Europe & EU January 2021 –

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Official website of the European Union
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The European elections 2019
Europe & EU 2018- November 2019

Italy’s government is under growing pressure to dissolve the Forza Nuova neo-fascist group involved in violent weekend protests against a government drive to make the COVID-19 ‘Green Pass’ mandatory for all workers. Since its foundation in 1997, Forza Nuova has repeatedly been accused of using violence against immigrants and police.

10 October
Bloomberg Politics: It was nothing short of a political earthquake that gripped Central Europe as heads of the established leaders began to roll over the weekend.
In Austria, Chancellor Sebastian Kurz resigned over a corruption scandal, while elections in the Czech Republic dealt a blow to billionaire Prime Minister Andrej Babis.
It’s been a dizzying turn of events in neighbors that straddle east and west. Both are members of the European Union that have tested its rules-based system. Neither are big hitters in the 27-nation bloc, but they’ve exploited opportunities to punch above their weight.
Kurz, Europe’s youngest leader, was at the vanguard of the far-right populism that gripped the EU after the refugee crisis that presaged Brexit and the rise of Donald Trump.
His anti-immigration stance caused trouble for Germany’s Angela Merkel and his perceived fiscal stinginess also made life difficult when the EU needed everyone to support a pandemic recovery fund.
Kurz’s demise is unlikely to be mourned west of Vienna, though a comeback cannot be excluded. He bounced back from a 2019 sleaze scandal that toppled his earlier government.
The situation in the Czech Republic is more volatile. Babis is locked in a long-running battle with the European Commission over conflicts of interest and whether he directed EU funds toward his agri-food conglomerate.
Holding onto power is potentially key to keeping him out of jail, which is why the combination of losing an election and his protector — President Milos Zeman was rushed to hospital yesterday — could mean power may change there too in more significant ways.
In Austria, Kurz stepped down and put forward an ally, Foreign Minister Alexander Schallenberg, with a view to still exerting influence behind the scenes. In Prague, it’s looking more like the end of an era. — Flavia Krause-Jackson

Czech president in hospital after shock election defeat for PM
Fears of a political crisis as Miloš Zeman, an ally of Andrej Babiš, is admitted to intensive care unit
(The Guardian) The Czech Republic is facing political upheaval and a possible power vacuum after its billionaire prime minister, Andrej Babiš, suffered a surprise general election defeat and then saw his most powerful backer and sole potential saviour, the country’s president, Miloš Zeman, taken to hospital, apparently gravely ill.
In a stunning upset that confounded pollsters’ forecasts, Babiš’ populist Action for Dissatisfied Citizens (ANO) 2011 party finished second in this weekend’s popular vote behind the centre-right Spolu (Together) alliance, which previously vowed not to form a government with him.
The president’s condition has a direct bearing on Babiš’ political survival because Zeman has said he would invite the leader of the biggest single party to form a government, a status applying to ANO 2011, despite its overall election defeat. The prime minister’s party won 72 seats, one more than Spolu, which is an alliance of three parties, the Civic Democrats (ODS), the Christian Democrats (KDU-ČSL) and the pro-EU Top 09.
3 October
Revealed: Czech PM used offshore companies to buy £13m French mansion
Pandora papers reveal Andrej Babiš financed purchase via secret loans through three overseas firms
Moving money offshore or using offshore companies to buy property is not illegal and is sometimes done for legitimate reasons of privacy or security. The original source of the funds is unknown, however, as is why Babiš chose such a complicated structure to finance a purchase he could have made directly. The arrangements did not offer Babiš any obvious tax benefit, experts said.

27 September
Post-Merkel, a muddle: 9 German election takeaways
Small parties are big winners in the contest to form the next government.
(Politico Eu) Negotiations among Germany’s parties have just begun. But one election outcome seems clear: The next government will be a centrist one once again — there’s just the small outstanding question of who will lead it.
That question will take weeks or months to answer. But what’s now evident is that the poor results of The Left party — which could have opened the door to a leftist alliance with the Social Democrats (SPD) and Greens — mean that the SPD’s Olaf Scholz has diminished leverage.
Harold James: Germany’s Europeanized Malaise
Although the 2021 German federal election has put an end to the country’s long-standing two-party dispensation, that doesn’t mean it has inaugurated a new era of change. On the contrary, Germans are still hewing to the center, but will now be subjected to a protracted, opaque negotiation process.

