Germany took over the rotating presidency of the European Union from Croatia on Wednesday amid disagreements among EU member states about the pandemic-induced economic recovery plan
BRUSSELS (Pakistan Point News / Sputnik - 02nd July, 2020) Germany took over the rotating presidency of the European Union from Croatia on Wednesday amid disagreements among EU member states about the pandemic-induced economic recovery plan.
For German Chancellor Angela Merkel, who has announced that she would not seek reelection to the chancellorship next year, the upcoming six-month EU presidency marks a symbolic legacy.
There are many issues to be solved by the end of the year, including the economic crisis linked to the coronavirus, the deadlocked post-Brexit negotiations, the rise in populism, the unpopularity of many EU leaders, including Merkel and French President Emmanuel Macron, tense relations with the United States and China, and the migration issue, still a key topic for European citizens that does not get proper attention from the European elites.
In addition, EU members still need to reach a consensus on the pending 750 billion euro ($843 billion) coronavirus recovery fund recently tabled by the EU Commission. The EU leaders are scheduled to meet on July 17-18, but the so-called frugal four group of European countries � Austria, Denmark, the Netherlands and Sweden � refuse to go ahead with the plan.
CHAOTIC DECISION PROCESS IN EUROPE
It is complicated to reach unanimity on important matters between 27 members of the bloc, the European Commission and the European Central Bank. While some EU countries want to create a supranational European state, others prefer to keep national states. At the same time, more and more European citizens do not believe in the present European project anymore.
For Germany, this is the second EU presidency under Merkel, 13 years since its previous presidency. Berlin will take over during a crucial time amid the economic and social hardships linked to the COVID-19 pandemic.
Germany is often accused, including by France, of not committing enough to reform Europe, and Berlin knows it is under pressure.
"We are facing economic challenges that we have never known in decades, and probably throughout history," Merkel said after a meeting with Macron on Monday.
By proposing a financial aid package to keep the European economy afloat, the German-French duo again unilaterally decided to take the lead in the EU.
But for the so-called frugal four, and many other member states, this arrogant leadership of the EU is irritating. Notably, European Commission President Ursula von der Leyen, who served as the German defense minister from 2013-2019, is Merkel's close friend, so Germany has all capabilities to strongly influence the final decision of the 27 EU heads of state on many of the issues the bloc is facing for the next 6 months.
"All together to strengthen Europe. Here is our slogan, and I am going to commit myself with all my might," Merkel said when presenting Berlin's slogan for the upcoming presidency.
For Merkel, it is very important to achieve success during Germany's presidency, as the chancellor is leaving politics next year.
The most pressing issue at the moment is the coronavirus-linked European aid package. Overall, the European Commission has been incapable of providing a rapid response to the coronavirus pandemic development. Remarkably, von der Leyen did not even visit Italy to show her support to the worst-hit country at the height of the pandemic. Moreover, Brussels did not send any medical aid, face masks or hospital equipment to Italy.
"All that the Europeans got were the excuses of Ursula von der Leyen for not acting, and a tutorial on how to wash your hands by Ursula herself. Pathetic! The Commission is now finally coming up with a financial plan, which is a copy-paste version of the conclusions of the Merkel-Macron meetings. Europeans will appreciate it. All together behind Merkel and Macron," Tom Vandendriessche, a Belgian politician and member of the European Parliament for Flemish Vlaams Belang party, told Sputnik.
There have been a number of issues and differences among eurozone countries as well. The Maastricht treaty criteria on debt and yearly deficits, which envisions a debt limit of 60 percent, was imposed by Germany and the Northern member states, and the criteria were not met by the countries in the South, including Italy and France. Then the Greek crisis hit in 2010, and the Nobel prize economist, Joseph Stiglitz, predicted the end of the euro currency soon afterward. Having a common currency with different economic and financial policies, as well as different debt levels, is doomed for failure, according to Stiglitz.
