The talk of the entry of fiscal union is a threat to the euro

cartoon

(Photo: Burkhard Mohr)

Lockdowns, school closings and closed restaurants have apparently blinded Europe’s citizens to revolutions. Because before their eyes something historical is happening without being appreciated: the completion of the European monetary union, the addition of a fiscal union to the euro. At least that is what Europe’s leaders conjure up in unison.

The establishment of the reconstruction fund to combat the corona crisis, in which the EU is allowed to take on its own debts on a large scale for the first time, is the “irreversible entry into the much-invoked fiscal union,” says Federal Finance Minister Olaf Scholz. French President Emmanuel Macron speaks of “a transfer union based on shared debt”. And the head of the Euro Central Bank, Christine Lagarde, wants to make the fund a “permanent institution”.

They all follow a saying attributed to Winston Churchill: “Don’t waste a good crisis.” Especially in Europe, where the mills grind particularly slowly, steps towards integration have recently only been taken in crises.

Scholz therefore even speaks of a “Hamilton moment” in which Europe can grow together fiscally like the USA under the then Finance Minister Alexander Hamilton when he communitized the US debt in 1790.

But apart from the fact that the comparison is flawed: With their invocations of irreversible entry into the fiscal union, the three do not strengthen the euro, they endanger it and possibly cause serious damage to the European project in the belief that it is doing good.

False pretenses

The problem is not the goal, but the process. Generations of thinkers have worked their way through the “coronation theory”, according to which Europe has been bridled from the wrong end. After that, the euro is not the first stone of a monetary union, but the last, the crowning glory of a political union. A fiscal union must come in the medium term. The wish that the reconstruction fund may be the first stone for this is understandable.

But Scholz and Co. pretend that the fiscal union is now a reality, a fact. But that is a false pretense. Europe is not a nascent fiscal union. The construction fund was born in a historical emergency, and even then only with great pain.

It is completely uncertain whether further integration steps will follow. If Austria or the Netherlands, Poland or Hungary do not take part in the next step, the illusion of fiscal union collapses immediately.

However, financial markets have long since priced in the fiscal union. Because of all the invocations, they already see the EU as an implicit liability union in which the German creditworthiness stands behind that of the other countries. That is the reason – in addition to the policy of the European Central Bank – why the euro states can run up debts for nothing despite record debts.

If these expectations are shaken, a rude awakening threatens. Then the economic costs threaten to quickly outweigh the political benefits of invocations of entry into the fiscal union. Serious turbulence on the financial markets could possibly result, in the worst case a Euro crisis 2.0. It seems that politicians have forgotten all the lessons learned from the euro crisis about how financial markets work.

Scholz must not overwhelm the citizens

And despite all the longing to no longer be criticized as a bad maker in Europe, but to be celebrated as a reformer, Scholz must not overlook: The political constellation in which he talks about a Hamilton moment is not exactly auspicious if you have Corona as a background slide pulls aside.

Scholz has to be careful not to overwhelm the average citizen with his new European euphoria. Because almost all European representatives are currently talking mainly pro domo. When Emmanuel Macron talks about “European solidarity”, he means the establishment of European community pots, although his country has already failed to raise funds for small collaborations.

When the Italian government speaks of “European solidarity”, it means accepting money “from those in Brussels” with an outstretched hand, but please without any interference as to what it is spent on. And when the President of the European Parliament David Sassoli talks about “European solidarity”, he means a haircut for Europe. A few days ago he seriously said that debt relief is “an interesting working hypothesis”.

That would all be half as bad if the EU Commission fulfilled its role as guardian of the treaties. But there are doubts about that. So she wants to almost bathe the stability pact and now even soften the rules for bank resolutions. Anyone who seriously wants the “ever closer union” has to push it forward without creating false expectations. And it must not limit itself to introducing a liability union without at the same time creating the appropriate democratic structures for it.