24 September
EU’s free-traders defeat French push to punish US
Trade and Tech Council will now go ahead on September 29 despite French rage about a lost submarine deal
A high-level meeting between EU and U.S. officials in Pittsburgh next week represents a cool-headed victory for Europe’s liberal, pro-market Atlanticist camp after days when it looked like French fury would kill it off.
Ever since Paris exploded last week over America swooping in to snatch away a massive submarine deal it had with Australia, France has vented its anger by putting big diplomatic set-pieces on ice. EU-Australia trade talks instantly fell victim to French wrath, and France’s EU commissioner, Thierry Breton, called for a “pause and reset” in transatlantic relations.
Over the past days, the highest profile hostage to the sub snub has been a meeting of the Trade and Tech Council scheduled for September 29, where top EU and U.S. policymakers were due to launch a fresh diplomatic forum for aligning their policies in areas such as microchips, robotics and artificial intelligence. For the Americans, this new format is a key way to try to forge an alliance against China to preserve technological supremacy in democracies.

23 September
The Economist European edition cover story
In her 16 years in the chancellery, Angela Merkel has weathered a string of crises, from economic to pandemic. Her abilities as a consensus-forger have served her country and Europe well. But her government has neglected too much, nationally and internationally. Germany is prosperous and stable. Yet trouble is brewing. And as Mrs Merkel prepares to leave office when a new government forms after an election this weekend, admiration for her steady leadership should be mixed with frustration at the complacency she has bred. After a lacklustre campaign that has failed to grapple with Germany’s looming problems, the world should expect post-election coalition talks to last for months, poleaxing European politics while they drag on. And at the end of it all, the country may well end up with a government that fails to get much done. That is the mess Mrs Merkel has left behind.

Bloomberg Politics: Under Angela Merkel, Germany came to be known as Europe’s indispensable nation. Her successor will soon feel the weight of that responsibility.
Merkel made her mark on the global stage, steering Europe’s response to multiple crises over almost 16 years in office.
Yet the campaign for Sunday’s election that will determine her succession has been notable for the lack of international focus: little discussion of transatlantic relations, hardly a mention of China, barely a whisper of the European Union’s future.
The domestic navel gazing is all the more striking as the U.S. under President Joe Biden forges global alliances to further his administration’s central goal of confronting China. As the world’s No. 3 exporter, Germany has core interests at stake that demand political engagement to keep Europe’s biggest economy humming.
Of course, elections aren’t won on foreign policy

5 August
The EU’s Post-Merkel Void
Ana Palacio
The German-led strategy of waiting until desperate times enable desperate measures has kept the European Union intact, but has also enabled the bloc to avoid taking clear stances on important issues. No matter who succeeds Angela Merkel as German chancellor, EU leaders are going to have to start making real decisions.
(Project Syndicate) The European project has always had its fault lines, but they have rarely caused earthquakes. That is thanks largely to Germany, which has proved to be a skilled arbitrator of disputes among European Union member states, especially during Chancellor Angela Merkel’s 16-year tenure. With Merkel’s final term ending in September, is the EU in for a tremor – or worse?
When Europe was focused exclusively on consolidating the single market, its fault lines were primarily economic. During the euro crisis that began in 2009, the economic cracks deepened, with many “frugal” northern eurozone countries finding themselves at odds with their supposedly “profligate” southern neighbors.It was not until the COVID-19 pandemic that – thanks not least to Merkel – EU members agreed to anything close to a European fiscal-transfer mechanism. But even the joint recovery fund, Next Generation EU, has a limited scope. And national spending plans under the program have not been without controversy.

30 July
European Colonialism in Africa Is Alive
Stelios Michalopoulos, Elias Papaioannou
By plundering Africa’s resources and carving it up into artificial states, Europe’s colonial powers created vicious cycles of violence, poverty, and authoritarianism that are playing out to this day. But overcoming this legacy will require much more than toppling statues in Bristol.
(Project Syndicate) Harvard University’s Nathan Nunn has merged shipment data on slaves’ ethnic affiliations with anthropological maps delineating ancestral homelands. This work shows that the areas affected the most by the slave trade – such as modern-day Angola and Nigeria – are on average poorer than those that were shielded from it by rugged terrain or remoteness from the coast (as in the case of Botswana).Subsequent studies have uncovered intriguing mechanisms to explain this pattern. For example, by disproportionately targeting males, slave trades affected population dynamics. In addition to reinforcing polygamy and spurring gender violence, changes in sex ratios led to underinvestment in education. To this day, educational attainment rates appear lower for ethnic groups that were more heavily affected by past slave trades.Moreover, a history of enslavement goes hand in hand with social distrust and authoritarian norms and attitudes, most likely stemming from the intergenerational transmission of violence.
… Not only are partitioned ethnicities’ historic homelands battlegrounds between government forces, militias, and rebel groups, but civilian violence in these areas is more intense compared to non-partitioned areas close to the same border. Since the early 1960s, roughly one-third of partitioned groups have been involved in a vicious cycle of ethnic civil war and repression, compared to one out of five for the non-partitioned groups.

