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News & Insights on Europe

News and Views on Europe – 25 Aug 2017

posted by eucentresg

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French President Macron – mixed views on his first 100 days and Eastern tour to push European integration
French President Emmanuel Macron reached the 100 days of being in office on Monday (21 August).

When he was elected in May there was much hope that he would advance the European integration and address burning domestic issues such as the high unemployment rate (according to Eurostat unemployment in France in June was at 9.6%, well above the EU-28 average of 7.7%). However, it has been widely acknowledged that on the international/European stage Macron did a good job, whereas at home he blundered quite a bit. This mixed judgement can be put down to a number of reasons, one being the inexperience of La République en Marche (LREM) Members of Parliament (MPs) and Macron himself – the party was just created last year; others have highlighted the limitations of the “Jupiter approach” – Macron’s governing style – characterised by a President focusing on foreign affairs and long-term issues, rather than day-to-day politics.

Domestically Macron’s government struggled with the quarrel over proposed housing benefits and the military budget – resulting in the resignation of France’s top military officer, and internal squabbles between Macron and the Prime Minister (PM) Edouard Philippe. All those (proposed) measures stemmed from the government’s objective to bring the country’s budget deficit under the EU limit of 3% of GDP. But on the international stage, Macron was able to restore France’s diplomatic prestige. At the European level, Macron’s pledges to implement serious economic reforms made it possible for France to talk with Germany with some credibility. The Independent concluded: “If we have learned anything from his first 100 days, it is that Emmanuel Macron is a determined reformer who really does want to get the wheels of a new deal for his ailing country spinning as quickly as possible.”

In order to push forward with European integration and promoting French interests, namely, protection for posted workers (or expat labour), defence policy, trade relations and migration, Macron started his diplomatic “tour de force” on Wednesday (23 August), with planned meetings with 12 European heads of state in 10 days. Macron symbolically chose Austria, Romania and Bulgaria as the first countries of his second state visit. No French president has set foot in Bulgaria for the past ten years. Macron’s office said that they want to show these countries that the “priority lies in the East”, hoping to prevent further cracks in European relations.

In Austria, Macron will also meet his Czech and Slovak counterparts, outside the Visegrad group (V4), which also includes Poland and Hungary. It is said that the meetings may redefine the role the countries will play in the EU. Bulgaria and Austria will hold the next EU presidencies, and therefore manage the first discussions about the upcoming French-German proposals to deepen European integration (in the second half of 2018) and single currency’s reform (in early 2019). Further, on 28 August, Macron will chair a summit with German Chancellor Angela Merkel, and the heads of state of Italy and Spain, together with EU foreign affairs chief Federica Mogherini. In the same week, Macron will also meet with his Belgian, Dutch and Luxembourgian counterparts, before heading to Greece on Friday 8 September to talk about Eurozone reforms.

 

UK publishes three more position papers ahead of Brexit negotiations next week
This week the British government published three more position papers prior to the next round of Brexit negotiations beginning next week. In the first paper, the UK calls on the EU to prevent leaks of sensitive information after the separation; i.e. any information marked classified before Britain leaves the EU should continue to enjoy similar protection after Brexit. Such protection might cover sensitive economic data shared during previous EU trade discussions, which could prove more sensitive now as Britain is seeking to strike rival bilateral deals. The paper mirrors a similar document produced by the EU negotiator, Michel Barnier, in June and, in itself, is unlikely to be a contentious issue. The second paper is on the continuity in the availability of goods for the EU and the UK. Essentially, the paper states that any goods that were placed on the market before Brexit should continue to be sold in the UK and the EU without any extra restrictions. It adds that where products have already been approved by the EU, it should not be necessary for them to be approved again after Brexit. In this paper, the UK also demands good and services be treated together in Brexit talks, citing the example of a maintenance contract that comes with the sale of an elevator.

These two papers, aimed at giving “businesses and consumers certainty and confidence in the UK’s status as an economic powerhouse after we have left the EU”, as British Brexit minister David Davis put it, are unlikely to be controversial. It is hardly the case with respect to the last paper on the role of European judicial systems after Brexit. While the UK does pave way for compromise over Court of Justice of the European Union (CJEU) jurisdiction post-Brexit by accepting that EU judges could continue to have a say in UK affairs during a transition period and in overseeing any future trade deal with the EU, Theresa May insisted that the “direct jurisdiction” of the CJEU will come to an end with Brexit.

Britain publishes these papers partly because London is under pressure from business to settle post-Brexit trade arrangements quickly. Although Theresa May was confident that Brexit talks will move to trade in October, Brussels has repeatedly warned that Britain must come forward with a proposal for how to calculate its EU exit bill before any discussion on future trade relations can take place. Commenting on the papers, one informed diplomat told Politico that “We feel they have come up with these papers to distract attention away from issues around the financial settlement,” suggesting that the documents served more as a smokescreen rather than an actual negotiating tool for Brexit talks.

