Europe & EU January 2021 –

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Europe & EU 2018- November 2019

2021: Another Sad Year for EU-Russia Relations
Sabine Fischer
Navalny’s return to Russia on January 17 has created a prominent link between Germany/the EU and Russian domestic politics—the geopoliticization of domestic politics—which neither side will be able to ignore in the future.
(Carnegie Moscow Center) When EU High Representative Josep Borrell visited Moscow at the beginning of February, the Russian leadership had a choice: it could have accepted Borrell’s offer of dialogue (which he had made despite fierce criticism at home) and taken a more conciliatory tone. Instead, Foreign Minister Sergei Lavrov opted to offend his interlocutor. Accordingly, EU-Russia relations got off to a terrible start to 2021, while still suffering from the degradation and shocks of the past year.

13 February
EU foreign policy RIP
Josep Borrell’s trip to Russia marked the end of Europe’s geopolitical ambitions.
European foreign policy died in Moscow last week. The burial will be held at sea this spring, some 35 fathoms under the Baltic, where a towering Russian vessel called “Fortuna” is laying the final section of the 1,230 kilometer-long Nord Stream 2 gas pipeline between Russia and Germany.
In what is being called “the humiliation” in Europe’s capitals, EU foreign policy chief Josep Borrell stood silent in Moscow last Friday as Foreign Minister Sergey Lavrov dismissed the EU as an “unreliable partner” during a joint appearance on live television. The only response Borrell managed to muster to Lavrov’s lengthy diatribe was a pained grin.
Borrell’s real crime was to let the mask drop on the EU’s powerlessness. Critics had been saying for weeks that he shouldn’t make the trip, especially on the heels of the Kremlin’s imprisonment of opposition leader Alexei Navalny and its crackdown on protesters. The Russians would use the trip for their own propaganda, they warned. Borrell went anyway, making tired arguments about the merits of “dialogue” with adversaries.

2 February
Eurozone on course for double-dip recession
Eurozone’s recovery goes into reverse amid second wave of Covid-19 pandemic
Eurozone national income, or GDP, fell by 0.7% from October to December as governments introduced new restrictions and lockdowns to try to curb the virus. GDP fell by 0.5% in the wider EU in the last three months of the year.
With lockdowns likely to persist through much of the first quarter of 2021 and the EU commission struggling with its vaccine rollout programme, analysts said the currency block would almost certainly suffer a second bout of declining economic activity during January to March. A recession is defined as at least two consecutive quarters of negative growth.

25 January
Italian PM Conte resigns in split over Covid response
Italian Prime Minister Giuseppe Conte has resigned – and it is not clear if he will be able to form and lead a new coalition government.
Parties are divided over spending in the coronavirus crisis, in which more than 85,000 Italians have died.
Mr Conte met President Sergio Mattarella, who may ask him to form a stronger government. Last week he lost his Senate majority.
But someone else could become Italy’s PM, or a snap election could be called.

Europe’s Bankruptcies Are Plummeting. That May Be a Problem.
Governments have extended national programs to keep troubled businesses afloat, but the aid may only be postponing a painful reckoning.
(NYT) France and other European countries are spending enormous sums to keep businesses afloat during the worst recession since World War II. But some worry they’ve gone too far; bankruptcies are plunging to levels not seen in decades.
While the aid has prevented a surge in unemployment, the largess risks turning swaths of the economy into a kind of twilight zone where firms are swamped with debt they cannot pay off but receiving just enough state aid to stay alive — so-called zombie companies. Unable to invest or innovate, these firms could contribute to what the World Bank recently described as a potential “lost decade” of stagnant economic growth caused by the pandemic.
Analysts say the government programs are already seeding the economy with thousands of inefficient businesses with low productivity, high debt and a high prospect of default once low interest rates normalize.