More: Hungary and Poland are blocking the decision on EU corona aid

.

Poland and Hungary are concerned with more than the Union’s billions

Hungary’s Prime Minister Viktor Orban with the Polish Prime Minister Mateusz Morawiecki

Poland and Hungary rely on confrontation in the current EU budget debate.

(Photo: dpa)

Wien There are hefty accusations that are flying back and forth between Brussels, Warsaw and Budapest. There has been talk of blackmail and betrayal since the East Central Europeans blocked the EU budget for the next seven years and the Corona aid with their vetoes. It’s about a lot of money: 1.8 trillion euros.

The Prime Ministers of Poland and Hungary also use problematic historical analogies: The rule of law has become a means to corner the weak members of the European Union, said Mateusz Morawiecki on Wednesday evening. “We Poles are very familiar with the use of such propaganda clubs from communism.” Viktor Orban even believes that the EU could become a “second Soviet Union”.

The criticism from Warsaw and Budapest is exaggerated, but not without reason. The governments are angry that they have been outmaneuvered: The dispute over whether the EU should link the disbursement of funds to constitutional criteria in the fight against the weakening of the separation of powers and the accumulation of power of the governments in Poland and Hungary, which has been evident for years, began in July just whitewashed. At the summit, an agreement on a new budget was only reached because the details of the introduction of the rule of law mechanism remained unclear.

A clause stipulated that a qualified majority was sufficient for the introduction. However, it also contained the suffix that the European Council, where the principle of unanimity applies, would “deal quickly with the matter”.

Warsaw and Budapest hastily celebrated this as a victory, assuming they could block a definitive introduction. In this way, the two capitals have been ensuring that Article 7 procedures on the rule of law have no consequences for years.

Wing fighting in Poland

But at the beginning of November the decision was made by majority vote. Poland and Hungary are now using the veto against the budget as a weapon, as its approval requires unanimity. East Central Europeans are not the only ones criticizing the fact that the rule of law mechanism is mixing up legal and political discussions and that other means of combating abuse are already available, such as infringement proceedings.

But Hungary in particular has developed a mastery in circumventing these safeguards for the European legal order. Orban’s entourage, which has become rich thanks to EU funds, has no interest in strengthening controls.

The situation in Poland can hardly be compared with that in Hungary: corruption in connection with EU funds is hardly a problem. Orban may pose as a great ideologue of illiberal democracy, but the real revolutionaries are in the Justice Ministry in Warsaw.

Its boss is Zbigniew Ziobro, a right-wing missionary who intends to destroy the existing legal system with his reforms and is on course for confrontation with Brussels with his authoritarian and chaotic approach. Initially, it was Ziobro’s Solidarity Poland party that led the resistance against the link between the budget and the rule of law with the slogan “Veto or Death”.

Prime Minister Morawiecki, who is considered a representative of the moderate wing of the three-party coalition in the government, initially held back. In the summer he had spoken of a “golden era” that Poland would face in the next seven years thanks to the 160 billion euros from Brussels.

Polish Minister of Justice Zbigniew Ziobro

Ziobro was head of the Polish Ministry of Justice between 2005 and 2007.

(Photo: via REUTERS)

In the last few days, however, he has switched to Ziobro’s hard line. The weak head of government undoubtedly did this under pressure from Jaroslaw Kaczynski, who after internal quarrels had to make concessions to the strengthened fundamentalists around Ziobro.

The wing battles in Warsaw, which also involve the succession of the aging Kaczynski, complicate finding a solution at the European level. The majority of diplomats and commentators assume that there is too much at stake financially and economically for the governments to force a break with the EU.

The bourgeois newspaper “Rzeczpospolita” speculates in its comments about what a face-saving compromise for Morawiecki could look like. According to media reports, a slight weakening of the mechanism, an additional agreement or a more precise specification of the preconditions is being discussed in Brussels.

