Here’s an arti­cle that high­lights one of the big rea­sons why Merkel’s rejec­tion of the plan for EU Pres­i­dent can­di­dates could be so dam­ag­ing to “project Europe”: one of the main rea­sons for switch­ing to the new sys­tem is that vot­ers increas­ing­ly don’t care about the EU elec­tions and this plan was intend­ed, in part, to per­son­al­ize the race for the top job and actu­al­ly engage vot­ers in the larg­er par­lia­men­tary elec­tions. So Merkel’s rejec­tion of this new sys­tem might not just gen­er­ate angry vot­ers. It could be cre­ate more non-vot­ers too:

Time
Skep­ti­cism Pre­vails as Europe Pre­pares to Go to the Polls

Char­lotte McDon­ald-Gib­son / Brus­sels @cmcdonaldgibson

May 13, 2014

An elec­tion that was sup­posed to get Euro­peans more excit­ed about their con­ti­nen­tal gov­ern­ment, which holds a round of vot­ing to decide which law­mak­ers sit in Euro­pean Par­lia­ment every five years, has fall­en prey to famil­iar divi­sions

Before the lead­ing can­di­dates for the Euro­pean Union’s most pow­er­ful posi­tion took to the stage for their first tele­vised debate late last month, the mod­er­a­tor looked con­fi­dent­ly into the cam­era and declared: “His­to­ry is being made.” For the first time, the mod­er­a­tor assured view­ers, “you have a say in choos­ing the Euro­pean Com­mis­sion Pres­i­dent.”

That may yet prove to be wish­ful think­ing. Until now, nation­al lead­ers of the Euro­pean mem­ber states would dis­ap­pear behind closed doors to pick a suit­able can­di­date to lead the main E.U. body, which pro­pos­es and upholds laws and guides the day-to-day admin­is­tra­tion of the 28-coun­try bloc. Giv­ing vot­ers a say in who gets Europe’s top job is meant to make this process more trans­par­ent and enthuse the continent’s noto­ri­ous­ly apa­thet­ic elec­torate. But the alliance is fac­ing a famil­iar prob­lem: Not all nation­al gov­ern­ments think it’s a good idea, and a sys­tem aimed at boost­ing the E.U.’s demo­c­ra­t­ic cre­den­tials threat­ens to do the exact oppo­site.

Here’s the back­ground: Every five years, cit­i­zens across the E.U. are giv­en a chance to elect law­mak­ers to sit in the Euro­pean Par­lia­ment, with the next vote tak­ing place May 22–25. This assem­bly works along with the 28 gov­ern­ments and the Euro­pean Com­mis­sion to for­mu­late, debate and pass laws. Soon after par­lia­men­tary elec­tions, the new Com­mis­sion Pres­i­dent is appoint­ed, and becomes the pub­lic face of the E.U.

This year, for the first time, the var­i­ous polit­i­cal groups in the Euro­pean Par­lia­ment have been have been asked to put for­ward a can­di­date for the post. The idea is that hav­ing per­son­al­i­ties fight­ing a U.S.-style cam­paign will reen­er­gize vot­ers and help boost turnout, which has dropped from 62% in the inau­gur­al elec­tion of 1979, to 43% in 2009. Anoth­er moti­vat­ing fac­tor is dwin­dling trust in the E.U., with Pew last year find­ing that only 45% of respon­dents viewed the E.U. favor­ably, down from 60% in 2012. This is part­ly because of the dev­as­tat­ing impact of the euro­zone cri­sis, which has sent unem­ploy­ment soar­ing and sparked aus­ter­i­ty pro­grams which will have an impact for years to come.

The habit of E.U. lead­ers mak­ing deci­sions behind closed doors with lit­tle pub­lic scruti­ny has also dent­ed the demo­c­ra­t­ic cre­den­tials of the alliance. And so, the polit­i­cal group that wins most of the 751 seats in par­lia­ment this month will be asked to nom­i­nate the next Euro­pean Com­mis­sion Pres­i­dent.

In the­o­ry, this is meant to make the process more trans­par­ent.

The Euro­pean Parliament’s two largest polit­i­cal groups have embraced the plan, with Jean-Claude Junck­er, the for­mer prime min­is­ter of Lux­em­bourg, rep­re­sent­ing the cen­ter-right Euro­pean People’s Par­ty, which is cur­rent­ly fore­cast to win the most seats. Mar­tin Schulz, the cur­rent Euro­pean Par­lia­ment pres­i­dent, is lead­ing the Social­ists & Democ­rats. Both have embarked on E.U.-wide bus tours, also tak­ing part in tele­vised debates to con­vince vot­ers that they are the best can­di­dates for the top job.

But there is one key prob­lem: The 28 nation­al lead­ers in Europe have the option of sim­ply ignor­ing can­di­date put for­ward by the largest polit­i­cal group in par­lia­ment. This is because the lan­guage in the E.U. treaty is unclear. The nation­al lead­ers are free to put for­ward their own choice for Com­mis­sion Pres­i­dent, with the treaty only oblig­ing them to take the elec­tion results “into account.” In oth­er words, despite the push for more trans­paren­cy, they could reject the nom­i­nee put for­ward by the polit­i­cal group that wins the upcom­ing elec­tion. Were such a sce­nario to unfold, IMF head Chris­tine Lagarde, Dan­ish Prime Min­is­ter Helle Thorn­ing-Schmidt and Irish Taoiseach Enda Ken­ny are all being tout­ed as poten­tial nom­i­nees.

Par­lia­ment would still have the option of refus­ing to approve a can­di­date select­ed by the heads of state—but that could lead to a pro­longed polit­i­cal stand-off which would be dis­as­trous for the bloc’s image. “If you do get to that sit­u­a­tion it’s only going to taint the image of the EU – it’s anoth­er insti­tu­tion­al argu­ment that is arcane and just looks like its on anoth­er plan­et to what peo­ple real­ly care about,” says Stephen Booth, Research Direc­tor at the Open Europe think tank in Lon­don.

The pos­si­bil­i­ty that nation­al lead­ers might chose their own can­di­date has already led to divi­sions between the sev­en dif­fer­ent polit­i­cal groups in the Euro­pean Par­lia­ment. Five are treat­ing the elec­tion as a vote for the next Com­mis­sion Pres­i­dent. The remain­ing two groups want the 28 heads of state to decide who holds the top job, argu­ing that nation­al lead­ers are elect­ed with greater turnout and there­fore have more demo­c­ra­t­ic legit­i­ma­cy. They also want the Com­mis­sion Pres­i­dent to remain polit­i­cal­ly neu­tral.

...

Yes, one of the con­se­quences to the pro­posed changes is the EU Com­mis­sion pres­i­dent would no longer be “polit­i­cal neu­tral”. So how does a pres­i­dent remain “polit­i­cal­ly neu­tral”? Well, in recent years this involved neu­tral­iz­ing polit­i­cal out­comes, so maybe the loss of that neu­tral­i­ty will be com­pat­i­ble with the whole “more democ­ra­cy” move­ment.

While defend­ing Por­tu­gal’s Troi­ka-enforced aus­ter­i­ty poli­cies, Jean-Claude Junck­er just argued that debt is deeply anti-demo­c­ra­t­ic:

EU Com­mis­sion Can­di­date Defends Por­tu­gal Aus­ter­i­ty
LISBON, Por­tu­gal May 18, 2014 (AP)
Asso­ci­at­ed Press

Euro­pean Com­mis­sion pres­i­den­cy can­di­date Jean-Claude Junck­er has defend­ed Por­tu­gal’s con­tin­u­ing aus­ter­i­ty pro­gram as it frees itself from a three-year bailout pro­gram that saved the coun­try from col­lapse.

Junck­er, who is cam­paign­ing in Lis­bon on Sun­day, said Por­tu­gal made a “clean exit” from the worst finan­cial cri­sis since World War II but need­ed to avoid future debt to cre­ate growth and jobs.

He said it was “moun­tains of debt” that got Europe into trou­ble, and that debt was deeply anti-demo­c­ra­t­ic because coun­tries lum­bered with it quick­ly become fair game for the mar­kets and “the vic­tim of spec­u­la­tors.”

Por­tu­gal became the sec­ond euro­zone coun­try after Ire­land to free itself from the aus­ter­i­ty and over­sight imposed by its Euro­pean part­ners and the Inter­na­tion­al Mon­e­tary Fund as part of its 78-bil­lion-euro ($107 bil­lion) bailout.

Ah yes, the “high debt forced us to impose poli­cies that exac­er­bate the high debt” argu­ment cou­pled with a “we don’t want nations to become ‘the vic­tim of spec­u­la­tors’ ” pre­emp­tive capit­u­la­tion (It’s how things seem to go). Will EU vot­ers be enticed by Junck­er’s embrace of the sta­tus quo? That depends on a lot. For instance, aus­ter­i­ty exiles might not be very pro-Junck­er:

15 May 2014 Last updat­ed at 10:54 ET

‘Exiled’ Euro­peans want voic­es to be heard
By Susana Men­don­ca BBC News, Lis­bon

Two men chat about jobs in a lit­tle office in Lis­bon. Jose Cruz is an unem­ployed civ­il engi­neer. Careers coach Jorge Fon­se­ca is show­ing him glossy brochures about Ango­la.

“Inter­na­tion­al com­pa­nies are start­ing to look to Africa. There are excel­lent oppor­tu­ni­ties there,” says Jorge, who runs recruit­ment agency EMA Part­ners.

But Jose Cruz has teenaged chil­dren in school. He does­n’t want to go, but he may have to. With unem­ploy­ment still above 15% and youth unem­ploy­ment close to 40%, around 100,000 peo­ple a year are leav­ing Por­tu­gal.

The gov­ern­ment has been paint­ing emi­gra­tion as an oppor­tu­ni­ty for out-of-work Por­tuguese to learn new skills. At the for­eign min­istry, Por­tuguese Com­mu­ni­ties Min­is­ter Jose Cesario says emi­gra­tion has always been part of the sto­ry of Por­tu­gal. “We have five mil­lion Por­tuguese all over the world. So that is our cul­ture, our his­to­ry.”

‘An insult’

But those kinds of com­ments have been caus­ing a back­lash online among those who have already packed up their bags and left.

“Emi­gra­tion from Por­tu­gal is not a hob­by,” Rodri­go Rivera tells me. The 27-year-old moved to Brazil in Sep­tem­ber to work for a gas com­pa­ny.

He is behind a new online cam­paign ahead of this mon­th’s Euro­pean elec­tions that is pick­ing up sup­port among Por­tuguese migrants world­wide. It is called Emi­gramos Mas Nao Desis­ti­mos, which means We Have Emi­grat­ed, But We Have Not Giv­en Up.

“We want to force the polit­i­cal par­ties to talk about us,” Rodri­go says. “We haven’t left Por­tu­gal of our own free will. We are polit­i­cal and eco­nom­ic exiles, who suf­fer under a regime of aus­ter­i­ty that has been imposed on us.”

Sup­port­ers of the cam­paign have emi­grat­ed to every­where from Brazil and Ango­la to Cam­bo­dia, UEA and Europe. Like Jose Reis and Miguel Fran­co — both in their ear­ly 30s — who I meet out­side Lon­don’s Por­tuguese Con­sulate.

“We had our prime min­is­ter advis­ing teach­ers to emi­grate,” says soci­ol­o­gy stu­dent Jose Reis. “We have had sev­er­al gov­ern­ment mem­bers almost say­ing to the youth of their coun­try ‘go away’. It felt like an insult.”

Miguel, who was a sci­ence teacher in Por­tu­gal and now works in a Lon­don restau­rant, shows me the cam­paign’s Face­book page. Some­one has uploaded a Por­tuguese song about being forced to work abroad. Anoth­er post explains how to vote in the Euro­pean elec­tions.

...

When your youth are wag­ing a “we haven’t giv­en up” cam­paign, you know some­thing has gone deeply awry (it has).

With the EU vote already start­ing in some coun­tries, one of the the big ques­tion of the day remains: Will vot­er apa­thy once again be the big win­ner an the EU-wide elec­tions:

Finan­cial Times
May 19, 2014 5:52 pm
Jean-Claude Junck­er tries to blaze a Euro­pean cam­paign trail

By James Fontanel­la-Khan in Madrid

Even though he already had two wrapped around his neck, Jean-Claude Junck­er was offered a third head­set by a host­ess so he could field ques­tions from the Span­ish elite at the Ritz Hotel in cen­tral Madrid.

“I’ll learn Span­ish next time,” joked Mr Junck­er, his arms raised in the air as if in sur­ren­der.

The tech­ni­cal hic­cup only inter­rupt­ed Mr Junck­er for a few min­utes on his eight-week, 32-city cam­paign tour of Europe as the centre-right’s can­di­date for Euro­pean Com­mis­sion pres­i­dent in this week’s EU-wide poll.

But it is high­ly sym­bol­ic of the chal­lenge he and the oth­er so-called “Spitzenkan­di­dat­en” – “lead can­di­dates” for each major par­ty group­ing – face: for the first time in EU his­to­ry, they are try­ing to per­suade cit­i­zens to look past nar­row domes­tic pol­i­tics and instead cast their votes based on the appeal of pan-Euro­pean can­di­dates.

The Spitzenkandidat’s advo­cates mod­elled the sys­tem on US pres­i­den­tial con­tests. Their hope was to fos­ter a tru­ly Euro­pean polit­i­cal debate and – by link­ing the Euro­pean par­lia­men­tary elec­tions’ out­come to the commission’s top job – to make its con­se­quences clear­er to dis­in­ter­est­ed vot­ers.

But unlike the US, the EU still remains a patch­work of lan­guages and polit­i­cal cul­tures. This means vot­ers still tend to obsess about nation­al issues rather than EU poli­cies when they go to the polls – even when select­ing Euro­pean par­lia­men­tar­i­ans.

“I don’t know if peo­ple under­stand the [Spitzenkan­di­dat­en] con­cept,” Mr Junck­er acknowl­edged, as he wiped his face with a steam­ing hot white tow­el and clasped his umpteenth Marl­boro red cig­a­rette of the day.

A for­mer long-time Chris­t­ian Demo­c­ra­t­ic prime min­is­ter of Lux­em­bourg, Mr Junck­er is regard­ed in EU cir­cles as the ulti­mate old-school insid­er – a back­slap­ping, wine-quaffing mas­ter of back­room intrigue who has both bro­kered alliances and made ene­mies with near­ly every major Euro­pean fig­ure of the last gen­er­a­tion.

Yet even Mr Junck­er, who head­ed the eurozone’s com­mit­tee of finance min­is­ters dur­ing the first three years of the euro­zone cri­sis, doubt­ed whether vot­ers will have his can­di­da­cy in mind when they cast their vote.

...

Still, vot­er igno­rance is evi­dent as the can­di­date and a cohort of aides from the cen­tre-right Euro­pean People’s Par­ty entered the offices of Tuen­ti, a Span­ish mobile start-up in Madrid. The youth­ful staff, almost uni­ver­sal­ly in shorts and T‑shirts, had lit­tle idea who Mr Junck­er is as he made the rounds.

Jorge Diz Pico, who man­ages Tuenti’s inter­net traf­fic sys­tem, assumed he was a Span­ish politi­cian. Oscar San José, a devel­op­er at the start-up, guessed that he is a Euro­pean offi­cial.

The same was true in France, even though both Mr Junck­er and Mr Schulz have cam­paigned there speak­ing flu­ent French. Melanie Przy­rows­ki, sec­re­tary-gen­er­al of Young Europe in Bor­deaux, admit­ted the choice of com­mis­sion can­di­dates is not inspir­ing the grass­roots.

...

Mr Junck­er is under no illu­sions. Hav­ing been at the fore­front of EU inte­gra­tion for near­ly three decades, he realis­es his appeal may be lim­it­ed in a cur­rent cli­mate of pop­u­lar hos­til­i­ty to Brus­sels and the EU. But he likes to think of him­self as a pio­neer in this new phase of pan-Euro­pean democ­ra­cy.

“It will take time” he said. “But it will hap­pen.”

That does­n’t sound very opti­mistic in terms of vot­er turnout. Then again, giv­en the EU’s record low 43% in 2009 and and the fact that there was no ‘Spitzenkan­di­dat’ sys­tem for EU Com­mis­sion pres­i­dent can­di­dates, an uptick in turnout is at least pos­si­ble. Like­ly? Not so much:

Quartz
The polls are open in Europe—will vot­ers actu­al­ly show up?
By Jason Kara­ian @jkaraian May 22, 2014

Can you sense the excite­ment? Vot­ing is under­way for the Euro­pean Par­lia­ment, with polls in Britain and the Nether­lands tak­ing place today. The bulk of the EU votes on Sun­day (May 25), so the results for the 751-seat par­lia­ment won’t be known until then. Only the Dutch will release exit polls before vot­ing clos­es in the EU’s 27 oth­er mem­ber states.
+

It is appro­pri­ate that the poll begins in the UK and Hol­land, as the rise of right-wing euroskep­tic par­ties has been a par­tic­u­lar­ly dom­i­nant theme of the cam­paigns there, as it has across much of Europe. British and Dutch vot­ers’ apa­thy when it comes to the Euro­pean Par­lia­ment is also indica­tive—only around a third of eli­gi­ble vot­ers in both coun­tries took part in the pre­vi­ous elec­tion, in 2009. Over­all, just 43% of EU cit­i­zens cast a vote for the pan-Euro­pean par­lia­ment the last time around, the low­est turnout since the insti­tu­tion was found­ed:

[see image]

Euro­crats hope to stem the slide this year, although some num­ber crunch­ers reck­on that turnout will be a mea­ger 40%, at best. Anoth­er fall in turnout risks turn­ing the par­lia­ment into “a failed exper­i­ment in pan-Euro­pean democ­ra­cy,” accord­ing to think tank Open Europe. Though the par­lia­ment has steadi­ly gained more pow­ers, the aver­age vot­er sim­ply doesn’t seem to care.

Vot­ers in the EU’s biggest countries—most of which were the EU’s found­ing members—are par­tic­u­lar­ly apa­thet­ic. Turnout has plunged by a fifth or more in Ger­many, France, and Italy since the first Euro­pean Par­lia­ment elec­tion in 1979. The trends in most oth­er coun­tries aren’t encour­ag­ing either.

[see image]

This plays into the hands of upstart par­ties with strong anti-EU views. While many peo­ple find the Brus­sels-based par­lia­ment some­what inscrutable, a grow­ing fac­tion sees the EU as a grave threat to nation­al sov­er­eign­ty. These vot­ers are much more like­ly to vote than sup­port­ers of main­stream par­ties that cling clos­er to the polit­i­cal cen­ter. The lat­est opin­ion sur­veys put the UK Inde­pen­dence Par­ty and France’s Nation­al Front in the lead among all par­ties in their coun­tries.

All told, the “pop­ulist anti-EU, anti-aus­ter­i­ty, anti-immi­grant, and anti-estab­lish­ment” par­ties could win around 30% of the Euro­pean Par­lia­ment vote, says Open Europe (pdf). Put anoth­er way, assum­ing that turnout is broad­ly sim­i­lar to the pre­vi­ous elec­tion, three-quar­ters of EU vot­ers “will have vot­ed against the EU, for rad­i­cal change, or not both­ered to vote at all.”
...

Uh oh. It’s look­ing like we should expect falling turnout and a far right surge. Or is it?

Far right suf­fers Dutch sur­prise as EU vote begins

By Luke Bak­er

BRUSSELS Thu May 22, 2014 10:35pm BST

(Reuters) — The Euro­pean Union’s marathon par­lia­men­tary elec­tion kicked off on Thurs­day when Britain and the Nether­lands vot­ed, with right-wing, anti-EU par­ties expect­ed to attract a surge of protest votes in many coun­tries on a low turnout.

How­ev­er, a Dutch exit poll indi­cat­ed that the anti-Islam, Euroscep­tic Free­dom Par­ty of Geert Wilders’ — which plans to forge an alliance with France’s far-right Nation­al Front — had fall­en well short of its goal of top­ping the poll.

...

With Europe strug­gling to recov­er from eco­nom­ic cri­sis, includ­ing record high unem­ploy­ment and neg­li­gi­ble growth, the elec­tion is expect­ed to pro­duce a surge in sup­port for Euroscep­tics on both the far-right and hard left.

In Britain, final opin­ion polls showed the UK Inde­pen­dence Par­ty, which wants to with­draw from the EU and impose tighter immi­gra­tion con­trols, top­ping the poll and push­ing the gov­ern­ing Con­ser­v­a­tives into third place behind Labour.

If con­firmed, that could raise pres­sure on Con­ser­v­a­tive Prime Min­is­ter David Cameron, who has promised an in/out ref­er­en­dum on EU mem­ber­ship in 2017 if he is re-elect­ed next year, to take a tougher line on reduc­ing the EU’s pow­ers.

In the Nether­lands, an IPSOS exit poll on pub­lic tele­vi­sion sug­gest­ed Wilders’ Free­dom Par­ty would fin­ish fourth with 12.2 per­cent, behind three pro-Euro­pean par­ties, the cen­tre-right Chris­t­ian Democ­rats, the cen­trist Democ­rats 66 and Prime Min­is­ter Mark Rut­te’s lib­er­als.

Wilders blamed the dis­ap­point­ing score on a low turnout, say­ing that “by stay­ing home (vot­ers) showed their loathing for and dis­in­ter­est in the Euro­pean Union. The Nether­lands has not become more pro-Euro­pean.”

In the last Euro­pean Par­lia­ment elec­tions five years ago the Free­dom Par­ty came sec­ond. Andre Krouwel, a polit­i­cal sci­ence pro­fes­sor at Ams­ter­dam’s VU Uni­ver­si­ty, said Wilders had failed to get enough of his sup­port­ers to turn out.

“His sup­port isn’t down, around one third of the elec­torate agrees with him — but that one third did­n’t show up,” he said. “That’s bad news for him, because he want­ed to por­tray him­self as a vic­tor ... That would have giv­en him sta­tus in Europe.”

...

So is vot­er apa­thy going to be Europe’s unex­pect­ed anti-far right elec­toral fire­wall? We’ll find out in a few days. And then, weeks lat­er and after rounds of back­room deals, we’ll find out who the new EU pres­i­dent is and whether or not it’s the same can­di­date vot­ers backed or not. And that point we’ll get a bet­ter idea of whether or not the EU has anoth­er round of bru­tal aus­ter­i­ty or some­what less bru­tal aus­ter­i­ty. So save your tears of joy if the far right has a bad week at the polls because you might need them lat­er. There’s a lot of lay­ers to the EU onion.

Swamp just alert­ed us to some par­tic­u­lar­ly vile com­ments by Jean-Marie Le Pen regard­ing ebo­la as the solu­tion to Europe’s “immi­gra­tion prob­lem”. Part of what makes Le Pen’s “obser­va­tion” so dis­turb­ing is that it was made less than a week before the EU elec­tions so you have to won­der if there was any pre-planned polit­i­cal cal­cu­lus in that com­ment (which would be ter­ri­fy­ing) or it was just an off the cuff peak into a sick mind. And based on his daugh­ter’s response, it’s look­ing like it might be the lat­ter:

‘That is a lie’ – Marine Le Pen dis­putes reports of Father’s com­ments

May 23rd, 2014
02:15 PM ET

By Mick Krev­er, CNN

Marine Le Pen, leader of France’s far-right Nation­al Front par­ty, dis­put­ed on Fri­day reports that her father sug­gest­ed Ebo­la as a pos­si­ble cure for Europe’s immi­gra­tion prob­lem.

“Madame, this is a lie,” Le Pen told CNN’s Chris­tiane Aman­pour. “That is a lie, a maneu­ver, a cam­paign maneu­ver. He nev­er said that.”

Ahead of Euro­pean Par­lia­ment elec­tions, Jean-Marie Le Pen – founder of the Nation­al Front – report­ed­ly said the dead­ly Ebo­la virus could help step glob­al pop­u­la­tion and help Europe’s “immi­gra­tion prob­lem” in the process, accord­ing to French media.

“He was not speak­ing about immi­gra­tion,” Marine Le Pen said. “He was speak­ing about the fate of human­i­ty as a whole. That is what he said.”

The Nation­al Front, like many far-right par­ties across Europe, is grap­pling with alle­ga­tions that in advo­cat­ing more nation­al auton­o­my from the EU they are also spew­ing racist pro­pa­gan­da.

“I do not have any image to clean up as far as the lead­er­ship is con­cerned. [My father] defends all French peo­ple, what­ev­er their race, what­ev­er their reli­gion, what­ev­er their ori­gins.”

“So let me just be clear,” Aman­pour said, “the French press report­ed that those were your father’s words ahead of a ral­ly in Mar­seille this week on Tues­day. Are you deny­ing that?”

“Yes, it is a lie,” Le Pen said.

http://www.theguardian.com/world/2014/may/21/jean-marie-le-pen-ebola-population-explosion-europe-immigrationThis com­ment, of course, is far from the first con­tro­ver­sy the Nation­al Front finds itself in. Under Jean-Marie Le Pen’s lead­er­ship, the par­ty was con­sid­ered to be very anti-Semit­ic; he famous­ly described the Holo­caust as just a detail of his­to­ry, Aman­pour said.

...

A recent BVA poll showed 79% of vot­ers think Le Pen’s posi­tion on the EU is unde­sir­able, and 68% have a poor opin­ion of Le Pen. What chance does she have of win­ning?

“I can remind you that the French pres­i­dent has sev­en­teen per cent pop­u­lar­i­ty at the moment. Mis­ter Copé, the pres­i­dent of the UMP [Union for a Pop­u­lar Move­ment] has twelve-per­cent pop­u­lar­i­ty. So you can see if twen­ty-four per­cent is the result, we can see that democ­ra­cy will have spo­ken.”

“The Nation­al Front is a move­ment which inter­ests many peo­ple through­out the world, and we have to see what things are from the point of view of the truth and not an image which our oppo­nents give of us.”

“The Nation­al Front is a move­ment which inter­ests many peo­ple through­out the world,” accord­ing to Le Pen. Through­out the world? That seems a bit much, although if there’s ever a glob­al ebo­la out­break there will no doubt me a great deal more glob­al inter­est in the Nation­al Front (and not entire­ly pos­i­tive inter­est at that point). But she is cor­rect that peo­ple out­side of France are keep­ing an eye on the Nation­al Front. Geert Wilders, for instance, formed an alliance with Le Pen last fall as part of a pan-Euro­pean far right move­ment and, per­haps not sur­pris­ing­ly, his inter­est in Le Pen and her fam­i­ly’s lega­cy has­n’t been very pos­i­tive either, of late:

The Tele­graph
EU elec­tions 2014: ‘tox­ic’ Marine Le Pen blamed for Geert Wilders defeat
EU elec­tion defeat for Geert Wilders blamed on his deci­sion to link with French Front Nation­al rather than Nigel Farage

By Bruno Water­field, Schevenin­gen and Hen­ry Samuel in Paris

5:32PM BST 23 May 2014

A dis­as­trous Euro­pean Union elec­tion vote for the Dutch far-Right has been blamed on a “tox­ic” Marine Le Pen and is seen as vin­di­ca­tion of Nigel Farage’s refusal to work with the French Front Nation­al.

The result is a blow to Miss Le Pen and will be wide­ly seen as the con­se­quence of her fail­ure to break from the Front Nation­al’s extrem­ist past, a lega­cy embod­ied by her father Jean-Marie who remains an MEP and hon­orary pres­i­dent of the par­ty.

His close alliance with Miss Le Pen is seen as the key fac­tor in the unex­pect­ed defeat of Geert Wilders and his Free­dom Par­ty (PVV) on Thurs­day night after Dutch exit polls put him in fourth place behind all the pro-EU Dutch polit­i­cal par­ties.

As Dutch vot­ers went to the polls, Mr Wilders faced ques­tions over Jean-Marie’s Le Pen’s claim that Ebo­la, the dead­ly virus, could solve the world’s pop­u­la­tion explo­sion and France’s immi­gra­tion prob­lems “in three months”, a row that recalled his past con­vic­tions for Holo­caust denial.

Mr Farage,bask­ing in the glow of Ukip’s bet­ter than expect­ed local elec­tion results, told the Tele­graph that he was not sur­prised that the link to the Front Nation­al had played bad­ly with Dutch vot­ers.

“How­ev­er impres­sive Marine Le Pen is, the Front Nation­al car­ries tox­ic bag­gage,” the Ukip leader said. “The best exam­ple is the com­ments by Jean-Marie Le Pen ear­li­er this week.”

Mr Wilders blamed the set­back on the “65 per cent” of his Free­dom Par­ty’s vot­ers who had “stayed at home” amid low Dutch turnout esti­mat­ed at around 34 per cent but admit­ted “the truth is that the exit polls are dis­ap­point­ing”.

Lucas Har­tong, the most senior MEP for Mr Wilders’ PVV refused to cam­paign in the EU elec­tions because he warned last month that the link with the Front Nation­al and the Aus­tri­an far-Right was wrong and would prove to be an elec­toral dis­as­ter.

“I am not at all sur­prised at the result. It’s what I warned of. I think there will be an inter­nal fight now, peo­ple will want to work with Farage and to drop Le Pen,” he said.

“These par­ties have a ten­den­cy to anti-Semi­tism. Most PVV vot­ers want to work with peo­ple like Ukip. They did­n’t come out because they were con­cerned.”

Mr Har­tong revealed that in 2011 he and his three col­leagues in the Euro­pean Par­lia­ment entered into talks with Mr Farage but that the pro­pos­al to form an alliance had been per­son­al­ly reject­ed by Mr Wilders, who now says he would like to work with Ukip in the future.

“It was Wilders who blocked it. My ques­tion is why did he want to work with Le Pen and not Farage?,” he said.

Esther Voet, the direc­tor of the influ­en­tial Dutch Infor­ma­tion and Doc­u­men­ta­tion on Israel Cen­tre, said that the com­ments by Mr Le Pen had remind­ed vot­ers of the Front Nation­al’s past links to anti-Semi­tism, a polit­i­cal taboo in the Nether­lands.

“I’m sure a lot peo­ple plan­ning to vote for him changed their minds,” she said.

Amid a French back­lash over her father’s com­ments about Ebo­la on Tues­day, Miss Le Pen insist­ed the com­ments had been “dis­tort­ed” and that he had meant to say that the dead­ly virus would act as a form of bru­tal pop­u­la­tion con­trol.

...

So will Le Pen’s glob­al death wish bleed over into Sun­day’s races in France and else­where or will the Ebo­la Par­ty and its allies man­age to main­tain their elec­toral momen­tum? Either way, it’s a reminder that, in addi­tion to ebo­la itself, those awful human mind virus­es that triv­i­al­ize and cel­e­brate mass death are alive and well too.

