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March 28, 2019

Fidesz exposes EPP to barrage of provocations

It is becoming clearer by the day that the EPP, after its decision to suspend Fidesz rather than expel it, will be subjected to a relentless barrage of targeted provocations from Budapest ahead of the European elections. The EPP leadership is now faced with a choice of ignoring them, weakening further the party's political credibility and giving ammunition to its political opponents, or speeding up the fact-finding mission that is to help decide whether Hungary’s ruling party is EPP-compatible or not.

In one of the latest illustrations of what is going on in Budapest Katalin Novak, the party’s number two, blithely denied on state TV that Fidesz had been suspended as a sanction. The EPP would receive a 130-page document refuting its criticism of Fidesz point for point, she added. Meanwhile in Brussels it has become apparent that, while Fidesz is suspended from party activities, its MEPs are free continue to sit with the EP group so long as no decision on a full expulsion of Fidesz is taken. The EPP’s sanction against its Hungarian member risks looking weaker by the day.

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March 28, 2019

How Berlin has turned the ghost of Aachen into a poltergeist

Franco-German relations have taken a sudden turn for the worst. The latest incident is the German government’s refusal to lift the arms export ban to Saudi Arabia, which indirectly affects French defence contractors. We have been observing for some time rising unilateralism from Berlin. Despite the closer co-operation between the two governments, such as joint cabinet meetings as recently agreed in the Aachen treaty, Germany does not consult with France on strategic questions. There are now signs that the arguably most pro-German French government in recent times is turning into a more reserved partner.

FAZ reports that the security council of the German cabinet - a subcommittee of ministers - was unable to lift the export ban because the SPD is blocking this manoeuvre ahead of the European elections. But the decision affects Franco-German defence co-operation directly as some French defence products rely on German machine components. We would not be surprised if the French concluded that they will in the future need to source components domestically, a debate that would run counter to attempts to create a common market for defence procurement.

FAZ' long and detailed coverage notes that the ghost of Aachen has turned into a poltergeist. The treaty committed both countries to greater defence co-operation on the basis on mutual trust. And it mentioned specifically a common approach to arms exports. We think this is very typical how the Merkel administration has been handling European questions ever since the start of the euro crisis. While pretending to seek a common European approach, reiterated time and again in celebratory but ultimately dishonest Sunday speeches, the reality is that Germany acts first and foremost as a national power. The French media have also picked up on the Macron administration’s growing frustration. Bruno Le Maire is reported as criticising Germany for what he perceived as a growing lack of will to seek European solutions. Annegret Kramp-Karrenbauer is now being caricatured in Paris as Germany’s latest Madame Nein, an honorary title that was once reserved for Merkel. The CDU leader's wish for a joint aircraft carrier has also been loudly derided.

We are noting strong parallels between the debates on eurozone reforms and defence integration. In both instances the German political system has acted like a unilateral hegemon, whether through the blanket refusal to consider a eurozone safe asset, or uncoordinated real cuts in defence spending. Macron's election provided a unique opportunity for both countries to reestablish trust, but the latest events are demonstrating that Berlin has no real interest in it. 

This slow erosion of trust will have no dramatic short-term consequences, but it will affect European politics in the longer term. 

We are not surprised, for example, that China has emerged as a strategic partner for several EU member states.  

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