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News & Insights on Europe

News and Views on Europe – 29 Sep 2017

posted by eucentresg


German federal election: Merkel wins a 4th term but weakened by surge of far-right
On Sunday (24 September) Germans went to the polls for the country’s federal election. As expected current Chancellor Angela Merkel will continue to govern for a fourth term. According to provisional results Merkel’s CDU secured 33% of the votes (down from 42% in 2013), followed by the Social Democrats (SPD) with 20.5% (down from 26% in 2013). The far-right Alternative for Germany (AfD) made its debut to the Bundestag and is the third strongest party with 12.6%. In total, six parties made into the 709 seat strong Bundestag, including the Liberals (FDP), who re-entered the Bundestag with 10.7%, the Left (Die Linke) with 9.2% and the Greens with 8.9%. In 2013 only four parties (CDU, SPD, the Greens and the Left) were able to win seats in Parliament, while the FDP and AfD failed to reach the 5% threshold that would allow them into the Bundestag. The voter turnout of 76.2% was slightly higher than in 2013 (71.5%).

Although the CDU and SPD are still the strongest parties, both suffered large setbacks, having the worst results in over 60 years. Estimates suggest that the CDU lost around 1 million and the SPD half a million of votes to the AfD. It is the first time in German postwar history that a far-right party has made into Parliament. It was primarily voters in East Germany whose support led to the victory of the AfD. Some analysts cast this as an indication that German reunification has failed. However, around 60% of people who voted for the far-right party said in a survey that they did this out of protest against the CDU and SPD.

The announcement of SPD leader Martin Schulz, that his party will not be available for another “grand coalition” with the CDU, left Merkel with the only option of a “Jamaica coalition” with the Greens and FDP (the parties’ colours match those of the Jamaican flag). That means the SPD will be the leading the opposition in the Bundestag, rather than the far-right newcomers. Although such a coalition would enjoy a comfortable majority in Parliament, the ideological differences between the three parties could prove challenging. For instance, issues around migration have been very controversial, while the FDP and the right-wing of the CDU (primarily its Bavarian sister party the CSU) are demanding a tougher line on asylum, both Merkel and the Greens are opposed. The CSU tries to push for an upper limit on refugees, also in light of next years Bavarian elections. Furthermore, a “Jamaica coalition” might mean the departure of Merkel’s Finance Minister Wolfgang Schäuble, with the FDP having ambitions to fill the finance post. In fact, it is certain that Schauble is on his way out as Finance Minister as he has been nominated as President of Parliament.

The question on Europe’s future could also prove to be tricky in the coalition talks. Although Merkel and the Greens are generally open to proposals by French President Emmanuel Macron to reform the eurozone, the FDP has taken a more skeptical view. FDP chief Christian Lindner said, setting up a budget that could be used to send money to France and Italy “would be unthinkable and a red line for us.” Therefore, a coalition of Merkel with the FDP has been called Macron’s worst nightmare.

The coalition talks are expected to be tough and lengthy and it is far from sure whether the three parties will be able to agree on terms. The SPD’s Schulz predicted that the trio would eventually reach an agreement, adding that it was an imperfect coalition that “will unfortunately leave Germany paralysed.” Others, however, also see the possibility of a minority government as an option, in case the parties fail to reach a deal, while some speculate about the possibility of a snap election. The next years will show whether the times of “political stable Germany” is over.


Macron laid out plans to revitalise the EU – with German support?
In a far-reaching 100 minute speech delivered at Sorbonne University (26 Sep), French president Emmanuel Macron called for an overhaul of the EU. He laid down his vision to make the EU more integrated, more democratic and more competitive, “a Europe that leads rather than adjusts”.

He presented a laundry list of broad ideas and specific reforms that the EU would need to do in the coming years to get out of the complacency “under the defensive wing of the United States”. His proposals ranged from revision of the Common Agricultural Policy to the introduction of a financial transaction tax, and call to strengthen the Eurozone by creating a Eurozone budget. His most ambitious plan was in the area of defence, calling for the EU “to equip itself with an intervention force capable of acting militarily on behalf of member countries”.

In the area of trade, Macron called for the creation of a new European trade prosecutor to ensure that EU’s trading partners play by the rules, and that the EU while remaining open to trade with the world, would demand reciprocity and be prepared for effective trade defence to “shield its people from the harshest effects of globalization”.