Internally, the gradually released British negotiating stances are also met with resistance. The heads of the devolved administrations in Scotland and Wales met on Tuesday (22 Aug) and denounced London’s plan to leave the EU as “blatant power grab”. In a joint statement released after the meeting, Scotland and Wales pledged to work together on amendments to the Great Repeal Bill to “to protect devolved powers and responsibilities and provide effective powers to ensure devolved law works on withdrawal from the EU.”

 

EU prepares for busy trade talks agenda
A packed trade agenda in the coming months will keep EU trade officials busy. The EU-Canada Comprehensive Economic and Trade Agreement (CETA), signed in October 2016, will be provisionally applied in mid-September after the European Parliament voted in favour of it early this year. (National parliaments of the EU member states must approve CETA before it can take full effect. For an overview of the economic benefits of the agreement, click here.)

A political agreement on the Japan-EU Economic Partnership Agreement (JEEPA) was reached before the G20 Summit in July with details being finalised now. The EU has also ongoing negotiations with Mexico and Mercosur and several Southeast Asian countries. And it is likely that mandate for negotiations with Chile, Australia and New Zealand will be given during the Estonian presidency (July-December 2017).

Despite the EU’s ambitious trade agenda, a report in the Irish Independent suggested that Brexit might bring about complications including demands for revisions to EU’s newly concluded FTAs in order to reflect Britain’s exit from the bloc. Citing a senior official of the City of London, the report noted that with UK no longer part of the FTA deals, “Singapore has raised the prospect of renegotiating terms on a long-awaited free trade deal” with the EU as Brexit removes British financial market from the deal. However, a statement from the Singapore Ministry of Trade and Industry only reiterated that Singapore’s priority is “to have the agreement enter into force as early as possible and we are working closely with the European Commission to ratify the agreement expeditiously”.

Another long-term implication of Brexit is that the removal of a pro-China force within the EU might clear the way for Brussels to get tougher on China in trade issues. France, Germany and Italy jointly filed a complaint to the Commission at the end of July, calling for the introduction of new trade defence measures against China because there was growing evidence of discrimination against European companies in China. One analyst, in an opinion piece carried by Euractiv this week, expects the UK for now to object any new trade defence measures against China lest any perceived anti-China EU trade policy derails its own FTA negotiations with China post-Brexit.

 

EU-Turkey relations under growing strain
The already tense relations between Turkey and the EU and its member states after last year’s coup, have become even more strained. Tensions rise with the arrest of German-Turkish writer Doğan Akhanli through Interpol in Spain, and the provocative calls by Turkish President Recep Tayyip Erdoğan to German-Turks not to support the major parties which he called “enemies of Turkey” in the upcoming German federal elections on 24 September. Germany has a large Turkish diaspora, with some 1.2 million entitled to vote. And although Erdoğan’s appeal is unlikely to sway the election’s outcome, there is also concern that German voters of Turkish origin could depress the SPD’s share of the vote (the Social Democrats (SPD) have traditionally been the community’s political home) and indirectly strengthen Merkel’s Christian Democrats.

Ties between Ankara and Berlin have been strained after last year’s failed coup and the following suspension of 150,000 people and detention of more than 50,000 people, including German nationals, by Turkish authorities. But last week’s comments of the Turkish President have been some of the harshest yet and caused fury – not only among German politicians. German Chancellor Angela Merkel was quick to shoot back at Erdoğan and said that Germany “would not allow any kind of interference” and attempts to influence the citizens vote in the election. Austrian Foreign Minister Sebastian Kurz, whose country will hold general elections in October, expressed similar sentiments and told Erdogan not to interfere in elections in other countries.

Politicians in the EU were further angered a day later (19 August) when German-Turkish author Doğan Akhanli was arrested in Spain due to a Turkish extradition request to Interpol. Akhanli, who is an outspoken critic of the Turkish government, was released on Sunday but must remain in Spain, until Spanish judges decide whether to extradite him to Turkey. Merkel criticised Turkey’s move: “We must not misuse international organisations like Interpol for such purposes.” The EUobserver wrote that the case of Akhanli “highlighted the way rogue regimes use Interpol to hunt their enemies inside the EU.” German security officials have voiced concern over current developments and pointed at the violent protests overshadowing the elections in the Netherlands earlier this year.

In response to these developments the EU enlargement commissioner Johannes Hahn has called for a policy change of the EU. He stated in an interview with the German newspaper Sueddeutsche Zeitung on Monday (21 August): “I believe it is time for the member states to discuss the strategic implications of this behaviour. Shrugging your shoulders is not a political strategy in the long run.” Despite a vote in July, during which a large majority in the European Parliament voted to suspend Turkey’s membership talks with the EU (over a number of issues, including concerns over press freedom and the rule of law in the country), EU member states and the European Commission have been rather muted in their criticism of the Turkish government. To the EU Turkey is a major trade partner, a NATO ally and has effectively stopped migrants reaching Greece, through the EU-Turkey deal.

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