Behind the deadlock in Brussels: the German double game to bury the Recovery Fund and the French counterattack
The French counter-attack has slightly upset the German team, which had exposed itself forward: by continuing according to the plan, Berlin would get the Recovery Fund to sink, but it would immediately face the French counter-plan to create the mini-EU. A qualified minority would be needed to stop him: the votes of Warsaw and Budapest are not enough, even if added to the votes of the remaining German 'clientes', the Nein of Germany is needed to stop him. It would be a Nein, this time, both to the 'Eurozone budget' and to the 'defense of the rule of law'. And the poor Italians, who really desperately wanted the Recovery Fund right away, are panicking …
The Recovery Fund , who forgets it. It was supposed to arrive "immediately", in July, then in September, but it never arrives. Lately it has been blocked by a Polish and Hungarian veto on a regulation 'to protect the rule of law' . Defended by the European Parliament and the rotating German Presidency on 5 November 2020, on 16 November 2020 it was approved by qualified majority. For the final launch, all that is needed is a vote by the European Parliament with a predictable outcome, but the date has not yet been set.
The regulation alone, however, is not enough and here Poland and Hungary find the weapons to defend themselves. Brussels also needs the approval of the multi-annual budget (which contains the approval of the raising of the maximum threshold of own resources, ie the size of the budget) "unanimously"; as well as, later, the establishment of the new categories of own resources (ie the new EU taxes), which "come into force only after the approval of the Member States in accordance with their respective constitutional requirements". In the absence of both, the Union would go into provisional operation and the Recovery Fund would end up in the drawer of failed projects. Logically, Poland and Hungary vetoed it.
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Having done this, the two countries have shown themselves to be firm. Anyone who says they would receive too much money from Europe to give it up does not consider that, with the new regulation, the two capitals would no longer even receive a cent. Those who say that Orban cannot bear the (modest) devaluation of their own currency are delirious.
The proposal of Poland and Hungary: to return to the agreement found at the July summit : the sanction was applied "in the event of violations", not of mere suspicion, as it is in the new regulation. That is, to return to sanctions subject to verified violations. In other words, the mechanism procedure would not lead to a penalty, but to an appeal to the European Court of Justice; exactly as it is today with the already existing procedure, of 2014, called the “EU framework for strengthening the rule of law” , which is resolved in the traditional financial penalties. Possibly with two nuances: the appeal to the Court would be made by the accused member country, rather than by the accusing Commission; the pecuniary sanction would be collected by deduction from the European funds destined for the member country at that point sentenced. This is what the Treaties say and this is what the Polish Prime Minister and the Hungarian Minister of Justice mean, we believe, when they add that they want to respect the Treaties. In line with the letter from Slovenian President Janša, dated 17 November, asking for "a return to the agreement reached at the July summit", since "only an independent judicial body can say what the rule of law is".
The alternative that some hypothesize would be to close the open procedures against Warsaw and Budapest pursuant to article 7 ; but the two capitals are already holding them ad libitum , so it is hard to see what advantage they would get.
The last Polish and Hungarian request, that of inserting the unanimous vote, seems to us an arthouse ballon since the July agreement already provided for qualified majority voting.
The alternative offered by the Commission, producing “a political declaration, that the new mechanism does not address specific countries and will respect the sovereignty of the Member States” but “no changes to the text of the regulation”, merits only mockery and has been rejected.
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The Germans, the Recovery Fund never really wanted it. Those who see them hostile to the Hungarian and Polish move do not consider that Merkel has always had good relations with Orban, that German industry has invested heavily in Hungary and Poland, that Berlin prefers the single market to the single currency. Observes Tino Oldani , referring to Hungary: “it is evident that, having to deal with such a casual premier about rights, it was child's play for German industrial groups to obtain” what they wanted.
The second thing to remember is that Merkel does not want to change the Treaties: "it is very important for us that the program remains within the framework of the European Treaties", he announced at the end of June. So when he says today, “we must explore all possible options”, he means 'all possible options within the Treaties'. It follows an attentive ear to the argument of Poles and Hungarians: that the new regulation is contrary to the Treaties.