But now, the COVID-19 pandemic has crashed the Maastricht rules to pieces. Deficits and debts are growing in all countries.
The euro survived the crisis, and Greece is heavily indebted for decades to come.
The only way forward was to fully change the European strategy, so Brussels has announced a very high amount of funding to help the worst-hit countries. Deficits and debts suddenly did not matter anymore.
The commission proposed providing 750 billion euros, as a supplement to the EU budget, to the countries worst-hit by the coronavirus crisis. In particular, 250 billion would be provided as loans and 500 billion more as "transfers" � in other words, free gifts to several countries � and many EU countries do not agree with this.
Germany wants to persuade the Netherlands, Denmark, Sweden and Austria to agree to the plan during the next European summit, so the national parliaments can promptly ratify an agreement to make funds available in 2021.
The commission's plan is called Europe's next generation, and, ironically, it is indeed the next generation who will pay for it.
This recovery plan is actually a revolution. For the first time, the idea of debt pooling seems to be supported by the majority of states, including Germany, which had long opposed this concept.
Ten years after the Greek crisis, during which Merkel and former German Finance Minister Wolfgang Schauble had imposed a drastic restructuring plan on Athens, the policy has changed. Schauble, who became president of the Bundestag, supports the new recovery plan. The strongest opposition in the Bundestag comes from the liberal Free Democratic Party (FDP) and the right-wing Alternative for Germany (AfD) party,
"States such as Austria and the Netherlands have already expressed legitimate doubts about the planned measures. You can not just ignore them. The Federal Government should use the second German Presidency to resolutely oppose Brussels' claim to power to transform the EU into a sovereign superstate. Instead, the opportunity would finally be to breathe new life into the original idea of the EU as a union of sovereign member states," Alexander Gauland, the head of the AfD faction in the Bundestag, said in parliament.
According to Gauland, "national states themselves" can solve the coronavirus pandemic, the migration crisis and other current issues.
"But at the end of her chancellorship, Merkel will probably do the exact opposite and continue to drive the EU on its way to becoming a European superstate, which means the foreseeable failure of the European idea," the AfD member said.
The supporters of the aid package argue that the COVID-19 crisis was created by the virus and not by humans, so no one can be blamed for it.
In order to convince the public and members of the Budgestag to support the recovery fund, Merkel could also argue that the collapse of the single European market would have catastrophic consequences for the German economy. In particular, the German automobile industry would be affected, as BMW and Mercedes also sell their cars in Italy, France, Spain and other countries.
In late May, 51 percent of Germans said that they would support this European recovery plan without complaining, according to opinion polls.
During the presidency, Berlin will face not only many issues, but also a reduced amount of meetings, as only teleconferences are allowed during the pandemic. Merkel prefers to "concentrate on the essential" during Germany's presidency.
Germany's top priority right now is to reach a consensus on the recovery fund during the next summit, and the clock is ticking.
There is also the issue of the next seven-year budget of the bloc. The problems include less funding because of the UK's departure, high indebtedness of some EU members because of COVID-19, and the controversial Green Deal Investment Plan of 1 trillion euros to fit into the budget, which is presented as a part of the fight against COVID-19. Overall, the challenges are big.
By the end of October 2020, Berlin aims to sign a deal between London and Brussels on the post-Brexit relationship, as the transition period ends on December 31. UK Prime Minister Boris Johnson has repeatedly said that the date will not be postponed.
The next EU-China summit, initially scheduled for September but postponed due to the pandemic, should take place in late November or early December. There might be some disagreements regarding an investment agreement between Brussels and Beijing, as Europe has started to oppose China on several issues, including national security law that, according to the EU, limits the freedoms of Hong Kong residents.
Finally, another challenge is migration. Merkel does not want to leave on another failure, and she plans to tackle the issue. The commission has launched a New Pact on Asylum and Migration, but the adoption of the plan has been postponed several times. Given the fact that migration is not among the priorities at the moment, the matter is most likely to be transferred to the next presidency Portugal.