Whether the German Council Presidency will succeed in finding such a solution remains to be seen, especially since important donor states and the European Parliament hardly seem willing to accept a dilution of the rule of law mechanism.

Pessimists like Tibor Navracsics, a former Orban confidante and EU commissioner who is considered relatively moderate, believe that European conflict resolution mechanisms are reaching their limits. Poland and Hungary are no longer about money.

“It’s about identity and national sovereignty,” he writes in a well-received comment. The federal states felt more and more restricted and rejected corresponding integration steps. It is a fundamental conflict that broke out during the dispute over the refugee crisis in 2015 and continues to smolder today.

More: The budget dispute with Poland is about the future of Europe

.

Angela Merkel’s tough negotiator Uwe Corsepius

Angela Merkel, Uwe Corsepius

The European policy advisor was always one of the Chancellor’s top crisis managers.

(Photo: © HorstWagner.eu)

Berlin Uwe Corsepius cannot be overlooked. When the Chancellor receives a state guest and her closest colleagues line up next to her to greet her, her European policy advisor towers above the others by a head’s length. But the public is hardly known to the doctorate economist. The 60-year-old has a decisive role to play in the dispute with Poland and Hungary ahead of the next meeting of EU heads of state and government in Brussels.

Because his boss is in a tight spot. The heads of government Viktor Orbán and Mateusz Morawiecki have vetoed the adoption of the billion-dollar EU budget including the Corona reconstruction aid. They do not want to accept that their EU subsidies will be cut in the future if they do not meet standards such as the independence of the courts.

Germany has the EU Council Presidency until the end of the year, and Corsepius has to find a solution for the Chancellor in no time at all.

Corsepius is considered a tough negotiator. He knows Brussels and Berlin inside out and has worked under the Chancellors Helmut Kohl and Gerhard Schröder. From 2006 to 2011, the economist was Merkel’s man for Europe. After that, the family man sat for four years as Secretary General of the EU Council at one of the switching points in Brussels until he moved back to Berlin in 2015. Apparently he had never warmed up with the machine in Brussels. As he himself discovered when he said goodbye, he is now moving back to Germany for a fraction of his salary.

Over the years, Corsepius was also one of the Chancellor’s top crisis managers. First of all, the looming euro crisis preoccupied him with the first rescue package for Greece. After his return to Berlin, the refugee crisis was immediately on the agenda. This summer, Corsepius and his French colleague prepared the Corona reconstruction fund for Merkel and President Emmanuel Macron.

In Brussels there was always criticism to be heard because of his style, which was sometimes perceived as arrogant and gruff. While during the euro crisis it was the southerners who sometimes felt offended, there have recently been increasing conflicts with Eastern Europeans, especially in refugee policy. Corsepius initially underestimated the resistance to a Europe-wide distribution of refugees, some in Berlin chalked him up.

The influence is huge

But his influence in Berlin couldn’t be greater. There has always been rivalry between the Chancellery and the Foreign Office over European policy. But in the Steinmeier era, the Foreign Office was structurally weakened in European policy, when the top officials at Werderscher Markt were more concerned with making a career in the EU Commission themselves than with positioning their minister in Brussels. Corsepius is the secret winner of this development to this day. Observers believe that he has more influence than Foreign Minister Heiko Maas in European politics.

Corsepius doesn’t have much time left to find a solution. Because from January 1st, the money for the Corona reconstruction aid should flow and the EU budget should be in the towel. This suits Corsepius, who has mastered the political game of poker like no other. This is how insiders from Brussels describe him. He should use his network to Vienna and Prague to get Budapest and Warsaw to give in.

But one thing is also clear to him: If Hungary and Poland stay with their veto, from the beginning of 2021 no more money will flow into the two countries from the structural funds. Corsepius has been in business too long to give in too soon to Poland and Hungary.

More: Hungary’s blockade is a hostage-taking of Europe.

.

