Why the EU wants to create a European metaverse

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Good morning. Today, our competition correspondent takes you inside the EU metaverse (or at least Brussels’ grand plans to create a metaverse that you might want to visit), and our Rome bureau chief has news on Italy’s interminable wait for pandemic recovery cash.

EUniverse

The EU is pushing to create its own metaverse — or metaverses — to rival American tech giants, writes Javier Espinoza.

Context: Brussels is concerned about the influence of companies such as Facebook-owner Meta in the virtual worlds of tomorrow, given the current version of the internet is already dominated by a handful of American behemoths.

Regulators in Brussels have come out for the first time with comprehensive thinking on how to make the EU more competitive in the virtual realm.

A policy paper seen by the FT calls for an elimination of “walled gardens” by setting up common standards between platforms, making sure they are compatible with each other. The aim is “to ensure [the metaverse] is not dominated by a few, setting the de facto standards” in the way American tech giants have done so far.

One key battle against Big Tech in recent years has focused on how the likes of Apple and Google operate a “walled garden”, where they both provide the platform and set its rules, leading to unfair advantages from a competition point of view.

To avoid this, the EU wants to support open source projects and attract tech start-ups to the bloc. The paper calls on member states to help finance new metaverse projects to “test new business models” and build a pan-European “tech hub” through partnerships between the private and public sectors.

“The EU should act now to become a major player [in the metaverse],” the policy paper said.

The draft document, which is set to be presented by the EU’s executive vice-president Margrethe Vestager in Strasbourg next week, also calls for guiding principles on the development of needed tech skills, and an “exchange platform” to be set up so that researchers can spot new trends of growth and innovation.

But the contest for the metaverse is not the only tech race the EU is currently desperate to catch up on.

Last year, the EU outlined global standards for the development of cutting-edge technology in an effort to counter Beijing’s appetite for setting its own benchmarks.

It seems like China and the US still remain the front-runners.

Chart du jour: Old wounds

Serb nationalists are making a comeback in northern Kosovo, following a disputed election in April when ethnic Albanians won mayoral posts in the majority-Serb part of Kosovo. The tensions could imperil diplomatic talks and security in the western Balkans.

Payment pending

For months, prime minister Giorgia Meloni’s government has hinted that Brussels was on the brink of releasing Rome’s next €19bn tranche of its pandemic recovery funds, which Italy requested back in December 2022.

That chorus heralding the money’s imminent arrival now looks set to resound through the summer, after Meloni’s government declined Brussels’ offer to make a partial payout, writes Amy Kazmin.

Context: Italy’s ambitious €200bn recovery program is key for its financial health, to meet deficit targets, raise its GDP growth potential and relieve its heavy debt burden. Rome had to hit 55 “milestones and targets” in the second half of 2022 to unlock the third €19bn tranche.

However, Brussels has questioned Italy’s execution of a €300mn project to create accommodation for 7,500 university students, who often struggle to find affordable housing in pricey cities where they study.

While the European Commission seeks more information needed to “assess” Italy’s performance on this project, Brussels did offer a partial payout, similar to those given to Lithuania and Romania.

But Meloni has decided that the political optics of a delayed payment is preferable to a partial payment with some money withheld, which her rivals could seize on as evidence of the government struggling to meet targets.

Meanwhile, stories in Italian newspapers are blaming Brussels for obstinance and excessively nitpicking questions, suggesting that the small student housing project should not be allowed to delay the entire payment.

More uncertainty lies ahead: Meloni’s government has not asked for its fourth tranche of €16bn, for goals due to be met in the first half of 2023, as it is lagging so far behind.

Instead, the government is focusing all its effort on redesigning the plan, which it hopes will win Brussels’ support and avoid hold-ups in the future.

What to watch today

1. Officials from Turkey, Finland and Sweden meet at Nato to discuss the latter’s membership application. Press statement at 4.30pm.

2. European Commission presents its strategic foresight report.

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