23 July
EU takes aim at ransomware with plans to make Bitcoin traceable, prohibit anonymity
(CSO) The European Commission has set out new legislative proposals to make crypto transfers more traceable. While the plans will close some existing loopholes, the impact on cybercrime is likely to be minimal, experts say.

15 July
Rescuers race to prevent more deaths from European floods
(AP) — In one flooded German town, the ground collapsed under family homes. In another, floodwaters swept through an assisted living center, killing 12.
Rescue workers across Germany and Belgium rushed Friday to prevent more deaths from some of the Continent’s worst flooding in years as the number of dead surpassed 125 and the search went on for hundreds of missing people.
Fueled by days of heavy rain, the floodwaters also left thousands of Germans homeless after their dwellings were destroyed or deemed to be at risk, and elected officials began to worry about the lingering economic effects from lost homes and businesses.
Elsewhere in Europe, dikes on swollen rivers were at risk of collapsing, and crews raced to reinforce flood barriers.
Over 100 die in Germany, Belgium floods despite early warnings
The catastrophic flooding has pushed climate change back up Germany’s election campaign agenda.
(Politico EU) Extreme flooding killed more than 100 people in Germany and Belgium on Thursday and Friday, with hundreds missing, despite clear advance warnings, in what one expert described as a catastrophic failure of Europe’s early alert system.
Preparedness for extreme weather events will become a necessary part of living with climate change in Europe. Because hot air carries more water, floods and extreme rainstorms are on the increase as the climate warms, according to a POLITICO review of the latest science, including a leaked draft report from the U.N. Intergovernmental Panel on Climate Change (IPCC).
The IPCC says that if warming breaches 1.5 degrees Celsius — it has already passed 1 degree — then around five million Europeans will have to live with annual flooding. In the past, those people in the same areas could have expected to be flooded once in a century.

Could Hungary break the EU?
The EU is facing a democracy crisis, and there is nothing it can do about it.
(Al Jazeera) Hungary’s controversial new anti-LGBTQ law which took effect on July 7 has blown open tensions within the EU over what to do with a rogue member state.
EU founding values: Commission starts legal action against Hungary and Poland for violations of fundamental rights of LGBTIQ people
(European Commission) The two Member States now have two months to respond to the arguments put forward by the Commission. Otherwise, the Commission may decide to send them a reasoned opinion and in a further step refer them to the Court of Justice of the European Union.

1 June
Austrian far-right leader quits, leaving succession open
(Reuters) The leader of Austria’s far-right Freedom Party (FPO) Norbert Hofer stepped down on Tuesday but pointedly did not back his high-profile deputy and rival Herbert Kickl to succeed him.
Hofer, widely seen as the most likeable face of the anti-Islam and anti-immigration party that crashed out of government amid scandal two years ago, came close to winning Austria’s presidential election in 2016 only to lose a re-run.

7 May
The Conference on the Future of Europe is back on. Barely.
( The EU on Friday was on the verge of turning the launch of the conference — a months-long examination of how the bloc should reform itself for coming generations — into a debacle.
With less than 48 hours to go before a scheduled event in France to kick off the conference, officials still couldn’t agree how the initiative would actually make its final decisions. One group wanted to ensure a smaller group of executive board officials had the last word, another insisted that hundreds of participants in a plenary should get more of a say. Some EU lawmakers called for the event to be canceled altogether.

6 May
US shift on vaccines embarrasses Europe before India summit
Continent divided over Biden’s proposal for patent waiver but Berlin sounds skeptical.
( U.S. President Joe Biden’s about-face to support a patent waiver for coronavirus vaccines has thrown the EU and other wealthy nations opposing the proposal onto the back foot.
The timing is especially notable in Europe, which is preparing to hold a summit on Saturday with India, a country reeling from the pandemic and urging the rest of the world to temporarily rescind intellectual property protections for COVID-19 vaccines.
India and South Africa initially submitted the waiver proposal eight months ago at the WTO. But the idea went nowhere for months as it faced strong opposition from the EU, Switzerland, Norway and Japan, not to mention pharmaceutical companies themselves and, of course, the U.S.
Whether the EU and others eventually follow the U.S. remains to be seen.

