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The EU Commission proposes to withdraw from the Energy Charter Treaty

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The European Commission has put forward a legislative proposal to jointly withdraw the EU and EU countries from the controversial international energy deal. The Brussels authority announced on Friday that the so-called Energy Charter Treaty is no longer compatible with the EU’s climate ambitions.

In order to ensure equal treatment of investors in the EU and beyond, the EU, member states and the European nuclear community Euratom must withdraw from the treaty without any modernization in an orderly manner.

In fact, the commission and countries wanted to modernize the so-called Energy Charter Treaty. However, the negotiations in this regard ended in failure. The agreement, which came into effect in 1998, was created to protect investments in gas, oil and coal projects and has long been criticized by environmental groups. It allows investors, for example, to sue states before arbitral tribunals. The objective behind this is to provide security to companies while investing.

The federal government decided to leave Germany at the end of last year. Other EU countries such as France, the Netherlands and Spain have also announced their withdrawal, while Italy did in 2016. However, the phase-out period is 20 years. A collective exit from the EU must now be decided by the EU countries and with the approval of the EU Parliament.

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The Federal Court of Justice is currently dealing with the question of whether EU countries can stay arbitration proceedings before national courts based on the Energy Charter Treaty. Among other things, it concerns heavy investments by RWE and Uniper groups in Dutch coal-fired power plants. A verdict is expected by the end of July. (dpa)

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