18 January
Josef Joffe: Merkel Minus Angela
Over the weekend, Germany’s Christian Democratic Union (CDU) anointed Armin Laschet, the unassuming, friendly-faced prime minister of North Rhine-Westphalia, as its chairman. Laschet is not exactly a star on the world stage. But remember the name. Statistically, a Christian Democrat is the odds-on favorite for the chancellor’s job. Five of Germany’s eight postwar chancellors have hailed from the CDU – from Konrad Adenauer to the current incumbent, Angela Merkel. And Merkel’s party currently leads in national polls by a wide margin, making it a safe bet that Merkel’s successor will again hail from the conservative camp after the general election in September.
Laschet does not promise a new dawn, or a break with 16 years of Merkel’s centrism and its creeping leftward tilt. That shift has now been accelerated by the COVID-19 pandemic, which is driving a massive expansion of government spending and redistribution across the West. Trillions of euros are being showered on individuals and “system-relevant” corporations.
Expect “Merkelism” in foreign policy as well. … Call it “diplomatic centrism.” Don’t let the United States drag Germany into conflicts with the two giants to the East. Keep your distance from Washington. Try to be on good terms with each and all, as befits Berlin’s position in the heart of Europe.As Chancellor, Laschet would not defy Russia by cutting the Nord Stream 2 pipeline that will pump Russian gas directly into the country, circumventing Poland and Ukraine and increasing German energy dependence on the Kremlin. Nor will Germany exclude Chinese 5G technology from its networks.

Supermarket pleas mount as Brexit leaves Northern Ireland shelves bare
Six top supermarket chains demand action as customs checks bite.
(Politico Eu) Supermarket chiefs warned that thinly supplied shelves in Northern Ireland stores will only grow barer unless British and EU trade officials urgently agree to simplify Brexit border checks.
In a joint letter this week to U.K. Cabinet Office Minister Michael Gove, the CEOs of six of Britain’s top supermarket chains — Tesco, Sainsbury’s, Asda, Marks & Spencer, Iceland and the Co-Op — forecast that supplying their Northern Ireland outlets with fresh goods will become “unworkable” if the full range of import checks goes into force on April Fool’s Day as planned.
To varying degrees, all six British grocers have battled to keep their Northern Ireland store shelves full since New Year’s Day, once enforcement began of the new Irish Sea customs border — a boundary that the Cabinet minister responsible for the region, Northern Ireland Secretary Brandon Lewis, insists doesn’t even exist.
The Northern Ireland protocol — agreed as part of the U.K.’s exit from the European Union — has left Northern Ireland, part of the U.K., still bound to the EU’s customs rules. This compromise was designed to avoid customs checks at dozens of roads along the 300-mile border with the Republic of Ireland.

9 January
It could happen here too: European Trumpism won’t end with Trump
Populist leaders may be losing a figurehead, but support won’t disappear.
Peter Geoghegan, author of “Democracy for Sale: Dark Money and Dirty Politics” (Head of Zeus, 2020).
LONDON — Early last year, I interviewed Steve Bannon for my latest book. U.S. President Donald Trump’s onetime advisor is an unreliable narrator with a history of hyperbole, but on one point he was definitive: Europe’s populist leaders looked to the Trump White House for inspiration.
Bannon boasted that he talked to senior European political figures on a “fairly regular basis” and was “still working behind the scenes driving stuff.” He namechecked a few in particular: Hungary’s Viktor Orbán; Italy’s Matteo Salvini; France’s Marine Le Pen.

8 January
Melvyn Krauss: The Brexit Boon to Europe and the US
(Project Syndicate) More than four years after the Brexit referendum, the United Kingdom has finally left the European Union, and the timing could not be better. With Britain gone, Europe has nothing preventing it from adopting a new economic-policy model that is better equipped for contemporary conditions, not least a strengthening euro.
… It would appear that the British left the EU at just the right moment. The new US president, facing a raft of urgent policy demands at home, will be in a strong position to nudge the Germans in precisely the direction they need to go – toward a new model of greater EU fiscal stimulus and internalized trade.Since this shift, which could prove a strong antidote to European populism, would help to harmonize US-EU relations and benefit both the US and European economies, no one in Washington, DC, or Brussels should shed any tears for Britain’s departure. The Germans may not be eager to embrace an internalized trade model, but they should recognize that Brexit, in this case, is good for Europe.

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