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July 06, 2017

On Merkel’s imperial overreach

There is a lot of optimism among commentators about Europe at the moment, based on three factors: a cyclical economic upswing, uncritical adulation for Emmanuel Macron, and hatred for Donald Trump. As so often, we note that the news coverage is driven largely by the twin sisters of wishful thinking and confirmation bias - the fake-news equivalents in the realm of commentary.

There is a lot of commentary goading on Angela Merkel to seek a showdown with Trump in order to save the planet and the liberal establishment's version of globalisation. We share some of this sentiment in relation to its goals, notably on climate policy, but we think that the attempt to isolate Trump diplomatically is more likely to backfire than to succeed. Even Judy Dempsey, who supports a more assertive European diplomatic stance at the G20, acknowledges that Russia and Australia may side with Trump at the G20 summit on the Paris accord. There are also serious differences of views on how to co-ordinate counter-terrorism at the G20 level, and on migration policies. 

The New York Times reports that efforts to isolate Trump are faltering. That does not surprise us. How can it be any different? How can the EU claim global leadership with its persistent beggar-thy-neighbour current account surpluses, its drain on global resources resulting from its lack of economic crisis resolution, and its members' refusal to adhere to their Nato spending commitments? Whatever other leaders may think of Trump, for many of them the US is and remains a more strategic partner in the long run. We agree that the EU should aspire to a global leadership role, but that would require a sharply different set of attitudes and policies as a starting point.

The New York Times also notes that Germany is giving up on hopes of an everyone-against-Trump G20 summit outcome. It says that Saudi Arabia is unlikely to support the majority in the G20 against Trump, while Russia, Turkey, and Indonesia, are sending mixed signals.

The US does, however, not appear to be seeking to destroy the Paris agreement, beyond pulling out itself. The article explains that an original draft of the "G20 action plan on climate and energy for growth" contains a passage in which the G20 supports the goals, while the US opposition is listed in a footnote. And then there is the communiqué, where the Trump administration is also resisting to be relegated to footnote status. The worst outcome for Merkel would be a failure to reach a common position, which would result in her having to summarise each country’s position separately.

We should also note the comments by the Turkish president, Recep Tayyip Erdogan, who said Germany’s decision not to let him speak at a political rally in Germany amounted to political suicide for Germany. He, too, is unlikely to rally behind Merkel.

We like the comment by Jeremy Shapiro who noted that there are a number of accidents waiting to happen. The fact that Trump sees no strategic purpose in his G20 participation does not mean that there will be no strategic consequences, he argues. If he pushes for LNG exports to Poland, this could drive a wedge between Poland and Germany, but would also annoy Russia, as it messes with the economic logic behind the Nordstream 2 gas pipeline project. And Trump could get mad about the many protesters he may encounter during his trip to Europe. 

As world leaders descend on Hamburg, there is a quite a bit of diplomatic activity going on in the background. Germany’s and China’s commitment to a strategic partnership is mostly based on hot air - and a few commercial contracts. More significant is the EU/Japan trade agreement that was formally concluded yesterday, in time for the G20 summit. The agreement turns the EU and Japan into a giant free trade area affecting 99% of goods, including cars. The EU import levy of 10% is to be phased out over seven years. But, unlike the Ceta agreement, this Japan trade deal has no provisions for investor protection yet. This remains on the agenda, though. FAZ reports that the Commission still considers it an open question whether this is an EU-level agreement, or a mixed agreement. 

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July 06, 2017

When the opposition opposes to oppose

What happened to the opposition in France? Republicans might talk like they are in opposition, but the fact that 75 out of the 99 present at the Assembly voted for Édouard Philippe shows the opposite. One of the MPs said that this was in fact not planned but a result of the grassroots no longer supporting plain opposition. The opposition opposes to oppose, concludes Cécile Cornudet. Opposing who and when? Is one to remain constructive as long as public opinion suggests it? Or to spear ahead and become the first opponent? This is what La France Insoumise and the Front National are doing. Is the opposition defined by numbers (Republicans) or the level of noise (France Insoumise)? Emmanuel Macron might win support every day, but can he govern well without opposition?

