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News & Insights on Europe

News and Views on Europe – 7 Jun 2019

posted by eucentresg


Transatlantic ties tested as President Trump visits UK amidst Brexit political turmoil
As US president Donald Trump makes his visit to the UK, various other meetings to foster EU-US ties have also been happening. US secretary of transportation, Elaine Chao, and U.S. Secretary of State Mike Pompeo attended The Global Entrepreneurship Summit held at the Hague from 3-5 June.

The aim of the Summit is to promote business and investment relations between the U.S. and the Netherlands. However, striking differences between the American and Dutch point of views on business and strategic priorities were exposed during the meeting. Dutch Prime Minister Mark Rutte delivered a speech citing the importance of cooperation between government and businesses to tackle global challenges together through innovation. Pompeo, on the contrary, said, “government has to stop strangling business”.

The chasm was also exposed in Dutch concerns about US infrastructure and technology regulation. Even though Trump promised a $2 trillion infrastructure plan before coming into office, Chao did not suggest that government would fulfil that promise. Moreover, when pushed by Carlos Moedas, the European commissioner for research, science and innovation on the future of regulation for space and technology, she deflected it with talk of drones in space.

Trump’s son in law and Middle East adviser, Jared Kushner, arrived in Brussels from London on Tuesday (4 June), to meet Jean Claude Juncker and Federica Mogherini. According to Kushner’s economic plan for the Middle East, Gulf Arab states are expected to make pledges to boost the troubled Palestinian economy. However, this lacks the political dimension hoped for by Brussels for “a lasting and sustainable peace and stability in the region”.

The US under Trump is expected to abandon support for the so-called “two-state” solution by avoiding the call for a Palestinian state. The EU stands firmly behind the two-state solution as Juncker told Kushner that in addition to the economic aspect, a plan for the Middle East must respect the “legitimate aspirations” of both Israelis and Palestinians.

Trump’s two day state visit to the UK (3-4June) coincides with a transition in British politics in the wake of Prime Minister May’s resignation. As the Tory leadership contest continues, a general election could also result in a sweep to power for the Labour Party and leader Jeremy Corbyn could become Prime Minister. This leaves much uncertainty for the final Brexit outcome as well as US-UK relations.

Trump was received by May on Tuesday (4 June) and given a symbolic and somewhat ironic gift hinting at the importance of transatlantic ties: the Atlantic Charter of 1941 drafted by Winston Churchill, a foundational text of the United Nations.

At a press conference on the same day with May, Trump announced that the US is willing to offer Britain a “phenomenal” post-Brexit trade deal in which he claims “everything is on the table” including a slip about the privatisation of the UK health system, the NHS. What he meant by this is opening up “market access” for American pharmaceuticals and medical devices. However, the President’s comments drew a host of criticism from defenders of the NHS including Health Secretary Matt Hancock and Labour leader, Jeremy Corbyn. Since then, in an interview with ITV, Trump has reneged on this claim, saying “that’s something that I would not consider part of trade”.

Jeremy Corbyn also ruffled Trump’s feathers by declining a state banquet invitation to speak at a protest rally in London during Trump’s visit. Meanwhile, Trump has signaled his endorsement of Brexit by meeting with Brexit Party leader Nigel Farage. Boris Johnson, in the leadership race to replace Theresa May, turned down a meeting with Trump even though the latter said Johnson would made a good prime minister.

After wrapping up his UK visit with a D-Day commemoration ceremony on Wednesday (5 June), President Trump visited Irish Prime Minister Leo Varadkar and said a post Brexit border between Ireland and the UK is “going to work out very well”. Varadkar responded that this is precisely what they are trying to avoid.

Trump’s volatile moves have made transatlantic ties more difficult as both Labour and the Conservatives share criticisms of Trump over the Iran nuclear deal, climate change, and the importance of multilateral bodies like the United Nations.