And the results are in, unof­fi­cial­ly at least. Euroskep­ti­cism appears to be the big win­ner in terms of rel­a­tive gains from the last elec­tion, with the “euroskep­tics” in the EU par­lia­ment rough­ly dou­bling to around a quar­ter of the par­lia­ment. But the impact may be most­ly felt at the nation­al lev­el since the pro-EU par­ties are still going to main­tain con­trol of the EU par­lia­ment and Jean-Claude Junck­er’s “cen­ter-right” par­ty looks to be on track to win enough seats to claim the right to declare Junck­er the new EU Com­mis­sion pres­i­dent. So a gen­er­al rejec­tion of aus­ter­i­ty and the EU project in gen­er­al were the big sym­bol­ic win­ners this year while Jean-Claude “Mr. Euro” Junck­er is poised to become the EU Com­mis­sion pres­i­dent. That should go well:

French far right in ‘earth­quake’ win as Europe votes

By Luke Bak­er, Paul and Tay­lor

BRUSSELS Mon May 26, 2014 12:41am BST

(Reuters) — Marine Le Pen’s far right Nation­al Front scored a stun­ning first vic­to­ry in Euro­pean Par­lia­ment elec­tions in France on Sun­day as crit­ics of the Euro­pean Union reg­is­tered a con­ti­nent-wide protest vote against aus­ter­i­ty and mass unem­ploy­ment.

With­out wait­ing for the final result, French Prime Min­is­ter Manuel Valls went on tele­vi­sion to call the break­through by the anti-immi­gra­tion, anti-euro par­ty in one of the EU’s found­ing nations “an earth­quake” for France and Europe.

Anti-estab­lish­ment far right and hard left par­ties, their scores mag­ni­fied by anoth­er low turnout, gained ground in many coun­tries although in Ger­many, the EU’s biggest mem­ber state with the largest num­ber of seats, the pro-Euro­pean cen­tre ground held firm, accord­ing to exit polls.

A jubi­lant Le Pen, whose par­ty beat Pres­i­dent Fran­cois Hol­lan­de’s rul­ing Social­ists into third place, told sup­port­ers: “The peo­ple have spo­ken loud and clear... they no longer want to be led by those out­side our bor­ders, by EU com­mis­sion­ers and tech­nocrats who are unelect­ed.

“They want to be pro­tect­ed from glob­al­i­sa­tion and take back the reins of their des­tiny.”

The Nation­al Front was set to win more than 25 per­cent of the vote, com­fort­ably ahead of the con­ser­v­a­tive oppo­si­tion UMP on 21 per­cent, with the Social­ists on 14.5 per­cent, their sec­ond defeat in two months after los­ing dozens of town halls in March.

First offi­cial results from around the 28-nation bloc showed the pro-Euro­pean cen­tre-left and cen­tre-right par­ties will keep con­trol of the 751-seat EU leg­is­la­ture, but the num­ber of Euroscep­tic mem­bers will more than dou­ble.

The cen­tre-right Euro­pean Peo­ple’s Par­ty, led by for­mer Lux­em­bourg Prime Min­is­ter Jean-Claude Junck­er, was on track to win 212 seats, pre­lim­i­nary results issued by the par­lia­ment showed.

“We did win the elec­tions,” Junck­er told reporters, say­ing his par­ty had earned the right to head the exec­u­tive Euro­pean Com­mis­sion.

The cen­tre-left Social­ists led by out­go­ing Euro­pean Par­lia­ment Pres­i­dent Mar­tin Schulz of Ger­many were in sec­ond place with 185 seats fol­lowed by the cen­trist lib­er­als on 71 and the Greens 55. Euroscep­tic groups were expect­ed to win about 143 seats, and the far left anoth­er 45.

A glum look­ing Schulz was not con­ced­ing defeat, telling reporters he was open to nego­ti­a­tions with oth­er par­ties.

The polit­i­cal fall­out may be felt more strong­ly in nation­al pol­i­tics than at EU lev­el, pulling main­stream con­ser­v­a­tive par­ties fur­ther to the right and rais­ing pres­sure to crack down on immi­gra­tion.

UKIP MAKE BIG GAINS

The anti-EU UK Inde­pen­dence Par­ty led by pop­ulist Nigel Farage scored major gains and was lead­ing the oppo­si­tion Labour par­ty and Prime Min­is­ter David Cameron’s Con­ser­v­a­tives in ear­ly results from Britain, where vot­ing took place last Thurs­day.

That will pile pres­sure on Cameron, who has promised Britons an in/out ref­er­en­dum on EU mem­ber­ship in 2017 if he is re-elect­ed next year, to take an even tougher line in Europe.

“The whole Euro­pean project has been a lie,” Farage said on a tele­vi­sion link-up with Brus­sels. “I don’t just want Britain to leave the Euro­pean Union, I want Europe to leave the Euro­pean Union.”

In Italy, Prime Min­is­ter Mat­teo Ren­z­i’s cen­tre-left Demo­c­ra­t­ic Par­ty was hold­ing off a strong chal­lenge from the anti-estab­lish­ment 5‑Star Move­ment of for­mer com­ic Beppe Gril­lo, accord­ing to a first exit poll of uncer­tain reli­a­bil­i­ty.

Den­mark’s anti-immi­gra­tion far right Peo­ple’s Par­ty was set to top the poll with an esti­mat­ed 23 per­cent and the extreme-right Job­bik, wide­ly accused of racism and anti-Semi­tism, was run­ning sec­ond in Hun­gary with 15 per­cent.

In the Nether­lands, the anti-Islam, Euroscep­tic Dutch Free­dom Par­ty of Geert Wilders’ — which plans to forge an alliance with Le Pen — fin­ished joint sec­ond in terms of Euro­pean Par­lia­ment seats behind a pro-Euro­pean cen­trist oppo­si­tion par­ty.

Although 388 mil­lion Euro­peans were eli­gi­ble to vote, less than half that num­ber cast bal­lots. Aver­age turnout was offi­cial­ly esti­mat­ed at 43.1 per­cent, bare­ly high­er than the 2009 nadir of 43.0 per­cent, despite efforts to per­son­alise the elec­tion with all the main­stream polit­i­cal fam­i­lies putting for­ward a lead­ing can­di­date or “Spitzenkan­di­dat”.

In Ger­many, Chan­cel­lor Angela Merkel’s Chris­t­ian Democ­rats were set to secure 36 per­cent of the vote, down from a 23-year-high of 41.5 per­cent in last year’s fed­er­al elec­tion but still a clear vic­to­ry. The cen­tre-left Social Democ­rats, her coali­tion part­ners, were fore­cast to take 27.5 per­cent.

The anti-euro Alter­na­tive for Ger­many (AfD) won par­lia­men­tary rep­re­sen­ta­tion for the first time with an esti­mat­ed 6.5 per­cent, the best result so far for a con­ser­v­a­tive par­ty cre­at­ed only last year.

“Ger­many has cast a clear pro-Europe vote and the high turnout is a good sig­nal for the idea of Euro­pean uni­ty,” said David McAl­lis­ter, the top Chris­t­ian Demo­c­rat can­di­date.

GREEK FAR LEFT GAINS

It was a dif­fer­ent sto­ry in Greece, epi­cen­tre of the euro zone’s debt cri­sis, where the rad­i­cal left anti-aus­ter­i­ty Syriza move­ment of Alex­is Tsipras was set to win with 26.7 per­cent, push­ing gov­ern­ing New Democ­ra­cy into sec­ond place on 22.8 per­cent.

That reflect­ed pop­u­lar anger at harsh spend­ing cuts the gov­ern­ment has adopt­ed in recent years to meet the terms of its EU/IMF bailout pro­gramme.

The surge in sup­port for the far left rais­es doubts about how much longer the coali­tion gov­ern­ment can last with a par­lia­men­tary major­i­ty of just two seats, although gov­ern­ment spokesman Simos Kedikoglou said it would endure.

“The polit­i­cal sce­nario of a gov­ern­ment col­lapse, which Syriza was try­ing to paint, has not been borne out by the facts,” he told Greek tele­vi­sion.

The two par­ties in the coali­tion, New Democ­ra­cy and PASOK, won a com­bined vote larg­er than that of Syriza.

Sun­day was the fourth and final day of vot­ing in elec­tions to the Euro­pean Par­lia­ment, which is an equal co-leg­is­la­tor with mem­ber states on most EU laws.

Far-right and rad­i­cal left groups were expect­ed to secure up to a quar­ter of the seats, enough to gain a much loud­er voice but prob­a­bly not to block EU leg­is­la­tion.

Offi­cials said final results and seat allot­ments would like­ly not be finalised until lat­er on Mon­day.

...

Of course, we still have to wait and see if Angela Merkel will back the new “Spitzenkan­di­dat” sys­tem and nom­i­nate Junck­er to leader the EU Com­mis­sion. But since she appar­ent­ly promised to back Junck­er if his par­ty came in first that may not be a prob­lem. The prob­lem of how to bal­ance Junck­er’s pledge to con­tin­ue the aus­ter­i­ty poli­cies with­out eas­ing up at all with the grow­ing revolt against those very poli­cies is just get­ting start­ed.

If you’ve ever thought, “boy, it sure would be neat to be a fly on the wall”, keep in mind that choos­ing a good wall to loi­ter on isn’t nec­es­sar­i­ly easy. For instance, if you hap­pened to be a fly on a wall in a room occu­pied by the EU’s lead­ers fol­low­ing the recent elec­tions you might end up a hor­ri­bly depressed fly on the wall:

The New York Times
The Con­science of a Lib­er­al
Euro­pean Green Lanterns
Paul Krug­man
May 26 11:13 am

Sit­ting in a room lis­ten­ing to EU offi­cials react­ing to the Euro­pean Par­lia­ment elec­tions — and it seems to me that they’re deep in denial. Bar­roso just declared that the euro had noth­ing to do with the cri­sis, that it was all failed poli­cies at the nation­al lev­el; a few min­utes ago he said that Europe’s real prob­lem is a lack of polit­i­cal will.

This is quite amaz­ing, in a real­ly bad way.

Sor­ry, but depres­sion-lev­el slumps didn’t hap­pen in Europe before the com­ing of the euro. And we know very well what hap­pened: first the cre­ation of the euro encour­aged mas­sive cap­i­tal flows to south­ern Europe, then the mon­ey dried up — and the absence of nation­al cur­ren­cies meant that the debtor coun­tries had to go through an extreme­ly painful process of defla­tion. How any­one could deny any role for the cur­ren­cy …

And if there’s one thing Europe has, it’s polit­i­cal will. All across the south­ern tier, gov­ern­ments have duti­ful­ly imposed incred­i­bly harsh aus­ter­i­ty in the name of being good Euro­peans. What should they have done that they haven’t?

I guess the notion is that if the Greeks, or the Por­tuguese, or the Spaniards real­ly, tru­ly com­mit­ted their all-pow­er­ful wills to reform and adjust­ment, their economies would boom despite defla­tion and aus­ter­i­ty. The pos­si­bil­i­ty that things are so bad — and rad­i­cals have been empow­ered — because the poli­cies are fun­da­men­tal­ly mis­guid­ed just doesn’t seem to be con­sid­ered.

The fly­’s eyes don’t lie: Just as 1 — 1 = 2 and always equaled 2, it’s per­fect­ly rea­son­able to plan on mas­sive­ly deflat­ing your econ­o­my while keep­ing your cur­ren­cy fixed and expect­ing it to all heal and there’s real­ly no oth­er way for­ward because the aus­ter­i­ty poli­cies were all the fault of nation­al gov­ern­ments any­ways. So says EU Com­mis­sion pres­i­dent Bar­roso. Again. Where there’s a will, there’s a way.

With the pro-aus­ter­i­ty Jean-Claude Junck­er now like­ly to be EU Com­mis­sion pres­i­dent (Merkel just gave Junck­er her bless­ing so it’s prob­a­bly a done deal at this point), the ques­tion aris­es of how like­ly it is that we’re going to see Pres­i­dent Le Pen in 2017:

Le Pen as Pres­i­dent? France thinks the unthink­able

By Mark John and Nicholas Vinocur

PARIS Thu May 29, 2014 3:44pm BST

(Reuters) — The vic­to­ry of France’s far-right Nation­al Front in EU elec­tions and the dis­ar­ray of its two main par­ties has the French ask­ing them­selves an awk­ward ques­tion: could its leader Marine Le Pen be their next pres­i­dent?

The answer for now is: “Prob­a­bly not”. But the mere fact that seri­ous ana­lysts are even enter­tain­ing the prospect of Le Pen enter­ing the Ely­see Palace after 2017 elec­tions shows how much the polit­i­cal land­scape has been shak­en in the past week.

...

“The way things are now, when Marine Le Pen speaks, peo­ple lis­ten to her,” said Jean-Daniel Levy of poll­ster Har­ris Inter­ac­tive. “Elec­tion after elec­tion, she just goes from strength to strength.

To be sure, the FN has been grad­u­al­ly build­ing momen­tum for years. But its sup­port­ers, ene­mies and inde­pen­dent polit­i­cal ana­lysts alike all agree that some­thing new is emerg­ing.

In 2002, when Le Pen’s fire­brand father Jean-Marie shocked France by beat­ing his Social­ist rival out of the run-off to that year’s pres­i­den­tial elec­tion, an esti­mat­ed 1.3 mil­lion peo­ple took to the streets in stunned protest.

In the deci­sive sec­ond round, left-wing vot­ers famous­ly took pic­tures of them­selves clutch­ing their noses as they vot­ed for the con­ser­v­a­tive can­di­date Jacques Chirac — putting aside their con­tempt for him to ensure Le Pen was com­pre­hen­sive­ly beat­en.

This time, there has been no such mass protest. Attempts to ral­ly anti-FN demon­stra­tors in Paris on Thurs­day’s Ascen­sion Day pub­lic hol­i­day mus­tered only about 4,200 peo­ple, most­ly high-school and uni­ver­si­ty stu­dents, accord­ing to police esti­mates.

“It (the FN’s poll win) shows that a cer­tain racist sen­ti­ment has become com­mon­place in France,” said Mar­i­on Faucheux, a 28-year-old wel­fare work­er at the ral­ly.

YOUTH APPEAL

Since tak­ing con­trol of the par­ty from her father in 2011, 45-year-old Marine Le Pen, a trained lawyer, has trans­formed the image of a par­ty once taint­ed by asso­ci­a­tion with anti-Semi­tism and sought, step by step, to make of it a par­ty of gov­ern­ment.

Aside from the odd slip — she was accused of incite­ment to racial hatred for a 2010 remark liken­ing Mus­lim street prayers to the Nazi occu­pa­tion of France — Le Pen has mar­gin­alised the par­ty’s old guard and pun­ished overt racism in par­ty ranks.

She has pro­mot­ed capa­ble oper­a­tors such as her vice-pres­i­dent Flo­ri­an Philip­pot, an alum­nus of the pres­ti­gious ENA school. The FN’s anti-immi­grant plat­form is still there but Le Pen her­self con­cen­trates her redoubtable debat­ing skills on tirades against the euro, free mar­kets and the inep­ti­tudes of her rivals.

The strat­e­gy shift has won the FN a whole new gen­er­a­tion of sup­port­ers, with poll­ster Ipsos-Ste­ria esti­mat­ing that no few­er than 30 per­cent of vot­ers under the age of 35 backed the FN in the Euro­pean vote, and a huge 37 per­cent among the unem­ployed.

More­over, the so-called “repub­li­can front” that in 2002 blocked Jean-Marie Le Pen — an unwrit­ten pact among main­stream par­ties to step back and endorse rivals if they stand a bet­ter chance of see­ing off the FN — is no longer guar­an­tee­do.

It was already ditched by the UMP ahead of 2012’s par­lia­ment elec­tions and patent­ly failed in March’s munic­i­pal vote. The result was that the FN is now run­ning a record 11 town halls across France.

“Can it be revived in time for the 2017 elec­tion? At this stage it is sim­ply too ear­ly to say,” said Fred­er­ic Dabi, deputy direc­tor of the Ifop polling insti­tute.

PARTY AT THE “ELYSEE LOUNGE”

As else­where, French mid-term polls are unre­li­able augurs: the ecol­o­gist Greens’ fol­lowed up their record 16.3 per­cent score in the 2009 Euro­pean Par­lia­ment vote with a mea­gre 2.5 per­cent in the 2012 pres­i­den­tial elec­tion.

But already France’s dis­cred­it­ed main­stream par­ties know they can­not go up against the FN in 2017 with the sta­tus quo. Yet chang­ing it in just three years may prove dif­fi­cult.

Top con­ser­v­a­tives led by for­mer prime min­is­ter Alain Juppe have urged the UMP to get back on its feet and com­bat the FN by forg­ing a new alliance with UDI-Modem cen­trists — a move Modem chair­man Fran­cois Bay­rou said this week he would con­sid­er.

The cen­trists want a pri­ma­ry to decide who gets any joint tick­et for 2017. Yet Sarkozy — who unless he is wound­ed by the fund­ing scan­dal sur­round­ing his 2012 cam­paign is still the first choice for many on the French right — is not pre­pared to sub­ject him­self to any such exer­cise, his allies say.

Like­wise the Social­ist Par­ty could seek to ral­ly the Greens and small hard-left group­ings such as the Left Par­ty of Jean-Luc Melen­chon behind its can­di­date. Yet left-wingers are unlike­ly to back Hol­lande — who this year came out as a mod­er­ate “social demo­c­rat” — or his even more cen­tre-lean­ing pre­mier Manuel Valls.

“Such an alliance is impos­si­ble if it is on the basis of the gov­ern­men­t’s cur­rent line,” Social­ist deputy Lau­rent Baumel told Reuters. “If the idea is to issue a ral­ly­ing cry for uni­ty against the FN threat — for­get it.”

Bar­ring a swift upturn in the for­tunes of the UMP and a tan­gi­ble eco­nom­ic recov­ery need­ed to restore the cred­i­bil­i­ty of the rul­ing Social­ists, Le Pen is seen like­ly to emu­late the 2002 exploit of her father and make it into the pres­i­den­tial run-off.

“If the FN makes it into the sec­ond round in 2017, our feel­ing is that the mar­gin of vic­to­ry will not be 80–20 as it was in 2002,” said Bruno Jean­bart of Opin­ion­way sur­vey group, refer­ring to Chirac’s land­slide 82-per­cent vic­to­ry.

The choice of venue for the Nation­al Fron­t’s post-elec­tion night cel­e­bra­tion last Sun­day was per­haps no acci­dent: a chic restau­rant-bar in Paris’s swish eighth arrondisse­ment called “L’El­y­see Lounge”.

One of the longer term ques­tions raised by the pos­si­bil­i­ty of “Pres­i­dent Le Pen” is what’s going to hap­pen, say a decade from now, if France does end up elect­ing a far right pres­i­dent promis­ing an anti-EU plat­form and all sorts of oth­er perks if the EU’s struc­ture sim­ply gives the nation­al gov­ern­ments no real room for flex­i­bil­i­ty? As is, Le Pen’s plat­form cen­tered around a “patri­ot­ic eco­nom­ic pol­i­cy” that includes:

...replac­ing the euro with a resus­ci­tat­ed French franc; erect­ing trade bar­ri­ers to foil “unfair” com­pe­ti­tion from the likes of Chi­na; ban­ning for­eign­ers from buy­ing French com­pa­nies; rais­ing wages; and scrap­ping the inde­pen­dence of the cen­tral bank so it can pro­duce mon­ey at the gov­ern­men­t’s beck and call.
...

It’s pret­ty unclear how real­ly any of that that can hap­pen with­out France leav­ing the euro­zone and maybe even the EU entire­ly. And with the direc­tion the EU — and espe­cial­ly the euro­zone — is head­ing in, where nation­al gov­ern­ments have less and less con­trol over their own poli­cies as they get sub­sumed into the larg­er EU aus­ter­i­ty-be-default sys­tem, you have to won­der how big protest votes like this are going to play out in the future if the nation­al lead­ers are increas­ing­ly pow­er­less to imple­ment any sort of real change in pol­i­cy while, at the same time, vot­ers are increas­ing­ly pin­ing for big changes because the sta­tus quo is so awful. What will the EU par­ty plat­forms be like in the future, after a few more rounds of protest votes like what we just saw, if the protests don’t real­ly lead to any changes because changes aren’t pos­si­ble at the nation­al lev­el with­out the acqui­es­cence of the EU lead­ers like Merkel? This isn’t the “Unit­ed States of Europe” yet and won’t be for a long time, espe­cial­ly in the minds of the elec­torate if par­ties like the Nation­al Front are surg­ing amongst the youth. But at some point, the kinds of promis­es Le Pen made sim­ply aren’t going to polit­i­cal­ly fea­si­ble because every­one will know they’re impos­si­ble to imple­ment unless France ditch­es the EU. And at that point, isn’t out­right seces­sion going to become the default “protest” plat­form?

Anoth­er inter­est­ing ques­tion that gets raised by this whole sit­u­a­tion: what would the Euro­pean far right’s response be if the EU had a mas­sive crack­down on immi­gra­tion with­in the EU and then eased up on the aus­ter­i­ty a bit. Would the Euro­pean far right embrace an EU that’s still large­ly anti-demo­c­ra­t­ic, pro-aus­ter­i­ty, and effec­tive­ly dom­i­nat­ed by Berlin if EU pol­i­cy-mak­ers decide to gut the EU’s immi­gra­tion poli­cies? Such a move may not be pop­u­lar in cen­tral and east­ern Europe, but how about in France or even the UK? Would vot­ers accept a per­ma­nent aus­ter­i­ty regime in exchange for anti-immi­gra­tion poli­cies that includ­ed restric­tions on free move­ment and immi­gra­tion with­in the EU for EU cit­i­zens?

How about EU lead­ers like Merkel? Will they find such a deal accept­able? Maybe? When the far right surges any­where dif­fi­cult ques­tion need to be asked and the high­ly unusu­al cir­cum­stances in the EU today don’t make those dif­fi­cult ques­tions any eas­i­er.

Here’s an arti­cle that high­lights the par­al­lels between the grow­ing glob­al dis­con­tent with the unde­mo­c­ra­t­ic and cor­po­ratist nature of unchecked the glob­al­iza­tion of the past gen­er­a­tion and how that feeds into the grow­ing nation­al­ist and far right sen­ti­ments across the EU

Who’s in con­trol – nation states or glob­al cor­po­ra­tions?
Around the world, calls for nation­al auton­o­my have grown. Minori­ties are blamed but the real cul­prit is neolib­er­al­ism

Gary Younge
The Guardian, Sun­day 1 June 2014

The night in 2002 when Luiz Iná­cio Lula da Sil­va won his land­slide vic­to­ry in Brazil’s pres­i­den­tial elec­tions, he warned sup­port­ers: “So far, it has been easy. The hard part begins now.” He was­n’t wrong. As head of the left­wing Work­ers’ par­ty he was elect­ed on a plat­form of fight­ing pover­ty and redis­trib­ut­ing wealth. A year ear­li­er, the par­ty had pro­duced a doc­u­ment, Anoth­er Brazil is Pos­si­ble, lay­ing out its elec­toral pro­gramme. In a sec­tion enti­tled “The Nec­es­sary Rup­ture”, it argued: “Regard­ing the for­eign debt, now pre­dom­i­nant­ly pri­vate, it will be nec­es­sary to denounce the agree­ment with the IMF, in order to free the eco­nom­ic pol­i­cy from the restric­tions imposed on growth and on the defence of Brazil­ian com­mer­cial inter­ests.”

But on the way to Lula’s inau­gu­ra­tion the invis­i­ble hand of the mar­ket tore up his elec­toral promis­es and boxed the coun­try around the ears for its reck­less demo­c­ra­t­ic choice. In the three months between his win­ning and being sworn in, the cur­ren­cy plum­met­ed by 30%, $6bn in hot mon­ey left the coun­try, and some agen­cies gave Brazil the high­est debt-risk rat­ings in the world. “We are in gov­ern­ment but not in pow­er,” said Lula’s close aide, Domini­can fri­ar Frei Bet­to. “Pow­er today is glob­al pow­er, the pow­er of the big com­pa­nies, the pow­er of finan­cial cap­i­tal.”

The lim­it­ed abil­i­ty of nation­al gov­ern­ments to pur­sue any agen­da that has not first been endorsed by inter­na­tion­al cap­i­tal and its prox­ies is no longer sim­ply the cross they have to bear; it is the cross to which we have all been nailed The nation state is the pri­ma­ry demo­c­ra­t­ic enti­ty that remains. But giv­en the scale of neolib­er­al glob­al­i­sa­tion it is clear­ly no longer up to that task.

“By many mea­sures, cor­po­ra­tions are more cen­tral play­ers in glob­al affairs than nations,” writes Ben­jamin Bar­ber in Jihad vs McWorld. “We call them multi­na­tion­al but they are more accu­rate­ly under­stood as post­na­tion­al, transna­tion­al or even anti-nation­al. For they abjure the very idea of nations or any oth­er parochial­ism that lim­its them in time or space.”

This con­tra­dic­tion is not new. Indeed, it is pre­cise­ly because it has con­tin­ued, chal­lenged but vir­tu­al­ly unchecked, for more than a gen­er­a­tion, that polit­i­cal cyn­i­cism has inten­si­fied.

“The cri­sis con­sists pre­cise­ly in the fact that the old is dying and the new can­not be born,” argued the Ital­ian Marx­ist Anto­nio Gram­sci. “In this inter­reg­num a great vari­ety of mor­bid symp­toms appear.”

The recent suc­cess of the far right in the Euro­pean par­lia­men­tary elec­tions revealed just how mor­bid those symp­toms have become. Nation­al­ist and open­ly xeno­pho­bic par­ties topped the polls in three coun­tries – Den­mark, France and the UK – and won more than 10% in anoth­er five. These vic­to­ries, elec­tion to a par­lia­ment with lit­tle real pow­er, on a very low turnout, can be over­stat­ed. Ukip won just 9% of the eli­gi­ble elec­torate, the Front Nation­al 10.6% and the Dan­ish Peo­ple’s par­ty 15%. But the trend should not be under­played. Over the past 30 years, fas­cism – and its 57 vari­eties of fel­low trav­ellers in denial – has shift­ed as a polit­i­cal cur­rent from mar­gin­al to main­stream to cen­tral in Europe’s polit­i­cal cul­ture.

The prob­lem with describ­ing these par­ties as racist is not that the descrip­tion is inac­cu­rate but that, by itself, it is inad­e­quate. For their appeal lies in a far broad­er set of anx­i­eties about the degree to which our pol­i­tics and eco­nom­ics are shaped by forces account­able to none and con­trolled by a few: a drift towards cos­mopoli­tanism in which cit­i­zens, once rel­a­tive­ly secure in their nation­al iden­ti­ty and finan­cial well­be­ing, are exclud­ed from the poli­ty.

...

“It seems clear that … nation­al­ism is not only not a spent force,” argued the late Stu­art Hall in an essay, Our Mon­grel Selves. “It isn’t nec­es­sar­i­ly either a reac­tionary or a pro­gres­sive force, polit­i­cal­ly.” It suits the far right to shroud its racial ani­mus with­in these blurred dis­tinc­tions in order to appear more mod­er­ate. “Our peo­ple demand one type of pol­i­tics: they want pol­i­tics by the French, for the French, with the French,” said Front Nation­al leader Marine Le Pen in her vic­to­ry speech. “They don’t want to be led any more from out­side. What is hap­pen­ing in France her­alds what will hap­pen in all Euro­pean coun­tries, the return of the nation.”

That is unlike­ly. Quite how these par­ties turn the clock back and what year they would set it to is not clear. Nei­ther the right nor the left has a solu­tion for this cri­sis. But while the left holds out hope of build­ing a more inclu­sive soci­ety in the future, the right has built its pop­ulist cre­den­tials on retreat­ing to an exclu­sion­ary past.

In the absence of any seri­ous strat­e­gy to pro­tect democ­ra­cy the right resorts, instead, to a defence of “cul­ture” – rein­vent­ed as “tra­di­tion”, ele­vat­ed to “her­itage” and imag­ined as immutable. Hav­ing evoked the myth of puri­ty it then tar­gets the human pol­lu­tants – low-skilled immi­grants, Gyp­sies, Mus­lims, take your pick. Peo­ple who would­n’t know a cred­it default swap if it ran up and kicked them out of their house, but who are as acces­si­ble and iden­ti­fi­able as neolib­er­al glob­al­i­sa­tion – that force with­out a face – is elu­sive.

“Minori­ties are the flash­point for a series of uncer­tain­ties that medi­ate between every­day life and its fast-shift­ing glob­al back­drop,” writes Arjun Appadu­rai in Fear of Small Num­bers. “This uncer­tain­ty, exac­er­bat­ed by an inabil­i­ty of states to secure eco­nom­ic sov­er­eign­ty in the era of glob­al­i­sa­tion, can trans­late into a lack of tol­er­ance of any sort of col­lec­tive stranger.” The tar­gets of this intol­er­ance shift accord­ing to the con­text: Roma in Hun­gary, Roma­ni­ans in Britain, Lati­nos in the US and Mus­lims almost every­where in the west. But the rhetoric and the true nature of the cri­sis remain con­stant. Parochial iden­ti­ties describe the pro­tag­o­nists, but it is glob­al eco­nom­ics that shapes the nar­ra­tive.

And here’s an arti­cle that’s a reminder that the neolib­er­al forces that have been unleashed across the EU aren’t sole­ly the con­se­quence of the neolib­er­al nature of the type of glob­al­iza­tion embraced by the glob­al com­mu­ni­ty. The EU, itself, is increas­ing­ly neolib­er­al in nature which is why cre­at­ing a real “Unit­ed States of Europe” is so dif­fi­cult: get­ting nation­al lead­ers to col­lec­tive­ly give up nation­al sov­er­eign­ty to a cen­tral author­i­ty is a dif­fi­cult enough task on its own. But when that cen­tral author­i­ty is neolib­er­al in nature, the sov­er­eign­ty hand­ed over by the nation states isn’t exact­ly gen­er­at­ed into a new a col­lec­tive­ly run pan-nation­al sov­er­eign­ty. It just gets hand­ed over to the cen­tral author­i­ties that are going to run the new “Unit­ed States of Europe” on neolib­er­al autopi­lot:

Rabble.ca
Europe dis­en­chant­ed: After the Euro­pean Par­lia­ment elec­tions
By
Dun­can Cameron
| June 3, 2014

The great French poet Vic­tor Hugo speak­ing to an inter­na­tion­al peace con­fer­ence in 1849 called for the estab­lish­ment of a Unit­ed States of Europe. With the blood hard­ly dry after World War II end­ed in Europe in 1945, a group of French thinkers, notably Jean Mon­net, drew up plans for Euro­pean eco­nom­ic co-oper­a­tion.

...

Today the Euro­pean Union counts 28 mem­bers. It is still gov­erned by treaty (the Maas­tricht Treaty of 1992 for­mal­ly cre­at­ed the Euro­pean Union).

Europe remains pri­mar­i­ly an eco­nom­ic space, giv­en a dis­tinct­ly neolib­er­al char­ac­ter by Mas­trich, accen­tu­at­ed by the intro­duc­tion of the euro, the com­mon cur­ren­cy adopt­ed by 18 of the 28 states, and by the recent two Sin­gle Mar­ket Acts.

The Euro­pean Union has no for­mal con­sti­tu­tion, inde­pen­dent head of state, or direct­ly elect­ed gov­ern­ment, yet by virtue of its reg­u­lat­ing author­i­ty it is a big part of every­day life for its over 500 mil­lion res­i­dents.