Hungary and Poland block decision for EU corona aid

I

In the middle of the corona crisis, the confederation is in a political crisis.

(Photo: dpa)

Brussels Rasmus Andresen is angry: The Greens politician in the European Parliament had negotiated the compromise for the controversial rule of law mechanism between the European Parliament, Council and Commission and thus cleared the way for the EUR 1.8 trillion EU financial package. But on Monday, Hungary and Poland vetoed.

Both countries do not want to accept the new mechanism for observing basic democratic rights such as the independence of the judiciary or freedom for teaching or education. The right-wing national governments in Budapest and Warsaw are therefore turning against the financial package made up of the EU budget and the Corona reconstruction fund.

The problem: The heads of state and government must unanimously adopt both the multiannual financial framework (MFF) for 2021 to 2027 and the reconstruction plan.

“The blockade of Orbán and the Polish PiS government is irresponsible,” complains Andresen. “Orbán is afraid that the new rule of law mechanism will damage his autocratic regime.” The EPP parliamentary group leader Manfred Weber (CSU) also sharply criticized the actions of Budapest and Warsaw. “The peoples of Europe currently have one enemy and that is the coronavirus and they expect us to deliver results now.”

In the middle of the corona pandemic, the veto of the two EU countries is now causing a political crisis. A video summit of the European Council is planned for Thursday. The focus should actually be on the pandemic. But now the meeting is overshadowed by Hungary and Poland’s blockade. It is still completely open what a compromise might look like.

What is certain, however, is that Angela Merkel is of central importance in the search for a way out. The introduction of the rule of law mechanism and its annual review with possible financial sanctions is one of the priorities of the German Council Presidency, which expires at the end of the year.

Difficult situation

Back in July, the heads of state and government had unanimously adopted the EU financial package and the rule of law mechanism at their four-day summit. The veto of Poland and Hungary now threatens serious economic consequences: “If the EU budget and the reconstruction package are blocked, the economic crisis in the EU will worsen, as a result of which the Hungarian and Polish economies will also suffer massively,” warns Andresen .

Countries like Italy, Spain, Greece and Portugal in particular urgently need the billions from Brussels for their badly ailing economies. But poorer EU countries such as Poland and Hungary also benefit from the aid.

EU parliamentarian Andresen blames Chancellor Merkel for the situation that has arisen. “Now there is a risk of revenge for the fact that the Chancellor has not yet intervened in the negotiations,” said the MEP. In fact, the Council Presidency has entrusted the month-long search for compromise primarily to its own diplomats. At the forefront was Michael Clauss, who acted skillfully and had been permanent representative to the EU for two years.

A solution, meanwhile, is anything but easy. Because the European Parliament has been insisting on a rule of law mechanism for years. All major groups in the European Parliament support the negotiated compromise. The fact that there is no possibility of financial sanctions against countries like Hungary and Poland because of their dealings with the judiciary, the media or universities has long been a thorn in the side of the EU representation.

Merkel will now speak to EU Council President Charles Michel, among others, to find a solution for the € 1.1 trillion MFF and the € 750 billion reconstruction plan. If there is no agreement by the end of the year, the previous EU budget would have to be updated. In addition to the heads of state and government, almost all parliaments in the member states still have to ratify the resolutions.

More: The EU reconstruction fund financed with joint debts provides the poorer EU countries in particular with higher growth rates, a study found.

.

Johnson’s chief advisor Dominic Cummings announces retirement

Dominic Cummings

UK Prime Minister Boris Johnson’s chief advisor has announced his end-of-year retirement.

(Photo: AP)

London The exodus of the Brexit hardliners from Downing Street has begun. After the resignation of Head of Communications Lee Cain on Wednesday, Boris Johnson’s controversial chief advisor Dominic Cummings announced that he would be leaving at the end of the year. The Brexit strategist confirmed his intention to the BBC on Friday night.

