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July 17, 2018

Forget the idea of an anti-Trump alliance between the EU and China

FAZ makes a number of good points in its coverage of the EU-China summit in Beijing - the other summit that took place yesterday and received much less attention than the bizarre spectacle in Helsinki. Co-operation between the EU and China is progressing but at a very slow pace - and, most importantly, there is no EU-China alliance against Donald Trump as the Chinese had wanted. Despite the statement by Trump that the EU was a bigger foe than China in terms of the trading relationship, there were no efforts by Donald Tusk and Jean-Claude Juncker to seek a strategic alliance with Li Kequiang, the Chinese prime minister. There were still fresh memories of the failure of last year’s summit in Brussels, when China refused to sign the joint declaration over its demand to be officially recognised as a market economy.

What both sides agreed this time is to create a joint working group to make suggestions for the reform of the WTO. But the Europeans reiterated their criticism of intellectual property theft by Chinese companies, and called on the Chinese leadership to confront this issue. The EU also called on China to make itself less dependent on investment and exports - a condition for a future bilateral investment agreement.

The article noted a fall in Chinese investments in the EU during the first half of this year. There is also an important sectoral shift going on. The Chinese are becoming less interested in classical manufacturing companies, but more interested in infrastructure, energy, high-tech and pharmaceuticals. 

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July 17, 2018

Towards a new social contract in France?

Emmanuel Macron will today receive employers and trade unionists from the eight major organisations in the Élysée palace, a first time since he came to power. Commentators wonder this morning whether this a signal of a new era. Many of the unionists hope for that after their annus horribilis. The social dialogue came to a standstill after the executive worked out the reforms for labour law, vocational training and unemployment insurance without listening to the unions much. 

It is not clear, though, what Macron's strategic line will be. It is not unreasonable to expect a shift in the relationship between the executive and the trade unions. One way to look at it is that Macron did the reforms he promised on the campaign trail and ignored the unions in his first year. Now that the reforms he had promised are on their way, it is time to talk about those aspects for which there is no mandate from the voters. In that sense it seems logical to expect that the unions and employers are to play a larger role, so Le Monde. 

Macron himself announced in his speech to the Congress that in his second year he wants to work towards a new social contract together with trade unions and employers as well as voters. Some unions go into the meeting cautiously, saying they are not in there to sign a new contract just yet.

Several subjects will be on the agenda. The unemployment insurance has high chances to dominate the debate. In his Congress speech Macron invited the employers and unionists to start negotiating about Unédic, the job-seekers' compensation scheme. In his letter he raised issues like the limitation of renewing short-term labour contracts, which could involve the introduction of a bonus-malus system for companies with low or high staff turnover; the combination of a salary and an unemployment allowance, which under current conditions encourages jobseekers to refuse opportunities for permanent jobs; and what to do with the unemployed when they reach the end of their allowances.

Unionists wonder why Macron wants to open up this subject now, after the parameters of Unédic had been worked out last year, agreed with employers in February of this year, and in parts already made it into a law currently under discussion in the parliament. Some suspect a trap, and that Macron wants to play for time only. The president of the employers' organisation Medef also appeared surprised, saying that renegotiation may be possible but there is not much room of manoeuvre for another agreement. So, is this just for sound bytes or a serious attempt by Macron to balance his politics which were tilted more to the right in the first year of his presidency?

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