching them with American suppliers is one way for the bloc to obtain larger volumes of US LNG.

Concerns about LNG prices are also casting a shadow over the talks.

The EU requires countries to fill their fuel storage tanks to 90% of capacity by November 1 each year, and capitals are concerned that the cost of rushing to buy supplies, most of which are American, during the summer will increase costs.

EU countries are trying to relax these rules, hoping that this flexibility will allow them to spend less on LNG.

On Thursday, European Commission President Ursula von der Leyen warned that the EU would respond in kind if tariffs were reimposed, but for now, “We want to give negotiations a chance.”

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