Cummings and Cain are the two leading figures in the “Vote Leave” camp at government headquarters. They led the Brexit campaign in 2016 and brought Johnson to Downing Street in 2019. In the past few months they had helped shape the uncompromising course in the free trade talks with the EU.

Cummings in particular was a major influence on the Prime Minister. Johnson thought it was so indispensable that he stuck to it in the spring, despite the fact that the agent faced calls for resignation for days after violating lockdown rules.

The departure of the Brexit veterans now indicates a fresh start on Downing Street. A number of staff are expected to follow their leader Cummings, including Oliver Lewis, an influential Brexit negotiator on David Frost’s team.

The free trade talks with the EU supposedly have nothing to do with the wave of resignation. “The rumors that it is somehow about the Brexit negotiations are fabricated,” Cummings told the BBC.

Johnson wants to set different accents in the future

But the timing suggests a connection. The negotiators have set themselves a deadline by the end of next week to reach a compromise. Most observers in London expect Johnson to agree to a deal because he needs political success.

After leaving the internal market, the Brexit hardliners have apparently done their part. According to the Times, Johnson wants to set different accents in the future. After years of Brexit polarization, he now wants to adopt a “conciliatory tone” and tie in with his time as liberal London mayor, reports the newspaper.

With Allegra Stratton, who was a long-time journalist for the left-wing “Guardian” and the BBC, Johnson has hired a spokeswoman who is said to be the new, friendly face of the government. Starting in January, she will hold daily live press conferences. The arrival of the rival triggered the resignation of chief communications officer Lee Cain. This in turn took his friend Cummings as an opportunity to also quit.

The Prime Minister plans to give a speech on climate change next week. He also recently highlighted the topic as something in common in his first phone call with US President-elect Joe Biden. Johnson also wants to improve relations with the Conservative MPs again.

Cummings’ understanding of politics does not fit this spirit of cooperation. He is accused of having run the government business like an election campaign: Every topic is polarized, resentment against an enemy must always be mobilized – regardless of whether it is the EU, the BBC, the civil servants or their own MPs.

The news of Cummings’ departure therefore caused relief among ministers, MPs and officials. “What a nice Christmas present,” one minister told Politico. Conservative MP Roger Gale told Sky News that Cummings had “been a bad influence on Downing Street for far too long.”

More: The Brexit hardliners will soon no longer be needed, says Handelsblatt author Carsten Volkery.

.

The end of the hardliners around Boris Johnson – comment

Johnson-Graffiti in Manchester

The slogan “Eton Mess This Manchester graffiti alludes to the mess in the government of Eton graduate Boris Johnson.

(Foto: laif/CAMERA PRESS/Brian Stark)

Things are not going well for British Prime Minister Boris Johnson. In the UK, more than 50,000 people have now died from the coronavirus. The kingdom suffered the biggest economic slump of the leading industrialized countries – with a minus of almost ten percent in the first nine months of the year. On top of that, a power struggle is raging on Downing Street, which led to the resignation of communications chief Lee Cain.

Cain’s departure highlights this dysfunctional government. The largely unknown employee was one of the leading representatives of the “Vote Leave” campaign, to which Johnson owes his rise. As a reward for the successful Brexit referendum in 2016 and the free choice as Prime Minister in 2019, the Tory had two dozen members of the campaign in his government, many of them in leading positions.

The influence of this conspiratorial force around chief advisor Dominic Cummings is seen by critics as the reason for the poor performance of the government. They are considered arrogant, unscrupulous and secretive. They are perceived as a separate state in the state where only the word of Cummings matters. They are accused of running government business like an election campaign: every topic is polarized and taken to extremes.

This approach is reaching its limits in the pandemic, as the government’s numerous U-turns show. And even with Brexit, the strategy of constant escalation no longer works at some point. If Johnson wants a free trade agreement with the EU, now is the time for compromise. The negotiators have set a deadline of next week.

