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June 26, 2020

An interesting candidacy in Dutch politics

The race for the leadership of a party in the Dutch government coalition would not normally attract out attention, but Dutch politics plays an unusually important role in the forthcoming discussions on the European recovery fund. As RTL news reports, Pieter Omtzigt, a eurosceptic MP, has applied to become the leader of the CDA. These are the Dutch Christian Democrats, a senior member of Mark Rutte’s coalition and a member of the EPP in the European Parliament. Rutte is the leader of the VVD, the liberals.

The CDA is also the party of Wopke Hoekstra, who decided he is not a born politician and that he will not run for the leadership after all. The leadership election matters because the CDA is the main rival to Rutte’s VVD in the Dutch conservative political centre. Both are fishing in liberal but eurosceptic political waters. We reported on a recent poll that a majority of the Dutch, and a large majority of those who support the CDA, are opposed to the European Commission’s version of the recovery fund and in favour of their own government’s approach. Rutte and the rest of the frugal four have indicated that they are ready to compromise on the fund. There is no talk of vetos. But the trends in Dutch politics are telling us that we should not take his support for granted. He will try to strike a hard bargain. If Rutte were to accept a soft compromise, a new CDA leader could have a field day ahead of the 2021 elections.

So, who is Omtzigt? He is not your average eurosceptic. He is best known for speaking out on corruption in Malta, and on Russia’s role in the downing of the MH17 plane over Ukraine. He is classic parliamentarian, respected in his party but previously seen as unlikely to run for the leadership. We make no predictions about the outcome. We presume that one of the other candidates, Hugo de Jonge who is deputy PM and health minister, would also be a strong contender. We consider this leadership election as a bellwether. If Omtzigt were to win it, Dutch politics would become a tad more complicated and an EU-level deal on the recovery fund would become more difficult. All of this will be decided before the next EU summit. There will be a short campaign, followed by a referendum among CDA member on July 6-9.

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June 26, 2020

The EU’s real test is China, not the pandemic

The policy papers we like the best are those with a clear-headed focus on strategy, as opposed to those that mix analysis and advocacy. François Godement has produced an admirable specimen of the first kind: a sharp analysis of Europe’s strategic options on China. Not mincing his words, he warns the Europeans that the Chinese administration is running rings around them. The two sides have had 29 rounds of negotiations over eight years to try and reach a deal on bilateral investment. But China is stalling, as he writes. One of the reasons is that China no longer sees the EU as a global power, and awaits the outcome of the November elections in the US to make its next move in relations with Europe.  

Godement acknowledges that, in some limited areas, the EU has made progress in developing a joint response. It created guidelines for critical security issues in 5G networks, and a new investment-screening regulation is due to come into effect in October. As we reported before, the European Commission has adopted a white paper on foreign subsidies.  

But none of this has the capacity to impress China. Godement uses more polite words than we do, but he is essentially saying that the EU is hopelessly divided and not sufficiently strategic. As we keep noticing, Angela Merkel is the exponent of European duplicity, in her stated support for a common European position on China while Germany acts with mercantilist unilateralism in its bilateral relations. There is a lot at stake for German industry right now. 

Godement notes that Sweden was the only country to advocate sanctions against China over its security law for Hong Kong. China, like Russia, is starting to play EU countries off against each other one by one. China’s ministry of commerce is busy counter-acting European efforts to become more independent of in its supply chains. Godement says the EU needs to resist this at all cost, and step up reshoring as a warning to Chinese leaders that a failure to grant reciprocal access will result in decoupling.

Godement notes that China interprets the European discussion on strategic autonomy not as a sign of a more united Europe, but, on the contrary, as a sign of weakening given that the EU is losing its main security protector. We think the Chinese view is accurate. The dismantling of the transatlantic alliance is not being accompanied by a strengthening of European defence.

Godement advocates tough action. China is no longer in conflict-avoidance mode as it was in the past. President Xi is the first Chinese leader willing to take calculated risks in China’s foreign relations. Godement also urges the EU to act on China’s undelivered promises, like action on climate change.

There is a lot more detail in the paper than we can relay here. We agree with Godement's overall strategic assessment: that the relation with China is the real test of European unity, and more important than the handling of the pandemic.

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