EU Politics: Gold Stars All Around

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Politics: Catherine Feore takes a look at what back-to-school means for the EU.

At 3:30 on Monday morning (20 July) there was a buzz, I glanced down at my phone. Had the 27 heads of government finally relented and agreed on the future budget and recovery package? Would sheer exhaustion alone drive them to submission, an accord, an agreement?

I opened WhatsApp and noted with a sigh that they had decided to call it a night and
regroup the following day at 14:00, so off to the land of nod I went, cursing the darkness.

A good chance for a lie-in for the EU’s leaders, you might have thought, but no; the morning would be full of bilateral, quadrilateral, frugal vs South lateral, East vs West lateral meeting madness, only some of it on the sunny terrace of the European Council building.

I’ve enjoyed many late-night discussions that have run into the early hours of the morning, but they’ve been on important questions like: Is Moonraker the best James Bond movie? Did the shot really come from the Texas school-book depository? The endless ping pong of “€400 billion for grants’’, “no €350”, “no €400”, “no €375” must make any leader question their will to live, or care. And I was caring less and less with each passing hour of the 90-hour negotiation. As a US Senator once said, “A billion here, a billion there, pretty soon, you’re talking real money.”

Would the new wave of commissioners and MEPs, who arrived bright-eyed and bushy-tailed determined to leave their mark, have been lining up for public office in 2019 had they been able to look into a crystal ball and seen that COVID-19 was just around the corner and about to take over their lives?

Gold stars: All in all, it was a good term, where commissioners have shown themselves to be conscientious and hardworking. They have diligently applied themselves to their course work and responded to some unexpected challenges; as of yet, no one has been caught smoking behind the bike shed, or playing fruit machines in the local pub. So, gold stars all round.

I hope that Europe’s leaders have had the opportunity to down tools, take a break and prepare themselves for the next term, where European Council conclusions have to turn into actions. The agreement reached on the budget and Next Generation EU was a historic achievement, but much remains to be done. Those struggles will play out over the next months and years.

Like students across Europe, they will no doubt have invested in some shiny new stationary. Maybe a new pencil case, emblazoned with an image of their favourite superhero, and some nice freshly sharpened pencils ready to jot down their plans for the year.

‘Perseveres with complex problems’: There is some tricky work ahead. One biggy is how to pay for the recovery instrument, a small matter of €750 billion. Some will be paid in the form of loans (€360bn) and therefore repaid via national coffers over an extended period, the rest (€390bn) will be paid via super-turbo- charged ‘own resources’. Commissioner Breton, who is responsible for the Internal Market, suggested that it wouldn’t be paid by EU taxpayers, which sounded a little like President Trump’s suggestion that the Mexicans were going to pay for the wall.

There is going to have to be a lot of creative thinking on this one. One option already developed to some extent will be a new plastic levy to be introduced in 2021. But expect proposals on a carbon border tax and digital levy. These will be denounced as protectionist by those outside the EU. A digital tax is likely to receive particular opprobrium in the United States – from whoever is at the helm in 2021 onwards. Revising the emissions trading scheme (ETS) to include aviation and maritime sectors would make the current system fairer, but these hard-hit sectors are likely to put up a fight. The idea of a financial transaction tax has raised its head again, just as the EU tries to put some steam behind its Capital Markets Union. Each of these proposals will be fiercely contested, but something, if not several somethings, are going to have to give in order to pay off the debt.

‘Room for improvement’: The European Union has a bit of an autocrat problem at the moment. There’s Orban in Hungary, who used to be considered the exception, but now there’s Poland’s Kaczyński and an ever-burgeoning number of wannabes happy to fix normal checks and balances to strengthen their hold on power. While the Bulgarian prime minister was busy negotiating in Brussels, much of Sofia was enjoying another night of demonstrations against what they consider to be his corrupt administration.

Many politicians have voiced concern that the EU’s budget has been abused to funnel money to government cronies – if not directly into the pockets of members of the government. The Hungarian and Polish prime ministers, the EU’s answer to Beavis and Butt-Head, declared victory after the negotiations, claiming that there would be no ‘rule of law’ conditionality, a strange thing to declare given that Orban would swear on his mother’s grave that he respects the rule of law.

Some are worried that the European Commission’s proposals on protecting the rule of a law through a mechanism to be adopted by Council using ‘reverse qualified majority voting’ – yes, I know – being replaced with a system that merely requires ‘qualified majority voting’ has shown a significant weakening of the Commission’s stance. I won’t bore you with the details, but neither is likely to be effective. More promising, however, is a commitment to include measures “to ensure the collection and comparability of information on the final beneficiaries of EU funding”, which might be more effective at keeping certain fingers out of the till.

‘Cooperates and works well with the other students in the class’: Finally, the headmaster, Mr Michel, will require a good solid effort at cooperation from all students. Governance measures that would allow member states to use an emergency brake could be particularly disruptive, and we would be grateful if this was only used en cas d’urgence. On the other hand, all good pupils in every EU state will be expected to produce plans that are clearly linked to their country-specific recommendations – the ones that up to now they’ve broadly ignored.

It will be busy a year, but with application and commitment, everyone might just pass their end-of-year exams.

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