As an impres­sive group of thinkers includ­ing French econ­o­mist Thomas Piket­ty has argued, the Euro­pean project bad­ly needs to be updat­ed and improved. Iden­ti­fy­ing debts as “nation­al” inside a cur­ren­cy union encour­ages spec­u­la­tion against the bonds of weak­er coun­tries, not access to bor­row­ing on fair terms. A mon­e­tary pol­i­cy designed to sti­fle infla­tion makes no sense in a world dom­i­nat­ed by defla­tion­ary pres­sures. Aus­ter­i­ty is anoth­er way of say­ing stag­ger­ing youth unem­ploy­ment, and pre­car­i­ous employ­ment.

The results of the May 25 Euro­pean Par­lia­ment elec­tions revealed an indif­fer­ence to the Euro­pean project, and worse.

The telling result was the rates of absten­tion from vot­ing, as high as 87 per cent in Slo­va­kia, 81 per cent in the Czech Repub­lic, and 77 per cent in Poland. Only Bel­gium (10 per cent), Lux­em­bourg (10 per cent), Ire­land (48 per cent), Den­mark (44 per cent) Greece (42 per cent), Italy (40 per cent), and Mal­ta (25 per cent) showed absten­tion rates below 50 per cent.

Worse was that the cryp­to-Fas­cist and Euro­pho­bic Nation­al Front led the polls in France with 25 per cent of the vote, and 24 of 74 seats, while the anti-Euro­pean Unit­ed King­dom Inde­pen­dence Par­ty (UKIP) won 28 per cent of the U.K. vote, and 23 of 73 seats.

Over­all the Euroscep­tics stayed home, while those who want change vot­ed for small par­ties of the left or right. The excep­tion was Italy, which gave a healthy 35 per cent of the vote to the left of cen­tre gov­ern­ing par­ty, 15 per­cent­age points more than in the last gen­er­al Ital­ian elec­tion.

The new 751-seat Euro­pean Par­lia­ment will be dom­i­nat­ed by Chris­t­ian Democ­rats (214 seats), and Social Democ­rats (191 seats). Of the oth­ers, Lib­er­al Democ­rats hold 64 seats, Greens 52, Con­ser­v­a­tives 46, and Europe Left 45. The nation­al sov­er­eign­ty group totals 36. Of the var­i­ous remain­ing par­ties, those unable to group (it takes 25 elect­ed mem­bers to form a par­lia­men­tary group) include the French Nation­al Front, which the British UKIP refuse to sit with because of FN anti-semi­tism, and the Greek Neo-Fas­cists, which the FN reject as unsuit­able seat­mates.

George Orwell wrote that the real schism in polit­i­cal regimes was between author­i­tar­i­an and lib­er­tar­i­an. Undoubt­ed­ly, the impo­si­tion of neolib­er­al eco­nom­ics by the EU treaty has repressed polit­i­cal expres­sion, replac­ing the give and take of pub­lic nego­ti­a­tions with a reg­u­la­to­ry process dom­i­nat­ed by cor­po­rate lob­bies, and car­ried on in the spir­it of pro­tect­ing investors.

Euro­pean nation­al lead­ers are reluc­tant to give up pow­er to a cen­tral author­i­ty, thus a fed­er­al Europe is unlike­ly to emerge from nor­mal Euro­pean pol­i­tics: peri­od­ic nation­al sum­mits.

Every time Europe has got­ten to the stage where it was ready to go beyond being an eco­nom­ic space, rather than pro­ceed with polit­i­cal inte­gra­tion, sum­mit lead­ers have vot­ed to take on new mem­bers.

It is hard to prac­tice open pol­i­tics in a space with­out an iden­ti­fi­able polit­i­cal face, or elect­ed exec­u­tive, let alone an engaged cit­i­zen­ry. So long as social demo­c­ra­t­ic mar­ket eco­nom­ics remain indis­tin­guish­able from neolib­er­al­ism expect Euro­pean dis­con­tent to con­tin­ue.

...

Despite dis­en­chant­ment, there is no rea­son to think social­ist Europe has said its last word on Euro­pean inte­gra­tion, or that the utopia imag­ined by the poet Hugo no longer inspires Euro­peans.

Part of what’s going to make the EU’s iden­ti­ty cri­sis rather fas­ci­nat­ing to watch going for­ward is that a “Euro­pean iden­ti­ty” root­ed in the shared sense of “Euro­pean val­ues” isn’t real­ly going be viable as long as those val­ues have to anchored to neolib­er­al (or mod­i­fied pan-nation­al Ordolib­er­al­sim) because these eco­nom­ic sys­tems inher­ent­ly put mon­ey before peo­ple. So the EU, as a whole, just might have placed itself in the kind of sit­u­a­tion where some­thing new is going to be required. Sure, at present the EU has some alarm­ing sim­i­lar­i­ties to the Clause­witz­ian vision for an unde­mo­c­ra­t­ic pan-Euro­pean eco­nom­ic union, but it does­n’t have to be like that for­ev­er.
And it’s also pos­si­ble that the EU can’t be a func­tion­al neolib­er­al, unde­mo­c­ra­t­ic Clause­witz­ian dystopia sim­ply because the neolib­er­al eco­nom­ics just won’t work with­out per­pet­u­al­ly send­ing mem­bers states into crises. What if the eco­nom­ic “har­mo­niza­tion” that Angela Merkel has laid out in her vision for the future of the EU isn’t actu­al­ly pos­si­ble even if the whole con­ti­nent embraces her vision? Peo­ple are quick to point out that com­mu­nism just did­n’t work. How about an increas­ing­ly neolib­er­al EU? Is that work­ing? Can it work in the long run under even ide­al con­di­tions giv­en all the junk eco­nom­ics inher­ent in the vision?

It’s dif­fi­cult to see the far right offer­ing any solu­tions that don’t involve either a com­plete breakup of the EU or an embrace of pan-Euro­pean neolib­er­al­ism as a trade off for far right eth­nic iden­ti­ty poli­cies in mem­ber states (the night­mare sce­nario). The far right’s “us vs them” men­tal­i­ty elim­i­nates a real Euro­pean iden­ti­ty that would be nec­es­sary for the cre­ation of a real inte­grat­ed Europe. And the neolib­er­al cur­rent regime is just a non-stop dis­as­ter. So the ques­tion of what would actu­al­ly work is going to be a ques­tion increas­ing­ly asked by EU cit­i­zens in gen­er­al and it could lead to some very use­ful answers not just for Europe but the rest of the world too.

Here’s an arti­cle that high­lights some of the aspects about the Scot­tish sep­a­ratist move­ment that fun­da­men­tal­ly dif­fer from the oth­er sep­a­ratist move­ments we seen pop­ping up around the EU: where­as the Scots seem to be dri­ven, in part, on a desire to expand their wel­fare state and remain open to immi­grants from around the EU, many of the oth­er sep­a­ratist sen­ti­ments grow­ing across the EU appear to be man­i­fest­ing in the wealth­i­est regions that want to either close off immi­gra­tion and/or stop sub­si­diz­ing their poor­er neigh­bors:

Europe chang­ing shape whichev­er way Scot­land goes

By Paul Tay­lor

PARIS Sun Sep 14, 2014 6:03am EDT

(Reuters) — What­ev­er the out­come of this week’s Scot­tish ref­er­en­dum on inde­pen­dence, the shape of Europe is chang­ing as pow­er ebbs away from old nation states, spark­ing a back­lash in some places.

If Scots vote “Yes” to split­ting from Eng­land after 307 years of union, it will cause a polit­i­cal earth­quake and whet appetites for self-rule from Cat­alo­nia to Flan­ders.

If they vote “No”, the British gov­ern­ment has promised to decen­tral­ize more pow­ers to Edin­burgh, with like­ly knock-on effects in Wales and North­ern Ire­land.

Either way, the prece­dent of a plebiscite on self-deter­mi­na­tion will rever­ber­ate around the con­ti­nent.

The Span­ish gov­ern­ment may find it hard to with­stand pub­lic pres­sure in Cat­alo­nia to allow that pros­per­ous north­east­ern region of 7.4 mil­lion peo­ple — big­ger than a dozen EU states — a vote on sov­er­eign­ty.

Hun­dreds of thou­sands of Cata­lans packed the streets of Barcelona last week to demand the right to choose. What the Cata­lans do is bound to influ­ence Spain’s Basques, who already have broad­er auton­o­my.

...

Glob­al­iza­tion and Euro­pean Union inte­gra­tion are part­ly respon­si­ble for unleash­ing a strug­gle between cen­trifu­gal and cen­tripetal forces that is far from sta­bi­liz­ing.

States that fought each oth­er for cen­turies now share a cur­ren­cy, an area of pass­port-free trav­el, a sin­gle mar­ket with free move­ment of cit­i­zens, cap­i­tal, goods and ser­vices, and a raft of joint­ly adopt­ed norms and stan­dards.

Nation­al­ists find that hard to swal­low, as the big vote for anti-EU par­ties in Britain, France, Aus­tria and the Nether­lands in this year’s Euro­pean Par­lia­ment elec­tions showed.

A for­mer impe­r­i­al pow­er like Britain which boast­ed in patri­ot­ic song of rul­ing the waves now has to nego­ti­ate its fish­ing catch in late-night Brus­sels hag­gling.

Euro­pean coun­tries have become what for­mer British and EU diplo­mat Robert Coop­er calls “post-mod­ern states”, freely pool­ing part of their sov­er­eign­ty.

“The Euro­pean Union is a high­ly devel­oped sys­tem for mutu­al inter­fer­ence in each oth­ers’ domes­tic affairs, right down to beer and sausages,” Coop­er wrote in his 2003 book The Break­ing of Nations.

That has made nation­al bor­ders less impor­tant and raised demands from cit­i­zens for more demo­c­ra­t­ic con­trol at a sub-nation­al lev­el.

The EU has been the cat­a­lyst for many of these changes but not always the solu­tion.

A Euro­pean Com­mit­tee of the Regions cre­at­ed in the 1990s to give local and region­al elect­ed offi­cials a say in Brus­sels mere­ly added anoth­er expen­sive talk­ing-shop to the bloc’s insti­tu­tions, with­out any real pow­er.

“The Com­mit­tee of the Regions is a total fail­ure. If you are not a state, you can­not get your issues onto the EU’s agen­da,” said a for­mer rep­re­sen­ta­tive of one of Europe’s most autonomous regions, who spoke on con­di­tion of anonymi­ty.

The big Euro­pean regions such as Ger­many’s Laen­der main­tain offices the size of embassies in Brus­sels to pro­mote their inter­ests, secure EU invest­ment funds and lob­by on leg­is­la­tion.

The Scot­tish and Cata­lan inde­pen­dence move­ments see Euro­pean uni­ty as a way of escap­ing the yoke of nation­al gov­ern­ments. They want their own seat at the EU table, cut­ting out the mid­dle-men in Lon­don and Madrid.

The eco­nom­ic cri­sis that began in 2008 has accel­er­at­ed the twin forces of cen­tral­iza­tion and region­al­ism in Europe. It has sharp­ened resource con­flicts between rich and poor­er regions such as Dutch-speak­ing Flan­ders and French-speak­ing Wal­lo­nia in Bel­gium, but also in Italy and Ger­many.

Wealthy Bavaria and Hesse no longer want to sub­si­dize poor­er north and east Ger­man fed­er­al states and have chal­lenged the coun­try’s fis­cal equal­iza­tion sys­tem in court. Pros­per­ous north­ern Italy, sick of pay­ing for the south­ern Mez­zo­giorno, has imposed a sys­tem of fis­cal fed­er­al­ism to lim­it the bur­den.

Vot­ers in Scot­land and Cat­alo­nia have turned to sep­a­ratists in greater num­bers part­ly in protest against aus­ter­i­ty poli­cies imposed by nation­al polit­i­cal elites depict­ed as out of touch with ordi­nary cit­i­zens.

Scot­tish nation­al­ist leader Alex Salmond is a mas­ter at tap­ping resent­ment against the Lon­don estab­lish­ment. He joked last week that if he had known the lead­ers of all three British polit­i­cal par­ties were com­ing to Scot­land to cam­paign for a “No” vote, he would have paid their bus fare.

The cri­sis has also fueled nation­al­ist forces such as the UK Inde­pen­dence Par­ty, France’s Nation­al Front and the Aus­tri­an and Dutch Free­dom par­ties that want to with­draw from the EU and re-erect nation­al bor­ders against immi­grants and imports.

“It is unlike­ly that the Euro­pean Union, as it is at the start of the 21st cen­tu­ry, has reached its final rest­ing place,” Coop­er wrote a decade ago. “For the long run the most impor­tant ques­tion is whether inte­gra­tion can remain a large­ly apo­lit­i­cal process.”

A fur­ther frag­men­ta­tion of nation states would increase the strain on the EU’s deci­sion-mak­ing sys­tem, risk­ing scle­ro­sis.

It is hard enough to get 28 mem­ber states to rat­i­fy treaties unan­i­mous­ly, some by ref­er­en­dum. With six more states in the West­ern Balka­ns seek­ing to join and the pos­si­bil­i­ty of exist­ing mem­bers break­ing up, some experts fear the EU could become unman­age­able.

Nico­las Lev­rat, an inter­na­tion­al law spe­cial­ist at the Insti­tute of Glob­al Stud­ies at Gene­va Uni­ver­si­ty, sees a pro­lif­er­a­tion of micro-states dri­ving the bloc to reform its gov­er­nance.

“This mul­ti­pli­ca­tion of new states will force the EU to change the way states are rep­re­sent­ed in the EU,” he said. “What start­ed for six (coun­tries) and more or less works for 28 will def­i­nite­ly not work for 100.”

This mul­ti­pli­ca­tion of new states will force the EU to change the way states are rep­re­sent­ed in the EU...What start­ed for six (coun­tries) and more or less works for 28 will def­i­nite­ly not work for 100.” Yep, although we don’t have to wait for more mem­ber states before the big shake up in how the EU func­tions takes place. Shak­ing up the EU is the sta­tus quo:

New Europe online
A break with the past
by Dan Alexe
13.09.2014 — 09:36

After the ini­tial sur­prise, the Junck­er Com­mis­sion can now be judged for both its bold­ness and its weak­ness­es. Boost­ing the Euro­zone econ­o­my was obvi­ous­ly the main goal behind its phi­los­o­phy, and Junck­er passed his first major test by pre­sent­ing the new com­po­si­tion in an implaca­ble, com­pact and ele­gant way. Upon announc­ing the dis­tri­b­u­tion of jobs and port­fo­lios, after a shrewd homage to Bar­roso, that was rather an exer­cise in diplo­ma­cy than a real trib­ute, it became clear that Junck­er’s Com­mis­sion will put a defin­i­tive end to Barroso’s amor­phous bureau­crat­ic machin­ery, which was shak­en, refur­bished and restruc­tured.

The new Com­mis­sion total­ly cor­re­sponds to Juncker’s own promis­es in front of the EU Par­lia­ment. It includes sev­en “super-Com­mis­sion­ers” in charge of what was ini­tial­ly called “clus­ters”, fields of com­pe­tence regroup­ing var­i­ous port­fo­lios that cov­er sim­i­lar fields or pri­or­i­ties.

The new Col­lege has thus sev­en Vice Pres­i­dents, six in addi­tion to the High Rep­re­sen­ta­tive for For­eign Affairs (Fed­er­i­ca Mogheri­ni), each lead­ing a project team, or what was ear­li­er called a “clus­ter”. Exam­ples include ‘Jobs, Growth, Invest­ment and Com­pet­i­tive­ness’, ‘Dig­i­tal Sin­gle Mar­ket’ or ‘Ener­gy Union’.

For ensur­ing the nec­es­sary author­i­ty, the “super-Com­mis­sion­ers” are for­mer heads of gov­ern­ments or for­mer com­mis­sion­ers (such as Kristali­na Georgie­va).

One of the Vice Pres­i­dents, the Dutch Frans Tim­mer­mans, who is “First Vice Pres­i­dent for bet­ter reg­u­la­tion, inter-insti­tu­tion­al rela­tions, rule of law and char­ter of fun­da­men­tal rights,” will have prac­ti­cal­ly absolute pow­ers, as much as Junck­er him­self. Tim­mer­mans will be able to stop any ini­tia­tive in the Com­mis­sion and will have direct access to all DGs and to the human resources of the Gen­er­al Sec­re­tari­at. He will actu­al­ly be Juncker’s alter ego. As Junck­er him­self put it in the press con­fer­ence that fol­lowed the pre­sen­ta­tion of the new col­lege, the two of them will act as duumvirs, the com­bined pres­i­den­cy of two con­suls with equal pow­ers in Ancient Rome.

Under them, six oth­er Vice Pres­i­dents with large pow­ers over low­er rank Com­mis­sion­ers (five, plus the Ital­ian Mogheri­ni, who, as High Rep­re­sen­ta­tive, is auto­mat­i­cal­ly vice-pres­i­dent).

Led by Junck­er from Lux­em­bourg and Tim­mer­mans from the Nether­lands, with extend­ed pow­ers bestowed upon the Bul­gar­i­an Kristali­na Georgie­va and the for­mer prime min­is­ters of Fin­land, Esto­nia, Latvia and Slove­nia (plus the Ital­ian Mogheri­ni), the new Com­mis­sion rep­re­sents a vic­to­ry for the small­er states, many of them East­ern Euro­pean, and for Angela Merkel’s aus­ter­i­ty pol­i­cy.

There is no vice-pres­i­dent from either France, Spain or the UK. On the oth­er hand, a coun­try like Poland got, with Don­ald Tusk, the pres­i­den­cy of the Coun­cil, but has also obtained, with Elz­bi­eta Bienkows­ka, the Inter­nal Mar­ket and Indus­try port­fo­lio. France, on the oth­er hand, which fought hard to obtain the Eco­nom­ic and Finan­cial Affairs for Pierre Moscovi­ci, will have its Com­mis­sion­er kept on a hier­ar­chi­cal and admin­is­tra­tive leash, under per­ma­nent scruti­ny from the duo Katainen-Dom­brovskis, approved by Merkel.

The new Com­mis­sion rep­re­sents thus a vic­to­ry for the small­er states and for Angela Merkel’s aus­ter­i­ty pol­i­cy. It is obvi­ous that con­flicts could arise from the present struc­ture of the Com­mis­sion, giv­en the implic­it hier­ar­chy imposed by the exis­tence of sev­en “ uper-com­mis­sion­ers” sup­posed to rein in the “nor­mal” Com­mis­sion­ers. Thus, the French Moscovi­ci would be right in feel­ing that the ruth­less Finn Katainen will be watch­ing him. In his posi­tion as Econ­o­my com­mis­sion­er, Moscovi­ci will be judge and accused at the same time, espe­cial­ly since his coun­try, France, announced imme­di­ate­ly after obtain­ing for him the job of Econ­o­my com­mis­sion­er that it won’t man­age to reduce its deficit under the 3% thresh­old next year, in 2015.

Finland’s ex-pre­mier Katainen is the one who will super­vise Moscovici’s activ­i­ty. He was attacked, in March this year, by the Nobel Prize win­ner Paul Krug­man, for hav­ing advo­cat­ed “grow­ster­i­ty,” the idea that growth can come from aus­ter­i­ty mea­sures. Katainen is also rumoured to have been the one to sug­gest that Greece could pawn the Acrop­o­lis or the island of Cor­fu.

...

There are oth­er attri­bu­tions of port­fo­lios that have raised eye­brows: the Hun­gar­i­an Navrac­sics has thus been giv­en the Cit­i­zen­ship and Edu­ca­tion port­fo­lio, while he was Jus­tice min­is­ter under the very nation­al­ist Hun­gar­i­an pre­mier Vik­tor Orban. Also, the Span­ish new com­mis­sion­er Cañete is crit­i­cised for hav­ing held sex­ist remarks, and also for owing shares in an oil com­pa­ny, while being offered the com­bined Ener­gy and Cli­mate port­fo­lio… which is a con­tra­dic­tion in itself, while the envi­ron­ment has been clus­tered with fish­eries.

There is also no Human Rights port­fo­lio, in spite of what has been antic­i­pat­ed, but there is one for Migra­tion and Inter­nal Affairs cumu­lat­ed. Noth­ing was fore­seen in this Com­mis­sion for deal­ing with the Roma issue, and the Mon­e­tary Affairs have also dis­ap­peared (“this is for the Euro­pean Cen­tral Bank to han­dle”, said Junck­er).

Anoth­er nov­el­ty is that the Ger­man lan­guage is now solid­ly reen­ter­ing the insti­tu­tions, includ­ing in the press room. Ger­man comes nat­u­ral­ly to Junck­er, thanks to his native Lëtze­buergesch; Mar­tin Sel­mayr, head of Juncker’s team, is a Ger­man backed by Merkel; Ger­mans like Mar­tin Schulz, Man­fred Weber and Elmar Brok (lead­ers of the EU Par­lia­ment, of its EPP fac­tion and of its Com­mit­tee on For­eign Affairs) close­ly con­trol the Par­lia­ment; the new Coun­cil pres­i­dent, the Pole Don­ald Tusk, can man­age Ger­man, while his Eng­lish is shaky and he has no French; and Ger­man is the lan­guage in which Angela Merkel talks with Putin. The decline of French is thus abrupt, although Junck­er him­self favours French over Eng­lish, and French is a lan­guage that both Tim­mer­mans and Mogheri­ni prac­tice well.

The oth­er­wise mas­sive Ger­man influ­ence might also explain what could be a dis­ap­point­ing port­fo­lio for the Ger­man Gunter Oet­tinger, who was in charge of the ener­gy in the pre­vi­ous com­mis­sion and who is now giv­en the “Dig­i­tal Econ­o­my and Soci­ety.”.

After a vote in the Par­lia­ment in Octo­ber, the Euro­pean Com­mis­sion will take office on 1 Novem­ber 2014.

Sur­prise! Now you have super-min­is­ters! That just how things work in the ever evolv­ing EU. As the arti­cle indi­cat­ed, the rad­i­cal over­haul­ing of the struc­ture of the Euro­pean Com­mis­sion is seen as a vic­tor for the small­er states (since they got a large num­ber of super-min­is­ters) but also a vic­to­ry for Angela Merkel and her ques­tion for end­less aus­ter­i­ty. So when the wealth­i­est regions secede and stop sub­si­diz­ing their neigh­bors, the rest of the nation can col­lapse into a new round of aus­ter­i­ty while both sides join the ever grow­ing EU in a giant super-state increas­ing­ly run by super-min­is­ters man­dat­ed to man­age nation­al poli­cies on aus­ter­i­ty-autopi­lot in a par­lia­ment increas­ing­ly dom­i­nat­ed by Ger­many. Freeeeee­dom!!!

It’ll be inter­est­ing to see if any of the oth­er out­go­ing EU Com­mis­sion­ers are will­ing to fol­low this guy’s lead:

Irish Exam­in­er
Aus­ter­i­ty pol­i­cy threat­ens euro­zone future, says EC jobs chief

Fri­day Octo­ber 10, 2014

By Ann Cahill
Euro­pean Cor­re­spon­dent

The EU’s aus­ter­i­ty pol­i­cy has failed, push­ing the num­bers of poor to record lev­els, and now threat­ens the future of the euro­zone, accord­ing to out­go­ing Employ­ment Com­mis­sion­er Lás­zló Andor.

An econ­o­mist, Mr Andor is the first Com­mis­sion­er to speak so clear­ly against the con­tin­u­ing Ger­man inspired push for aus­ter­i­ty.

He warned that reduc­ing pover­ty “must per­me­ate the meet­ing rooms of EU finance min­is­ters... to avoid the EU becom­ing a pover­ty-gen­er­at­ing, low-skills, low pro­duc­tiv­i­ty, and low-wage econ­o­my”.

Pover­ty should not be con­sid­ered to be the accept­able col­lat­er­al dam­age from fis­cal adjust­ment he said and warned against indis­crim­i­nate­ly adopt­ing all poli­cies seen as cre­at­ing growth.

A quar­ter of Europe’s peo­ple, 124m, are at risk of pover­ty — the high­est fig­ure since the foun­da­tion of the EU. It had increased by 8m in the past four years, Mr Andor told a con­fer­ence on ‘lessons from the cri­sis’.

“The cri­sis and the inter­nal deval­u­a­tion applied in many mem­ber states with­out pri­or social impact assess­ments pro­voked a deep and long eco­nom­ic con­trac­tion that led to the clos­ing of fac­to­ries, the reduc­tion of wages and wel­fare pro­grammes as a way of adjust­ing to the falling nation­al income,” he said.

How­ev­er, jobs and growth were not enough to reduce pover­ty — more than 116m were at risk of pover­ty in 2008 when growth was strong. And hav­ing a job did not pre­vent pover­ty either.

The num­ber of work­ing poor has been grow­ing, as wages have stag­nat­ed or fall­en in many parts of Europe, despite increased prof­its. When wages are not linked to an increase in pro­duc­tiv­i­ty, inequal­i­ty grows, Mr Andor said.

The grow­ing dif­fer­ences between the bet­ter off and less well off coun­tries threat­ens the eco­nom­ic per­for­mance of the euro­zone, “because no union can func­tion if its mem­bers drift apart”.

He also said that while EU mem­ber states have said they will cut the num­bers of poor by 15% with­in six years, the cur­rent poli­cies will not achieve this.

...

He also took issue with the idea that overblown wel­fare sys­tems added to the cri­sis — “it orig­i­nat­ed in dereg­u­lat­ed finan­cial mar­kets and bankers run­ning amok” — and with­out social secu­ri­ty near­ly half of Euro­peans would be liv­ing in pover­ty.

Well that was uplift­ing. So it’ll also be inter­est­ing to see what Mr Andor’s replace­ment, Mar­i­anne Thyssen, has to say about these top­ics. Although, thanks to the sud­den new struc­ture of the Euro­pean Com­mis­sion that includes sev­en new “Vice Pres­i­dents” with “over­sight” author­i­ty over the Com­mis­sions, Thyssen’s views on these mat­ters aren’t real­ly all that inter­est­ing:

EurActive.com
Junck­er gives key port­fo­lios to Ger­man allies, aus­ter­i­ty back­ers
Pub­lished: 10/09/2014 — 17:29

Jean-Claude Junck­er, the incom­ing head of the Euro­pean Com­mis­sion, unveiled an EU exec­u­tive team today (10 Sep­tem­ber) that hand­ed key eco­nom­ic respon­si­bil­i­ties to French and British com­mis­sion­ers, but over­seen by oth­ers, in a new-look hier­ar­chy.

Appoint­ing Britain’s Jonathan Hill to a brief includ­ing banks and the inte­gra­tion of EU cap­i­tal mar­kets was wide­ly seen as a ges­ture to Prime Min­is­ter David Cameron, a vocal crit­ic of Junck­er and his sup­port for a pow­er­ful Brus­sels that Cameron says could push the UK to quit the Euro­pean Union.

Pierre Moscovi­ci, the nom­i­nee of French Pres­i­dent François Hol­lande, and a pro­po­nent of gov­ern­ment spend­ing to boost euro zone growth, will run eco­nom­ic and mon­e­tary affairs.

But in a sign of the bal­ance struck between the com­pet­ing inter­ests of the 28 EU mem­ber states, both the econ­o­my and finance port­fo­lios will be over­seen by two vice-pres­i­dents on Junck­er’s Com­mis­sion.

For­mer prime min­is­ters Jyr­ki Katainen of Fin­land and Vald­is Dom­brovskis of Latvia will be respec­tive vice-pres­i­dents, with over­sight of Jobs, Growth, Invest­ment and Com­pet­i­tive­ness and The Euro and Social Dia­logue.

Both north­ern euro zone coun­tries are allies of Angela Merkel, and back­ers of aus­ter­i­ty.

Ger­many, as the eco­nom­ic pow­er­house of the Union, will undoubt­ed­ly have a major say in its affairs. Berlin’s rep­re­sen­ta­tive, the out­go­ing EU ener­gy com­mis­sion­er Gün­ther Oet­tinger, will be respon­si­ble for the Dig­i­tal Econ­o­my port­fo­lio, notably the tele­coms indus­try.

...

So who’s going to be the new “vice pres­i­dent” over­see­ing the new Employ­ment Com­mis­sion­er? The would be this guy:

EurActive.com
MEPs roast Katainen over sup­port for aus­ter­i­ty
Pub­lished: 07/10/2014 — 13:50 | Updat­ed: 08/10/2014 — 11:04

After cham­pi­oning a €300 bil­lion invest­ment pack­age to boost growth in the EU at his con­fir­ma­tion hear­ing today (7 Octo­ber), Jyr­ki Katainen was attacked by MEPs for Finland’s tough stance on aus­ter­i­ty and euro­zone bailouts dur­ing the finan­cial cri­sis.

Katainen, for­mer Finnish prime min­is­ter and finance min­is­ter, is Jean-Claude Juncker’s choice for Vice-Pres­i­dent for Jobs, Growth, Invest­ment and Com­pet­i­tive­ness.

If Juncker’s new team is approved by MEPs, he will coor­di­nate Com­mis­sion­ers over­see­ing, among oth­ers, finan­cial ser­vices, eco­nom­ic and mon­e­tary affairs, indus­try and entre­pre­neur­ship.

Left-wing MEPs said his new focus on growth was incom­pat­i­ble with his sup­port for aus­ter­i­ty and cuts. They also demand­ed details of the invest­ment pack­age, which was promised by Junck­er.

Katainen said he could not give too much detail about the invest­ment pack­age because the new Com­mis­sion did not yet exist and he did not have time to meet the oth­er Com­mis­sion­ers.

And he blamed Finland’s insis­tence on strin­gent bailout terms for Greece €110 bil­lion res­cue pack­age and those for oth­er cri­sis-hit mem­ber states such as Spain, Por­tu­gal and Ire­land, on his Social Demo­c­rat coali­tion part­ners and pub­lic opin­ion.

Por­tuguese Social­ist Elisa Fer­reira said, “You assumed a moral­is­tic stance that sin­ners must atone for their sins. Greece had to bor­row to meet your demands.”

You pro­posed aus­ter­i­ty, yet now your pro­pose stim­u­lus, she said before ask­ing to applause, “Why? Where is the mon­ey com­ing from?”

Katainen said that aus­ter­i­ty and growth were not mutu­al­ly exclu­sive, and that con­fi­dence was a pre-con­di­tion for invest­ment and growth.

“We have to reduce debt to increase growth. Gov­ern­ments were between a rock and hard place when defend­ing their cred­i­bil­i­ty and fight­ing to get their con­fi­dence back,” he said.

Now there is con­fi­dence, the time is right to invest, he said. “It’s not black and white between whether we need respon­si­ble finan­cial pol­i­cy or growth – we need both,” he added.
...