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July 06, 2017

Everybody wants the medicines agency

One of the least reported operative conclusions of the recent European Council was to spell out a timetable and a procedure to decide on the relocation of the two EU agencies located in London: the European Banking Authority and the European Medicines Agency. Official candidacies can be filed until the end of July. Then, the European Commission will produce a detailed evaluation of each by the end of September. According to El Mundo, Italy wanted the Commission's evaluation to be at least somewhat decisive, if not ranking the candidates maybe eliminating the less suitable ones. But Spain and the Netherlands successfully lobbied for a political discussion to take place in the general affairs council in October, on the basis of the Commission's evaluation. There will be a final vote in another general affairs council in November.

The race to host the European Medicines Agency has been under-reported relative to the European Banking Authority. Candidate cities include Amsterdam, Barcelona, Bratislava, Copenhagen, Dublin, Milan, or Vienna. Bratislava is seen by some as the stalking horse in this race. Its proximity to Vienna essentially makes Vienna-Bratislava a dual candidacy, which would benefit both cities but in particular the smaller one.

There are some bizarre twists to the race. There has been one suggestion to tie in the relocation of the EMA with the longstanding debate on the European Parliament's dual site, by proposing that Strasbourg host the EMA in exchange for keeping the European Parliament in Brussels full-time. Antonio Tajani rejected this, according to Politico. A story on the choice for Dublin claims that the possibility of a daily commute from London to Dublin by airplane would reduce the disruption to the lives of EU staff currently established in London. And a story on the choice for Barcelona notes that an unilateral referendum on Catalan independence on October 1st would be smack in the middle of the decision process on EMA relocation, which sources in Brussels say doesn't contribute to making Barcelona an attractive destination. 