When it comes to choosing between Paris and her 'clientes' , Merkel always chooses the latter. He demonstrated this when it came to sinking Macron's federalist project: he will remind the reader that the latter, in 2017 at the Sorbonne, had proposed a large budget for the Eurozone and that, in 2018 in Meseberg, Merkel had done so to pieces, leaving the Dutch to complete the work in subsequent European Councils. There we were talking about the Eurozone and Merkel could only move the Nordic 'clientes' , here we are talking about the EU and Merkel can also move the 'clientes' of Eastern Europe. This has allowed it to develop a more complex game, pitting them against each other until an agreement is impossible, whether the 'rule of law mechanism' remains strict or is emptied.
Thus Berlin, conducting negotiations with the European Parliament on the regulation, as the current president of the EU, with the right hand advanced a moderate proposal for a compromise, with the left hand it was docilely overwhelmed. Thus, the German Weber, president of the popular group in the European Parliament, with his left hand signed a very harsh communiqué from the Conference of Group Leaders ("no further concessions will be made on our part"), with his right hand he obtained to postpone the final parliamentary ratification at a date to be decided. Thus Merkel, with her left hand, pushes the Finns forward ("the rule of law is a fundamental element of the agreement"), the Austrians ("linking the distribution of European funds to the rule of law is an absolute necessity"), the Dutch (“for the Netherlands, the compromise reached on the rule of law is the bare minimum, we cannot accept anything less”); with his right hand he strengthened Poles and Hungarians, moving the Slovenian pawn in support of them (and other Nordic and Eastern pawns will follow).
The Eurosummit of December 10-11 is expected, plausibly in attendance. In that forum Merkel aims to converge a qualified majority (which excludes the Nordics), on the counter-proposal for a regulation made by the Poles and Hungarians. Thus allowing them to lift the veto on the multi-year budget, which would be approved unanimously. By separate decision, both the 'rebates' (i.e. the discounts on the contributions due granted to the Nordics, as well as to Germany) and the structural funds (of which the Eastern countries are major beneficiaries), both currently expiring, would be extended. so as to make them flow even if the Union went into provisional exercise according to the regime of apparent budget continuity known as 'twelfths'. This could happen, while waiting for the ratification of the European Parliament to the regulation and the budget, as well as the ratification of the national parliaments to the new EU taxes.
If the Council and Parliament yielded, the Nordics would collect their 'rebates' , and then take advantage of the vote against the regulation and complete the work. How? Saying indignant. The Dutch general elections are next March 15, 2021, in the current Parliament in The Hague there is no majority to approve the new Union taxes and the deputies are asking for nothing better than a good excuse to postpone the elections and training until after. of the next government: the other time it took 225 days, at the same pace we would go in October. That is, after the German general elections: here, to make the government, the other time it took 171 days, at the same pace it would go in March 2022. The vaccines are arriving: from here to that date, Covid will no longer be a memory and, with it, the Recovery Fund . By letting their 'clientes' from east and north fight, what have the Germans to lose?
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This time, however, it is different: Macron was very badly burned at the time of Meseberg. Unlike Germany, France has no overriding interests in Eastern European member states and, unlike Merkel, Macron is eager to change the Treaties. He knows this is the last chance not to go down in history like the sucker who got fooled twice by the old woman in Berlin. This time, Macron plays on the counterattack.
How? Pushing Poles and Hungarians to rupture: in the Council, faced with the proposal to accept the changes desired by the Poles and Hungarians, Macron will play the spoiler, sell his skin dearly. In agreement with the left in Brussels institutions, starting with the cheeky president of the European Parliament, Sassoli (the regulation serves "to prevent resources from being used by governments that undermine common democratic systems").
Macron is looking for a break, okay, but to what end? Its minister Clément Beaune continually reiterates "determination on the Recovery Fund and the rule of law". Which is to say wanting, together, ice and fire: it can only be done with an intergovernmental agreement, which excludes the rebels. Among Macron's allies in the European Parliament, the green Sven Giegold specifies that it should be 'enhanced cooperation' and the liberal Guy Verhofstadt adds that this would be "the only way ahead". It is a mini-EU, which uses the EU Commission and meets within the EU Councils, but votes for its own business and for its own affairs it makes common policies in what it wants, with the exception of the internal market and regional policies and what else the EU already does. To form it, the favorable vote of the qualified majority of the member states of the greater EU is enough, that is, the votes of Warsaw and Budapest are not enough to stop it.