Note that when Katainen says “con­fi­dence was a pre-con­di­tion for invest­ment and growth,” and “Now there is con­fi­dence, the time is right to invest”, he’s basi­call back­ing the “con­fi­dence fairy” school of eco­nom­ics: when the econ­o­my is down, you must slash pub­lic spend­ing and/or impose low­er wages and oth­er forms of aus­ter­i­ty on the mass­es in order to get busi­ness con­fi­dence up. Once enough aus­ter­i­ty has been imposed, busi­ness­es will be so tempt­ed by all that new cheap labor that they won’t be able to resist the temp­ta­tion to invest and start grow­ing the econ­o­my again, although it will have to be export-based growth since the inter­nal econ­o­my was just evis­cer­at­ed in order to gain all that “con­fi­dence”. It’s not a very good the­o­ry.

Con­tin­u­ing...

...
Respond­ing to fur­ther ques­tions from Por­tuguese and Greek MEPs, Katainen said he had sup­port­ed the hun­dred bil­lion euro bailouts of those coun­tries.

He said, “I was in favour of both pack­ages, unlike some peo­ple in my coun­try. It was high­ly unpop­u­lar […] peo­ple were very dis­ap­point­ed in Greece, in Por­tu­gal, in Spain, and in Ire­land.”

“Both as prime min­is­ter and finan­cial min­is­ter, I made sure my coun­try par­tic­i­pat­ed in those pack­ages.”

“Let’s stop remem­ber­ing what has hap­pened in the past and look to the future,” he added.

But many MEPs were not in a mood to for­give or for­get, denounc­ing his sup­port for a “failed” aus­ter­i­ty pol­i­cy.

“Cut­ting wages did not restore com­pet­i­tive­ness,” Eva Kaili, a Greek Social­ist said.

300 bil­lion pack­age

Katainen said, “We need an unprece­dent­ed mobil­i­sa­tion of the pub­lic and pri­vate sec­tors, the Com­mis­sion, the Euro­pean Invest­ment Bank and mem­ber states to pull togeth­er the €300 bil­lion euro pack­age.

“We need a fresh impe­tus for jobs, growth and invest­ment, with­out cre­at­ing new debt, and for that we will need to mobilise both pub­lic and pri­vate mon­ey in a new way,” he added.
...

Also note that Katainen isn’t jok­ing when he sug­gests a debt-free stim­u­lus. He’s cur­rent­ly rec­om­mend­ing that France and Italy is that the should engage in stim­u­lus spend­ing with­out increas­ing pub­lic spend­ing.

Con­tin­u­ing...

...
Katainen said that many of the details were yet to be ironed out and that, as part of the new Com­mis­sion struc­ture, he would met with the Com­mis­sion­er he is lead­ing to dis­cuss dif­fer­ent pri­or­i­ties and plans.

He also said that some of the finan­cial instru­ments being looked at were “mar­ket-sen­si­tive” and so could not be dis­cussed at a pub­lic hear­ing at this stage.

But he did call for public/private part­ner­ships, increased lend­ing capac­i­ty for the Euro­pean Invest­ment Bank and oth­er EU lend­ing bod­ies, more “future invest­ment” by EU nations in areas such as infra­struc­ture and the com­ple­tion of the sin­gle mar­ket, includ­ing in dig­i­tal.

By tak­ing these mea­sures, and by intel­li­gent­ly ‘lever­ag­ing the EU bud­get – tar­get­ing pub­lic mon­ey at worth­while projects not attrac­tive pri­vate mon­ey – the EU could regain com­pet­i­tive­ness and tack­le its high unem­ploy­ment.”

Udo Bull­man, a Ger­man Social­ist, said the Euro­pean Par­lia­ment would back Katainen’s pack­age if he made a com­mit­ment to come back before the com­mit­tee before the end of the year. That com­mit­ment was not forth­com­ing.

...

Well, that’s one way to stim­u­late busi­ness­es: first trash econ­o­my, and then sell off increas­ing amounts of the pub­lic sec­tor in place of a real stim­u­lus pro­gram. And, best of all, it’s debt-free! In the­o­ry! Let the con­fi­dence flow.

A peak into the minds of the EU’s sadomon­e­tarists: “The readi­ness to make changes is high­er if the pop­u­la­tion feels some pressure,...As soon as you have some suc­cess, the risk of com­pla­cen­cy is much high­er.”
Yes, the only way for a nation to achieve suc­cess is for an all-stick-no-car­rot unyield­ing beat down. So says Ger­many’s finance min­is­ter:

The Wall Street Jour­nal

Schaeu­ble, Sum­mers Debate the Psy­chol­o­gy of Eco­nom­ic Reform

By Paul Han­non
5:52 pm ET
Oct 9, 2014

WASHINGTON–Do Euro­peans need to have their backs to the wall before they will accept change, or would a peri­od of growth and job cre­ation make them more will­ing to do so?

That is one of the ques­tions at the heart of the debate over what needs to be done to push the euro­zone out of its length­en­ing peri­od of very low infla­tion and ane­mic growth. And it got an air­ing Thurs­day dur­ing a pan­el here at the annu­al meet­ings of the Inter­na­tion­al Mon­e­tary Fund.

On one side of the debate sat Ger­man Finance Min­is­ter Wolf­gang Schaeu­ble on Thurs­day, a defend­er of the eurozone’s cur­rent strat­e­gy, which is to con­tin­ue to cut bud­get deficits while pur­su­ing struc­tur­al changes to spur growth, such as alter­ing labor-mar­ket laws to make it eas­i­er to hire and fire, and elim­i­nat­ing dam­ag­ing dis­tinc­tions between old­er work­ers with job secu­ri­ty and younger peo­ple with­out jobs, or if they have them, very lit­tle secu­ri­ty.

As the euro­zone econ­o­my has weak­ened in recent months, that strat­e­gy has been ques­tioned with­in and with­out the cur­ren­cy area. But in a pan­el dis­cus­sion on the cur­ren­cy area’s predica­ment, Mr. Schaeu­ble was unmoved.

“Euro­pean gov­ern­ments have to stick to struc­tur­al reforms and the bud­get rules,” he said.

Speak­ing on the same pan­el, for­mer U.S. Trea­sury Sec­re­tary Lawrence Sum­mers dis­agreed.

“Vir­tu­al­ly every year, growth is weak­er than expect­ed. You need a dis­con­ti­nu­ity in strat­e­gy,” he said. “We are deal­ing with some­thing that approx­i­mates the Depres­sion.”

Mr. Sum­mers argues that euro­zone gov­ern­ments should loosen their purse strings and start spend­ing again, par­tic­u­lar­ly on infra­struc­ture projects.

But the dis­agree­ment over pol­i­cy is in part based on dif­fer­ent views of psy­chol­o­gy. In Mr. Schaeuble’s view, the euro­zone nations are unlike­ly to agree to the fun­da­men­tal changes in the way labor and oth­er mar­kets oper­ate unless they are expe­ri­enc­ing the neg­a­tive effects of an unre­formed econ­o­my.

“The readi­ness to make changes is high­er if the pop­u­la­tion feels some pres­sure,” he said. “As soon as you have some suc­cess, the risk of com­pla­cen­cy is much high­er.”

For Mr. Sum­mers, peo­ple under pres­sure are unlike­ly to embrace change.

“Strength­en­ing demand and avoid­ing defla­tion makes struc­tur­al reforms eas­i­er,” he said. “I know of no case in which defla­tion has been a pow­er­ful spur to struc­tur­al reform.”

...

As Mr. Schaeu­ble puts it, “the euro­zone nations are unlike­ly to agree to the fun­da­men­tal changes in the way labor and oth­er mar­kets oper­ate unless they are expe­ri­enc­ing the neg­a­tive effects of an unre­formed econ­o­my,” so if the pub­lic isn’t agree­ing to the reforms the euro-elites desire those elites just need to go ahead and trash the econ­o­my in order to inflict the required amount of pain to gain agree­ment for said “reforms”. Unre­lent­ing pres­sure. That’s the kind of col­lec­tive psy­chol­o­gy that Ger­many finance min­istry thinks is required if the fun­da­men­tal changes the aus­te­ri­ans desire to see where the rich get rich­er and every­one else gets poor­er because that’s how to max­i­mize “com­pet­i­tive­ness”. Unre­lent­ing pain and pres­sure as the EU’s new M.O. .

So, if you think the Euro­pean pub­lic can’t sour on the EU much more than is already the case, keep that sen­ti­ment in mind. Also keep in mind that the upcom­ing Novem­ber 30th EU Bud­get Judg­ment Day, when mem­ber states make their case to the pro-aus­ter­i­ty Euro­pean Com­mis­sion that they’ve cut social pro­grams enough, is going to be part of the EU expe­ri­ence year after year. For­ev­er. That should do won­ders for the EU’s col­lec­tive will­ing­ness to “reform”:

Bloomberg
EU Bud­get Judg­ments Due as Rifts Widen Among Gov­ern­ments
By Rebec­ca Christie and Ian Wishart Nov 24, 2014 2:04 AM CT

Italy, France and Ger­many will face off over how to rebuild euro-area growth when the Euro­pean Com­mis­sion pass­es judg­ment this week on their draft bud­gets.

Ger­many may come under renewed pres­sure to switch from sav­ings to invest­ment, while France and Italy will again be con­front­ed with the gap between their eco­nom­ic strate­gies and the cur­ren­cy bloc’s rules on fis­cal dis­ci­pline. On both ends of the debate, nations are like­ly to resist change to their own bud­get plans while call­ing on their neigh­bors to do more.

Ger­man Chan­cel­lor Angela Merkel has said that con­sol­i­dat­ing gov­ern­ment bud­gets is the only way to “mas­ter the cri­sis per­ma­nent­ly,” which lim­its the amount of avail­able lee­way. Italy coun­ters that it needs room to lim­it the pain inflict­ed by the changes with the most long-term ben­e­fits.

As a result, the bud­get rules put nations under pres­sure to either limp along under cur­rent pol­i­cy or go to bat­tle over how to ease the short-term impact on vot­ers, said Gun­tram Wolff, direc­tor of the Bruegel research group in Brus­sels.

“Some­one in Ger­many would typ­i­cal­ly say if you don’t have pres­sure on the fis­cal side, you’re nev­er going to do the reforms,” Wolff said.“Italians would say, we have our back against the wall, we can’t pass any reforms because we can’t bail out the losers of those reforms.”

Five Coun­tries

The Brus­sels-based com­mis­sion has so far post­poned hold­ing coun­tries’ feet to the fire on the euro-area bud­get rules, find­ing in Octo­ber that no nation was at risk of break­ing EU bud­get rules by a big enough mar­gin to war­rant imme­di­ate action. The move gave France and Italy more time to win approval for their draft spend­ing plans, ahead of a Nov. 30 dead­line for final opin­ions.

France and Italy, the euro area’s sec­ond- and third-largest economies, were among five coun­tries the com­mis­sion in Octo­ber asked for more infor­ma­tion about 2015 spend­ing plans. Along with Aus­tria, Mal­ta and Slove­nia, the nations have offered plans for future spend­ing cuts and oth­er eco­nom­ic mea­sures designed to keep penal­ties at bay.

Coun­tries in the euro bloc are oblig­ed to bring their deficits to with­in 3 per­cent of gross domes­tic prod­uct and reduce debt to below 60 per­cent. France and Italy want a more flex­i­ble approach to take into account growth that’s bleak­er than pre­vi­ous­ly fore­cast, which they say makes the task of meet­ing the EU’s dead­lines more dif­fi­cult.

Ten-year bond yields from France to Italy dropped today amid spec­u­la­tion the Euro­pean Cen­tral Bank will buy sov­er­eign debt to stim­u­late the euro-area econ­o­my.

Extra Time

In past years, the EU has grant­ed extra time when sought and has avoid­ed con­fronting how to pun­ish coun­tries that repeat­ed­ly don’t meet the tar­gets. France was giv­en two extra years — until 2015 — to meet the 3 per­cent goal. Lat­est fore­casts see the coun­try not achiev­ing that until 2017.

EU rules allow the com­mis­sion to impose tougher mon­i­tor­ing and even finan­cial pay­ments, if con­di­tions war­rant.

.“Any exten­sion of the dead­line by which France must cor­rect its exces­sive deficit and com­ply with the sta­bil­i­ty pact is accept­able only if Paris makes a clear and cred­i­ble com­mit­ment to reform,” EU Dig­i­tal Tech­nol­o­gy Com­mis­sion­er Guen­ther Oet­tinger, a mem­ber of Merkel’s Chris­t­ian Democ­rats, wrote in the Finan­cial Times on Nov. 21. “Yes, some steps have already been tak­en. But these have been too few and not suf­fi­cient­ly ambi­tious. More is need­ed.”
...

The beat­ings will con­tin­ue until the econ­o­my improves, regard­less of morale. Hap­py days are here again.

Behold Jean-Claude Junck­er’s “last chance” plan for the EU to drag itself out of eco­nom­ic dol­drums: get the pri­vate sec­tor to invest 300 bil­lion euros for big infra­struc­ture invest­ments, where the EU pub­lic incurs the great­est risk and assumes “first loss­es”. So the big “last chance” plan involves anoth­er round of pri­va­tiz­ing the gains and social­iz­ing the loss­es:

The Tele­graph
Jean-Claude Junck­er’s €315bn New Deal dis­missed as a sub­prime gim­mick
‘It’s unbe­liev­able. The pri­vate sec­tor will take gov­ern­ments to the clean­ers,’ said Pro­fes­sor Charles Wyplosz

By Ambrose Evans-Pritchard, Inter­na­tion­al Busi­ness Edi­tor

6:21PM GMT 25 Nov 2014

The Euro­pean Com­mis­sion has launched a €315bn “New Deal” to pull Europe out of its eco­nom­ic slump over the next three years, but will pro­vide almost no new mon­ey of its own and is rely­ing on sub­prime forms of finan­cial engi­neer­ing.

.The shop­ping list of invest­ments and infra­struc­ture projects will take months to sift through, and the stim­u­lus will not reach mean­ing­ful scale until 2016. The scheme has already run into a bliz­zard of crit­i­cism. It depends on lever­age that increas­es the head­line fig­ure by 15 times, leav­ing EU tax­pay­ers bear­ing the heav­i­est risk while pri­vate investors are shield­ed from loss­es.

Jean-Claude Junck­er, the Commision’s embat­tled new pres­i­dent, has made the plan the cen­tre­piece of his “last chance” dri­ve to restore pop­u­lar faith in the EU project, but it risks becom­ing an emblem of paral­y­sis and fail­ure instead.

“The mon­ey is chick­en feed and it won’t do any­thing to kick-start growth,” said Pro­fes­sor Charles Wyplosz, from Gene­va Uni­ver­si­ty. “It is unbe­liev­able they are doing this rather than real fis­cal expan­sion. The pri­vate sec­tor will just take gov­ern­ments to the clean­ers.

“This is real­ly an excuse to pre­tend they are they doing some­thing while the aus­ter­i­ty is still going on. It will take too long to work and there will be a big fight over the projects as every coun­try tries to get a share of the cake.”

The EU’s “Col­lege” of com­mis­sion­ers agreed to the plan on Tues­day in Stras­bourg. It will be known as the Euro­pean Fund for Strate­gic Invest­ment (EFSI). Fur­ther details will not be released until Wednes­day .but offi­cials say pri­vate­ly that the pack­age will be based on €21bn of EU mon­ey that will in the­o­ry lever almost €300bn of ven­ture cap­i­tal and pri­vate funds in a com­plex chem­istry.

These will be used to build roads, renew rail­ways, refine ener­gy grids or upgrade high-speed inter­net, if the scheme goes accord­ing to plan. It requires the assent of EU lead­ers, and leg­is­la­tion next year. Like much of the macro-eco­nom­ic stim­u­lus pro­vid­ed by the EU insti­tu­tions, it is a fond hope rather than a hard com­mit­ment.

The projects are “high­er risk” ven­tures that have been shunned by the Euro­pean Invest­ment Fund, jeal­ous of its AAA rat­ing. This places the issue of tax­pay­er risk square­ly on the table. Gov­ern­ments have already sent a list of 1,800 pos­si­ble projects to Brus­sels. These will be screened by a pan­el of inde­pen­dent experts. There will, in prin­ci­ple, be no nation­al quo­tas.

The EU funds will most­ly come from gut­ting the Commission’s research direc­torate and oth­er parts of the exist­ing EU bud­get, with €5bn in guar­an­tees from the Euro­pean Invest­ment Bank (EIB). Wern­er Hoy­er, the EIB’s chief, sought to play down what he called “exu­ber­ant” expec­ta­tions.

The EU bod­ies will suf­fer the “first loss” if any project defaults, a device all too like the struc­tured finance used in the hey­day of the pre-Lehman boom, when Dublin became a hub for “spe­cial invest­ment vehi­cles” (SIVs) that dis­guised the con­cen­tra­tion of risk. The plans entail a de fac­to sub­sidy, but of a con­tentious kind. Crit­ics call it “socialised loss, pri­vate gain”.

Charles Grant, direc­tor of the pro-EU Cen­tre for Euro­pean Reform, said Mr Juncker’s valiant efforts to do some­thing sub­stan­tive have been scup­pered by pow­er­ful oppo­nents. “It is yet anoth­er sad moment in the his­to­ry of mis­man­age­ment in Europe. The Ger­mans don’t believe in the scheme and they don’t want to pro­vide any new mon­ey for it. They sim­ply don’t get how bad things are in Europe,” he said. Britain has also opposed a full-scale spend­ing spree.

Markus Fer­ber, finance spokesman for the Ger­man Social Chris­tians (CSU), said the plan was fun­da­men­tal­ly mis­guid­ed. “The idea of a loss-lia­bil­i­ty means the EU mem­ber states are tak­ing on new debt,” he said.

France’s econ­o­my min­is­ter, Emmanuel Macron, said the scheme needs “at least €60bn to €80bn of fresh mon­ey” to gain trac­tion. Paris pro­posed use of the EU bailout fund (ESM) to raise finance for a much big­ger spend­ing blitz. This was blocked by Berlin, ever wary of eurobonds or fis­cal union by the back door.

Mario Draghi, the head of the Euro­pean Cen­tral Bank, has been plead­ing for EU fis­cal author­i­ties to launch a recov­ery pack­age, warn­ing that mon­e­tary stim­u­lus can­not do the job alone. Yet it is far from clear whether this EFSI plan will move the macro-eco­nom­ic dial.

Mr Juncker’s hands have been tied from the start. Ger­many, Britain and oth­er north­ern states have capped EU spend­ing near €140bn a year until 2020, forc­ing Brus­sels to resort to shad­ow finance.

...

In oth­er news....

Angela Merkel has a mes­sage for the EU at a recent CDU par­ty event: Berlin’s “wari­ness” of allow­ing its Euro­pean part­ners to engage in gov­ern­ment stim­u­lus spend­ing was not a case of “Ger­man per­nick­eti­ness”. No, it’s a mat­ter of EU mem­bers main­tain­ing cred­i­bil­i­ty. “If we don’t do that . . . we will squan­der the trust we have won back”. Yes, in Angela Merkel’s mind, mak­ing lunatic demands that are divorced from eco­nom­ic his­to­ry and real­i­ty is how you win back your cred­i­bil­i­ty:

The Irish Times
Merkel cheered for sting­ing crit­i­cism of coali­tion part­ner
No show for Nicholas Sarkozy at CDU event after he was per­suad­ed to stay away

Wed, Dec 10, 2014, 01:02

First pub­lished: Wed, Dec 10, 2014, 01:02

Ger­man chan­cel­lor Angela Merkel has secured her 15th straight year as head of the rul­ing Chris­t­ian Demo­c­ra­t­ic Union (CDU) with 96.7 per cent sup­port, insist­ing her par­ty is “good for Ger­many”.

...

In a 70-minute address, Dr Merkel earned cheers for attack­ing the “bank­rupt­cy” of the Social Demo­c­ra­t­ic Par­ty (SPD), her Berlin ally, for join­ing a state coali­tion in Thuringia as junior part­ner under the hard-left Linke. “How much small­er does the SPD want to make itself?” she asked.

...

In her address, Dr Merkel said her major achieve­ment in office was strik­ing a bal­ance between fis­cal restraint and social respon­si­bil­i­ty, cit­ing as proof Germany’s first bal­anced fed­er­al bud­get in four decades.

In Catholic Cologne, the Luther­an CDU leader dis­missed claims that her bal­anced bud­get – dubbed the “black zero” – was a polit­i­cal holy eucharist to be “car­ried around and adored in a mon­strance”.

Far more, she said, finance min­is­ter Wolf­gang Schäuble’s suc­cess at bal­anc­ing Berlin’s books was a far-sight­ed effort to secure Germany’s fis­cal future. “We have called time on liv­ing on the nev­er-nev­er,” she said.

That Berlin’s wari­ness of debt-fuelled spend­ing extend­ed to its Euro­pean part­ners was not a case of “Ger­man per­nick­eti­ness”, the chan­cel­lor added, but of EU mem­bers main­tain­ing cred­i­bil­i­ty by stick­ing to sta­bil­i­ty and growth rules beefed up in the euro cri­sis.

“If we don’t do that . . . we will squan­der the trust we have won back,” she said, warn­ing that the cri­sis was far from over.
...

“We have called time on liv­ing on the nev­er-nev­er”. With lines that that it’s no won­der a major­i­ty of Ger­mans want her to run for a fourth term as Chan­cel­lor. Merkel for­ev­er!

Of course, you have to won­der about how the rest of the EU is going to feel about a fourth Merkel term because the rab­ble on the street isn’t nec­es­sar­i­ly going to be as enthu­si­as­tic as their euro elite rulers might be about Merkel’s insane defla­tion­ary eco­nom­ic poli­cies going for­ward. Angela did warn the “the cri­sis was far from over” after all and eco­nom­ic straight­jack­ets are just a lot less com­fort­able when you’re poor.

And then there’s the fact that even the Euro­pean elites appear to be get­ting sick of the aus­ter­i­ty-for­ev­er treat­ment. At least some of them. Sure, most of the elites prob­a­bly love the “trick­le down” nature of the end­less aus­ter­i­ty. Aus­ter­i­ty just makes the rab­ble that much eas­i­er to manip­u­late. But for Europe’s elites there’s a grow­ing prob­lem: as part of the price for the Berlin-imposed aus­ter­i­ty, the Euro­pean elite’s tra­di­tion­al manip­u­la­tion of their own rab­ble is increas­ing­ly being manip­u­lat­ed by Berlin too. In oth­er words, as part of the price for mak­ing them­selves even more elite rel­a­tive to their rab­ble, Europe’s elite had to make them­selves less elite rel­a­tive to the new super-elite class that runs Europe.

So, even­tu­al­ly, could this super-elite manip­u­la­tion of elite manip­u­la­tion of the rab­ble become a prob­lem? It’s one of the ques­tions of the day for Europe. Espe­cial­ly if the elites that were pre­vi­ous­ly in favor of hand­ing over con­trol to the Euro­pean Commission/IMF/ECB “Troi­ka” sys­tem con­trol did­n’t real­ize that the con­trol was nev­er going to be returned:

The Irish Times
Ireland’s rela­tion­ship with EU plunges to low ebb after U‑turn on water meter­ing
Revised water charges cre­ate con­flict as troi­ka pays Dublin a post-bailout vis­it

Arthur Beesley

First pub­lished: Mon, Dec 8, 2014, 01:10

Rela­tions between Dublin and Brus­sels are at a very low ebb after a con­fronta­tion in the Depart­ment of Finance a fort­night ago over the new water scheme.

At issue upfront is the Government’s acute dis­plea­sure at ques­tions pub­licly raised by a source close to the Euro­pean Com­mis­sion about the fraught deci­sion to charge a flat rate for water.

How­ev­er, the dis­pute reflects deep­er ten­sions with the EU author­i­ties. While the exchanges over water came as troi­ka offi­cials car­ried out a sec­ond post-bailout inspec­tion of Ireland’s affairs, Dublin and Brus­sels have also been at log­ger­heads over fis­cal pol­i­cy and cor­po­rate tax.

The pre­text is clear. The Gov­ern­ment exe­cut­ed a huge about-turn on Wednes­day, Novem­ber 19th, when it cut the water rate and post­poned metered charg­ing. This was sen­si­tive polit­i­cal­ly giv­en the force of protests against the charge, the Government’s loss of sup­port and its fail­ure to cap­i­talise on income tax cuts in the Octo­ber bud­get.

A cru­cial con­sid­er­a­tion was to ensure the debts of Irish Water would remain off the State’s bal­ance sheet.

Both the annu­al bud­get deficit and the nation­al debt would increase if these lia­bil­i­ties remained on bal­ance sheet, neces­si­tat­ing fur­ther retrench­ment. The Gov­ern­ment insists Irish Water will go off bal­ance sheet but the deci­sion is in the gift of Euro­stat, the commission’s sta­tis­tics arm, and it will not make a rul­ing until April.

Revised scheme
The day after the new plan was unveiled, a source close to the com­mis­sion expressed con­cern to The Irish Times and oth­er media that the revised scheme could jeop­ar­dise the Government’s fis­cal plan­ning.

The source said there was sur­prise at the move to sus­pend metered charg­ing, and ques­tioned the mer­its of a flat charge. The source also said Euro­stat nev­er issued pro­vi­sion­al guid­ance to any mem­ber on its like­ly treat­ment of any ini­tia­tive.

There was an angry response at the high­est lev­el with­in the Coali­tion after sto­ries duly appeared, includ­ing the front-page lead item in The Irish Times on Fri­day, Novem­ber 21st.

...

Quite what tran­spired remains unclear. By all accounts, how­ev­er, a severe rebuke was deliv­ered by a high-lev­el Depart­ment of Pub­lic Expen­di­ture offi­cial over the inter­ven­tion by the source close to the com­mis­sion. The exchange has been described as “dif­fi­cult” and “tense”.

At one point a com­mis­sion offi­cial is said to have declared that he did not like the “atti­tude” on the Irish side. His con­cerns were imme­di­ate­ly dis­missed. The Euro­pean offi­cial was told – in uncom­pro­mis­ing­ly direct lan­guage – that there would be no change what­ev­er in atti­tude or tone.

Accord­ing to an informed source, a meet­ing sched­uled that day between troi­ka inspec­tors and sec­re­taries gen­er­al of Gov­ern­ment depart­ments was can­celled.

Inten­si­fy efforts
That after­noon a joint post-inspec­tion state­ment was issued by the com­mis­sion and the Euro­pean Cen­tral Bank, and a sep­a­rate state­ment was issued by the Inter­na­tion­al Mon­e­tary Fund. There was no men­tion of water in the Euro­pean state­ment.

Point­ed­ly, how­ev­er, the com­mis­sion and the ECB said Ire­land should inten­si­fy efforts to reduce the bud­get deficit lead­ing up to the next elec­tion and beyond.

This, too, went down very bad­ly in Irish polit­i­cal cir­cles. A Min­is­ter said such demands were “dif­fi­cult to com­pre­hend” giv­en the advanc­ing recov­ery of the Irish econ­o­my.

...

Among many Irish con­cerns is the ques­tion as to whether the com­mis­sion was seek­ing to become a pro­tag­o­nist in domes­tic debate.

At a time when the French gov­ern­ment was insist­ing on its right to breach EU bud­get guide­lines, the point was made that Ire­land had met all tar­gets. One year has passed since the Gov­ern­ment reclaimed Irish sov­er­eign­ty at the end of the bailout.

With exter­nal over­sight strength­ened in the wake of the crash, the bat­tles to assert that sov­er­eign­ty con­tin­ue.

Ok, to sum­ma­rize the Irish-EU water-meter­ing fight:

...
At one point a com­mis­sion offi­cial is said to have declared that he did not like the “atti­tude” on the Irish side. His con­cerns were imme­di­ate­ly dis­missed. The Euro­pean offi­cial was told – in uncom­pro­mis­ing­ly direct lan­guage – that there would be no change what­ev­er in atti­tude or tone.
...
Point­ed­ly, how­ev­er, the com­mis­sion and the ECB said Ire­land should inten­si­fy efforts to reduce the bud­get deficit lead­ing up to the next elec­tion and beyond.
...
At a time when the French gov­ern­ment was insist­ing on its right to breach EU bud­get guide­lines, the point was made that Ire­land had met all tar­gets. One year has passed since the Gov­ern­ment reclaimed Irish sov­er­eign­ty at the end of the bailout.

With exter­nal over­sight strength­ened in the wake of the crash, the bat­tles to assert that sov­er­eign­ty con­tin­ue.

That’s basi­cal­ly what hap­pened to Ire­land and, as we can see, Ire­land did­n’t real­ly appre­ci­ate being told to “inten­si­fy efforts to reduce the bud­get deficit lead­ing up to the next elec­tion and beyond” by the Euro­pean Com­mis­sion even after it offi­cial­ly left the bailout/Troika regime last year. Even Ire­land’s elites seemed miffed and why not? Ire­land’s elites don’t even get to rule over their own rab­ble any­more! They got down­sized! Tem­porar­i­ly giv­ing up sov­er­eign­ty in order to get an out­side force to dec­i­mate your nation’s pub­lic ser­vices might sound like a great deal for most fascis­tic nation­al lead­ers, but only if it’s tem­po­rary.

This is all part of one of the great unknowns regard­ing the Euro-cri­sis: To what extent did pro-aus­ter­i­ty Euro elites real­ize, in advance, that they were basi­cal­ly per­ma­nent­ly hand­ing over sov­er­eign­ty to a Berlin-dom­i­nat­ed Euro­pean Com­mis­sion when the Fis­cal Com­pact and oth­er aus­ter­i­ty poli­cies were vot­ed into law. How many of them thought this was all just a one time, tem­po­rary smack down of the rab­ble?

Is there an “elite expec­ta­tion gap”? If so, that could become an increas­ing­ly pow­er­ful force in Euro­pean pol­i­tics because, as Angela Merkel keeps mak­ing clear, Europe will respect her pan-Euro­pean author­i­ty, one way or anoth­er:

Bloomberg
Merkel Takes Tougher Line on Neigh­bors’ Plans in Deficit Fight
By Jeff Black Dec 7, 2014 6:13 AM CT

Ger­man Chan­cel­lor Angela Merkel increased pres­sure on France and Italy to deliv­er extra eco­nom­ic reforms in exchange for more time to meet bud­get tar­gets.

The Euro­pean Com­mis­sion “has made clear that that, which until now has been on the table, isn’t enough,” Merkel said in an inter­view with Die Welt am Son­ntag. “I would sub­scribe to that view.”

France and Italy, the euro area’s sec­ond- and third-largest economies, have until March to bring the deficits in their 2015 bud­get plans into line with Euro­pean Union rules. That largess was grant­ed on con­di­tion the gov­ern­ments in Paris and Rome use the time to enact fur­ther leg­is­la­tion in pur­suit of eco­nom­ic com­pet­i­tive­ness.

“The com­mis­sion has estab­lished a timetable for France and Italy to present fur­ther mea­sures,” Merkel said. “That’s sen­si­ble, as both coun­tries are cur­rent­ly in the mid­dle of a process of reform.”

Italy’s long-term cred­it rat­ing was low­ered last week by Stan­dard & Poor’s, which cit­ed weak growth prospects and high pub­lic debt. The down­grade came even after Prime Min­is­ter Mat­teo Ren­zi won a key vote in the Sen­ate on a plan to over­haul Italy’s labor rules.