It is therefore perhaps no coincidence that the tension on Downing Street is now eroding. In Johnson’s environment, the insight is evidently gaining ground that a new beginning is necessary – and that this also requires personnel consequences. Some conservative MPs are already hoping for a cleansing thunderstorm that will sweep away the rest of the Brexit hardliners after Cain.

Johnson had the opportunity to fire his chief advisor in the spring after he broke the lockdown rules. Back then, he held onto Cummings because he thought he was indispensable. Once Brexit is over, however, Johnson could reassess the situation – and usher in the next phase of his five-year term.

More: Boris Johnson’s chief communications officer, Lee Cain, resigns.

.

Lockdown of the EU Parliament provokes MPs

EU Parliament in Brussels

The administration of the EU Parliament only works with an emergency staff.

(Photo: dpa)

Brussels There is a yawning emptiness inside the EU Parliament this week. The European Parliament has suspended its parliamentary work in view of the corona situation in Belgium, which is difficult to control. Parliament President David Sassoli decided to cancel almost all parliamentary and committee meetings for the whole of November.

The administration of the EU Parliament only works with an emergency staff. Even the negotiations between Parliament, the Council and the Commission on the 1.8 trillion financial package can only take place physically on a very small scale.

The approach leads to sharp criticism, especially from the ranks of the CDU and CSU. “A parliament that is dissolved by its official representative loses its legitimacy. This damage to the only democratically elected European institution by you is unacceptable ”, warns the CSU politician in an email to the Italian EU Parliament President David Sassoli.

“Having served as a member of this prestigious house for over 26 years, I never thought I would witness this self-destruction.” All national parliaments have found ways to continue their work and serve their citizens. “As President of the European Parliament, you should do your best to make our work possible and not to hinder it,” said Ferber.

Union politicians are calling for a U-turn

The European politicians of the CDU / CSU in the European Parliament demand from Sassoli an end to the lockdown. “We absolutely want the possibility of all MEPs participating in the plenary sessions, parliamentary committee meetings and the trialogues on site in Brussels or via remote access, regardless of their location. In order to resume parliamentary work on site, we are ready to accept numerous precautions and restrictions, ”said David Caspary, head of the CDU / CSU group in the European Parliament, the Handelsblatt on Tuesday.

The CDU / CSU group has unanimously decided on a corresponding position paper, which is available to the Handelsblatt. It is suggested that only one member of parliament or one member of parliament can work in each member’s office in order to reduce the risk of infection.

“If European democracy is to function effectively as a marketplace for ideas, especially in times of crisis, this can only happen through personal and, above all, lively debates in the plenary of the European Parliament,” says the joint declaration.

The national parliaments had also succeeded in maintaining the debates among politicians in the plenary chamber while at the same time complying with the necessary hygiene measures. In addition, other parliaments in Brussels would continue to meet in attendance. CDU politician Caspary therefore demands: “Those MPs who have to or want to come to Brussels should also be able to attend meetings in the future.”

Greens and liberals also criticize the closure of the EU Parliament. “I have a democratic stomachache when we MEPs don’t meet for months. I therefore advocate a minimum of democratic exchange, ”said Anna Cavazzini, Chair of the Internal Market Committee in the European Parliament, on Tuesday.

“With purely digital plenary and committee meetings, not only are debates very limited, but all informal opportunities for Members to meet are excluded.” Finally, the national parliaments would also find a way to continue to meet physically. “The lockdown poses a problem for parliamentary work, especially when it comes to sensitive issues and difficult compromises,” confirms MEP and digital politician Moritz Körner (FDP).

The President of Parliament sees no alternative

But the parliamentary administration does not want to orient itself to the practice in the member states. In view of the dangerous pandemic situation in the Belgian capital, she sees no alternative to a new lockdown.