Enhanced cooperation without Hungary and Poland is fine. But to do what? Macron : "I launched this idea at the Sorbonne … it took time but, in June 2018 we signed the Meseberg agreement with Germany … it led to an imperfect agreement at European level but, thanks to the Covid-19 crisis, to May 2020 we signed the Franco-German agreement ”on the Recovery Fund . Macron is saying that the Recovery Fund is the second half of the game for the Eurozone budget. And many greetings to Covid .
A budget for the Eurozone is fine. But for how long? Forever. Macron: "a union of transfers, based on a common signature, and a common debt". Then again Sassoli : “we must… make the common debt definitive”, “Eurobonds”, “put our hand to the treaties”.
A budget for the Eurozone is permanent, that's fine. But with what money? By transferring the Mes into the EU budget: thus Sassoli ("reform it and make it a community instrument, no longer intergovernmental") and Letta ("transform the Mes and bring it into the EU Commission, hand it over to the Commission") . Compared to the Recovery Fund , the bill for all Member States would be considerably lower.
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Then it happened that, of the French plan, Sassoli revealed one detail too many: urged by the journalist on debt cancellation, he replied “it's an interesting working hypothesis”. Immediately stopped by Gentiloni ("for now, debt is not seen as an obstacle"), stunned by Lagarde ("anything that goes in this direction would be a violation of the Treaties", and it is here that he had to add "ECB by definition cannot fail or run out of money "), re-educated by Cottarelli (it is not called 'cancellation', but 'repurchase', that is monetization ), crucified by Münchau (" it is what German conservatives have always feared would happen … that a Italian would come one day and commit the final sin "), mocked by the FAZ (" politically, the question is very clumsy, it is said by many: the Italian demand is grist for the opponents of European funds and common debts "). The fact is that the general German public, if they hear 'debt cancellation', put their hand to the gun: Sassoli could not have given a greater gift to a government eager to reject the other arguments of the French plan, however all unacceptable for Berlin. .
In fact, those who imagine Merkel willing to form an enhanced cooperation have never heard of Meseberg and do not remember the stakes she set at the end of June . Nein means Nein .
And, however, the French counter-attack has slightly upset the German team, which had exposed itself forward: by continuing according to the plan, Berlin would get to sink the Recovery Fund , but would immediately be faced with the French counter-plan to create the mini- EU. A qualified minority would be needed to stop him: the votes of Warsaw and Budapest are not enough, even if added to the votes of the remaining German 'clientes' , the Nein of Germany is needed to stop him. It would be a Nein , this time, both to the 'Eurozone budget' and to the 'defense of the rule of law' (no one will talk about Covid anymore).
This applies both to Merkel and to whom Merkel's party will choose, over the next few months, to succeed her at the Chancellery: since, during the electoral campaign, it is inevitable that the CDU-CSU candidate will take sides against the plan French, can do nothing else. With the result of allowing Macron to run the next French presidential elections, in April 2022, on the basis of a very different platform from the previous one: more national, let's say. In short, the history of the Macron presidency would no longer be written like that of the fool who got fooled twice by the old woman from Berlin, but as that of an unfortunate idealist, who freed the truth for his subjects and who, therefore, deserves to continue to sit on the throne.
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In all this, the poor Italians, who really wanted the Recovery Fund – desperately – immediately, are panicking: Amendola, weeps misery ("the second wave of Covid "), hides indecently behind the German presidency, finally adds "dear Hungarian and Polish friends… we shouldn't fear the rule of law if we all say we are respecting the rule of law ”: a silly speech that Labor must have dictated to him. As with the last Strumtruppen left to guard the gas can, Macron will sooner or later remember him and send him new orders.
The post Behind the deadlock in Brussels: the German double game to bury the Recovery Fund and the French counterattack appeared first on Atlantico Quotidiano .
This is a machine translation from Italian language of a post published on Atlantico Quotidiano at the URL http://www.atlanticoquotidiano.it/quotidiano/dietro-lo-stallo-a-bruxelles-il-doppiogioco-tedesco-per-affossare-il-recovery-fund-e-il-contropiede-francese/ on Mon, 23 Nov 2020 04:29:00 +0000.