Huawei says sorry over private call to EU industry tsar

Good morning. We have agreement on a new EU asylum and migration system, struck last night in Luxembourg after seven years of negotiations. Laura has the details.

Two pieces for you today that you won’t read anywhere else. First, our competition correspondent reveals that Chinese tech company Huawei called the EU’s industry chief on his private mobile phone just as the bloc was debating curbs on Beijing’s participation in telecoms projects, in a flagrant breach of protocol. And Germany’s finance minister tells our Berlin bureau chief we should remain calm over the startling rise in support for the far-right.

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Huawei has apologised to EU industry commissioner Thierry Breton for a breach of protocol that indicates how intensely the Chinese group is lobbying Europe.

One of the Chinese company’s executives rang the senior EU official on his private number, according to documents seen by the Financial Times, at a time when the EU was looking into curbing the influence of Beijing in key 5G projects, writes Javier Espinoza.

Context: For years, Huawei has been fighting to be included as a key vendor for crucial telecommunications projects in the EU. Last December, the EU published guidelines for member states to ban high-risk vendors (ie, Huawei) from crucial projects.

The exchange between the company’s rotating chair, Ken Hu, and Breton highlights just how much Europe matters for the Chinese group.

On December 11 2020, Hu wrote to Breton: “I am sorry for the distress this incident has caused you. The staff member responsible has been made aware of the seriousness of this mistake and I am assured that this will not occur again.”

Breton replied saying he was concerned about the “seriousness of the event”, according to a letter seen by the FT. “I am willing to put this episode behind us and pursue any future discussions we may have in full respect of the highest transparency and ethical standards.”

The correspondence between the Chinese company and the EU official exposes a breach of protocol, but also raises concerns about the lobbying tactics pursued by Huawei, say Brussels officials.

This comes after revelations that the EU is considering making it mandatory for member states to ban Huawei from the bloc’s key telecommunications infrastructure activities. A report next week will say only a third of countries have introduced a ban.

Huawei did not immediately reply to a request for comment.

Chart du jour: The deluge

The destruction of the Kakhovka dam in Ukraine has flooded towns and villages under Russian control and left thousands stranded. Russian-backed authorities have said five people have died.

Nothing to see here

Few polls have triggered more alarm in Germany than last week’s Deutschlandtrend. The far-right Alternative for Germany (AfD) has reached 18 per cent support — putting it on the same level as chancellor Olaf Scholz’s Social Democrats (SPD), writes Guy Chazan.

Context: The AfD seems to have benefited from widespread disenchantment with Scholz’s coalition of SPD, Greens and Liberals (FDP), and anger over its bungled plans to ban gas-fired boilers. Concerns about rising migration have also boosted the AfD’s fortunes.

Finance minister and FDP leader Christian Lindner, though, is taking the latest polls in his stride. “The current situation is not unique,” he told the FT in an interview, pointing to a 2018 survey which also put the AfD and SPD head to head at 18 per cent. All parties, Lindner said, suffered ups and downs. His own was polling at 7 per cent.

“You won’t cut [the AfD] down to size by acting nervously and hectically, by appeasing it or demonising it,” Lindner said. “You’ll do it by solving people’s problems.” His priority was “to enact good policies and take this country forward, and if we succeed in that then the coalition’s approval ratings will improve.”

The big question on many people’s minds, though, is whether this government is capable of enacting good policies, with the boiler ban debacle giving ammunition to those who have doubts. Lindner said “some people” (ie his coalition partner, the Greens) cared more about getting the ban passed quickly than ensuring it was a well-written law.

He said that Scholz’s coalition had a lot to be proud of and was implementing a “huge number of big, important projects”, such as reforming the welfare state, speeding up planning procedures and providing tax relief for the middle classes.

And one particular source of pride for an FDP finance minister: reintroducing Germany’s debt brake, its constitutional restriction on new borrowing, “after years of very expansive fiscal policy”.

“Yes there’s this narrative that it’s all just gridlock and we’re always arguing,” Lindner said. “But that’s not the reality.”

What to watch today

1. European Commission president Ursula von der Leyen speaks at the University of Toulouse.

2. European parliament president Roberta Metsola opens the European Youth Event.

3. EU justice ministers meet in Luxembourg.

Now read these

Financial Times