EU Should Upgrade Submarine Cable Infrastructure with State Aid, Paper Says

Europe should take measures to build or upgrade its submarine cable infrastructure and with state aid if necessary, according to a European Commission proposal, underscoring concerns about vulnerabilities exposed by the damage on two Baltic Sea telecoms cables last year.

Submarine cable infrastructures, which form the backbone of the internet by carrying more than 97% of the world's data traffic, have become the latest flashpoint among countries amid rising geopolitical uncertainties and conflicts.

Such concerns have prompted the EU executive to come up with a roadmap including measures to protect and secure the bloc's subsea cables, according to the proposal due to be announced on Wednesday.

"This Recommendation aims to encourage the deployment or significant upgrade of submarine cable infrastructure via CPEIs in compliance with EU law, including state aid rules," the Commission document seen by Reuters said.

CPEI (Cable Projects of European Interest) refers to projects jointly funded by the private sector and governments chipping in on easier terms.

The document said funding could come from EU programs, the European Investment Bank, National Promotional Banks, other development and public financial institutions, private-sector finance institutions and private-sector investors as well as equity funds.

The paper proposed a group of experts to help the Commission come up with a list of strategic CPEIs, facilitate information exchange between EU countries and assess risks, vulnerabilities and dependencies of submarine cable infrastructures as well as propose mitigating measures.

"This Recommendation invites Member States to adopt measures to ensure that submarine cable infrastructure operators meet the highest security standards (including defense-level standards, where appropriate)," the document said.

A gas pipeline connecting Estonia with Finland and several telecoms cables were damaged last year when a ship dragged its anchor along the seabed, investigators said. That followed explosions a year before that ruptured the Nord Stream pipelines under the Baltic Sea.

(Reuters - Reporting by Foo Yun Chee, Editing by Nick Zieminski)