30 April
Sigmar Gabriel: What Europe Must Do
Europeans have long known that the global balance of power is shifting rapidly to Asia, and America’s attention with it. With the transatlantic alliance only barely surviving Donald Trump’s presidency, this may be the last chance to repurpose it for the twenty-first century.
(Project Syndicate) Europeans face a stark choice. If we want the US to return to its previous role of stewarding global rules and norms, we must at least do everything we can to lighten its burden by enhancing stability in our own neighborhood. And to do that, we must develop a common foreign and development policy for the Middle East, Africa, and Eastern Europe – one that offers a real alternative to China’s all-too-enticing Belt and Road Initiative (BRI) of infrastructure construction and investment across Africa and Eurasia.
…confrontation or a two-pronged strategy of containment and cooperation appear to be the only options left, owing to the lack of mutual trust between the US and China. And unless the US and Europe can agree on a nuanced strategy to persuade China to moderate its current aggressiveness, an economic and technological collision seems unavoidable.Fortunately, such a rapprochement is possible. Though Europeans differ among themselves about China, pretty much everyone agrees that the world is entering a dangerous decade that will be shaped by the Sino-American rivalry. If Europe wants to have any influence on that geopolitical dynamic, it will have to engage seriously with Biden on a joint strategy.

27 April
EU wades deeper into Indo-Pacific fray against China
EU says China is endangering peace and stability in the South China Sea while a new strategic paper signals a firmer stand in region
(Asia Times) In a muscular expression of the European Union’s pivot to Asia, the regional bloc released its own Indo-Pacific Strategy policy paper earlier this month, an unprecedented declaration that promises to put the EU at certain loggerheads with China.
The 10-page strategy document, innocuously titled “EU Strategy for Cooperation in the Indo-Pacific”, covers a wide range of potential bilateral cooperation areas with regional players, ranging from trade, investment and climate change to battling the Covid-19 pandemic, transnational terrorism and disinformation.
The timing and the language of the paper, however, show that rising concerns over China’s geopolitical assertiveness are at the heart of the EU’s new strategic recalibration.
… In 2019, the EU upped the ante by openly describing China as a “systemic rival.” In a much-publicized strategic communication that outlined the regional bloc’s 10-point recommendations in dealing with a rising China, the EU described the Asian superpower as “an economic competitor in pursuit of technological leadership and a systemic rival promoting alternative models of governance.”
In a visible departure from its more trade-driven diplomacy, the European Commission also criticized certain member states, including Italy, for supporting China’s controversial Belt and Road Initiative (BRI), which has been criticized for its alleged “debt trap” diplomacy and lack of compliance with prevailing good governance standards in infrastructure development.

21 April
Merkel: EU ‘probably’ needs treaty changes, especially for health policy
‘I have always been open to treaty changes if they make sense,’ says German chancellor.
( German Chancellor Angela Merkel said Wednesday she is open to making changes to the EU’s founding treaties, particularly in the area of health policy, and urged the bloc to find ways to make its foreign policy more efficient.
“I believe that Europe needs more competencies in the area of health. This will probably also require changes to the treaties,” Merkel said at an event organized by her center-right pan-EU political family, the European People’s Party, which discussed potential EU reforms that could also come up as part of the Conference on the Future of Europe.
The chancellor also reiterated previous calls for reforming EU treaties in the area of competition policy to facilitate the creation of so-called European champions that can compete with bigger rivals from China or the U.S.
Merkel said the EU could also reform the way it makes decisions on certain policies to make the process more efficient, such as by changing the threshold for approval from unanimity to a qualified majority.

EU reaches major climate deal ahead of Biden climate summit
The European Union has reached a tentative climate deal to put the 27-nation bloc on a path to being “climate neutral” by 2050, with member states and parliament agreeing on binding targets for carbon emissions on the eve of a virtual summit hosted by U.S. President Joe Biden.

14 April
6 questions looming over the Nord Stream 2 pipeline
The project is almost finished — but the fight is far from over.
The Nord Stream 2 pipeline is a lot more than a business project aimed at shipping natural gas from Russia to Germany under the Baltic Sea — it’s turned into a massive diplomatic headache for Washington, Berlin, Brussels, Warsaw, Kyiv and many other capitals.
There’s furious pressure on U.S. President Joe Biden’s administration to slap sanctions on the pipeline and block its completion. Germany’s pro-Nord Stream 2 position may shift after upcoming elections. The EU’s ability to effectively respond to Russia’s military buildup near Ukraine is also questioned, given European reliance on Moscow for a crucial energy source.