In France, Finance Min­is­ter Michel Sapin said on Dec. 3 that an addi­tion­al 3.6 bil­lion euros ($4.4 bil­lion) in bud­get cuts planned for next year mean that the deficit will decline to 4.1 per­cent in 2015. EU rules stip­u­late deficits shouldn’t exceed 3 per­cent of gross domes­tic prod­uct.

...

Yes, Angela Merkel just informed France and Italy that the aus­ter­i­ty would not only con­tin­ue, the aus­ter­i­ty would have to increase in order to make up for their lag­gard­ly ways.

So here’s the tem­plate going for­ward:

Euro­pean Com­mis­sion to mem­ber state: Hey, cut your deficit to get it under 3% of GDP. Soon. It’s the rules.

Mem­ber state: Ok, but if we do that our economies will tank and the peo­ple will revolt and then the deficit, as a per­cent­age GDP, is just going to rise.

Euro­pean Com­mis­sion: Ok, we’ll give you until March of 2015 to fig­ure out how your going to get your deficit down to 3%. But, in exchange for our “largess” of extra time, Angela wants the new plans to include even more cuts to pub­lic even faster to ensure that the goals are met on time.

It’s not just end­less aus­ter­i­ty. It’s end­less­ly increas­ing aus­ter­i­ty if you refuse to enthu­si­as­ti­cal­ly com­ply with the pre­vi­ous demands, no mat­ter how crazy they may be. And no real author­i­ty for the elites to stop the bleed­ing even when the rab­ble is call­ing for blood.

Way to go sec­ond-tier Euro elites. It’s Merkel for­ev­er for you too.

Matt O’Brien at the Wash­ing­ton Post has a fas­ci­nat­ing the­o­ry about the moti­va­tions dri­ving Europe’s elite insan­i­ty: The EU elites want a “Unit­ed States of Europe” even­tu­al­ly, one with the kinds of rou­tine fis­cal trans­fers you find in the US that would dra­mat­i­cal­ly ame­lio­rate the issues we’re see­ing pop up the shared cur­ren­cy, but they’re con­vinced that the only way they can over­come the rab­ble’s polit­i­cal oppo­si­tion to such a plan is to cre­ate an eco­nom­ic cri­sis so awful that cre­at­ing a “Unit­ed States of Europe” is the only option.

In oth­er words, the incred­i­ble string of one eco­nom­i­cal­ly inex­cus­able pol­i­cy after anoth­er emerg­ing from one EU leader after anoth­er over the past six years has all been act­ing, and the elites have a some­what less insane long-term goal in mind: This peri­od of mass insan­i­ty is just a tem­po­rary, but nec­es­sary, phase required to teach the rab­ble a les­son about how a not-very-Unit­ed States of Europe is a bad thing!

At least that’s the the­o­ry. And let’s hope the the­o­ry is cor­rect because it’s nice to imag­ine that the cur­rent euro-night­mare isn’t the long-term elite vision for Europe. Nice, albeit con­tex­tu­al­ly dis­turb­ing, but still nicer than the idea that long-term plan is to have a Europe that’s des­tined to be ruled by junk-onom­ics for­ev­er.

Still, nice or not, let’s also hope that the elites’ secret plans to cause hor­ri­ble events intend­ed to soft­en up the rab­ble’s oppo­si­tion to elite-desired poli­cies does­n’t include revis­it­ing all of the lessons of the 1930’s:

The Wash­ing­ton Post

The les­son from Greece: A 1930s-style depres­sion cre­ates 1930s-style pol­i­tics

By Matt O’Brien Jan­u­ary 26 at 10:02 AM

It’s nev­er good when neo-Nazis who can’t even cam­paign because their lead­ers are in jail for mur­der­ing a polit­i­cal oppo­nent still man­age to come in third in your elec­tions.

That’s what hap­pened in Greece, though, after its main­stream par­ties dis­cred­it­ed them­selves by pre­sid­ing over so much aus­ter­i­ty that vot­ers are will­ing to turn to quite lit­er­al­ly any­one who promis­es to end it. That includes actu­al Nazis, cryp­to-Nazis, actu­al Com­mu­nists, and for­mer Com­mu­nists like Syriza, who won pow­er, though not an out­right major­i­ty, with an unex­pect­ed­ly strong 36 per­cent of the vote. It turns out that keep­ing a coun­try in a 1930s-style depres­sion cre­ates 1930s-style pol­i­tics.

Now let’s back up. It’s not like Greece need­ed any help get­ting itself into a depres­sion. Its gov­ern­ment bor­rowed too much mon­ey, lied about how much it was bor­row­ing, and has such Kafkaesque reg­u­la­tions that start­ing a busi­ness or even hir­ing some­one is, well, some­thing of an odyssey. So when Greece had its Wile E. Coy­ote moment in 2010, there was always going to be a lot of eco­nom­ic pain. It had to cut spend­ing and it had to regain com­pet­i­tive­ness, whether or not Ger­many told it to. And the truth that nobody wants to hear is that Greece would have had to cut a lot more if not for all the “aus­ter­i­ty” imposed on it, which was real­ly a bailout that gave it more mon­ey than it would have oth­er­wise had.

...

Keep in mind hhat Greece prob­a­bly would­n’t have accu­mu­lat­ed near­ly as much debt if it had­n’t joined the euro­zone in the first place and the offi­cial ‘book cook­ing’ was done (with some help from Wall Street) specif­i­cal­ly in order to meet the euro­zone’s require­ments. Plus, it’s not like these deals were actu­al­ly a secret. So there’s a lot of respon­si­ble to spread around here.

Con­tin­u­ing...

...
Aus­ter­i­ty, in oth­er words, isn’t what Europe deserves blame for in Greece. Hard mon­ey is. Or, if you want to go all the way back, cre­at­ing the euro in the first place when text­book eco­nom­ics said a cri­sis like this was inevitable if they did. We’ll get there in a minute. First, though, let’s talk about what “com­pet­i­tive­ness” means. It’s pret­ty sim­ple, actu­al­ly: It’s how much you get paid for doing a cer­tain amount of work. Greece’s prob­lem was that, in the after­math of its gov­ern­ment bub­ble, its wages were too high, rel­a­tive to Ger­many’s, for what its work­ers were doing. That real­is­ti­cal­ly left it with three options. Either Greece could cut its wages while Ger­many kept its the same, Greece could keep its wages the same while Ger­many increased its, or they could meet some­where in the mid­dle. (The fourth option, which you can’t real­ly plan on, is that Greece’s work­ers could have sud­den­ly become a lot more pro­duc­tive).

This was the dif­fer­ence, for Greece, between, if not a Great Reces­sion and a Great Depres­sion, at least a Less­er Depres­sion and a Great Depres­sion. Think about it this way. Peo­ple, you might have noticed, don’t like tak­ing pay cuts, so you have to fire them to get them to do so. But high­er unem­ploy­ment only low­ers GDP, which makes debts hard­er to pay back. It’s self-defeat­ing. That, though, is what Europe chose for Greece. Ger­many, you see, is so afraid of the infla­tion under its bed that it would rather force Greece to adjust its wages all the way down than adjust its own wages any of the way up. That’s why the ECB raised inter­est rates twice in 2011 to fight most­ly-phan­tom infla­tion, and is only now about to start buy­ing bonds on a large scale. It’s no sur­prise, then, that Ger­man infla­tion isn’t any­where close to its just-below-2-per­cent tar­get, but has instead fall­en all the way to 0.1 per­cent—which means Greece needs neg­a­tive infla­tion to regain com­pet­i­tive­ness. And that’s what it’s got­ten, with Greek prices now falling 2.6 per­cent. So Europe’s tight mon­ey has more than undone the good from Europe’s bailout. Indeed, Greece’s econ­o­my has shrunk 27 per­cent, its unem­ploy­ment rate has hit 28 per­cent, and its youth unem­ploy­ment rate is over 50 per­cent.

Europe isn’t pan­ick­ing, though, because things are going accord­ing to plan. Or at least close enough. Any econ­o­mist could have told them, and plen­ty of them did, that some­thing like this was bound to hap­pen if coun­tries share mon­e­tary, but not fis­cal, pol­i­cy. That’s because, at some point, one coun­try will need hard and anoth­er one will need loose mon­ey. And whichev­er one los­es out will spi­ral out of con­trol if there aren’t fis­cal trans­fers to slow them down or speed them up. But the com­mon cur­ren­cy does­n’t have these kind of shock absorbers. That means the euro not only push­es coun­try into, but also keeps them stuck in depres­sions.

Think about Greece. It would­n’t have been able to bor­row near­ly as much mon­ey to begin with if it weren’t in the euro. Its bor­row­ing costs would­n’t have spiked any­where near as much if it’d been able to print its own mon­ey. And it could have deval­ued its way to com­pet­i­tive­ness overnight instead of deflat­ing over years, sav­ing itself a lot of unem­ploy­ment. So why, you’re prob­a­bly won­der­ing, is this part of the plan? In five words, a Unit­ed States of Europe. Elites want to cre­ate one, com­plete with a joint trea­sury, but nobody else does. But they hope that will change if the only way out of the cri­sis they walked into with at least one eye open is to build the sin­gle state they want. It’s a process that began 60 years ago when France and Ger­many decid­ed to share their coal and steel—making it hard­er for one of them to re-arm—and it might be anoth­er 60 it ends in a Euro­pean gov­ern­ment. But that’s okay, that’s the plan. (Which is why, as Dan Davies points out, that Europe nev­er expects Greece to pay it back, even though it can’t say that, since every­one will pool their debts some day in the maybe-not-so-far future).

There’s only one flaw in Europe’s plan. It’s the pol­i­tics, stu­pid. You can’t keep a coun­try in a nev­er-end­ing slump, or close enough to it, and not expect them to revolt. And when it does hap­pen, odds are you won’t like the peo­ple lead­ing it, either. Take Greece’s main­stream par­ties, the cen­ter-left Pasok and the cen­ter-right New Democ­ra­cy. They were bas­tards, but they were Europe’s bas­tards. They ruled Greece as a cor­rupt duop­oly, you see, and they deserved to lose. But they were at least will­ing to do what they were told for the sake of the com­mon cur­ren­cy. That includes tak­ing turns clutch­ing the polit­i­cal grenade that is aus­ter­i­ty. As you can see above, their com­bined share of the vote fell from 77 per­cent before the bailout began to 42 per­cent after they start­ed imple­ment­ing it to just 32.5 per­cent today. Europe’s strat­e­gy, in oth­er words, has­n’t just been eco­nom­i­cal­ly self-destruc­tive, but polit­i­cal­ly, too. Forc­ing main­stream par­ties to fol­low failed poli­cies only dis­cred­its them. The same thing hap­pened in the 1930s when the estab­lish­ment was only will­ing to leave the gold stan­dard when stay­ing on it had failed as much as it could.

And, then as now, this only con­cedes the eco­nom­ic high ground to the cra­zies. Now, Greece might have got­ten lucky if Syriza, despite its mix of for­mer and not-so-for­mer Marx­ists, turns out to be not so rad­i­cal. Its demands cer­tain­ly aren’t. It wants more debt relief, which Greece has already got­ten a lot of, and more social spend­ing to fight their health and hunger crises. That should put Syriza firm­ly in the cen­ter-left, just with a lit­tle more empha­sis on the left part. But if it fails, things could start to get a lot ugli­er. There are the neo-Nazis, who despite being on tri­al for mur­der, still came in third with 6.3 per­cent of the vote. The right-wing Inde­pen­dent Greeks, who are only a hop, skip, and a swasti­ka away from being neo-Nazis them­selves, at 4.75 per­cent. (Their leader, to give you an idea, made up a sto­ry about Jew­ish peo­ple get­ting spe­cial tax breaks). And then there are the real, live Com­mu­nists, as in wav­ing the ham­mer-and-sick­le flag, at 5.5 per­cent. None of these are that big on their own, but if you add in all the small­er par­ties of fel­low travelers—presumably Lenin­ist-Marx­ists instead of Marxist-Leninists—you’re talk­ing about 20 per­cent of the vote going to the far-left and the far-right. And that’s not even includ­ing Syriza.

...

The irony, of course, is that the euro was sup­posed to be a paper mon­u­ment to peace and pros­per­i­ty that brought peo­ple togeth­er. But, for now at least, it’s made pros­per­i­ty impos­si­ble and dri­ven them apart instead, reviv­ing old prej­u­dices, stir­ring new ones, and mak­ing peo­ple more, not less, nation­al­is­tic.

So much for a Unit­ed States of Europe.

So is the plan to dri­ve Europe into such a deep and painful eco­nom­ic slump that the rab­ble just gives up on any of their attach­ments to nation­al sov­er­eign­ty and decides to embrace a much more deeply inte­grat­ed “Unit­ed States of Europe” mod­el? That the­o­ry does seem to fit what’s actu­al­ly hap­pen­ing so it’s cer­tain­ly a pos­si­bil­i­ty. And a “Unit­ed States of Europe” mod­el def­i­nite­ly has the poten­tial to result in a lot more eco­nom­ic and social jus­tice than the cur­rent “no fis­cal trans­fers with­out aus­ter­i­ty!” garbage mod­els.

If true, this is also one of the most Machi­avel­lian meth­ods for achiev­ing a pol­i­cy that you can imag­ine: Inten­tion­al­ly abus­ing the pop­u­la­tion for decades while you feed their fears of ‘lazy Greeks’ and hyper­in­fla­tion all in order to cre­ate a sit­u­a­tion so bad that the rab­ble basi­cal­ly capit­u­lates itself into a new par­a­digm. And yet, since that hor­ror sce­nario fits what’s hap­pen­ing now we cer­tain­ly can’t rule O’Brien’s the­o­ry out.

It all leaves one more ques­tion: Is dri­ving the pop­u­lace into a far-right fer­vor also part of the secret elite plan? Because that also fits the data.

It’s also worth keep­ing in mind that, even though a “Unit­ed States of Europe” mod­el could work a lot bet­ter for Europe, it’s not a guar­an­tee that things will actu­al­ly get bet­ter. A “Unit­ed States of Europe” can divide and con­quer itself too. It fits the data.

If you’ve ever won­dered what it would be like if the gov­er­nor of, say, Texas had unof­fi­cial veto pow­er over the rest of the US gov­ern­ment, here’s a peek:

Bloomberg Busi­ness
Greece’s Varo­ufakis Takes Ham­mer­ing From Riled EU Min­is­ters

by Ian Wishart, Cori­na Ruhe and Karl Stag­no Navar­ra

4:52 AM CDT April 24, 2015

Euro-area finance min­is­ters hurled abuse at Greek Finance Min­is­ter Yanis Varo­ufakis behind closed doors as they shut down his bid to find a short­cut to releas­ing finan­cial aid.

Jeroen Dijs­sel­bloem, the Dutch chair­man of the euro-zone finance chiefs’ group, cat­e­gor­i­cal­ly ruled out mak­ing a par­tial aid pay­ment in exchange for a nar­row­er pro­gram of reforms after a stormy meet­ing in Riga, Latvia, in which Varo­ufakis was heav­i­ly crit­i­cized by his euro-area col­leagues over his fail­ure to deliv­er eco­nom­ic reforms.

Euro-area finance chiefs said Varoufakis’s han­dling of the talks was irre­spon­si­ble and accused him of being a time-waster, a gam­bler and an ama­teur, a per­son famil­iar with the con­ver­sa­tions said, ask­ing not to be named because the dis­cus­sions were pri­vate.

“It was a very crit­i­cal dis­cus­sion and it showed a great sense of urgency around the room,” Dijs­sel­bloem said at a press con­fer­ence after the meet­ing. Asked if there was any chance of a par­tial dis­burse­ment, he said, “The answer can be very short: No.”

Varo­ufakis said the two sides have come “much clos­er togeth­er” and Greece is aim­ing for a deal as soon as pos­si­ble.

Draghi Pres­sure

Euro­pean Cen­tral Bank Pres­i­dent Mario Draghi added to the pres­sure on the Greek finance chief warn­ing that pol­i­cy mak­ers may review the con­di­tions of the emer­gency fund­ing keep­ing his country’s banks afloat.

Euro-area gov­er­nors will “care­ful­ly mon­i­tor” the hair­cuts imposed on Greek banks’ col­lat­er­al when bor­row­ing from the Bank of Greece, Draghi said, to take into account the “change in the envi­ron­ment.” The gov­ern­ing coun­cil is due to dis­cuss the mat­ter on May 6, accord­ing to two peo­ple with knowl­edge of the talks.

“The high­er are the yields, the big­ger is the volatil­i­ty, the more col­lat­er­al gets destroyed,” he said. “Time is run­ning out as the pres­i­dent of the Eurogroup said, and speed is of the essence.”

...

Bypass Veto

The 19-nation bloc’s finance min­is­ters were riled after Greek Prime Min­is­ter Alex­is Tsipras tried to bypass their veto on finan­cial aid with an appeal to Angela Merkel on Thurs­day. Tsipras sought to cir­cum­vent the finance min­is­ters’ author­i­ty, plead­ing his case with the Ger­man Chan­cel­lor and French Pres­i­dent Fran­cois Hol­lande on the side­lines of a sum­mit on immi­gra­tion in Brus­sels.

Under euro-area pro­ce­dures, it’s the finance min­is­ters who have to sign off on any aid dis­burse­ment and Merkel said last month she’s not pre­pared to over­ride those con­trols.

“I would describe today’s meet­ing as a com­plete break­down in com­mu­ni­ca­tion with Greece,” Mal­tese Finance Min­is­ter Edward Sci­clu­na said.

Varo­ufakis, an econ­o­mist whose exper­tise is game the­o­ry, start­ed irri­tat­ing his euro-area coun­ter­parts almost as soon as he became finance min­is­ter under Greece’s Syriza-led gov­ern­ment in Jan­u­ary.

...

As we can see, as opposed to the typ­i­cal euro­zone-style “the emper­or has no clothes” sit­u­a­tion, by going above the boss­es’ heads to their unof­fi­cial boss, Greece man­aged to cre­ate a “the 19 emper­ors have clothes, but it’s not real­ly up to them whether they go naked or not” moment. Awk­ward!

...
The 19-nation bloc’s finance min­is­ters were riled after Greek Prime Min­is­ter Alex­is Tsipras tried to bypass their veto on finan­cial aid with an appeal to Angela Merkel on Thurs­day. Tsipras sought to cir­cum­vent the finance min­is­ters’ author­i­ty, plead­ing his case with the Ger­man Chan­cel­lor and French Pres­i­dent Fran­cois Hol­lande on the side­lines of a sum­mit on immi­gra­tion in Brus­sels.

Under euro-area pro­ce­dures, it’s the finance min­is­ters who have to sign off on any aid dis­burse­ment and Merkel said last month she’s not pre­pared to over­ride those con­trols.
...

No one said it was easy being a ring­wraith.

Por­tu­gal’s recent elec­tions are start­ing to look rather moot. Fol­low­ing ini­tial calls of vic­to­ry for the rul­ing pro-aus­ter­i­ty right-wing par­ty, which gar­nered 38 per­cent of the vote vs 32 per­cent for the anti-aus­ter­i­ty social­ists, it turns out that it’s the social­ists that are able to cob­ble togeth­er enough par­ties into a major­i­ty coali­tion. And despite the fact that Por­tu­gal is no longer offi­cial­ly under the Troika’s con­trol, the fact remains that Troikan poli­cies are still the law of the land.

So does an anti-aus­ter­i­ty rul­ing coali­tion mean that we’re about to see a Por­tuguese ver­sion of Greece’s recent show­down with the Troi­ka? Uh...well...if so, that comes lat­er. At this point, we’re just wait­ing to see if the anti-aus­ter­i­ty coali­tion is even going to be allowed to take pow­er since its up to Por­tu­gal’s con­sti­tu­tion­al pres­i­dent to appoint a new gov­ern­ment. And, so far, it’s look­ing like he’s going to reap­point the pro-aus­ter­i­ty rul­ing par­ty, cit­ing fears that allow­ing an anti-aus­ter­i­ty coali­tion that won a major­i­ty of the votes would vio­late the Fis­cal Com­pact and piss off the inter­na­tion­al finan­cial mar­kets. That’s seri­ous­ly his rea­son­ing:

The Tele­graph
Euro­zone cross­es Rubi­con as Por­tu­gal’s anti-euro Left banned from pow­er
Con­sti­tu­tion­al cri­sis looms after anti-aus­ter­i­ty Left is denied par­lia­men­tary pre­rog­a­tive to form a major­i­ty gov­ern­ment

By Ambrose Evans-Pritchard

4:30PM BST 23 Oct 2015

Por­tu­gal has entered dan­ger­ous polit­i­cal waters. For the first time since the cre­ation of Europe’s mon­e­tary union, a mem­ber state has tak­en the explic­it step of for­bid­ding euroscep­tic par­ties from tak­ing office on the grounds of nation­al inter­est.

Ani­bal Cava­co Sil­va, Portugal’s con­sti­tu­tion­al pres­i­dent, has refused to appoint a Left-wing coali­tion gov­ern­ment even though it secured an absolute major­i­ty in the Por­tuguese par­lia­ment and won a man­date to smash the aus­ter­i­ty regime bequeathed by the EU-IMF Troi­ka.

He deemed it too risky to let the Left Bloc or the Com­mu­nists come close to pow­er, insist­ing that con­ser­v­a­tives should sol­dier on as a minor­i­ty in order to sat­is­fy Brus­sels and appease for­eign finan­cial mar­kets.

Democ­ra­cy must take sec­ond place to the high­er imper­a­tive of euro rules and mem­ber­ship.

“In 40 years of democ­ra­cy, no gov­ern­ment in Por­tu­gal has ever depend­ed on the sup­port of anti-Euro­pean forces, that is to say forces that cam­paigned to abro­gate the Lis­bon Treaty, the Fis­cal Com­pact, the Growth and Sta­bil­i­ty Pact, as well as to dis­man­tle mon­e­tary union and take Por­tu­gal out of the euro, in addi­tion to want­i­ng the dis­so­lu­tion of NATO,” said Mr Cava­co Sil­va.

“This is the worst moment for a rad­i­cal change to the foun­da­tions of our democ­ra­cy.

“After we car­ried out an oner­ous pro­gramme of finan­cial assis­tance, entail­ing heavy sac­ri­fices, it is my duty, with­in my con­sti­tu­tion­al pow­ers, to do every­thing pos­si­ble to pre­vent false sig­nals being sent to finan­cial insti­tu­tions, investors and mar­kets,” he said.

Mr Cava­co Sil­va argued that the great major­i­ty of the Por­tuguese peo­ple did not vote for par­ties that want a return to the escu­do or that advo­cate a trau­mat­ic show­down with Brus­sels.

This is true, but he skipped over the oth­er core mes­sage from the elec­tions held three weeks ago: that they also vot­ed for an end to wage cuts and Troi­ka aus­ter­i­ty. The com­bined par­ties of the Left won 50.7pc of the vote. Led by the Social­ists, they con­trol the Assem­bleia.

The con­ser­v­a­tive pre­mier, Pedro Pas­sos Coel­ho, came first and there­fore gets first shot at form­ing a gov­ern­ment, but his Right-wing coali­tion as a whole secured just 38.5pc of the vote. It lost 28 seats.

The Social­ist leader, Anto­nio Cos­ta, has react­ed with fury, damn­ing the president’s action as a “grave mis­take” that threat­ens to engulf the coun­try in a polit­i­cal firestorm.

“It is unac­cept­able to usurp the exclu­sive pow­ers of par­lia­ment. The Social­ists will not take lessons from pro­fes­sor Cava­co Sil­va on the defence of our democ­ra­cy,” he said.

Mr Cos­ta vowed to press ahead with his plans to form a triple-Left coali­tion, and warned that the Right-wing rump gov­ern­ment will face an imme­di­ate vote of no con­fi­dence.

There can be no fresh elec­tions until the sec­ond half of next year under Portugal’s con­sti­tu­tion, risk­ing almost a year of paral­y­sis that puts the coun­try on a col­li­sion course with Brus­sels and ulti­mate­ly threat­ens to reignite the country’s debt cri­sis.

The bond mar­ket has react­ed calm­ly to events in Lis­bon but it is no longer a sen­si­tive gauge now that the Euro­pean Cen­tral Bank is mop­ping up Por­tuguese debt under quan­ti­ta­tive eas­ing.

Por­tu­gal is no longer under a Troi­ka regime and does not face an imme­di­ate fund­ing crunch, hold­ing cash reserves above €8bn. Yet the IMF says the coun­try remains “high­ly vul­ner­a­ble” if there is any shock or the coun­try fails to deliv­er on reforms, cur­rent­ly deemed to have “stalled”.

Pub­lic debt is 127pc of GDP and total debt is 370pc, worse than in Greece. Net exter­nal lia­bil­i­ties are more than 220pc of GDP.

The IMF warned that Por­tu­gal’s “export mir­a­cle” remains nar­row­ly based, the head­line gains flat­tered by re-exports with lit­tle val­ue added. “A durable rebal­anc­ing of the econ­o­my has not tak­en place,” it said.

“The pres­i­dent has cre­at­ed a con­sti­tu­tion­al cri­sis,” said Rui Tavares, a rad­i­cal green MEP. “He is say­ing that he will nev­er allow the for­ma­tion of a gov­ern­ment con­tain­ing Left­ists and Com­mu­nists. Peo­ple are amazed by what has hap­pened.”

Mr Tavares said the pres­i­dent has invoked the spec­tre of the Com­mu­nists and the Left Bloc as a “straw man” to pre­vent the Left tak­ing pow­er at all, know­ing full well that the two par­ties agreed to drop their demands for euro-exit, a with­draw­al from Nato and nation­al­i­sa­tion of the com­mand­ing heights of the econ­o­my under a com­pro­mise deal to the forge the coali­tion.

Pres­i­dent Cava­co Sil­va may be cor­rect is cal­cu­lat­ing that a Social­ist gov­ern­ment in league with the Com­mu­nists would pre­cip­i­tate a major clash with the EU aus­ter­i­ty man­darins. Mr Costa’s grand plan for Key­ne­sian refla­tion – led by spend­ing on edu­ca­tion and health – is entire­ly incom­pat­i­ble with the EU’s Fis­cal Com­pact.

This fool­ish treaty law oblig­es Por­tu­gal to cut its debt to 60pc of GDP over the next 20 years in a per­ma­nent aus­ter­i­ty trap, and to do it just as the rest of south­ern Europe is try­ing to do the same thing, and all against a back­drop of pow­er­ful defla­tion­ary forces world­wide.

The strat­e­gy of chip­ping away at the country’s mas­sive debt bur­den by per­ma­nent belt-tight­en­ing is large­ly self-defeat­ing, since the denom­i­na­tor effect of stag­nant nom­i­nal GDP aggra­vates debt dynam­ics.

It is also point­less. Por­tu­gal will require a debt write-off when the next glob­al down­turn hits in earnest. There is no chance what­so­ev­er that Ger­many will agree to EMU fis­cal union in time to pre­vent this.

The chief con­se­quence of draw­ing out the agony is deep hys­tere­sis in the labour mar­kets and chron­i­cal­ly low lev­els of invest­ment that blight the future.

Mr Cava­co Sil­va is effec­tive­ly using his office to impose a reac­tionary ide­o­log­i­cal agen­da, in the inter­ests of cred­i­tors and the EMU estab­lish­ment, and dress­ing it up with remark­able Chutz­pah as a defence of democ­ra­cy.

The Por­tuguese Social­ists and Com­mu­nists have buried the hatch­et on their bit­ter divi­sions for the first time since the Car­na­tion Rev­o­lu­tion and the over­throw of the Salazar dic­ta­tor­ship in the 1970s, yet they are being denied their par­lia­men­tary pre­rog­a­tive to form a major­i­ty gov­ern­ment.

This is a dan­ger­ous demarche. The Por­tuguese con­ser­v­a­tives and their media allies behave as if the Left has no legit­i­mate right to take pow­er, and must be held in check by any means.

These reflex­es are famil­iar – and chill­ing – to any­body famil­iar with 20th cen­tu­ry Iber­ian his­to­ry, or indeed Latin Amer­i­ca. That it is being done in the name of the euro is entire­ly to be expect­ed.

...

“Mr Cava­co Sil­va is effec­tive­ly using his office to impose a reac­tionary ide­o­log­i­cal agen­da, in the inter­ests of cred­i­tors and the EMU estab­lish­ment, and dress­ing it up with remark­able Chutz­pah as a defence of democ­ra­cy.”
Yep. That’s one more vic­to­ry for the euro­zone.

Dutch finance min­is­ter Jeroen Dijs­sel­bloem, who also hap­pens to chair the Euro­goup of euro­zone finance min­is­ters, just issued a warn­ing to oth­er mem­bers of the Schen­gen zone about the pos­si­ble con­se­quences over the cur­rent intra-EU tus­sle over coun­tries should take in refugees and how many should be accept­ed to share the bur­den: If the coun­tries don’t agree to accept refugees might not be accept­ed into the new “mini-Schen­gen” that Dijs­sel­bloem says should replace the cur­rent Schen­gen-zone if the some EU nations con­tin­ue to refuse to accept refugees:

Reuters
Dijs­sel­bloem: Refugee cri­sis could trig­ger ‘mini-Schen­gen’

Fri Nov 27, 2015 5:00am EST
BRUSSELS

Dutch finance min­is­ter Jeroen Dijs­sel­bloem warned that coun­tries which fail to ade­quate­ly guard Europe’s bor­ders and do not take in a fair share of refugees could find them­selves out­side the bor­ders of a future “mini-Schen­gen” zone.

In an inter­view in Bel­gian busi­ness dailies De Tijd and L’E­cho on Fri­day, Dijs­sel­bloem, who is also the chair of the euro zone group of finance min­is­ters, said the EU’s pass­port-free Schen­gen zone could not work if only a few coun­tries gave shel­ter to refugees.

“There are a few coun­tries that are car­ry­ing the heav­i­est bur­den in the asy­lum cri­sis, tak­ing in the most refugees,” he told the papers, nam­ing Swe­den, Ger­many, Aus­tria, Bel­gium and the Nether­lands.

“Some coun­tries are now say­ing, ‘It’s not our prob­lem. It’s yours. Good luck.’ That places our sol­i­dar­i­ty under huge pres­sure,” he said.

Many mem­bers of the 26-coun­try Schen­gen zone, par­tic­u­lar­ly poor­er East­ern Euro­pean ones, oppose a Euro­pean Com­mis­sion plan to dis­trib­ute refugees who have arrived in Europe since the start of the year.

Poland’s new­ly elect­ed gov­ern­ment has said the risk of mil­i­tant attacks in the wake of the Paris shoot­ings makes it hard­er for it to shel­ter asy­lum seek­ers flee­ing war and pover­ty in the Mid­dle East.

Dijs­sel­bloem said his aim was to pre­serve the Schen­gen zone, but if coun­tries did not shoul­der their fair share, oth­ers would have to go it alone, since the migrant influx would oth­er­wise endan­ger their gen­er­ous wel­fare states.