“In view of the worrying situation in connection with the spread of Covid-19, especially in Brussels, where four percent of the population are currently infected each month (and the trend is rising), and to avoid health risks for the members of the European Parliament, its staff and other persons “, the President decided,” that ordinary and extraordinary meetings of the governing bodies of Parliament, the plenary, the committees and the political groups in November can only be attended remotely without the physical presence of any person other than the respective chair, the indispensable staff of the secretariat and the for the technical support indispensable staff may take place ”, it says in an internal letter of the parliament administration.

How things will continue after November is unclear. “The situation will be reassessed against the background of future developments and subject to further decisions by the President,” says the lengthy statement to the MPs.

Belgium is the most dangerous country in Europe in Corona times, because Belgium, with its 11.5 million inhabitants, mourns over 120 deaths per day. Data from the European Center for Disease Control (ECDC) show 1,735 infections per 100,000 inhabitants in the past two weeks.

For comparison: In Germany, which is almost eight times larger, there were only 215 new infections per 100,000 inhabitants in the same period. The European Parliament already experienced a lockdown when the pandemic broke out in spring. Since the spring, the EU representation has not held its meetings in Strasbourg, the official headquarters of Parliament. France protested the precautionary measure in vain.

Meanwhile, Sassoli’s decision is well received by employees in the EU Parliament. “So far, the majority of the MEPs have worked from home and never came to Brussels,” says an employee in Brussels. “That worked well. The current decision is therefore not a major disadvantage for the work. ”In Corona times, working is difficult for the parliamentarians anyway. Because, in contrast to the imposing entrance halls, the offices are narrow. Even before Corona, numerous employees were already working from home.

The lockdown in Brussels also has financial disadvantages for MPs. Because there is an attendance fee of around 320 euros per day of meetings in Brussels and Strasbourg. The attendance list for European politicians to withdraw their daily allowances is no longer available until at least the end of November.

“I think it is right not to pay out the daily allowances so that there are no additional incentives to travel there,” said the Green MP Cavazzini, welcoming the President of the Parliament’s decision and knowing that not all of the more than 700 members of parliament hold this opinion.

More: Dispute over EU budget escalates

.

Brexit “Real Progress” in Trade Talks

Liz Truss

The British Minister of Commerce reiterated that the UK could carry out Brexit without a trade agreement.

(Photo: AFP)

London Britain and the EU are making “real progress” in their Brexit talks, according to British Trade Minister Liz Truss. An agreement is possible, said Truss on Friday. At the same time, however, she affirmed that the United Kingdom could implement Brexit without precise regulations for trade if Britain’s independence is not preserved.

The clock is ticking as the UK and the EU negotiate their future relationship. At the end of the year, the transition period, during which the UK still applies EU rules, expires. After that, chaos threatens. That could hit the economy hard. New tariffs on many products would then be the order of the day. Issues that are particularly contentious are rules on fair competition, dispute settlement procedures and fishing quotas in UK waters.

In the end, neither side wanted to make major compromises, which is why talks stalled. However, daily talks were agreed on Thursday. From an EU perspective, negotiations can take place until mid-November. Then an agreement should be in place so that parliaments have enough time to ratify it this year.

The UK signed the first major post-Brexit trade deal with Japan on Friday. However, the world’s third largest economy is a much smaller trading partner than the EU.

More: Holger Schmieding: A hard Brexit would hit the British above all

.

Britain and Japan sign free trade agreements

signing

The British Minister for International Trade, Liz Truss and Japan’s Foreign Minister Toshimitsu Motegi signed the treaty in Tokyo on Friday.

(Photo: AFP)

Such Japan and Great Britain have agreed on a bilateral free trade agreement that will apply after the current Brexit transition phase has expired. Japan’s Foreign Minister Toshimitsu Motegi and the British Minister for International Trade, Liz Truss, signed an agreement to this effect in Tokyo on Friday.

In doing so, they paved the way for the agreement to come into force on January 1st. Both states want to ensure continuity in trade and investment after London leaves the European Union. The agreement, which largely corresponds to Japan’s existing free trade agreement with the EU, must first be ratified by the parliaments of both countries.