Reports from Politico saw nothing particularly new in his speech, just a tripling down of his “Europhile commitments” that he made during his presidential campaign. A report from EurActiv France was more positive lauding Macron for a forward looking speech and breaking old taboos. Most reports also noted that Macron’s reform agenda would need German’s support which appeared a little uncertain now in view of the 24 September election results which saw the euroskeptic AfD securing 13% of votes which would translate into more than90 seats in the Bundestag.

German newspapers were quick to link Macron’s speech to the domestic politics in Germany. The daily Süddeutsche Zeitung praised Macron for his political instinct and timing of the speech, despite probably irritating Merkel who is trying to form a coalition after Sunday’s general election. The newspaper wrote that Macron – figuratively – is also sitting at the table during coalition talks. The newspaper also highlighted the success of Macron’s European and national reform plans would be in the interest of Germany. Zeit Online commented that Macron tailored his speech to a possible coalition of Merkel with the liberal FDP, back-pedalling on his initial ideas on a European economic government.

An informal EU summit in Tallinn on 29 Sep would provide Macron with the opportunity to push forward its vision for a revitalised EU. Reuters reported that Merkel “praised Macron’s ambitions for the European Union” and said that his ideas would be the foundation for Franco-German cooperation on the future of Europe.


Brexit negotiations remained fraught despite May’s conciliatory speech in Florence
The fourth round of Brexit negotiations began on Monday (25 Sep) after a major speech by British Prime Minister Theresa May’s in Florence on 22 Sep. May’s speech was meant to provide more clarity on Brexit and was also an attempt to break the deadlock in the “divorce negotiations” thus far. The previous three rounds of Brexit negotiations had led to little progress on the key issues of financial settlement, citizens’ rights and the border of Ireland.

In Florence, Prime Minister May struck a conciliatory tone and said that the UK is committed to settling the financial obligations as it leaves the bloc, and also agreed that the European Court of Justice could play a role in defending citizens’ rights. Most importantly, her speech acknowledged the need to have a transition deal so that “people and businesses would benefit from a period to adjust in a smooth and orderly way”. She added that the UK would like to seek a future partnership model that is not based either on the Norwegian model or the template provided by the EU-Canada Comprehensive Economic and Trade Partnership (CETA). Instead it would be a new economic relationship that is based on the fact that “we start from unprecedented position” as each other’s largest trading partner, sharing similar high standards of rules and regulations.

Reactions to her speech from the EU were generally cautious. Michel Barnier, the EU’s Chief negotiator welcomed May’s speech but stressed that there were still many questions on how her vision and words could be translated to “concrete implications” when the fourth round of negotiations get underway. The President of the European Council, Donald Tusk also told reporters after his meeting with May on Tuesday (26 Sep) at Downing Street that there is “no sufficient progress” in Brexit talks yet.

At the end of the 4th round of the negotiations, Barnier was reported saying that “May’s speech in Florence had created a new dynamic and made it possible to unlock talks” but warned also that the EU and UK are “far from being at a stage… where we will be able to say there has been sufficient progress on the principles of this orderly withdrawal”. In contrast, David Davis presented a much rosier picture saying that “We’re making decisive steps forward”.

Several Members of the European Parliament also noted that while May’s speech reflected that UK position is becoming more realistic, it is still vague and lacked details. The UK and the EU also remained divided over when the future partnership negotiations should begin, with the EU preferring that all the core issues concerning the divorce be settled before starting negotiations on a transitional deal.

A Politico report noted that as a sign that the European Parliament “is ready to play the bad cop in the talks and disrupt negotiations if the British side doesn’t satisfy their demands”, the European Parliament has presented a resolution on Thursday (28 Sep) calling on the European Council not to move the negotiations into the next stage on future relationship if sufficient progress has not yet been made on major issues including citizens’ rights, Ireland and Northern Ireland and the financial settlement.

Adding to the “woes” of the British is the reported divisions within the UK negotiating team. Oliver Robbins , who left as the top bureaucrat in David Davis’ Brexit department, stayed on as Prime Minister May’s EU adviser. It was also reported by Politco that he would head a new EU-focused Unit, “creating a potential rival power structure parallel to Davis’ Brexit department (Department for Exiting the European Union).