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  • Merkel promises 1m charging stations - but doesn't tell us how
  • June 24, 2019
  • Economic reform has torn up the SPD - climate policy does the same for the CDU/CSU
  • Not intruding, not really
  • February 11, 2019
  • SPD dumps Hartz IV
  • Macron's revival
  • October 04, 2018
  • The Brexit Queen’s new dancing clothes
  • Ceci n’est pas une crise politique
  • May 28, 2018
  • A no-confidence motion that could backfire
  • The political repercussions of a historic referendum in Ireland
  • Why the lack of an international role for the euro matters
  • January 19, 2018
  • On the futility of discussing the German current account surplus
  • The Brexit revocation madness
  • Varadkar, the enfant terrible in the Brexit negotiations
  • September 14, 2017
  • Bravo Mr Juncker
  • ... what he said about the labour market
  • ... and what his speech means for Brexit
  • May 11, 2017
  • Germany rejects IMF’s policy recommendations before they are issued
  • Why Labour is losing
  • January 05, 2017
  • French Socialist primaries - old wine in new bottles
  • Le Pen's hard ecu
  • Will Tusk get a second mandate?
  • Themes of 2017
  • August 26, 2016
  • Will the refugee crisis return?
  • Montebourg en avant
  • Moisi on Sarkozy's chances
  • Binary choices
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • October 07, 2019
  • What did Conte know?
  • August 27, 2019
  • Remain’s narrowing pathway
  • Macron's diplomatic masterstroke
  • July 10, 2019
  • Turkish drilling off Cyprus - a test case for the EU
  • Labour’s new Brexit policy is not really a shift
  • June 03, 2019
  • Reinventing the French right without Wauquiez
  • Tory leadership election is between feasible and unfeasible Brexit options
  • April 29, 2019
  • Labour's national executive to vote on second referendum
  • What the debate about electric cars says about Germany
  • March 25, 2019
  • An object lesson in realpolitik
  • On the probability of a no-deal Brexit
  • February 18, 2019
  • How the splits on the left and the right will affect Brexit
  • January 14, 2019
  • Our Brexit predictions
  • 1789 - Macron's version
  • Tsipras calls confidence vote after Kammenos pulls out
  • December 14, 2018
  • Running down the clock
  • Macron, Philippe - untouchable no more
  • EP blasts Commission over Babis
  • November 14, 2018
  • Now what?
  • October 15, 2018
  • Black Brexit smoke
  • Bettel can relax and stay in office
  • Solving the crime vs solving the problem
  • September 17, 2018
  • About the new partnership between Russia and China
  • EU ponders Irish backstop protocol to help May
  • August 20, 2018
  • ... and a subtle shift in EU policies towards both Russia and Turkey
  • Nothing to celebrate about the end of the bailout programme
  • Support for Brexit holding up
  • July 20, 2018
  • Why preparations for no-deal Brexit are a positive development
  • On confirmation bias in the Brexit commentary
  • June 25, 2018
  • Trump's car tariff to come early
  • On the lack of a sharp focus in the eurozone debate
  • June 01, 2018
  • Will France and Germany stick together in their response to US trade tariffs?
  • From a eurozone budget to a slush fund
  • May 09, 2018
  • A moment of truth in the Brexit talks
  • A leap of faith, Mr Kierkegaard?
  • April 16, 2018
  • Italy's and Germany's pained response to the Syria attacks
  • On the end of the eurozone's economic honeymoon
  • Why Bulgaria should stay out of the euro
  • Where shall we meet after Brexit?
  • March 26, 2018
  • On the run no more
  • Terrorist attack will challenge Macron
  • A double-whammy of geopolitical and financial uncertainty
  • March 05, 2018
  • One rock, two vetos, three governments
  • Rutte weighs in
  • February 12, 2018
  • What the euro debate is really about
  • How Brexit can still falter
  • January 22, 2018
  • Carles Puigdemont's flying circus
  • Macedonia and the insurrection of Greek patriotism
  • On the real hurdles for Brexit revocation
  • And the satellites, too
  • January 05, 2018
  • Catalonia's government by Skype
  • The case for EEA membership
  • December 07, 2017
  • Schengen suspended
  • Puigdemont's European arrest warrant withdrawn
  • Another Greek red line crossed
  • What the (failed) agreement on the Northern Irish border tells us
  • November 21, 2017
  • A short note on the impact of German political chaos on Brexit
  • A scandal, overshadowed
  • November 06, 2017
  • Pressures on EU rise over Catalonia
  • German pre-coalition talks hit glitch
  • If you thought UK politics couldn‘t get worse...
  • October 23, 2017
  • Macron's plans for the European Parliament
  • First phase of Brexit negotiations in final stretch
  • Why the left hates Europe
  • October 10, 2017
  • The UK is slowly gearing up for a no-deal Brexit scenario
  • No liberal parties in Austria
  • September 29, 2017
  • Is the CDU about to rebel against Merkel?
  • What about defence?
  • What happened to the French mainstream parties?
  • September 18, 2017
  • Why Germany cannot lead Europe, let alone the free world
  • Will Macron help to build up Mélenchon?
  • Boris' Coup
  • September 07, 2017
  • Northern Ireland and Brexit - a diplomatic nightmare
  • Can Macron succeed where Balladur failed?
  • ECJ upholds relocation of asylum seekers
  • August 29, 2017
  • The deep significance of Labour's Brexit U-turn
  • The day after the SPD loses
  • August 21, 2017
  • Soft, getting softer
  • Tsipras' chances of a boost
  • On the fallacy of a middle-ground option for the eurozone
  • July 31, 2017
  • Russia sanctions bill becomes US law
  • Spain's Guardia Civil in the eye of the Catalan storm
  • A grand bargain between France and Germany
  • July 24, 2017
  • Macron's popularity falls amid more budget cuts
  • Orbán to support Polish government against EU
  • No exit from Brexit
  • July 17, 2017
  • What Tony Blair's Brexit confusion tells us
  • Schulz advocates compulsory investments
  • Italy’s government has effectively lost its majority
  • July 12, 2017
  • And now for the real Brexit talks
  • July 10, 2017
  • EU in self-destruction mode
  • The EU's fault lines
  • Fake News and Fake views
  • July 07, 2017
  • Is Emmanuel Macron just another Matteo Renzi?
  • The real obstacles to a Brexit deal
  • Why Nordstream 2 should be delayed
  • On why the G20 won’t solve the main problem