“To pre­serve them, you need to guard the exter­nal bor­ders. (Oth­er­wise) loads of peo­ple come and demand sup­port and they blow the sys­tem up. That is what is hap­pen­ing now in the Nether­lands,” he said.

He called for more joint invest­ment in guard­ing the EU’s exter­nal bor­ders and for more sup­port for refugee camps in Turkey and Lebanon.

“If we do not do it in the exter­nal bor­ders of the EU’s 28 mem­bers, or in the Schen­gen zone, then maybe we will have to do it on the lev­el of a mini-Schen­gen zone,” he said, adding he want­ed to avoid that out­come.

The Nether­lands first float­ed the idea of a pass­port-free inner core ear­li­er this month, though Ger­many, with­out which such a plan would be unwork­able, imme­di­ate­ly dis­tanced itself from the pro­pos­als.

On Wednes­day, Jean-Claude Junck­er, the head of the EU’s exec­u­tive, warned that the fate of the Schen­gen zone was bound up with that of the euro sin­gle cur­ren­cy: the one would not sur­vive the fail­ure of the oth­er.

...

“On Wednes­day, Jean-Claude Junck­er, the head of the EU’s exec­u­tive, warned that the fate of the Schen­gen zone was bound up with that of the euro sin­gle cur­ren­cy: the one would not sur­vive the fail­ure of the oth­er.”
That’s a pret­ty omi­nous warn­ing from Jean-Claude Junck­er: If you kill the Schen­gen zone, you just might kill the euro­zone in the process. And if that sounds like an extreme con­se­quence of end­ing free­dom of trav­el with­in Europe, keep in mind that the cur­rent Schen­gen zone includes twn­ty six nations, but the pro­posed mini-Schen­gen zone might be clos­er to five nations:

Reuters
Dutch gov­ern­ment floats ‘mini-Schen­gen’ idea to EU part­ners

AMSTERDAM | By Toby Ster­ling
Thu Nov 19, 2015 8:43am EST

The Dutch gov­ern­ment has debat­ed inter­nal­ly and with its allies a plan to intro­duce pass­port checks at the bor­ders of sev­er­al West­ern Euro­pean coun­tries in a bid to con­trol an influx of migrants and refugees.

The idea of carv­ing out a “mini-Schen­gen” with­in the Schen­gen area would seem to vio­late the treaty guar­an­tee­ing free trav­el with­in 26 Euro­pean coun­tries.

The Euro­pean Com­mis­sion, the EU’s exec­u­tive arm, has received no for­mal pro­pos­als regard­ing the cre­ation of a “mini-Schen­gen” zone with­in the exist­ing pass­port-free area, a Com­mis­sion spokes­woman said on Thurs­day.

Europe is strug­gling to cope with its biggest migra­tion cri­sis since World War Two.

Ger­man Inte­ri­or Min­is­ter Thomas de Maiziere told a news con­fer­ence in Berlin on Thurs­day that his Dutch coun­ter­part had raised the idea with him, but Ger­many was not enthu­si­as­tic.

“Our polit­i­cal goal must be that the Schen­gen area as a whole func­tions,” he said. “Every­thing else would just be sup­ple­men­tary con­sid­er­a­tions.”

The Dutch plan is sep­a­rate from a French plan to intro­duce sys­tem­at­ic bor­der checks with­in the Schen­gen area as a secu­ri­ty mea­sure after the attacks in Paris last week.

The “mini-Schen­gen area” would include Aus­tria, Ger­many, Bel­gium, Lux­em­bourg and the Nether­lands, and would involve set­ting up tran­sit camps for migrants out­side those bor­ders, a report in news­pa­per De Telegraaf said.

For­eign Min­is­ter Bert Koen­ders con­firmed those details in part to the paper, but said oth­er mea­sures were also under con­sid­er­a­tion.

“The Nether­lands and oth­er coun­tries are talk­ing about many dif­fer­ent solu­tions,” said spokes­woman Janet Tak­ens of the Jus­tice Min­istry, which over­sees immi­gra­tion pol­i­cy.

“We are talk­ing with like-mind­ed coun­tries on a reg­u­lar basis,” she said, declin­ing to pro­vide details.

...

“The “mini-Schen­gen area” would include Aus­tria, Ger­many, Bel­gium, Lux­em­bourg and the Nether­lands, and would involve set­ting up tran­sit camps for migrants out­side those bor­ders, a report in news­pa­per De Telegraaf said.”
From twen­ty six Schen­gen mem­bers down to five. That’s quite a down­grade for a core Euro­pean prize.

But some­thing to keep in mind with this pro­pos­al is that it has a great deal of over­lap with anoth­er idea for rad­i­cal changes that’s been bandied about in recent years (espe­cial­ly dur­ing a cri­sis): the cre­ation of a “two-tiered” euro­zone, with dif­fer­ent mon­e­tary poli­cies and rules for the wealthy “core” and a sec­ond-tier “periph­ery”. And the five nations that would be part of the new “mini-Schen­gen” also hap­pen to be the five euro­zone coun­tries that would almost cer­tain­ly become part of a euro­zone “core” (France is miss­ing from the list, but that’s it). So when we hear warn­ings that end­ing the Schen­gen zone as it exists today would also kill the euro­zone, that’s like­ly true but it would only kill the euro­zone as it exists today. If the estab­lish­ment of the “mini-Schen­gen” coin­cid­ed with the cre­ation of the two-tiered eurozone...well, that could con­ceiv­ably hap­pen. Sure, it would be a giant night­mare to sud­den­ly break up both the Schen­gen zone and euro­zone simul­ta­ne­ous­ly and imme­di­ate­ly replac­ing them with new sys­tems, but the cur­rent euro­zone is also a pret­ty big night­mare, hence all the pri­or spec­u­la­tion about break­ing it up into two tiers before refugee real­ly took hold. Plus, if those five nations broke off to form their own mini-Schen­gen, it’s not like the oth­er 21 nations have to sud­den­ly stop accept­ing free trav­el with each oth­er. In oth­er words, the cre­ation of a “mini-Schen­gen” might just shrink the exist­ing Schen­gen zone, but not kill it.

And don’t for­get that Ger­many’s pow­er­ful finance min­is­ter Wolf­gang Schaeu­ble has been plead­ing for a euro­zone “core” with more rapid inte­gra­tion for years. Includ­ing last year:

Reuters
Twen­ty years on, Schaeu­ble pleads again for core Europe
PARIS

Mon Sep 1, 2014 4:38pm BST

Ger­man Finance Min­is­ter Wolf­gang Schaeu­ble renewed a call for a core group of Euro­pean Union coun­tries to move ahead faster with eco­nom­ic and polit­i­cal inte­gra­tion, 20 years after his ground-break­ing pro­pos­al fell on deaf ears in key part­ner France.

In an arti­cle pub­lished in the Finan­cial Times on Mon­day, Schaeu­ble pro­posed cre­at­ing an EU com­mis­sion­er with the pow­er to reject nation­al bud­gets that breach the bloc’s fis­cal rules, and estab­lish­ing an inner-core par­lia­ment for the euro zone.

“In order to make progress in all of these areas, we should keep using the approach that proved its met­tle back in 1994: to estab­lish cores of co-oper­a­tion with­in the EU that enable small­er, will­ing groups of mem­ber states to forge ahead,” Schaeu­ble wrote in the arti­cle, co-authored by fel­low Ger­man Chris­t­ian Demo­c­rat Karl Lamers.

The cen­tre-right pro-Euro­pean mem­bers of Chan­cel­lor Angela Merkel’s par­ty said the EU had already tak­en that direc­tion with the launch of the euro cur­ren­cy.

They acknowl­edged that many EU coun­tries remain ret­i­cent about clos­er polit­i­cal union that would involve trans­fer­ring more sov­er­eign­ty to Europe.

...

The orig­i­nal Schaeu­ble-Lamers plan for a “core Europe” to forge ahead with polit­i­cal union, pub­lished in Le Monde in 1994, drew an embar­rassed silence from the French author­i­ties, then divid­ed between ail­ing Social­ist pres­i­dent Fran­cois Mit­ter­rand and a con­ser­v­a­tive gov­ern­ment led by Edouard Bal­ladur.

While France and Ger­many joint­ly laid the foun­da­tions for post-war Euro­pean inte­gra­tion, Paris has twice drawn back from clos­er polit­i­cal union, reject­ing a Euro­pean defence com­mu­ni­ty in 1954 and a pro­posed EU con­sti­tu­tion in 2005.

“In order to make progress in all of these areas, we should keep using the approach that proved its met­tle back in 1994: to estab­lish cores of co-oper­a­tion with­in the EU that enable small­er, will­ing groups of mem­ber states to forge ahead.”
That was the call from Ger­many’s pow­er­ful finance min­is­ter last Sep­tem­ber and this is from some­one arguably more pow­er­ful and influ­en­tial in Berlin than Angela Merkel. So the estab­lish­ment of some sort of “core” it’s pret­ty clear­ly a top pri­or­i­ty for at least some in Berlin and at appears that Schaeu­ble would pre­fer to see such a “core” formed soon­er rather than lat­er.

So while talk of a “mini-Schen­gen” zone might seem out­landish giv­en the ways it would fun­da­men­tal­ly break not just a core Euro­pean prize (free­dom of trav­el) but also the euro­zone, don’t for­get that break­ing the EU and euro­zone (and then remak­ing them) is still very much on the agen­da.

Back in Octo­ber, the EU Com­mis­sion issued a descip­tion of the next phase of inte­gra­tion for the euro­zone while pla­cat­ing demands from Berlin: The euro­zone has the goal of estab­lish­ing of a “fis­cal board” next year with the pow­er to impose finan­cial sanc­tions on euro­zone mem­bers that don’t reduce their deficits as much as the EU rules man­date. And, of course, Ger­man Finance Min­ster Wolf­gang Schauble com­plained that this was­n’t enough and an inde­pen­dent board needs to be set up with the pow­er to mon­i­tor bud­gets and issue sanc­tions. In oth­er words, the high­ly polit­i­cal nature of the mon­i­tor­ing bud­gets and judg­ing nation­al spend­ing plans (like how much is spent on social ser­vices) should be depoliti­cized and per­ma­nent­ly hand­ed over to a tech­no­crat­ic insti­tu­tion with a blind man­date to enforce bud­get caps:

The Wall Street Jour­nal
EU to Cre­ate Fis­cal Board to Advise on Bud­get Poli­cies
Euro­pean Com­mis­sion wants sin­gle seat on IMF exec­u­tive board for euro­zone by 2025

By Gabriele Stein­hauser
Updat­ed Oct. 21, 2015 12:31 p.m. ET

BRUSSELS—The Euro­pean Com­mis­sion on Wednes­day set out its next steps for strength­en­ing the Continent’s embat­tled cur­ren­cy union, say­ing it would cre­ate a fis­cal board to help steer its rul­ings on nation­al bud­gets and pro­pose a sys­tem for back­ing up nation­al deposit-guar­an­tee funds before the end of the year.

The Euro­pean Union’s exec­u­tive arm has been fac­ing resis­tance to some of its plans for deep­en­ing inte­gra­tion in the 19-coun­try euro­zone, part­ly due to divi­sions between fis­cal hawks, such as Ger­many and Fin­land, and coun­tries like France and Italy, which want the bloc to ease aus­ter­i­ty.

At the same time, gov­ern­ments pre­oc­cu­pied with deal­ing with large flows of migrants into Europe are reluc­tant to ques­tion nation­al pow­ers on the eco­nom­ic front at the same time.

Nev­er­the­less, the commission’s vice pres­i­dent for the euro, Vald­is Dom­brovskis, said strength­en­ing the sup­port and over­sight mech­a­nisms of the euro­zone was nec­es­sary, giv­en high lev­els of unemployment—nearly 18 mil­lion of the bloc’s work­ers are with­out jobs. “The recov­ery is still to be felt by many peo­ple in Europe,” Mr. Dom­brovskis said.

In its pro­pos­als Wednes­day, the com­mis­sion sought to bal­ance nation­al con­cerns, tread­ing par­tic­u­lar­ly care­ful­ly around Germany’s fears it will end up pay­ing for finan­cial and eco­nom­ic prob­lems in its euro­zone neigh­bors.

Part­ly in response to demands from Berlin, the com­mis­sion said it would set up a Euro­pean Fis­cal Board to help steer deci­sions on nation­al bud­gets as well as the fis­cal path for the entire euro­zone.

The com­mis­sion already scru­ti­nizes nation­al bud­gets every year and can ask gov­ern­ments to revise their spend­ing plans. If a coun­try fails to cuts its debts and deficits accord­ing to EU rules, the com­mis­sion can impose finan­cial sanc­tions.

But Ger­man Finance Min­is­ter Wolf­gang Schäu­ble has com­plained that the com­mis­sion is less strict with large play­ers such as France, Italy and his own coun­try and has called for an inde­pen­dent fis­cal board to take bud­get deci­sions instead of the com­mis­sion. Wednesday’s plans fall short of that demand, giv­ing the board mere­ly an advi­so­ry role and leav­ing the judg­ment of nation­al spend­ing plans to the com­mis­sion.

Mr. Dom­brovskis didn’t give a pre­cise date for when the fis­cal board would take up its work, say­ing only that “the aim is for the board to start oper­at­ing next year.”

...

“But Ger­man Finance Min­is­ter Wolf­gang Schäu­ble has com­plained that the com­mis­sion is less strict with large play­ers such as France, Italy and his own coun­try and has called for an inde­pen­dent fis­cal board to take bud­get deci­sions instead of the com­mis­sion. Wednesday’s plans fall short of that demand, giv­ing the board mere­ly an advi­so­ry role and leav­ing the judg­ment of nation­al spend­ing plans to the com­mis­sion.”

So that was the pro­pos­al back in Octo­ber, with the expect com­plaints from Berlin that the plan does­n’t leave aus­ter­i­ty poli­cies on “inde­pen­dent” auto-pilot quite enough. But also note that it was­n’t just indi­vid­ual mem­ber states that would be over­seen by the EU’s pro­posed board. It would also “help steer deci­sions on nation­al bud­gets as well as the fis­cal path for the entire euro­zone.” Giv­en that, it’s worth not­ing that the EU Com­mis­sion issued anoth­er decree last month about a sig­nif­i­cant change it would like to see in Ger­many’s fis­cal poli­cies, although its unclear if the pro­posed fis­cal board would have any pow­er to enforce the decree: Ger­many and the Nether­lands needs to stop squelch­ing demand and spend more:

Reuters
Ger­many should invest more to help euro zone grow — Com­mis­sion

BRUSSELS | By Jan Strupczews­ki

Thu Nov 26, 2015 8:01am EST

Ger­many and the Nether­lands, which have big cur­rent account sur­plus­es, should invest more to help boost eco­nom­ic growth and infla­tion in the whole euro zone, the Euro­pean Com­mis­sion said on Thurs­day.

The Com­mis­sion, the Euro­pean Union’s exec­u­tive arm, analysed the economies of all 28 EU coun­tries in an annu­al exer­cise called the macro eco­nom­ic imbal­ances pro­ce­dure, aimed to iden­ti­fy prob­lems ear­ly and address them before they grow.

It said that to boost the euro zone’s mod­er­ate eco­nom­ic recov­ery and per­sis­tent­ly low infla­tion, gov­ern­ments should focus next year on invest­ment, struc­tur­al reforms and sound pub­lic finances.

The respon­si­bil­i­ty for more invest­ment, how­ev­er, was main­ly with those who could afford it best — the Ger­mans and the Dutch — that would also ben­e­fit from a rebal­anc­ing of their own economies.

“The risk of pro­tract­ed low growth and low infla­tion at euro-area lev­el should be mit­i­gat­ed espe­cial­ly by coun­tries that are bet­ter placed to boost invest­ment,” the Com­mis­sion said.

“This is the case of Ger­many and the Nether­lands whose cur­rent account sur­plus­es are fore­cast to remain high in the com­ing years,” it said, adding the per­sis­tence of very high sur­plus­es point­ed to a lack of domes­tic sources of growth.

The Com­mis­sion believes that a cur­rent account sur­plus high­er than 7 per­cent of gross domes­tic prod­uct is exces­sive and Ger­many already last year had a sur­plus of 7.8 per­cent.

This year Ger­many will record a sur­plus of 8.7 per­cent, the Com­mis­sion said, 8.6 per­cent in 2016 and 8.4 per­cent in 2017.

The sur­plus of the Nether­lands is even high­er — it has been well above 10 per­cent of GDP since 2012 and is only to ease to 9.6 per­cent in 2017.

MISALLOCATION OF RESOURCES

“The per­sis­tence of size­able cur­rent account sur­plus­es in coun­tries with rel­a­tive­ly low delever­ag­ing needs implies large sav­ings and invest­ment imbal­ances, point­ing to a mis­al­lo­ca­tion of resources,” the Com­mis­sion said.

The remarks are unlike­ly to go down well in Ger­many, the world’s biggest exporter, which believes its export-ori­ent­ed econ­o­my is run­ning well and wants to cal­i­brate addi­tion­al invest­ment in a way that would not clash with cut­ting debt.

Ger­man offi­cials also believe that more spend­ing by Europe’s biggest econ­o­my alone will not solve the growth prob­lems of the sin­gle cur­ren­cy area and that oth­er gov­ern­ments should do their home­work too by imple­ment­ing struc­tur­al reforms.

The Com­mis­sion agreed that “coun­tries of sys­temic rel­e­vance” like Italy and France must step up struc­tur­al reforms but not­ed those with high debt, like Italy, or a cur­rent account deficit like France, would ben­e­fit from the addi­tion­al demand the sur­plus coun­tries could cre­ate.

“A reduc­tion of sur­plus­es in coun­tries with rel­a­tive­ly low delever­ag­ing needs would bring a much need­ed improve­ment in demand in the euro area and help ease the trade-off faced by high­ly indebt­ed coun­tries,” the Com­mis­sion said.

It said the euro zone had one of the world’s largest cur­rent account sur­plus­es in val­ue terms, expect­ed to reach some 390 bil­lion euros, or 3.7 per­cent of its GDP.

The bulk of it is cre­at­ed by Ger­many and the Nether­lands, whose con­tri­bu­tion rep­re­sents 2.5 per­cent of euro zone GDP and 0.7 per­cent respec­tive­ly. The third biggest is Italy which adds 0.4 per­cent of euro zone GDP to the over­all sur­plus num­ber.

“The risk of pro­tract­ed low growth and low infla­tion at euro-area lev­el should be mit­i­gat­ed espe­cial­ly by coun­tries that are bet­ter placed to boost invest­ment.”
Yes, in a union, those run­ning high cur­rent account sur­plus­es should prob­a­bly be the dri­vers of new demand in the midst of a chron­ic demand short­age instead of sim­ply impos­ing more demand-cut­ting aus­ter­i­ty on the weak­est union mem­bers. What a rad­i­cal con­cept.

And, of course, to folks like Bun­des­bank pres­i­dent Jens Wei­d­mann who recent­ly com­ment­ed on Ger­many’s chron­ic mas­sive cur­rent account sur­plus­es, the demand that Ger­many increase its domes­tic demand is indeed a rad­i­cal con­cept. Instead, as Wei­d­mann puts it below, the EU should just accept that Ger­many’s large cur­rent account sur­plus, while a “chal­lenge”, is due to fac­tors like the falling val­ue of the euro (and we’re also pre­sum­ably sup­posed to ignore the impact of the per­ma­nent and dra­mat­i­cal­ly low­ered the val­ue of Ger­many’s cur­ren­cy as a con­se­quence of join­ing the euro­zone) and isn’t the result of pro­tec­tion­ist eco­nom­ic poli­cies (again, we’re just sup­posed to ignore the deval­ued cur­ren­cy that comes from sim­ply join­ing the euro­zone and Ger­many’s nation­al poli­cies intend­ed to sup­press wages to increase “com­pet­i­tive­ness” start­ed over a decade ago).

So, accord­ing to Wei­d­mann, chron­ic mas­sive account sur­plus­es are a chal­lenge, but one that should just be endured. Instead, the real rebal­anc­ing act isn’t about rebal­anc­ing chron­ic cur­rent account sur­plus­es and deficits. It’s about rebal­anc­ing “lia­bil­i­ties” and “con­trol”. Specif­i­cal­ly, in order to rebal­ance the euro­zone in the long run, some sort of “fis­cal trans­fers” maybe be required from the wealth­i­er nations to weak­er nations, an idea Wei­d­mann has long opposed. But, of course, in order to main­tain the “bal­ance” between “lia­bil­i­ty” and “con­trol”, those coun­tries on the receiv­ing end of the trans­fers need to give up con­trol:

The Wall Street Jour­nal
High Cur­rent-Account Sur­plus Is an Eco­nom­ic Chal­lenge, Says ECB’s Wei­d­mann
Ger­man cur­rent-account sur­plus more than 8% of GDP

By Todd Buell
Dec. 10, 2015 1:30 p.m. ET

FRANKFURT—A high cur­rent account sur­plus pos­es a chal­lenge, but still isn’t as dan­ger­ous as a high cur­rent-account deficit, Germany’s top cen­tral banker said in pre­pared remarks Thurs­day.

...

“A sur­plus of more than 8% of GDP, such as we are cur­rent­ly see­ing in Ger­many, is an eco­nom­ic chal­lenge, too,” he said in remarks pre­pared for deliv­ery to an audi­ence in Lis­bon.

Germany’s cur­rent account sur­plus has come under fire for years from inter­na­tion­al crit­ics who say that the Ger­man econ­o­my relies too much on exports and not enough on domes­tic demand.

Mr. Wei­d­mann said, how­ev­er, that the high sur­plus “is not the result of pro­tec­tion­ist eco­nom­ic pol­i­cy mea­sures, and that the recent rise is caused, not least, by the deval­u­a­tion of the euro” and the fall in ener­gy prices.

“More­over, it should be not­ed that a sur­plus country—in con­trast to a deficit country—is not at risk of being cor­rect­ed abrupt­ly, and is there­fore less vul­ner­a­ble,” he said.

The Ger­man cen­tral banker took a musi­cal approach to illus­trat­ing a point he has made before that in Europe the bal­ance between “lia­bil­i­ty”, essen­tial­ly coun­tries bail­ing each oth­er out, and shared deci­sion-mak­ing and sur­veil­lance, or “con­trol”, isn’t where it should be. He recalled the Frank Sina­tra song “Love and Mar­riage,” say­ing “while some would argue that love and mar­riage are sep­a­ra­ble con­cepts, it real­ly is an illu­sion to sep­a­rate lia­bil­i­ty and con­trol with­out under­min­ing the sta­bil­i­ty of mon­e­tary union.”

“And there is no get­ting around the fact: a com­bi­na­tion of nation­al sov­er­eign­ty and com­mon sol­i­dar­i­ty can pose a risk to the sta­bil­i­ty of our mon­e­tary union,” he added.

“Cre­at­ing a fis­cal union—that is, cen­tral­ized deci­sion-mak­ing in the fis­cal realm — com­bined with fis­cal trans­fers or mutu­al lia­bil­i­ty in the form of eurobonds could make [the euro­zone] less vul­ner­a­ble,” he said. “The bal­ance between con­trol and lia­bil­i­ty would be restored.”

“Cre­at­ing a fis­cal union—that is, cen­tral­ized deci­sion-mak­ing in the fis­cal realm — com­bined with fis­cal trans­fers or mutu­al lia­bil­i­ty in the form of eurobonds could make [the euro­zone] less vulnerable...The bal­ance between con­trol and lia­bil­i­ty would be restored.”
Yes, the bal­ance between “con­trol” and “lia­bil­i­ty” would restored if only the euro­zone could set up a sys­tem where the wealthy nations basi­cal­ly become the per­ma­nent Troi­ka for their weak­er neigh­bors. Behold the bal­ance!

So might the new­ly pro­posed euro­zone “fis­cal board” accom­plish what Wei­d­mann has in mind? Of course not. Instead of the right to finan­cial sanc­tion mem­bers that vio­late the euro­zone’s bud­get rules, the new fis­cal boards needs more inde­pen­dence from the Euro­pean Com­mis­sion and com­pul­so­ry pow­ers. But since that’s not polit­i­cal­ly fea­si­ble at this point, Wei­d­mann pro­pos­es basi­cal­ly what Wolf­gang Schaeu­ble pro­posed: set up the new ‘fis­cal board’, but make it inde­pen­dent from the Euro­pean Com­mis­sion to remove ‘polit­i­cal pres­sure’:

Reuters
Europe’s pro­posed fis­cal watch­dog not strong enough: Bun­des­bank

Thu Dec 10, 2015 1:35pm EST
FRANKFURT

A pro­posed Euro­pean advi­so­ry board to assess nation­al bud­gets is not strong enough and the euro area needs a fis­cal author­i­ty with greater pow­ers, Bun­des­bank Pres­i­dent Jens Wei­d­mann said on Thurs­day.

The body pro­posed by the Euro­pean Com­mis­sion would work too slow­ly to rein in spend­thrift gov­ern­ments and would not have enough pow­er to ensure the Com­mis­sion respect­ed its rec­om­men­da­tions, Wei­d­mann said in pre­pared remarks in Lis­bon.

“This does not bode well for the objec­tive of a more depoliti­cized appli­ca­tion of the rules,” said Wei­d­mann, who also sits on the Euro­pean Cen­tral Bank’s rate-set­ting Gov­ern­ing Coun­cil. “For that, a fis­cal coun­cil needs to be tru­ly inde­pen­dent, and its rec­om­men­da­tions need to car­ry weight.”

The euro zone has strug­gled since its incep­tion to find ways to make its mem­ber states observe bud­get rules intend­ed to help them live with­in the con­straints of a shared cur­ren­cy.

The advi­so­ry Euro­pean Fis­cal Board was pro­posed in Octo­ber with mem­bers com­plete­ly out­side the Com­mis­sion, whose crit­ics say it has bowed to pres­sure to be more lenient with major coun­tries such as France than with oth­ers.

Wei­d­mann said that a pow­er­ful author­i­ty is need­ed because the euro area’s risk-shar­ing arrange­ment reduces the incen­tive for sound fis­cal pol­i­cy.

A fis­cal union with com­pul­so­ry cen­tral­ized deci­sion-mak­ing would make the euro zone less vul­ner­a­ble but there is not enough polit­i­cal sup­port for such a move, Wei­d­mann said.

The best viable option would be to keep eco­nom­ic and fis­cal pol­i­cy deci­sions at the nation­al lev­el with an inde­pen­dent over­sight body that could take some of the polit­i­cal pres­sure off the Euro­pean Com­mis­sion, Wei­d­mann added.

“The best viable option would be to keep eco­nom­ic and fis­cal pol­i­cy deci­sions at the nation­al lev­el with an inde­pen­dent over­sight body that could take some of the polit­i­cal pres­sure off the Euro­pean Com­mis­sion, Wei­d­mann added.”

Yep, in the future euro­zone, the fis­cal deci­sions, which are some of the most polit­i­cal deci­sions a democ­ra­cy can make, are about to be over­seen by a new Euro­pean Com­mis­sions agency with the pow­er to sanc­tion “way­ward” mem­bers that don’t keep their deficits below 3 per­cent. And if Berlin gets its way, that new over­see­ing com­mis­sion is going to be polit­i­cal­ly inde­pen­dent. So we’re about see the pol­i­tics tak­en out of fis­cal poli­cies at the nation­al lev­el across the euro­zone (at least for the weak­er nations), and pos­si­bly removed from the supra­na­tion­al lev­el too. Have fun with that.

Some sort of big joint EU response to the Brex­it designed to rein­vig­o­rate the Euro­pean project and give EU cit­i­zens a sense of shared pur­pose and uni­ty is some­thing that we should prob­a­bly expect at this point giv­en the grow­ing pro-“exit” sen­ti­ments across Europe. But if the sen­ti­ments expressed by EU lead­ers in the arti­cle below are any indi­ca­tion of what specif­i­cal­ly to expect, we should most­ly expect a bunch of hap­py talk and that’s it:

Reuters

Europe launch­es reform ‘reflec­tion’ after Brex­it shock

BRUSSELS | By Noah Barkin
Wed Jun 29, 2016 11:05am EDT

Hop­ing to stave off a broad­er polit­i­cal cri­sis after Britain’s shock deci­sion to leave the EU, Euro­pean lead­ers agreed on Wednes­day to spend the next nine months devel­op­ing pro­pos­als for an over­haul of the bloc amid deep divi­sions between its mem­bers.

Dis­il­lu­sion with the EU has risen sharply fol­low­ing years of eco­nom­ic weak­ness and after a record influx of refugees and series of dead­ly attacks by Islam­ic mil­i­tants.

The prob­lems have fueled the sense that elites in Brus­sels and oth­er Euro­pean cap­i­tals are inef­fec­tive and out of touch with the con­cerns of ordi­nary peo­ple.

Last week, the anger bub­bled over in Britain’s Brex­it vote, which threw six decades of clos­er Euro­pean inte­gra­tion into reverse and raised fears of a domi­no effect on the con­ti­nent, where anti-EU, xeno­pho­bic par­ties are on the rise.

EU lead­ers, who met on Wednes­day with­out Britain, agree that change is need­ed. But they also know that time is required to get the remain­ing 27 mem­bers behind a com­mon Euro­pean ini­tia­tive due to a deep divide over what lessons to draw from Brex­it.

Ger­man Chan­cel­lor Angela Merkel, speak­ing to reporters at the end of the sum­mit, said it was unre­al­is­tic to con­sid­er rad­i­cal changes, such as mov­ing towards a fis­cal or polit­i­cal union, in the cur­rent envi­ron­ment. These would require changes to the EU’s Lis­bon Treaty and more ref­er­en­dums, which lead­ers are des­per­ate to avoid.

“It is not about more or less Europe but about deliv­er­ing bet­ter results,” Merkel said.

“Our cit­i­zens often don’t under­stand why we are doing some­thing and what our goals are. All of us want to change this. It is not about chang­ing the EU Treaty, about intro­duc­ing more laws or less. It’s about deliv­er­ing on our goals.”

Offi­cials said that Dutch Prime Min­is­ter Mark Rutte, who holds the rotat­ing pres­i­den­cy of the EU, had made clear to oth­er lead­ers that it was not the time for “rev­o­lu­tions”.

Anoth­er top offi­cial acknowl­edged that vague pledges to cre­ate a “bet­ter Europe” were large­ly emp­ty but that the main pri­or­i­ty for now was to send a sim­ple mes­sage that every­one around the table could agree on.

EXISTENTIAL

The peri­od of “polit­i­cal reflec­tion” will start in earnest in mid-Sep­tem­ber at a sum­mit in Bratisla­va, Slo­va­kia. Some EU lead­ers have said the goal is to reach a set of pro­pos­als by March of next year, the 60th anniver­sary of the EU’s found­ing Rome Treaty.

The peri­od mir­rors the one that fol­lowed French and Dutch rejec­tions of a Euro­pean con­sti­tu­tion in dual ref­er­en­dums in 2005. Merkel came to pow­er the same year and led nego­ti­a­tions on the more mod­est Lis­bon Treaty.