Deepening rift between “two” Spains
Over the past few weeks the Spanish government has stepped up its efforts to stop the Catalonian independence referendum, scheduled for 1 October (Sunday). It insists the referendum is illegal and unconstitutional. The measures taken by the national government are manifold and range from prosecuting 712 Catalan mayors, to taking control of the region’s finances. Officials linked to the vote were arrested and the Spanish government is deploying thousands of extra police to seal off the Generalitat’s polling stations. Also almost 10 million ballot papers were seized. Things escalated further when courts began taking down 59 websites connected to the referendum. Another 85 sites are in the process of being closed down. The European Commission came under fire for not reacting to the crackdown on freedom of expression in an EU member state, but Commission chief spokesperson Margaritis Schinas explained that the EU does not have the competences to take action.

Faced with these actions, the pro-independence leaders of Catalonia, home to around 7.5 million people, have accused Madrid of “repression”, comparing it to the Franco era. However, issues around the referendum have become increasingly polarising, leaving a large section of the Catalan population, who do not want to be on either side, marginalised. Experts believe around 1.5 million of Catalonia’s 5.5 million eligible voters fall into this category. The deepening rift between the two sides and the national government’s refusal to debate such a vote, make a solution unlikely. Secessionists claim Prime Minister Mariano Rajoy wants to deny them a basic democratic right to vote on their future. Or as Ramon Piqué, manager of the pro-independence campaign for the Catalan National Assembly (ANC) put it: “There’s a political problem here and one side has proposed a solution — to hold a referendum — and the other side doesn’t want to even sit down and talk.”

Hundreds of thousands of Catalans are expected to try and cast a ballot on Sunday. Thousands of national police forces have been deployed to Catalonia in anticipation of potential protests. The measures by the Spanish government are an indication of the seriousness of the conflict. PM Rajoy has also pulled out of an informal summit of European Union leaders in Estonia on Friday, so that he can attend the last meeting of his cabinet before the referendum.


Schengen code updated and new resettlement plan for refugees
On Wednesday (27 September) the European Commission set out its policy plans for migration and asylum, aiming at resettling 50,000 refugees over the next two years. Over the past two years there was a similar scheme, through which 23,000 people have been resettled from refugee camps in countries outside the EU, particularly Turkey and Jordan. According to the new proposal, resettlement would continue from those areas, and be extended to Libya, Egypt, Niger, Sudan, Chad, and Ethiopia. According to the Commission the aim is to further stabilise migration flows along the Central Mediterranean route. European commissioner for migration and home affairs, Dimitris Avramopoulos said that “We need to open real alternatives to taking perilous irregular journeys. Investing in more legal pathways, both for protection but also for study or work, is therefore essential.” This resettlement scheme would be voluntary, unlike the Commission’s compulsory refugee relocation scheme, which expired on Tuesday (26 Sep). The two-year scheme aimed at relocating 160,000 refugees within the EU, but failed to do so – only 29,000 were reallocatd thus far – because of reluctance by several member states to accept the compulsory allocation of the refugees.

Also on Wednesday the Commission proposed in a Communication on preserving and strengthening Schengen to update the rules for the Schengen border code, notably the reintroduction of border controls in response to increased terrorist and internal security threats. The Schengen zone is the largest free travel area in the world, allowing more than 400 million EU citizens to move freely and one of the major achievements of European integration. However, in response to the 2015 migration crisis , and also increased security and terrorist risks several EU member states have brought in temporary internal border controls in recent years, which are expected to end later this year. Wednesday’s proposal would allow EU states to prolong checks for up to a maximum of three years, while at the same time introducing stricter procedural safeguards, obliging EU Member States to assess if alternative measures could address the identified threat more efficiently. “We are not proposing the prolongation of internal controls,” Commissioner Avramopoulos said, “but a regime change” in how EU countries coordinate their efforts to safeguard the borders.

The EU Commission is facing a tricky balancing act: while keeping internal borders open, national governments demand more police checks and border stops. Commission Vice-President Frans Timmermans highlighted that “Member States should be allowed to act in an exceptional situation when confronted with serious threats to their public policy or internal security. At the same time, they should act only under strict conditions. This is how we secure free movement and promote security within Schengen.”

In order to strengthen the protection of the external border, the Commission also demands “to open the Schengen area of free movement to Bulgaria and Romania immediately, followed swiftly by Croatia once it has met all the criteria.”

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