EU Parliament Elections 2019 Follow-up: A Scramble for Alliances and Over Choice of Commission President
Far-right Euroskeptic populists embodied by Nigel Farage’s Brexit Party, Matteo Salvini’s 5Star Movement and Marine Le Pen’s National Rally Party to name a few, are scrambling for alliances after their recent gains in the 2019 European Parliament elections. Currently, the right-wing populist parties in the European Parliament are scattered into 3 different parliamentary groups. To be recognised by the European Parliament, a group must have at least 25 Members of the European Parliament (MEPs) who hail from at least 7 different countries, with such recognition granting access to more money from the Parliament and greater influence in the Legislature.

To this end, Nigel Farage faces a dilemma since his old parliamentary group, the Europe of Freedom and Direct Democracy (EFDD), faces a highly uncertain future given that several of its member parties did not win this time round. A spokesperson for the EFDD said that Farage is trying to maintain the group by recruiting new member parties to meet the 7-country criterion. However, it is likely to be tough to persuade new members to come on board or even existing parties to stay on board with a coalition that may not stay in Parliament for long since Farage’s party in keeping with its name, “aims to ensure Britain is out of the EU by its latest Brexit deadline of October 31”. Farage has also received a European Parliament committee request to appear in Brussels within 24 hours to testify about allegations that he failed to disclose gifts worth £450,000 from a British businessman. Some of these alleged gifts included a car with a driver, trips to the United States and a lavish home in London’s upscale Chelsea neighbourhood. “What is this but an EU kangaroo court where I am given 24 hours’ notice about allegations picked up from press stories,” Farage said in a statement, denying any wrongdoing and adding that he “did not receive any private money for political purposes”.

Although they are united in opposing migration, Euroskeptic parties have significantly different views on issues of public debt, environmental protection, economic and social policy. Salvini, for example, wants to see more solidarity from EU members in taking in asylum seekers, which is something Hungarian Prime Minister Viktor Orbán resolutely opposes, along with the governments of Poland and the Czech Republic. Moreover, while Le Pen, Salvini and Orbán maintain friendly ties with the Kremlin, Poland’s governing Law and Justice (PiS) party is a strong critic of Moscow. In a comment that highlights the divisions among Euroskeptics, a senior Polish official said Le Pen is “a kind of red line for us”.

While the Euroskeptic parties are scrambling to have a bigger influence in the Parliament, the choice of the EU Commission President is wide open with no clear front runner. Officials are bracing for a potentially gridlocked process in which it will be difficult to settle on a nominee for the Commission presidency. This is because the Parliament election results did not accord the mainstream parties with big majority. The European People’s Party (EPP) remains the biggest group though controlling a far slimmer plurality and making the conservatives a minority within a larger pro-EU coalition that is expected to lean center-left and include the Social Democrats, Liberals and Greens.

Adding another layer of complexity to consultations which are set to begin between the Council president Donald Tusk and leaders of the parliamentary groups is a new system of six coordinators, who have been charged by leaders of the 3 main political families in the EU with directing discussions on filling the Commission presidency and nearly all of the EU’s top jobs. However, Tusk will need to continue his own intensive consultations with EU leaders, not knowing the extent to which the coordinators speak for others. This is because leaders of large EU countries such as the UK and Poland are not part of the 3 main political families and the 2 most powerful EU leaders, German Chancellor Angela Merkel and French President Emmanuel Macron, are also not participating in those discussions.

Manfred Weber was reelected leader of the EPP in the European Parliament and remains the group’s nominee for the European Commission presidency. The center-right group forms the largest bloc in the Parliament and overwhelmingly backed Weber.

Conservatives in Brussels see a clear path to holding onto power by turning the fight over the EU’s top jobs into a 2-person contest between Angela Merkel and Emmanuel Macron, and expecting the former to emerge triumphant. If Macron proves unwilling to cut a deal that lets the EPP claim the Commission presidency, the EU’s top job, for Manfred Weber, the conservatives are hoping Merkel will instead form a coalition with the center-left Social Democrats and the Greens. As EPP officials describe it such a coalition would allow them to claim the Commission presidency while awarding the Parliament presidency to the Greens and giving the Social Democrats a choice of either the European Council presidency or the position of the High Representative.