But the cur­rent cri­sis is more exis­ten­tial for the EU because of the Brex­it vote, which in one fell swoop deprives the bloc of one of its only eco­nom­ic and polit­i­cal heavy­weights.

Years of cri­sis have also left deep scars among mem­ber states and there is very lit­tle agree­ment about what the changes should entail.

Poland, Slo­va­kia, Hun­gary and the Czech Repub­lic have called for the pow­ers of the Euro­pean Com­mis­sion to be reined in fol­low­ing Brex­it.

Politi­cians in France and Bel­gium have sug­gest­ed that a core of like-mind­ed mem­ber states press ahead with deep­er inte­gra­tion in a “mul­ti-speed” Europe.

And Ger­man Finance Min­is­ter Wolf­gang Schaeu­ble appears to favor stricter bud­get rules, an idea that would infu­ri­ate south­ern Euro­pean coun­tries which are strug­gling to cope with high unem­ploy­ment after years of aus­ter­i­ty.

A poll by the Pew Research Cen­ter ear­li­er this month showed sup­port for the EU plung­ing in its biggest mem­ber states.

The fall was most pro­nounced in France, where only 38 per­cent of respon­dents said they had a favor­able view of the EU, down 17 points from last year. Favor­a­bil­i­ty rat­ings were also down sharply in Spain, at 47 per­cent, and Ger­many, at 50 per­cent.

...

“Anoth­er top offi­cial acknowl­edged that vague pledges to cre­ate a “bet­ter Europe” were large­ly emp­ty but that the main pri­or­i­ty for now was to send a sim­ple mes­sage that every­one around the table could agree on.”

That’s inspir­ing. Almost as inspir­ing as Wol­gang Schaeu­ble pro­pos­al for stricter bud­get rules. Anoth­er way of say Europe needs more aus­ter­i­ty in response to the Brex­it. That should do won­ders for the anti-EU sen­ti­ments.

But while at least some EU lead­ers might be pre­dict­ing a mut­ed response, if a report by Pol­ish pub­lic broad­cast­er TVP Info is accu­rate EU lead­ers are appar­ent­ly qui­et­ly plan­ning on push­ing a pro­pos­al to merge the armies, crim­i­nal codes, tax sys­tems, and cur­ren­cies of all EU mem­bers:

thenews.pl

New EU ‘super­state plan’ by France, Ger­many: report

The for­eign min­is­ters of France and Ger­many have pro­posed cre­at­ing a “Euro­pean super­state” lim­it­ing the pow­ers of indi­vid­ual mem­bers fol­low­ing Britain’s ref­er­en­dum deci­sion to leave the EU, Pol­ish pub­lic broad­cast­er TVP Info has report­ed.

27.06.2016 09:20

The doc­u­ment in which the pro­pos­als appear is to be pre­sent­ed to Viseg­rad Group coun­tries meet­ing in Prague on Mon­day by Ger­man For­eign Min­is­ter Frank-Wal­ter Stein­meier, TVP Info said, adding that the doc­u­ment was an “ulti­ma­tum”.

TVP Info said the pro­pos­als would mean mem­bers of a super­state would in prac­tice have no right to their own army, to a sep­a­rate crim­i­nal code or a sep­a­rate tax sys­tem, and would not have their own cur­ren­cy.

In addi­tion, TVP Info said, mem­ber states would lose con­trol over their own bor­ders and pro­ce­dures for admit­ting and relo­cat­ing refugees.

Pol­ish For­eign Min­is­ter Witold Waszczykows­ki told TVP Info: “This is not a good solu­tion, of course, because from the time the EU was invent­ed... a lot has changed.

“The mood in Euro­pean soci­eties is dif­fer­ent. Europe and our vot­ers do not want to give the Union over into the hands of tech­nocrats.

...

Mar­tin Schae­fer, a spokesman for the Ger­man for­eign min­istry, said: “Berlin does not want super­state, it wants a bet­ter Europe.”

Mean­while, Waszczykows­ki said lat­er on Mon­day that the doc­u­ment by Ger­many and France was drawn up before the Brex­it deci­sion. He said it includ­ed “old ideas” and “does not take into account what hap­pened dur­ing the... ref­er­en­dum.”

“TVP Info said the pro­pos­als would mean mem­bers of a super­state would in prac­tice have no right to their own army, to a sep­a­rate crim­i­nal code or a sep­a­rate tax sys­tem, and would not have their own cur­ren­cy.”

Yeah, push­ing a ‘super­state’ plan would prob­a­bly ruf­fle some pop­ulist feath­ers right now. As Poland’s for­eign min­is­ter acknowl­edged, it appears to have been a plan drawn up before the Brex­it deci­sion and Ger­many’s for­eign min­istry spokesman appeared to to be dis­tanc­ing his min­istry from the idea. So if there is a ‘super­state’ plan that’s still in effect post-Brex­it, it sounds like the kind of plan that the plan­ners plan on not pub­licly dis­cussing for the time being.

Also keep in mind that Poland’s pub­lic broad­cast­ing out­lets were recent­ly tak­en con­trol of by the coun­try’s right-wing gov­ern­ment, so if this report was­n’t entire­ly accu­rate it would­n’t be shock­ing.

Still, it’s not an entire­ly implau­si­ble behind-the-scenes plan to be dis­cussed by EU lead­ers at this point since a major exis­ten­tial cri­sis like the Brex­it is poten­tial­ly the kind of cri­sis that could cat­alyze the adop­tion of such a plan in the same way the euro­zone finan­cial cri­sis cat­alyzed many of the neolib­er­al “struc­tur­al reforms”/austerity poli­cies that helped fuel the pre­vail­ing anti-EU sen­ti­ment to unprece­dent­ed lev­els. So if there real­ly is a strong desire held by at least some EU lead­ers to cre­ate a ‘super­state’ soon, right now is a log­i­cal time to do it. Or at least test the waters.

At the same time, as Poland’s for­eign min­is­ter indi­cat­ed, a ‘super­state’ push is pret­ty implau­si­ble in a post-Brex­it envi­ron­ment in part because a more tight­ly inte­grat­ed Europe that entails an even greater loss of sov­er­eign­ty is exact­ly the kind of change that could push even more pop­u­la­tions toward the near­est “-exit”. It’s a ten­sion that high­lights one of the great­est chal­lenges the EU faces today: a “Unit­ed States of Europe”, where you don’t have a hand­ful of pow­er­ful nations effec­tive­ly run­ning the place but one big “we’re all in this togeth­er” Euro­pean nation and reg­u­lar fis­cal trans­fers from rich to poor mem­ber stats, real­ly is one of the most effec­tive means for ensur­ing the long-term socioe­co­nom­ic sta­bil­i­ty of a unit­ed Europe.

But in order to imple­ment a tru­ly func­tion­al “Unit­ed States of Europe”, it isn’t just the nation­al sov­er­eign­ty that needs to be for­mal­ly sac­ri­ficed and pooled togeth­er. The infor­mal super-sov­er­eign­ty that comes with being the most eco­nom­i­cal­ly pow­er­ful mem­ber states, cur­rent­ly Ger­many and to a less­er extent France, is also going to have to be sac­ri­ficed along with a lot of these wealth­i­er mem­bers’ wealth because that wealth is going to have to be redis­trib­uted if the eco­nom­i­cal­ly unit­ed Europe is going to func­tion. You can’t have an EU where when­ev­er there’s a major cri­sis the first ques­tion on every­one’s mind is “what will Berlin do because it holds the biggest purse strings?” That’s not a foun­da­tion for a viable unit­ed Europe.

Are the vot­ers and elites of the EU’s wealthy states pre­pared for that kind of struc­tur­al reform? Tru­ly pool­ing pow­er with an EU par­lia­ment and mov­ing away from a mod­el of back­room nego­ti­a­tions where super-sov­er­eign­ty reigns supreme? Sup­port­ers of the Euro­pean project had bet­ter hope so, because it’s going to be absolute­ly nec­es­sary.

And yes, that same neces­si­ty for a tru­ly shared union means that a viable EU ‘super­state’ real­ly isn’t com­pat­i­ble with any long-term visions that involve turn­ing the EU into a Clause­witz­ian night­mare state where each mem­ber is a large­ly pow­er­less ‘lan­guage groups’ unof­fi­cial­ly run by the most pow­er­ful mem­bers if it’s going to avoid end­less strife and con­flict. Good. Let’s hope there are some new ideas in the post-Brex­it pipeline.

With next year’s French elec­tions look­ing like it will come down to a sec­ond round runoff between Marine Le Pen and who­ev­er The Repub­li­cans (the new name for the con­ser­v­a­tive UMP) nom­i­nate, it’s prob­a­bly a good time to take a look at what grand ideas the var­i­ous Repub­li­can can­di­dates have in mind for jump start­ing the Euro­pean project. It sounds like most of the Repub­li­can can­di­dates agree on a core Répub­li­can plan: 1) the EU should reform Schen­gen and give each coun­try has more con­trol over its bor­ders; 2) Europe should get its own ver­sion of the Inter­na­tion­al Mon­e­tary Fund (pre­sum­ably because the IMF has­n’t been pro-aus­ter­i­ty enough sat­is­fy the Con­ser­v­a­tives, which is appalling); 3) the Euro­pean Com­mis­sion should write even few­er laws; 4) nation­al par­lia­ments should be able to veto them all; and, 5) The EU should stop expand­ing.

But there are still plen­ty of dif­fer­ences. The cur­rent front-run­ner, Alain Jup­pé, called for a new round of treaty changes and a EU-wide ref­er­en­dum, but cau­tions that nei­ther would hap­pen before France regained cred­i­bil­i­ty as an eco­nom­ic force in Berlin’s eyes. So the cur­rent Repub­li­can front-run­ner is offer­ing big reforms, but not before there’s a lot more aus­ter­i­ty and not unless the aus­ter­i­ty works (Le Pen must be hop­ing Jup­pé stays in the lead).

For­mer pres­i­dent Nico­las Sarkozy might have the most ambi­tions agen­da. It appears to involve cre­at­ing a new euro­zone Pres­i­dent. But all euro­zone cit­i­zens won’t vote for this pres­i­dent. Instead, it will rotate between France and Ger­many. Yep.

So if Sarkozy gets the nom­i­na­tion, it’s look­ing like French vot­ers will be choos­ing between the far-right Nation­al Front that wants to see France leave the EU, and the Repub­li­can par­ty with an agen­da to make France a per­ma­nent co-pres­i­dent of the euro­zone. And the pri­ma­ry sea­son has yet to real­ly begin so this is prob­a­bly just a taste of the big bold EU reform plans that we’re going to hear over the next year. And in all cas­es there’s prob­a­bly going to be a lot more aus­ter­i­ty because this is the Repub­li­can par­ty and that’s their thing. It’s one more rea­son to dread next year’s elec­tions in France:

Politico.eu

The French Right’s plan to save Europe: More France

Nico­las Sarkozy and his con­ser­v­a­tive rivals are all imag­in­ing the future of the EU.

By Nicholas Vinocur

7/1/16, 5:29 AM CET

PARIS — With Europe in cri­sis, much of the EU is look­ing to its de fac­to lead­ers, French Pres­i­dent François Hol­lande and Ger­man Chan­cel­lor Angela Merkel, for answers on how to fix the bloc and fend off a post-Brex­it breakup.

But if polls are to be trust­ed, at least one half of that duo could be out of pow­er by the time seri­ous talks on EU reform begin.

Hol­lande is as unpop­u­lar as ever, and may well not run for re-elec­tion. If he does, all cur­rent sur­veys sug­gest he would be knocked out in round one of a pres­i­den­tial elec­tion, open­ing the way for a cen­ter-right pres­i­dent in 2017.

Which means the bur­den of imag­in­ing the EU’s future would fall to one of Hollande’s con­ser­v­a­tive rivals: Nico­las Sarkozy, Alain Jup­pé, François Fil­lon or Bruno Le Maire — the top four con­tenders in a pri­ma­ry to elect the cen­ter-right pres­i­den­tial can­di­date.

How does France’s con­ser­v­a­tive estab­lish­ment see the bloc’s future? In a nut­shell: small­er, nar­row­er, weak­er and more nation­al.

After a sem­i­nar at Les Répub­li­cains (LR) par­ty head­quar­ters this week, Sarkozy spelled out five points for EU reform that one of his back­ers said were “total­ly con­sen­su­al” (nev­er mind that Le Maire and Nathalie Kosciusko-Morizet, also a can­di­date, did not both­er to show up and brain­storm).

The Répub­li­cain plan en bref: 1) the EU should reform Schen­gen, so each coun­try has more con­trol over its bor­ders; 2) Europe should get its own ver­sion of the Inter­na­tion­al Mon­e­tary Fund, to avoid being “on its knees before the Unit­ed States”; 3) the Euro­pean Com­mis­sion should write even few­er laws; 4) nation­al par­lia­ments should be able to veto them all; and, 5) Europe’s “nev­er-end­ing” expan­sion should, well, end.

Beyond those bul­let points, how­ev­er, the con­sen­sus fades. Each con­tender for the nom­i­na­tion has his or her own cus­tom-built plan for the EU’s future. And now that Brex­it has made the EU a fash­ion­able top­ic again after a long peri­od dur­ing which it took a back seat to France’s dimin­ished eco­nom­ic stature, all are deter­mined to hawk their wares as loud­ly as pos­si­ble.

Fix­ing Europe is ‘up to us’

Take Sarkozy. Osten­si­bly, the LR par­ty chief should stick to the five points, since he is not an offi­cial pri­ma­ry can­di­date. But, at a meet­ing with French vot­ers in Lon­don Wednes­day, he went far beyond the par­ty line, argu­ing for deep changes and a star­ring role for France. “In ten months,” he said, refer­ring to France’s pres­i­den­tial elec­tion, “[the job of fix­ing Europe] will be up to us.”

How? Via a rapid treaty change — an option reject­ed Wednes­day by EU lead­ers — and a brand-new euro­zone pres­i­den­cy that would switch back and forth between France and Ger­many, he said, “because they rep­re­sent half of the eurozone’s eco­nom­ic activ­i­ty.” And the oth­er mem­bers of the sin­gle cur­ren­cy? “Too bad if I anger the small coun­tries!” Le Figaro cit­ed him as say­ing.

There is more. While Sarkozy treads care­ful­ly due to his role as par­ty chief, he is road-test­ing more rad­i­cal ideas via oth­ers, notably LR vice pres­i­dent Lau­rent Wauquiez. At the top of this B‑list is killing off the Euro­pean Com­mis­sion.

“We can no longer allow an admin­is­tra­tive body to make leg­isla­tive pro­pos­als,” Wauquiez told the Nation­al Assem­bly Tues­day. The idea pro­voked cries of “pop­ulist!” and a stern rebuke from Social­ist Prime Min­is­ter Manuel Valls. But it was no throw­away. A day ear­li­er anoth­er Sarkozy com­padre, Guil­laume Lar­rivé, was giv­ing it air­time on TV, say­ing the Com­mis­sion need­ed to be replaced with a “Sec­re­tari­at of Nations.”

If the idea sticks, Sarkozy may well snatch it up for him­self.

On the oppo­site side of the spec­trum, there is Jup­pé. Cur­rent­ly favored to win the Novem­ber Répub­li­cain pri­ma­ry, and then go on to become pres­i­dent, the for­mer PM has carved out a Europhile niche for him­self in an increas­ing­ly Euroskep­tic par­ty.

On June 27, he wrote on his blog that Europe need­ed to get more polit­i­cal, while France should “merge [its] capac­i­ties with the coun­tries with whom we share a world­view and civ­i­liza­tion­al val­ues.” A treaty change was nec­es­sary, he argued, and so was an EU-wide ref­er­en­dum to approve it. But nei­ther would hap­pen before France regained cred­i­bil­i­ty as an eco­nom­ic force in Berlin’s eyes.

In oth­er words, under Jup­pé the EU would be in for more of the same.

On the side of ex-prime min­is­ter Fil­lon, the tone is more Euroskep­tic. The fourth man in the race, behind Sarkozy, Jup­pé and Le Maire, Fil­lon wants to nar­row the EU’s leg­isla­tive scope dras­ti­cal­ly.

In the future, he wrote in an op-ed for Le Monde, “I want Europe to inter­vene in a lim­it­ed num­ber of areas, and when it has an explic­it man­date from nations and peo­ples… sub­sidiar­i­ty and flex­i­bil­i­ty would take prece­dence over today’s uni­for­mi­ty.”

Final­ly, there is Le Maire, the for­mer agri­cul­ture min­is­ter who told POLITICO in May that France need­ed a ref­er­en­dum of its own to reset its trou­bled rela­tion­ship with the EU. Like David Cameron’s failed gam­ble? Or Marine Le Pen’s “Frex­it” pledge? Not at all.

“My ref­er­en­dum is the exact oppo­site of the one being pro­posed by David Cameron,” Le Maire said. His would be a “pos­i­tive” plebiscite, with no option of leav­ing the EU, only sign­ing on to a pack­age of reforms. If it failed, no prob­lem, because his ref­er­en­dum would be con­sul­ta­tive, or non-bind­ing for the gov­ern­ment.

...

“Beyond those bul­let points, how­ev­er, the con­sen­sus fades. Each con­tender for the nom­i­na­tion has his or her own cus­tom-built plan for the EU’s future. And now that Brex­it has made the EU a fash­ion­able top­ic again after a long peri­od dur­ing which it took a back seat to France’s dimin­ished eco­nom­ic stature, all are deter­mined to hawk their wares as loud­ly as pos­si­ble.”

That’s right, in the post-Brex­it envi­ron­ment, com­par­a­tive visions for EU reforms are a guar­an­teed major focus on upcom­ing elec­tions across the EU. Espe­cial­ly in a coun­try like France, where talk of estab­lish­ing a Fran­co-Ger­man euro­zone pres­i­den­cy is appar­ent­ly some­thing main­stream politi­cians do these days:

...

Take Sarkozy. Osten­si­bly, the LR par­ty chief should stick to the five points, since he is not an offi­cial pri­ma­ry can­di­date. But, at a meet­ing with French vot­ers in Lon­don Wednes­day, he went far beyond the par­ty line, argu­ing for deep changes and a star­ring role for France. “In ten months,” he said, refer­ring to France’s pres­i­den­tial elec­tion, “[the job of fix­ing Europe] will be up to us.”

How? Via a rapid treaty change — an option reject­ed Wednes­day by EU lead­ers — and a brand-new euro­zone pres­i­den­cy that would switch back and forth between France and Ger­many, he said, “because they rep­re­sent half of the eurozone’s eco­nom­ic activ­i­ty.” And the oth­er mem­bers of the sin­gle cur­ren­cy? “Too bad if I anger the small coun­tries!” Le Figaro cit­ed him as say­ing.

There is more. While Sarkozy treads care­ful­ly due to his role as par­ty chief, he is road-test­ing more rad­i­cal ideas via oth­ers, notably LR vice pres­i­dent Lau­rent Wauquiez. At the top of this B‑list is killing off the Euro­pean Com­mis­sion.
...

“Too bad if I anger the small coun­tries!”

So Sarkozy’s plan to address EU-wide angst is to devolve EU pow­ers and make Ger­many and France the euro­zone co-kings. Wow.

Keep in mind that it’s not insane to con­sid­er simul­ta­ne­ous­ly devolv­ing the EU while fur­ther inte­grat­ing the euro­zone. They are two very dif­fer­ent crit­ters in terms of what is need­ed to keep them func­tion­ing. If the EU is a giant free-trade that’s going to be tricky, but not near­ly as tricky as a giant shared cur­ren­cy zone like the euro­zone. All indi­ca­tions are that the euro­zone requires more bur­den-shar­ing and gen­er­al inte­gra­tion if it’s going to func­tion. And a lot less aus­ter­i­ty. The EU, on the oth­er hand, has recent­ly because an EU-wide tool for aus­ter­i­ty with things like the Fis­cal Com­pact and things like that can and should be rolled back. If the EU devolves, it’s prob­a­bly not a dis­as­ter. If the euro­zone does­n’t inte­grate fur­ther, it prob­a­bly is a dis­as­ter. But if it inte­grates in a man­ner that makes it less demo­c­ra­t­ic and just a Fran­co-Ger­man (and most Ger­man) vas­sal-state, that’s one of the worst out­comes imag­in­able for the Europe project.

Also keep in mind that the Social­ists, the par­ty that should be lead­ing the fight in France for sane future, is basi­cal­ly out of the run­ning because it’s cur­rent imple­ment­ing and defend­ing an EU-direct­ed neolib­er­al agen­da that it does­n’t real­ly have an option to not imple­ment. Hol­lan­de’s gov­ern­ment has Stock­holme Syn­drome, leav­ing the Repub­li­cans like Nicholas “Too bad if I anger the small coun­tries!” Sarkozy or Marine Le Pen to take over. Again, wow.

As we can see, while the post-Brex­it iden­ti­ty cri­sis is indeed a rare oppor­tu­ni­ty for the Euro­pean project to address its insan­i­ties reimag­ine itself for the real chal­lenges of the 21st cen­tu­ry, there’s no rea­son it can’t get cra­zier!

The results are com­ing in for the EU’s par­lia­men­tary elec­tions and one thing is clear: the post-elec­tion nego­ti­a­tions over the EU Com­mis­sion pres­i­den­cy is are going to be inter­est­ing. That’s because the big los­er in the elec­tions appears to be the cen­tre par­ties. For the first time ever, the cen­tre-left S&D and cen­tre-right EPP umbrel­la par­ties can’t com­bine to form a major­i­ty in the EU par­lia­ment on their own. Fol­low­ing the recent vote the min­i­mum num­ber of par­ties that can form a major­i­ty coali­tion is four. In addi­tion to the EPP and S&D, the right-wing pro-EU ALDE par­ty and left-wing Greens are both required to form a major­i­ty coali­tion. That’s part of why these nego­ti­a­tions are going to be inter­est­ing.

So what does the four-way major­i­ty coali­tion mean for the prospects of Man­fred Weber, the lead­ing can­di­date to replace Jean-Claude Junck­er as EU Com­mis­sion pres­i­dent? Well, as the fol­low­ing arti­cle notes, the leader of the S&D, Frans Tim­mer­mans, is call­ing for these four par­ties to get togeth­er and have nego­ti­a­tions on how to pro­ceed for­ward. But as we’re also going to see, those four-way nego­ti­a­tions con­tain a dynam­ic to that could great­ly imper­il Weber’s prospects.

How so? Recall how the sys­tem for select­ing the EU Com­mis­sion pres­i­dent was a major­i­ty vote by the nation­al gov­ern­ments based on back­room nego­ti­a­tions. The nation­al lead­ers select­ed the nom­i­nee and then the EU par­lia­ment had a major­i­ty vote. But that sys­tem sort of changed in 2014 when the par­lia­ment and Euro­pean Com­mis­sion backed the plan to switch to the ‘Spitzenkan­di­dat’ sys­tem. That was the sys­tem where each par­ty would put for­ward a “Spitzenkan­di­dat” before the elec­tion who would become the Euro­pean Com­mis­sion pres­i­dent if that par­ty wins a gov­ern­ing coali­tion. The idea was to help make the pol­i­tics of EU par­lia­men­tary elec­tions more of a pan-Euro­pean affair and let vot­ers know who would pre­sum­ably get the pres­i­den­cy if a giv­en par­ty wins.

The Spitzenkan­di­dat sys­tem was pushed by Mar­tin Schulz, head of Ger­many’s cen­tre-left SPD and the ‘Spitzenkan­di­dat’ for The S&D in 2014. Schultz, then the speak­er of the EU par­lia­ment, led the push for the new sys­tem in 2013. It was opposed by the coun­cil of nation­al lead­ers who want­ed to retain the pow­er to make this deci­sion. Angela Merkel and David Cameron were lead­ing the oppo­si­tion to the move which makes sense since back room nego­ti­a­tions in the EU are gen­er­al­ly going to be dom­i­nat­ed by Berlin and the UK had a great deal of clout so Merkel and Cameron real­ly were giv­ing up pow­er with the new sys­tem.

This 2014 stand­off between the nation­al lead­ers and the EU par­lia­ment was resolved with the nation­al lead­ers relent­ing and agree­ing to nom­i­nate Junck­er. Enough par­lia­ment mem­bers were insist­ing they would only back Junck­er and a major­i­ty of the par­lia­ment is need­ed to back who­ev­er the nation­al lead­ers coun­cil nom­i­nates so the nation­al lead­ers did­n’t real­ly have a choice in the mat­ter. By the end of June 2014, Merkel gave her bless­ing to Junck­er and that sealed the deal. It was sort of like the Spitzenkan­di­dat sys­tem won out in 2014 but this isn’t real­ly entire­ly resolved.

So how does the Spitzenkan­di­dat sys­tem poten­tial­ly imper­il Weber’s prospects? Because both of the small­er par­ties of these four-way nego­ti­a­tions are mak­ing up their own rules for Spitzenkan­di­dat sys­tem. Back in Novem­ber, the Greens select­ed two co-Spitzenkan­di­dats. Then in March, the lib­er­al ALDE par­ty — ‘lib­er­al’ in the right-wing lib­er­tar­i­an sense — decid­ed to make up its own sys­tem for nam­ing the par­ty’s Spitzenkan­di­dat: instead of select­ing one Spitzenkan­di­dat, ALDE select­ed sev­en peo­ple who would all be con­sid­ered poten­tial can­di­dates for the top sev­en EU jobs which includes the pres­i­den­cy. In addi­tion, ALDE has an incen­tive to break the Spitzenkan­di­dat sys­tem: ALDE has been court­ing Emmanuel Macron’s par­ty and Macron is a big oppo­nent of the Spitzenkan­di­dat sys­tem.

So if one of the sev­en ALDE Spitzenkan­di­dats ends up being select­ed in these four-way talks that would raise seri­ous ques­tions about whether or not the EU par­lia­ment is still unit­ed around the idea to demand it remains in place. And it turns out one of those sev­en ALDE can­di­dates appears to have a real shot at being the com­pro­mise can­di­date sim­ply based on her rel­a­tive pop­u­lar­i­ty: Mar­grethe Vestager, the EU’s com­pe­ti­tion min­is­ter. Vestager has the dis­tinc­tion of being rel­a­tive­ly pop­u­lar, gar­ning around 50 per­cent sup­port in a poll back around March mak­ing her the most pop­u­lar of the Euro­pean Com­mis­sion pres­i­dent can­di­dates. So if there’s a need for a com­pro­mise can­di­date in these four-way talks Vestager is an obvi­ous choice. But if she’s cho­sen as the ulti­mate coali­tion nom­i­nee that kind of breaks the Spitzen­can­di­dat sys­tem because Vestager’s ALDE par­ty clear­ly and open­ly defied the sys­tem by putting for­ward sev­en can­di­dates.

And as we’re also going to see, it’s gen­er­al­ly an open ques­tion as to whether or not the Spitzenkan­di­dat sys­tem will remain in place at all because some EU offi­cials are open­ly talk­ing about Euro­pean Com­mis­sion pres­i­dent nom­i­nees who aren’t the par­ty Spitzenkan­di­dats at all. In par­tic­u­lar, Brex­it nego­tia­tor Michel Barnier is open­ly talked about as a EU Com­mis­sion pres­i­dent in Brus­sels and if you point out that he’s not a Spitzenkan­di­dat they laugh at you. That’s what one of the arti­cles says.

Even worse for Weber’s prospect is that ALDE and Macron have just called for a “new can­di­date” who can “an build a robust major­i­ty way beyond the par­ti­san lines.” So ALDE is open­ly anti-Weber at this point head­ing into the four-way talks.

Also of note is the fact that, after the EPP won a plu­ral­i­ty of vote in 2014 Angela Merkel secret­ly reached out to Fran­cois Hol­land to see if France’s Social­ists would put for­ward Chris­tine Lagard as an alter­na­tive EU Com­mis­sion pres­i­dent who Merkel would back instead of back­ing the EPP’s Spitzenkan­di­dat Jean-Claud Junck­er. David Cameron was also so opposed to the idea of a Junck­er pres­i­den­cy that he threat­ened to pull Britain out of the EU. But Hol­lande nev­er got behind the idea of putting for­ward Lagarde in part on the basis that it was bet­ter to keep Lagard at the head of the IMF. So while Merkel appeared to be val­i­dat­ing the Spitzenkan­di­dat sys­tem when she even­tu­al­ly relent­ed in late June 2014 and backed Junck­er in the face of par­lia­men­tary demands, it’s impor­tant to keep in mind that this was only after her secret attempts to find an alter­na­tive nom­i­nee failed.

So if the Spitzenkan­di­dat sys­tem is in effect in 2019 Weber should prob­a­bly be the next Euro­pean Com­mis­sion pres­i­dent but it’s not at all guar­an­teed even under the Spitznekan­di­dat sys­tem and less clear if the sys­tem is still in effect. A whole bunch of open ques­tions about how the EU oper­ates have to be answered soon and that’s why the upcom­ing four-way coali­tion nego­ti­a­tions are so his­toric:

New Europe

Euro­pean Par­lia­ment inevitably heads towards EPP-led four-par­ty coali­tion

By Irene Kosta­ki
Jour­nal­ist,
Pub­lished 02:05 May 27, 2019
Updat­ed 03:22 May 27, 2019

It’s game on for the four lead­ing par­ties com­ing out of the Euro­pean Par­lia­ment elec­tions, as chances are very slim that any three-par­ty coali­tion could con­sti­tute a sta­ble, or at least com­fort­able, major­i­ty.

With the tra­di­tion­al fron­trun­ners, name­ly the cen­tre-right Euro­pean People’s Par­ty (EPP) and Par­ty of Euro­pean Social­ists (S&D Group in the Euro­pean Par­lia­ment) retain­ing the top two posi­tions in the new 2019–2024 Euro­pean Par­lia­ment, the Lib­er­al Democ­rats of ALDE and Macron’s Renais­sance, togeth­er with the Greens/EFA have now become the key par­ties nec­es­sary for the cham­ber to estab­lish a demo­c­ra­t­ic coali­tion.

The 2019 elec­tions had a record-high turnout for over 20 years bring­ing the num­ber of Euro­peans that went to the polls to 50,5% of eli­gi­ble vot­ers.

It is the first time that the cen­tre-right Euro­pean People’s Par­ty and the Alliance of Pro­gres­sives of the Social­ists and Democ­rats in the Euro­pean Par­lia­ment, name­ly the S&D, that will not be able to form a “grand coali­tion” of their own.

Fail­ing to reach a major­i­ty, means that cer­tain­ly ALDE, and most like­ly the Greens – whose suc­cess is pro­ject­ed to fill Euro­pean Par­lia­ment seats after strong per­for­mances in Ger­many and Ire­land – will have to agree to form a major­i­ty with the weak­ened big-two. While the four par­ties arrange talks, the far-right groups in the Euro­pean Par­lia­ment count their mar­gin­al vic­to­ries, colours on the EU map going black in Italy and France, with Mat­teo Salvini’s Lega cham­pi­oning the Ital­ian vote, and Marine Le Pen’s Rassem­ble­ment Nation­al (FN) strik­ing a vic­to­ry with 23,5% against Emmanuel Macron’s La Republique En Marche, stand­ing at 22.5%.