Japan, the third largest economy in the world before Germany, had negotiated such an agreement with Great Britain, since the free trade agreement between Japan and the EU did not cover the UK after the end of the Brexit transition phase on December 31.

The bilateral agreement provides for tariffs on Japanese cars to be gradually reduced to zero by 2026 – this is also what the existing trade agreement between Japan and the EU provides. Japanese tariffs on British agricultural products will also remain at the same level as laid down in the trade agreement between Japan and the EU.

Japanese companies welcome the agreement, but at the same time they are concerned about whether London will really get an agreement with the EU after the end of the transition phase.

The British voters had voted in 2016 with a narrow majority to leave the EU. Great Britain then left the EU at the end of January 2020, but is still a member of the EU internal market and the customs union during a transition period until the end of the year. Only then does the economic break come. Talks are currently underway again about a Brexit trade agreement with the EU in order to avoid a hard break with tariffs and trade barriers at the turn of the year.

“It is of the utmost importance that the supply chains between the UK and the European Union remain intact even after the UK leaves the European Union,” said Japanese Foreign Minister Motegi. Japan has high hopes that an agreement will soon be reached in the negotiations between London and Brussels on a Brexit trade agreement.

The deal with Japan is the first deal that London has made with a major economy after the end of the Brexit transition period. In addition to the negotiations on a Brexit agreement with the EU, London’s trade talks with the USA, Australia and New Zealand are still ongoing. The trade agreement between Japan and the EU entered into force in 2019.

More: Johnson ends the forced break in trade talks with the EU

.

With his actions he threatens to destroy the EU

Mark Rutte

The Dutch prime minister was only ready to reach an agreement after receiving a € 1.9 billion discount on his country’s EU contribution.

(Photo: dpa)

Hardly any other country in the European Union is as economically successful as the Netherlands: They made Rotterdam the most important hub for all European foreign trade and Schiphol one of the largest EU airports. They sell their greenhouse tomatoes and flowers all over the world and even manage to flood the supermarkets of France with their milk from polderland, which is blessed with incomparably better natural resources.

But the biggest coup was the Christian Democratic Prime Minister Mark Rutte: He is milking the whole EU. As the?

As a pioneer of the “thrifty four” – including the Netherlands, Austria, Denmark and Sweden – he succeeded in the negotiations on the EU reconstruction fund in replacing a large part of the planned grants with loans.

Now it turns out that many countries do not want these loans at all: Germany, France, Spain, Portugal, Belgium, Greece, and even the Netherlands have already given up, others are still hesitating. The loans are either too expensive for them or with too many requirements. Rutte now only wants the subsidies – which he tried to prevent in July.

So is the development to be seen as a defeat for Rutte, whose credit strategy became the air number? By no means! Because the cunning Christian Democrat probably did not defend his demand so steadfastly because he was convinced that the loans made sense. He has built up a position that he could buy for dearly.

Sebastian Kurz said: “It was worth it”

All countries willing to agree, especially Germany and France, suspected even before the summit that Rutte wanted EU money. This is how it happened: he was only ready to reach an agreement after receiving a discount of 1.9 billion euros on his country’s EU contribution. The other countries of the “Sparing Four” also received tens of millions of euros. “It was worth it,” said Austria’s Sebastian Kurz.

Do they have to return the money after it turns out that their credit policy has failed? No. The four countries, especially the Netherlands, behaved like free riders, better still: like fare dodgers who force paying passengers to make a donation. But such an act is only punished in real life, not in the EU.

However, this is how the clever four destroy the European Union. Milking others and then turning a blind eye to the consequences is not an acceptable basis for a community like the EU. And the Netherlands and Austria depend on their well-being.

More: At 9 p.m. it is Zapfenstreich: Macron imposes nocturnal curfews.

.