How China’s Nuctech earned EU funds before being hit by EU raids

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Good morning. Spain’s Prime Minister Pedro Sánchez has said he’s considering quitting in response to corruption allegations against his wife, and will announce whether to end his almost six-year-long premiership next Monday.

Meanwhile, the Belgians have activated an EU crisis response mechanism over concerns about disinformation ahead of bloc-wide elections in June. 

Today, we report on how the Chinese company raided by the EU’s anti-subsidy watchdog has been earning . . . EU money. And our Paris bureau chief previews Emmanuel Macron’s big speech on the future of Europe this morning.

Baggage handlers

When EU investigators start going through documents from the raided offices of Chinese security equipment supplier Nuctech, they will find some familiar names in their business dealings: the bloc’s governments are some of its biggest clients.

Context: Nuctech’s offices in Rotterdam and Warsaw were raided on Tuesday morning by EU investigators probing the company for breaching foreign subsidy rules. It is part of a slew of increasingly forceful trade measures being taken by Brussels against Beijing.

The European Commission is accusing the company — which makes airport, freight and baggage scanners — of receiving unfair subsidies from Beijing that “distort” the market. But awkwardly, the commission has also signed off on spending EU funds to buy those products for use by national customs authorities.

The company’s products are ubiquitous across Europe. From scanning the tens of millions of containers transiting the EU’s two biggest container ports — Rotterdam and Antwerp — to the luggage of passengers at Brussels’ Eurostar terminal.

Some of those devices were put there thanks to EU funding, under the Customs Control Equipment Instrument, which has a budget of over €1bn to help member states update their equipment.

Even before Tuesday’s raids, Nuctech had been triggering concerns. The US has since 2020 warned of “its involvement in activities contrary to the national security interests of the US” and “security risks posed by Nuctech equipment . . . given the company’s control by the PRC government”.

European parliament lawmakers have also demanded action against the company, and condemned a 2022 decision to purchase Nuctech scanners by Strasbourg airport — the terminal many of them use to get to their monthly plenary sessions.

“There is a reasonable ground to exclude companies like Nuctech because they are from a country with espionage programmes, which can compel all their businesses or citizens to comply with any request form their services,” said Bart Groothuis, a Dutch liberal MEP. “They will weaponise dependencies against us.”

Nuctech has denied the allegations and said it “is committed to defending its reputation of a fully independent and self-supporting economic operator”.

Chart du jour: Greek tragedy

Greece’s strong economic recovery has made it one of the best performers in the eurozone. But that has come with brutal costs for its long-suffering population, writes Valentina Romei.

Mr Europe

When French President Emmanuel Macron delivered a landmark speech on the future of Europe at the Sorbonne University back in 2017, he sketched out an audacious vision to turn the bloc into a more independent, sovereign power by 2024.

Today, a more experienced, crisis-hardened Macron will take to the same stage for what his advisers are billing as Sorbonne II, writes Leila Abboud.

Context: An ardent pro-European, Macron will argue for moving on from his earlier “agenda for sovereignty” — much of which France believes has been achieved — to an “agenda for European power”, following the full-scale invasion of Ukraine and the Covid-19 pandemic.

Macron’s 2017 speech is like a time capsule of the early months of his first presidency, when he swept into power by demolishing old French political parties and seeking to disrupt consensus in both Paris and Brussels. “The Europe of today is too weak, too slow and too ineffective, but only Europe can give us a true ability to act to face the big global challenges,” he said then.

He will doubtlessly be less harsh today, given that he is now partly responsible for the state of the EU. What has changed is that other countries, crucially Germany, have come around to some of his positions — although Macron’s grandstanding and off-the-cuff remarks still rankle in many capitals.

“The EU has never been more French,” said Georgina Wright, an analyst at the Montaigne Institute in Paris. “To an extent he was ahead of the curve — the ideas of sovereignty and industrial policy are no longer taboo, and the bloc is doing more on security and defence than ever.”

Macron’s advisers are promising Sorbonne II will be more than a victory lap, and include specific proposals for where the EU should go next.

One thing is clear: Europe’s disrupter-in-chief already has his eye on his legacy with three years left in office, and he wants Europe to be a big part of it.

What to watch today

1. Nato secretary-general Jens Stoltenberg visits Germany, meets defence minister Boris Pistorius.

2. Latvian Prime Minister Evika Siliņa visits Sweden.

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