11 March
The EU has a presidential problem (and a navel-gazing one)
After a year of debate, there’s common vision for a ‘game changer’ event to help the EU get its ‘magic back.
(Politico Eu) So far, no one is predicting any concrete outcomes from the Conference on the Future of Europe, a roughly 15-month-long, Continent-wide self-scrutiny tour that is the brainchild — some would say devil-spawn — of French President Emmanuel Macron.
But if the EU wants to avoid making itself the butt of (more) jokes, one goal might be to rewrite the EU treaties to cut the number of officials that it calls “president.” …that requires figuring out how many presidents the EU has in the first place, which, depending on the institutions included, might be 10. Does the European Economic and Social Committee count? Then make it 11.
The overabundance of presidents was on full display Wednesday as European Parliament President David Sassoli, Commission President Ursula von der Leyen, and Portuguese Prime Minister António Costa, representing the presidency of the Council of the EU, gathered for a ceremony to formally initiate the conference and finally put to rest a year-long battle over who would be its president.
The EU’s institutions were deadlocked over an initial plan to name an “eminent European personality” to be in charge — partly over fears that such a personality, for example MEP and former Belgian Prime Minister Guy Verhofstadt, would perhaps be a bit too eminent and more than a little too federalist. The bigger concern was that such a champion of Brussels and its Bubble would steer toward an overall result out of step with the current mood in Europe, which seems to favor a socially-distant Union rather than an “ever closer” one.
What is the Conference on the Future of Europe?
Everything you wanted to know about the pan-Continental powwow but were afraid to ask.

9 March
How the Legacy of Poland’s Dissidents Is Being Challenged
(Carnegie Europe) Jan Litynski, a leading dissident under Poland’s communist regime and later a passionate defender of the rule of law, will be buried on March 10 in Warsaw. The values and principles he fought for are now under threat more than ever before.
What Lityński and the dissidents fought for is now being challenged by Poland’s governing Law and Justice (PiS) party, led by Jarosław Kaczyński.
Kaczyński was a Solidarity supporter and a member of the 1989 roundtable negotiations. But since taking power in 2015—after a brief stint in 2005–2007—PiS has done everything to demonize Poland’s dissidents, attack its intellectual elites, and, above all, undermine the rule of law and the checks and balances that form the cornerstone of the Polish constitution.

5 March
U.S. and Europe Will Suspend Tariffs on Alcohol, Food and Airplanes
The governments agreed to temporarily halt levies on billions of dollars of products as they search for a settlement to a long-running clash over subsidies given to Airbus and Boeing.
The United States and European Union agreed to temporarily suspend tariffs levied on billions of dollars of each others’ aircraft, wine, food and other products as both sides try to find a negotiated settlement to a long-running dispute over the two leading airplane manufacturers.
President Biden and Ursula von der Leyen, the president of the European Commission, agreed in a phone call on Friday to suspend all tariffs imposed in the dispute over subsidies given to Boeing and Airbus for “an initial period of four months,” Ms. von der Leyen said in a statement.

28 February
The Ugly Divorce Between Britain and Brussels Is Just Getting Started
As trade disputes pile up, the blame game evident in the early months of the split suits domestic political needs on both sides.
By Mark Landler, NYT London bureau chief
Few people on either side of the English Channel believed that Britain’s exit from the European Union would go off without a hitch. … But Britain and the European Union have also fallen out politically and diplomatically, with a speed and bitterness that has surprised even pessimists about the relationship. While these strains are less tangible to Britons than having to pay extra costs for imported coffee from Italy, they could have an equally corrosive long-term effect.
Tensions have flared on matters large and small since a new trade agreement formalized Brexit on Jan. 1. The British refused to grant full diplomatic status to the European Union’s envoy to London. European leaders lashed out at shortages in the supply of a British-made coronavirus vaccine and briefly threatened to rip up the agreement governing trade with a post-Brexit Northern Ireland.

25 February
Thomas de Waal: In Georgia, a New Crisis That No One Needs
(Carnegie Europe) When it should be dealing with issues of global importance, Georgia’s government seems intent on shredding the country’s democratic credentials and waging an acrimonious political civil war on its domestic opponents.

19 February
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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