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July 01, 2020

Macron's executive - obstacle or enforcer?

There is already resistance building up inside the French government to the new green makeover bid by Emmanuel Macron. He embraced almost all of the 149 proposals from the citizen climate council, a forum of participative democracy Macron initiated after the gilets jaunes protests. Expect more reluctance to implementation to come forth. Could this give the president a reason to fire his prime minister? Or is this what the liberal version of Macron's green policies will look like?

Édouard Philippe has clearly retreated into the background in recent days. There has been no word from the prime minister after Macron's promise to spend €15bn on his green agenda, or his endorsement of the citizens' proposals. This may be a prelude for either Philippe's exit or a new definition of their working relationship. Will Philippe be ready to become the enforcer of Macron's green agenda despite his own reservations? The two met last night to talk about the basis of future cooperation between Elysée and Matignon. Macron may prefer the executive to figure out how to turn his promises into something concrete. For this role, Philippe's government has to play along. Listening to his finance minister on TV yesterday, the difficulties between Elysée and Matignon seem to increase the closer one examines those 149 concrete proposals.

Bruno Le Maire cautioned yesterday against prohibiting advertisement for polluting SUV cars, one of the proposals. He also spoke out against an outright ban on any further expansion of existing airports, suggesting instead the inclusion of environmental considerations into the cost/benefit analysis for the new terminal of the Paris CdG airport. Like Macron, he is clearly against a VAT increase to finance green measures. 

There is some cherry-picking too. Le Maire is backing the proposal to shift freight transport from road onto rail and inland waterways. More detailed proposals will be worked out in the autumn, he promised. He is also in favour of more scrutiny of the most polluting industrial sites in France, and a moratorium on shopping centres. An order to allow a stop on shopping centres outside towns has been in place since 2019, though it has yet to be applied at the local level, Les Échos points out. So, will the new liberal-green agenda be constrained by economic and political realities? Macron's bid is to prove that a liberal green agenda is possible that delivers environmental results while supporting economic growth. 

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July 01, 2020

New low in transatlantic relations

We have been expecting a worsening of transatlantic relations ahead of the US elections for some time. Several moves now support this trend.

The EU trade commissioner Phil Hogan told the press yesterday that his attempts to reduce tensions between the US and Europe have failed. Hogan expects a rough patch in negotiations, which could lead to higher tariffs on European and US goods. The risks are particularly high now that Donald Trump is gearing up for elections, given that trade sanctions seem to work for him politically. Last week the US administration floated the idea of $3.1bn in tariffs on European goods in retaliation for EU subsidies to Airbus. Robert Lighthizer, the US trade representative, also threatened tariffs if the EU imposes digital service taxes on US companies. Lighthizer told Hogan that the US considers Boeing to be in compliance with WTO rules. A WTO ruling on it is expected in September. Hogan said Europe is preparing retaliatory measures.

Another area where the gloves have come off is on Covid-19 treatments. According to the Guardian, the US bought up virtually all the stocks for the next three months of remdesivir, one of the two drugs showing promise in the treatment against Covid-19. This leaves none for the EU., the UK, and most of the rest of the world. The Trump administration has already demonstrated its readiness to outbid and outmanoeuvre all other countries to secure medical supplies for the US.

And finally, on defence, it is now official that the US will reduce its troops in Germany. Donald Trump approved Pentagon plans to redeploy 9500 of the 34,500 US troops still stationed there. Trump's approval came hours after the US Congress declared they were readying proposals to rebuke Trump's withdrawal plans from Germany out of concern that it would weaken Nato. Where the troops will go is not official yet, but Poland could be one of the destinations.

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