EU Commission moves on digital, climate and Italian budget concerns
A draft memo by European Commission officials has outlined the key priorities for the next financial services Commissioner. The Commission’s Directorate General for Financial Stability, Financial Services and Capital Markets Union (DG FISMA) identified a need for a new capital markets union strategy (CMU), shoring up Fintech services, financial stability, transitioning to a more sustainable economy and managing Brexit’s effect on the European financial sector.

The recent European Parliament election results demonstrated the importance placed on sustainability and climate issues by the European electorate and as World Wide Fund for Nature Europe (WWF) Policy Office Director Ester Asin argued, parliament must only accept a Commission President who has articulated a strong agenda on climate, environment and sustainability. Asin noted that parliament had a key role to play in approving the next Commission President and should use the opportunity to ensure the President-designate articulated strong commitments to the environmental agenda.

Reflecting the demands to do more on climate change, the European Commission proposed a €168.3 billion budget on Wednesday (5 June), and close to 21% of the proposed budget was devoted to climate change issues. If accepted by member states, this might propel climate change to the top of the agenda in 2020.

Separately, the Commission has also moved on issues concerning the digital economy. Speaking at the OECD’s conference on competition and the digital economy, EU Competition Chief Margrethe Vestager called for regulatory reforms to the EU’s digital marketplace. Expressing concern over the dominance of American tech giants, Vestager said that the EU needed to preserve the space for smaller tech players to break into the market and be “ready to act” should “privacy, freedom and fairness” be under threat from expanding digital monopolies. Speaking to the importance of digital connectivity and regulation in the bloc, Bulgarian Digital Commissioner Mariya Gabriel renounced her seat won in the recent EP elections in order to remain a European commissioner.

On Wednesday (5 June), the European Commission also launched a disciplinary process against Italy for failing to comply with EU spending rules. The commission has begun proceedings for an excessive deficit procedure against Italy, who could face a hefty €3.5 billion fine as a result. The move came six months after Italy agreed to avoid further increases in its public debt, a commitment that was not met. The Italian government argued that public spending was necessary to bolster Italy’s struggling economy and accused the commission of applying “double standards”. Analysts note that Italy can avoid fines if they can convince Brussels that it would comply with the EU’s spending rules.


Denmark Social Democrats wins national elections, will maintain tough immigration policy
Centre-left Social Democrats won the majority of the seats in Parliament at the Danish general elections on Wednesday (5 June). The Social Democrats secured 26 percent of the vote, giving them 48 of the 179 seats in parliament, ahead of the Liberal Party of current Prime Minister Lars Løkke Rasmussen, which won 23 percent of the vote, or 43 seats.

The current ruling coalition is made up of Denmark’s Liberal Party (Venstre), the Liberal Alliance and the Conservative People’s Party. However, they are supported by the far-right Danish People’s Party (DPP), which has been influencing Denmark’s hardline immigration and integration policy since 2001. Denmark has accepted fewer migrants than its neighbours during the 2015 migrant crisis and also approved a burqa ban last year.

Support for (DPP) has waned as shown in the European Parliament elections where they won about 11 percent of the vote, as opposed to 27 percent in 2014. Mette Frederiksen of the Social Democrats, who is likely to oust Liberal Prime Minister Lars Lokke Rasmussen has vowed to carry on the tough immigration policies.

Denmark has taken tough measures like confiscating valuables from asylum seekers to offset their upkeep. According to Nicolai Wammen, a senior Social Democrat, Denmark “needs a firm and realistic immigration policy” to “maintain our welfare state”.

Frederiksen said she wants to form a one-party minority government and seek support from both left and right. Besides immigration, climate change has climbed onto the top of the agenda–the significant voter turnout of 66 percent pushed it forward–and all mainstream Denmark parties are willing to use the EU to achieve it.

Meanwhile, EU Competition Commissioner and Danish Liberal Margarethe Vestager seems to have lost her strongest endorsement in her bid to Commission Presidency from outgoing prime minister Rasmussen. Frederiksen has not shown her support to her liberal rival but she is unlikely to refuse if her fellow Dane was given the top EU job with the backing of Brussels.

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