Pop­ulist far-right groups gain, how­ev­er, a lot less ground than ini­tial­ly antic­i­pat­ed by the polit­i­cal ana­lysts, with the advance of the right being less pro­nounced in Ger­many, where a strong show­ing by the Greens pro­duced the sto­ry of the night, while the anti-immi­grant Alter­na­tive for Deutsch­land broke the 10% bar­ri­er.

Spain and Por­tu­gal are the only major cas­es where the S&D is dom­i­nant in Europe, with Span­ish Prime Min­is­ter Pedro Sanchez cel­e­brat­ing his par­ty top­ping the polls, a result he will like­ly use to wield more influ­ence in the bloc. Same goes for the Por­tuguese pre­mier Anto­nio Cos­ta, who came out strong from Sunday’s bal­lots.

Greek PM Alex­is Tsipras on the oth­er hand, has called a snap elec­tion for the end of June, fol­low­ing EU elec­tion results show­ing the GUE/NGL affil­i­at­ed par­ty will be defeat­ed by the cen­tre-right Nea Dimokra­tia by over 9 per­cent­age points.

EPP to use high turnout to secure Weber’s Spitzek­na­di­dat advan­tage

With the Euro­pean cit­i­zens flock­ing to the polls more than in the last gen­er­a­tion, the EPP Spitzenkan­di­dat Man­fred Weber is seek­ing to become the next Euro­pean Com­mis­sion Pres­i­dent, at any cost, notice­ably hav­ing sig­nif­i­cant sim­i­lar­i­ties in rhetoric with the Greens/EFA can­di­dates Ska Keller and Philippe Lam­berts on the first steps of nego­ti­a­tions. “The first steps of nego­ti­a­tions should be con­tent,” agree both par­ties, with the EPP under­lin­ing the need for “sta­bil­i­ty”.

Pro­gramme comes first says Tim­mer­mans

“My group lost seats, we have to be hum­ble,” said the S&D Spitzenkan­di­dat Frans Tim­mer­mans. Pre­sent­ing great results from his home coun­try the Nether­lands, Tim­mer­mans dis­agreed with Weber’s read­ing on sta­bil­i­ty, claim­ing that the EPP leader just wish­es to keep things as they are.

“I am not putting claims,” added Tim­mer­mans, accept­ing that it is the first time for the EPP and the S&D with­out a major­i­ty in the cham­ber. Tim­mer­mans told the cham­ber, filled with jour­nal­ists from around the globe, that an alliance pro­gres­sive forces should first get togeth­er and make a pro­gramme for Europe’s future, and then decides who will lead that pro­gramme as Com­mis­sion Pres­i­dent. Tim­mer­mans said he “would be hon­oured to lead that pro­gramme,” but that the process should fol­low “that order”.

...

———-

“Euro­pean Par­lia­ment inevitably heads towards EPP-led four-par­ty coali­tion” by Irene Kosta­ki; New Europe; 05/27/2019

“With the tra­di­tion­al fron­trun­ners, name­ly the cen­tre-right Euro­pean People’s Par­ty (EPP) and Par­ty of Euro­pean Social­ists (S&D Group in the Euro­pean Par­lia­ment) retain­ing the top two posi­tions in the new 2019–2024 Euro­pean Par­lia­ment, the Lib­er­al Democ­rats of ALDE and Macron’s Renais­sance, togeth­er with the Greens/EFA have now become the key par­ties nec­es­sary for the cham­ber to estab­lish a demo­c­ra­t­ic coali­tion.”

A four-way nego­ti­a­tion to find a sin­gle can­di­date accept­able to the greens, lib­er­tar­i­ans, and cen­trists. That sounds intense. Espe­cial­ly since this is the first time a “grand coali­tion” of the two cen­tre par­ties isn’t an option. Man­fred Weber remains the lead­ing can­di­date but he’s clear­ly not guar­an­teed. Accord­ing to the Spitzenkan­di­dat sys­tem any of the Spitzenkan­di­dats in the four-way coali­tion would be a fair selec­tion. Or course, as we’ll see, ALDE has sev­en Spitzenkan­di­dats and the Greens have two so the nego­ti­a­tions are already on unsteady grounds:

...
It is the first time that the cen­tre-right Euro­pean People’s Par­ty and the Alliance of Pro­gres­sives of the Social­ists and Democ­rats in the Euro­pean Par­lia­ment, name­ly the S&D, that will not be able to form a “grand coali­tion” of their own.

...

EPP to use high turnout to secure Weber’s Spitzek­na­di­dat advan­tage

With the Euro­pean cit­i­zens flock­ing to the polls more than in the last gen­er­a­tion, the EPP Spitzenkan­di­dat Man­fred Weber is seek­ing to become the next Euro­pean Com­mis­sion Pres­i­dent, at any cost, notice­ably hav­ing sig­nif­i­cant sim­i­lar­i­ties in rhetoric with the Greens/EFA can­di­dates Ska Keller and Philippe Lam­berts on the first steps of nego­ti­a­tions. “The first steps of nego­ti­a­tions should be con­tent,” agree both par­ties, with the EPP under­lin­ing the need for “sta­bil­i­ty”.
...

Under­scor­ing the tepid nature of Weber’s prospects is the fact that the S&D’s own Spitzenkan­di­dat, Frans Tim­mer­man, is call­ing for the four par­ties to get togeth­er and have talks over who they want to lead the four-way coali­tion as Euro­pean Com­mis­sion pres­i­dent and then points out how he would per­son­al­ly be hon­ored to be cho­sen as the pres­i­den­tial nom­i­nee:

...
Pro­gramme comes first says Tim­mer­mans

“My group lost seats, we have to be hum­ble,” said the S&D Spitzenkan­di­dat Frans Tim­mer­mans. Pre­sent­ing great results from his home coun­try the Nether­lands, Tim­mer­mans dis­agreed with Weber’s read­ing on sta­bil­i­ty, claim­ing that the EPP leader just wish­es to keep things as they are.

“I am not putting claims,” added Tim­mer­mans, accept­ing that it is the first time for the EPP and the S&D with­out a major­i­ty in the cham­ber. Tim­mer­mans told the cham­ber, filled with jour­nal­ists from around the globe, that an alliance pro­gres­sive forces should first get togeth­er and make a pro­gramme for Europe’s future, and then decides who will lead that pro­gramme as Com­mis­sion Pres­i­dent. Tim­mer­mans said he “would be hon­oured to lead that pro­gramme,” but that the process should fol­low “that order”.
...

And Weber and Tim­mer­mans aren’t the only Spitzenkan­di­dat who is part of this four-way nego­ti­a­tion who has already announced their inter­est in the job. ALDE’s Mar­grethe Vestager, of the par­ty’s sev­en co-Spitzenk­endi­dats, is mak­ing her inter­est offi­cial too:

Reuters

EU’s Vestager eyes top job, break­ing cen­tre-right hold on pow­er

May 26, 2019 / 5:46 PM / Updat­ed

BRUSSELS (Reuters) — The Euro­pean Union’s top com­pe­ti­tion offi­cial, Mar­grethe Vestager, called on Sun­day night for an end to the centre-right’s hold on pow­er in the bloc after Euro­pean elec­tion, and for a first gen­dered-bal­ance Euro­pean Com­mis­sion.

“I have worked with break­ing monop­o­lies, this is basi­cal­ly what I’ve been doing for five years by now, this is also what vot­ers have been doing today. The monop­oly of pow­er is bro­ken. And this is of course why we can do some­thing else,” Vestager said.

———-

“EU’s Vestager eyes top job, break­ing cen­tre-right hold on pow­er”; Reuters; 05/26/2019

Mar­grethe Vestager, one of sev­en ALDE Spitzenkan­di­dat, is offi­cial­ly in the race for pres­i­dent. Although, as the fol­low­ing arti­cle notes, Vestager has real­ly been in the race for months now. Just qui­et­ly. As the arti­cle also notes, ALDE leader Guy Ver­hof­s­tadt enthu­si­as­ti­cal­ly embraced the Spitzenkan­di­dat sys­tem in 2014 but sud­den­ly changed his tune of late. Why? Because ALDE is court­ing Emman­nuel Macron and Macron oppos­es the Spitzenkan­di­dat sys­tem which he sees as unfair­ly favor­ing the EPP. Beyond that, peo­ple are Brus­sels open­ly talk about chief Brex­it nego­tia­tor Michel Barnier for the role and if you point out he’s not a Spitzenkan­di­dat they laugh at you. And that all a big part of why the Spitzenkan­di­dat might be doomed in 2019:

Berlin Pol­i­cy Jour­nal

The Kiss of Death for the Spitzenkan­di­dat Sys­tem?

By field­ing a sev­en-per­son team of EU elec­tion can­di­dates, Europe’s Lib­er­als have simul­ta­ne­ous­ly dis­rupt­ed the Spitzenkan­di­dat sys­tem for choos­ing the next Com­mis­sion pres­i­dent and height­ened the chances of a Lib­er­al get­ting the EU’s top job.

Dave Keat­ing , March 27, 2019

Last week, on the mar­gins of a Euro­pean Coun­cil sum­mit dri­ven to dis­trac­tion by Brex­it, Europe’s Lib­er­als dealt what could be the deci­sive blow to the young Spitzenkan­di­dat sys­tem for choos­ing Euro­pean Com­mis­sion pres­i­dents.

As a result, the next two months of debate between the pres­i­den­tial can­di­dates ahead of the EU elec­tion on 23–26 May could all be for noth­ing.

The sys­tem was used for the first time dur­ing the last Euro­pean elec­tion in 2014, after years of debate about how to address the “demo­c­ra­t­ic deficit” in select­ing peo­ple for the EU’s top posts. The idea is that each Euro­pean polit­i­cal fam­i­ly nom­i­nates a Spitzenkan­di­dat (“lead can­di­date” in Ger­man) to become the Euro­pean Com­mis­sion pres­i­dent. The can­di­date of whichev­er par­ty obtains the major­i­ty vote in the Euro­pean Par­lia­ment election­­—or can com­mand a major­i­ty in the Euro­pean Parliament—becomes pres­i­dent.

The sys­tem was pushed by both the com­mis­sion and par­lia­ment but was opposed by the coun­cil of 28 nation­al lead­ers, who said the choice of com­mis­sion pres­i­dent is theirs alone. The EU treaties sim­ply state that the deci­sion should be made “tak­ing into account the result of the Euro­pean Par­lia­ment elec­tion.”

While it’s clear that the coun­cil appoints the com­mis­sion pres­i­dent, he or she must be approved by the par­lia­ment. And the par­lia­ment refused to approve any­one who wasn’t a Spitzenkan­di­dat. So in the end, the nation­al gov­ern­ments bowed to pres­sure and appoint­ed Jean-Claude Junck­er, the Spitzenkan­di­dat of the cen­ter-right Euro­pean People’s Par­ty (EPP) which had attract­ed the most votes in the elec­tion.

The sys­tem was enthu­si­as­ti­cal­ly embraced in 2014 by Lib­er­al leader Guy Ver­hof­s­tadt. But this year he’s done an about-face. That’s because it is strong­ly opposed by French Pres­i­dent Emmanuel Macron. The Lib­er­als are try­ing to woo Macron into tak­ing his En Marche par­ty into their ALDE polit­i­cal fam­i­ly.

Macron has come out ear­ly and fierce­ly against the sys­tem, which he says is an EPP stitch-up because Europe’s largest polit­i­cal fam­i­ly is always guar­an­teed to get the most votes. He says the sys­tem is a way to guar­an­tee the appoint­ment of this year’s EPP nom­i­nee Man­fred Weber, a man nobody is par­tic­u­lar­ly enthu­si­as­tic about.

The “Sev­en Dwarves”

Until last week, the Lib­er­als had refused to even par­tic­i­pate by field­ing a can­di­date. But in the end, they decid­ed to hedge their bets. We’ll par­tic­i­pate, they said, but we’ll do it our way.

Last Thurs­day, at the pre-sum­mit of Europe’s eight Lib­er­al prime min­is­ters in Brus­sels, they unveiled a “Team Europe”—five women and two men—as their can­di­dates for all the EU’s top jobs. That is, com­mis­sion pres­i­dent, coun­cil pres­i­dent, par­lia­ment pres­i­dent, and High Rep­re­sen­ta­tive for For­eign Affairs.

The oth­er par­ties have react­ed furi­ous­ly, with many accus­ing the Lib­er­als of cheat­ing the sys­tem.

The Euro­pean Par­lia­ment, dig­ging in its heels in the face of Macron’s oppo­si­tion, has said it will not nom­i­nate any com­mis­sion pres­i­dent who was not one of the Spitzenkan­di­dat­en ahead of the elec­tion. This means that while the oth­er groups have just one per­son as a pos­si­bil­i­ty (or two in the case of the Greens and far-left GUE), ALDE will have sev­en. One could say their chances of get­ting a Lib­er­al com­mis­sion pres­i­dent just increased sev­en-fold.

“It’s a dirty trick,” one EPP mem­ber grum­bled pri­vate­ly.

How­ev­er, the effec­tive­ness of this trick is dilut­ed by the stature of the can­di­dates, who have been mocked in Brus­sels as “the sev­en dwarves.” The only two peo­ple on the list with a high pro­file in Europe are EU Com­pe­ti­tion Com­mis­sion­er Magrethe Vestager and Guy Ver­hof­s­tadt.

The oth­er five are the for­mer Euro­pean com­mis­sion­er from Italy, Emma Boni­no (much beloved in Italy but unknown out­side), Nico­la Beer of Germany’s Free Democ­rats, Span­ish politi­cian Luis Gar­i­cano from the upstart par­ty Ciu­dadanos, EU Trans­port Com­mis­sion­er Vio­le­ta Bulc from Slove­nia, and Hun­gar­i­an politi­cian Katal­in Cseh from the small Momen­tum par­ty.

Vestager’s Qui­et Can­di­da­cy

Ver­hof­s­tadt was seri­ous­ly in the run­ning to become EU Com­mis­sion Pres­i­dent in 2004, but he was vetoed by British Prime Min­is­ter Tony Blair who saw him as too fed­er­al­ist. Feel­ings about Ver­hof­s­tadt among nation­al lead­ers has only become more neg­a­tive since then, with many see­ing him as a show­boat­ing politi­cian with imprac­ti­cal solu­tions.

Even if Ver­hof­s­tadt were to attract a major­i­ty vote in the Euro­pean Par­lia­ment to become com­mis­sion pres­i­dent, it’s dif­fi­cult to see nation­al lead­ers accept­ing this. EU nation­al gov­ern­ments have always been reluc­tant to appoint any com­mis­sion pres­i­dent who they think would be adver­sar­i­al toward them and try to dilute nation­al pow­er (many see the council’s appoint­ment of Jacques Delors in 1985 as the biggest mis­take made by the coun­cil in this insti­tu­tion­al pow­er strug­gle).

Vestager, how­ev­er, is a dif­fer­ent sto­ry. She has won plau­dits for her tenure as com­pe­ti­tion com­mis­sion­er over the past five years—not just for the bold­ness of her deci­sions but also for her clear and direct style of com­mu­ni­ca­tion. Many, includ­ing The Econ­o­mist mag­a­zine, think she is exact­ly the woman the EU needs at the helm in this dif­fi­cult time. She does not call her­self a fed­er­al­ist, but rather a real­ist.

Vestager has been care­ful not to be seen as cam­paign­ing for the job, and even dur­ing last week’s launch she was stu­dious­ly under­stat­ed. She only joined the tick­et in order to “inspire peo­ple to take part” and to “engage in the debate,” she told reporters. When pressed about whether she wants to be com­mis­sion pres­i­dent, she said: “First things first. We need to know what is the task … before we start hand­ing out CVs and job appli­ca­tions.”

If she were to stick her neck out fur­ther, peo­ple might start sharp­en­ing the knives in Paris and Berlin. Her recent deci­sion to block a pro­posed merg­er between Germany’s Siemens and France’s Alstom prompt­ed a furi­ous reac­tion from the two coun­tries, and some have spec­u­lat­ed the deci­sion has doomed her chances of becom­ing pres­i­dent because either coun­try would veto it.

On the oth­er hand, her courage in tak­ing the deci­sion could increase her stock with the EU’s 26 (or 25, should Brex­it hap­pen) oth­er coun­tries, eager for a pres­i­dent who is not afraid to take on the Fran­co-Ger­man behe­moth.

...

Spitzen­can, or Spitzencan’t?

Were Vestager to become the next pres­i­dent, it would hard­ly be a vic­to­ry for pro­po­nents of the Spitzenkan­di­dat sys­tem. The Lib­er­als have essen­tial­ly dis­rupt­ed it by field­ing “Team Europe” and Vestager is mere­ly hedg­ing her bets by par­tic­i­pat­ing.

The fact that the sys­tem does not enjoy the sup­port of Europe’s third-largest polit­i­cal fam­i­ly, led by one of the most pro-Euro­pean fed­er­al­ist politi­cians in the form of Ver­hof­s­tadt means its cred­i­bil­i­ty has been severe­ly dam­aged. The par­lia­ment may be insist­ing it will not appoint any­one who was not a can­di­date, but in Brus­sels peo­ple are open­ly talk­ing about oth­er names for the post, includ­ing chief Brex­it nego­tia­tor Michel Barnier. If some­one inter­jects by say­ing, “But he’s not a Spitzenkan­di­dat!,” they are greet­ed with laugh­ter.

It could be that Weber or Frans Tim­mer­mans, the Social­ists & Democ­rats’ can­di­date, become pres­i­dent and the sys­tem is vin­di­cat­ed. But this seem increas­ing­ly unlike­ly. Should any­one oth­er than these two men become pres­i­dent, includ­ing any of the Lib­er­al sev­en, the Spitzenkan­di­dat sys­tem will prob­a­bly be con­signed to the dust­bin of his­to­ry.

———–

“The Kiss of Death for the Spitzenkan­di­dat Sys­tem?” by Dave Keat­ing; Berlin Pol­i­cy Jour­nal; 03/27/2019

“It could be that Weber or Frans Tim­mer­mans, the Social­ists & Democ­rats’ can­di­date, become pres­i­dent and the sys­tem is vin­di­cat­ed. But this seem increas­ing­ly unlike­ly. Should any­one oth­er than these two men become pres­i­dent, includ­ing any of the Lib­er­al sev­en, the Spitzenkan­di­dat sys­tem will prob­a­bly be con­signed to the dust­bin of his­to­ry.”

Accord­ing to the rules, the only viable Spitzenkan­di­dats in these four-way talks are the EPP of S&D can­di­dates because the Greens cheat­ed and ALDE cheat­ed big time. It’s a rather large com­pli­ca­tion head­ing into those four-way talks. Espe­cial­ly with ALDE’s part­ner Macron open­ly oppos­ing the sys­tem. It’s ALDE’s way of hav­ing its cake and eat­ing it too: by select­ing sev­en Spitzenkan­di­dat the par­ty is simul­ta­ne­ous­ly gam­ing the sys­tem and break­ing it:

...
The sys­tem was enthu­si­as­ti­cal­ly embraced in 2014 by Lib­er­al leader Guy Ver­hof­s­tadt. But this year he’s done an about-face. That’s because it is strong­ly opposed by French Pres­i­dent Emmanuel Macron. The Lib­er­als are try­ing to woo Macron into tak­ing his En Marche par­ty into their ALDE polit­i­cal fam­i­ly.

Macron has come out ear­ly and fierce­ly against the sys­tem, which he says is an EPP stitch-up because Europe’s largest polit­i­cal fam­i­ly is always guar­an­teed to get the most votes. He says the sys­tem is a way to guar­an­tee the appoint­ment of this year’s EPP nom­i­nee Man­fred Weber, a man nobody is par­tic­u­lar­ly enthu­si­as­tic about.

...

The oth­er par­ties have react­ed furi­ous­ly, with many accus­ing the Lib­er­als of cheat­ing the sys­tem.

The Euro­pean Par­lia­ment, dig­ging in its heels in the face of Macron’s oppo­si­tion, has said it will not nom­i­nate any com­mis­sion pres­i­dent who was not one of the Spitzenkan­di­dat­en ahead of the elec­tion. This means that while the oth­er groups have just one per­son as a pos­si­bil­i­ty (or two in the case of the Greens and far-left GUE), ALDE will have sev­en. One could say their chances of get­ting a Lib­er­al com­mis­sion pres­i­dent just increased sev­en-fold.

“It’s a dirty trick,” one EPP mem­ber grum­bled pri­vate­ly.
...

And while this might be seen as just ALDE trolling the rest of the sys­tem, the fact that Mar­grethe Vestager is the most pop­u­lar Euro­pean Com­mis­sion pres­i­dent can­di­date and has gen­er­al­ly won wide praise for her work as the EU com­pe­ti­tion min­is­ter. So she just might be the can­di­date that can thread that nee­dle of accept­abil­i­ty in these nego­ti­a­tions:

...
Even if Ver­hof­s­tadt were to attract a major­i­ty vote in the Euro­pean Par­lia­ment to become com­mis­sion pres­i­dent, it’s dif­fi­cult to see nation­al lead­ers accept­ing this. EU nation­al gov­ern­ments have always been reluc­tant to appoint any com­mis­sion pres­i­dent who they think would be adver­sar­i­al toward them and try to dilute nation­al pow­er (many see the council’s appoint­ment of Jacques Delors in 1985 as the biggest mis­take made by the coun­cil in this insti­tu­tion­al pow­er strug­gle).

Vestager, how­ev­er, is a dif­fer­ent sto­ry. She has won plau­dits for her tenure as com­pe­ti­tion com­mis­sion­er over the past five years—not just for the bold­ness of her deci­sions but also for her clear and direct style of com­mu­ni­ca­tion. Many, includ­ing The Econ­o­mist mag­a­zine, think she is exact­ly the woman the EU needs at the helm in this dif­fi­cult time. She does not call her­self a fed­er­al­ist, but rather a real­ist.
...

So what are the odds that Vestager emerges as the com­pro­mise can­di­date at the risk of break­ing the Spitzenkan­di­dat sys­tem? Well, accord­ing to the fol­low­ing arti­cle that describes the joint anti-Weber front that has already emerged from ALDE and Macron’s par­ty, the odds of a Vestager pres­i­den­cy are grow­ing. Why? Because while the Euro­pean Coun­cil of nation­al lead­ers con­tin­ues to assert that it is NOT bound by the Spitzenkan­di­dat sys­tem (the same posi­tion the coun­cil took in 2014), the leader of the Euro­pean Com­mis­sion, Sec­re­tary-Gen­er­al Mar­tin Sel­mayr, con­tin­ues to stand by the Spitzenkan­di­dat sys­tem. And, cru­cial­ly for Vestager’s chances, Sel­mayr told Politi­co he con­sid­ers Vestager to be an accept­able Spitzenkan­di­dat. So it would appear that ALDE’s cheat­ing of the Spitzenkan­di­dat sys­tem is going to be treat­ed as accept­able which sug­gests that while the prospects for Vestager’s pres­i­den­cy are get­ting bet­ter, the prospects for the Spitzenkan­di­dat sys­tem sur­viv­ing to the next elec­tion just got a lot worse:

Politico.eu

Anti-Weber front mate­ri­al­izes on EU elec­tion morn­ing after

As EU lead­ers are set to dis­cuss EU top jobs on Tues­day, Lib­er­als are com­ing after the EPP’s Spitzenkan­di­dat.

By Mar­i­on Sol­let­ty

5/27/19, 1:54 PM CET
Updat­ed 5/27/19, 5:39 PM CET

Man­fred Weber is the face of the par­ty that won the most votes in the Euro­pean elec­tion, yet his posi­tion has nev­er been so frag­ile.

Empow­ered Lib­er­als on Mon­day led the charge against the Euro­pean Peo­ple’s Par­ty nom­i­nee for Euro­pean Com­mis­sion pres­i­dent — or Spitzenkan­di­dat — fir­ing the first shots in the fight for the most sought-after of the EU’s top jobs.

“Clear­ly, we think the EPP can­di­date is today com­plete­ly dis­qual­i­fied,” France’s Pas­cal Can­fin, No. 2 on Emmanuel Macron’s En Marche list, told France Inter. “We will throw all of our weight in the bal­ance to have either a French can­di­date, who could be Michel Barnier, or a can­di­date that is in any case much clos­er to the new Par­lia­men­t’s cen­ter of grav­i­ty, much less to the right than before.”

The EPP was pro­ject­ed to win 180 seats in the new Euro­pean Par­lia­ment as of Mon­day morn­ing, a big drop from the 216 it holds in the out­go­ing Par­lia­ment. The cen­ter-left Pro­gres­sive Alliance of Social­ists and Democ­rats (S&D) is expect­ed to come sec­ond with 146 seats, while the Lib­er­als are pre­dict­ed to come third, with 109 seats, fol­lowed by the Greens on 69. A dis­parate array of far-right and anti-EU forces is set to win at least 115 seats but it is unclear how coor­di­nat­ed they will be.

As horse-trad­ing for EU top jobs — includ­ing the pres­i­den­cies of the Com­mis­sion, the Coun­cil and the Par­lia­ment — kicks off, all eyes are on a new cen­trist-lib­er­al coali­tion led by Macron and Dutch Prime Min­is­ter Mark Rutte that will like­ly play a deci­sive role in shap­ing the new EU.

“The results of the 2019 Euro­pean elec­tions are clear,” the group plans to declare in a state­ment to be released Mon­day and pre­viewed by POLITICO. “No pro-Euro­pean major­i­ty is pos­si­ble with­out the new cen­tral group that the ALDE Fam­i­ly, Renais­sance, [Roman­ian par­ty] USR Plus and oth­er reform-dri­ven like-mind­ed par­ties will cre­ate.”

Court­ing the Social­ists

What kind of deal the new lib­er­al group strikes with oth­er par­ties includ­ing the Social­ists will be key in dis­put­ing the EPP’s dom­i­nance over key EU posts.

After meet­ing with Por­tuguese Prime Min­is­ter António Cos­ta last week, Macron is din­ing on Mon­day with Spain’s Pedro Sánchez, also a Social­ist, to dis­cuss EU top jobs ahead of a meet­ing of all EU lead­ers on Tues­day.

Sanchez’s PSOE fin­ished first in Spain in the Euro­pean elec­tion with 20 seats (based on pro­vi­sion­al results), giv­ing his par­ty’s del­e­ga­tion weight in the nom­i­na­tion process ahead.

Macron is also reach­ing out to EPP lead­ers.

...

The Euro­pean Coun­cil has the legal pow­er to nom­i­nate the Com­mis­sion pres­i­dent, and warned repeat­ed­ly it isn’t bound by the Spitzenkan­di­dat sys­tem — under which the lead can­di­date of the group able to com­mand the sup­port of Par­lia­ment should be cho­sen as Com­mis­sion pres­i­dent.

The Com­mis­sion’s pow­er­ful Sec­re­tary-Gen­er­al Mar­tin Sel­mayr on Mon­day defend­ed the Spitzenkan­di­dat sys­tem at POLITI­CO’s day-after event.

“I think it will require for any Com­mis­sion to get into office to have the EPP, the Social­ists and the Lib­er­als work­ing togeth­er, and tak­ing into account the Greens,” he said. But “demo­c­ra­t­ic par­ties” should stick to the Spitzenkan­di­dat sys­tem, he sug­gest­ed. “Why should they go for some­one else?”

The EPP stood its ground Sun­day evening.

“We have won the elec­tion,” Joseph Daul, the pres­i­dent of the EPP, said at a ral­ly with Weber in Brus­sels. “There is only one job for us — it’s pres­i­dent of the Com­mis­sion. It’s Man­fred Weber.”

“Our fam­i­ly com­mit­ted to the Spitzenkan­di­dat con­cept ... Only a per­son can be elect­ed and that one must be Spitzenkan­di­dat,” Weber said.

But even some new­ly elect­ed can­di­dates from his own polit­i­cal fam­i­ly offered Weber only luke­warm sup­port. French EPP par­ty Les Répub­li­cains will sup­port him “out of coher­ence,” Les Répub­li­cains can­di­date Geof­froy Didi­er told France Inter.

Mean­while, one of the Lib­er­al alliance’s slate of lead can­di­dates, Mar­grethe Vestager, on Sun­day sought to posi­tion her­self as the obvi­ous alter­na­tive can­di­date.

“Yes, I want to become the EU Com­mis­sion’s next pres­i­dent,” she told Ger­man broad­cast­er ARD.

“I have worked with break­ing monop­o­lies, this is basi­cal­ly what I’ve been doing for five years by now, this is also what vot­ers have been doing today,” she told reporters.

At POLITICO’s event Mon­day, Sel­mayr said he con­sid­ers “Vestager as a Spitzenkan­di­dat.”

———-

“Anti-Weber front mate­ri­al­izes on EU elec­tion morn­ing after” by Mar­i­on Sol­let­ty; Politico.eu; 05/27/2019

““Clear­ly, we think the EPP can­di­date is today com­plete­ly dis­qual­i­fied,” France’s Pas­cal Can­fin, No. 2 on Emmanuel Macron’s En Marche list, told France Inter. “We will throw all of our weight in the bal­ance to have either a French can­di­date, who could be Michel Barnier, or a can­di­date that is in any case much clos­er to the new Par­lia­men­t’s cen­ter of grav­i­ty, much less to the right than before.””

Weber is com­plete­ly dis­qual­i­fied as com­mis­sion pres­i­dent. That’s the posi­tion of Emmanuel Macron’s par­ty. And Macron’s par­ty is part of these nego­ti­a­tions. Beyond that, the Euro­pean Coun­cil of nation­al lead­ers has repeat­ed­ly assert­ed that it isn’t bound by the Spitzenkan­di­dat sys­tem. But per­haps the biggest blow to Weber’s prospects is the fact that the Sec­re­tary-Gen­er­al of the com­mis­sion, who is a strong sup­port­er of the Spitzenkan­di­dat sys­tem, is still will­ing to con­sid­er Vestager a viable Spitzenkan­di­dat despite ALDE’s bla­tant cheat­ing:

...
The Euro­pean Coun­cil has the legal pow­er to nom­i­nate the Com­mis­sion pres­i­dent, and warned repeat­ed­ly it isn’t bound by the Spitzenkan­di­dat sys­tem — under which the lead can­di­date of the group able to com­mand the sup­port of Par­lia­ment should be cho­sen as Com­mis­sion pres­i­dent.

The Com­mis­sion’s pow­er­ful Sec­re­tary-Gen­er­al Mar­tin Sel­mayr on Mon­day defend­ed the Spitzenkan­di­dat sys­tem at POLITI­CO’s day-after event.

“I think it will require for any Com­mis­sion to get into office to have the EPP, the Social­ists and the Lib­er­als work­ing togeth­er, and tak­ing into account the Greens,” he said. But “demo­c­ra­t­ic par­ties” should stick to the Spitzenkan­di­dat sys­tem, he sug­gest­ed. “Why should they go for some­one else?”

...

At POLITICO’s event Mon­day, Sel­mayr said he con­sid­ers “Vestager as a Spitzenkan­di­dat.”
...

Yes, it would appear that Euro­pean par­ties can just nom­i­nate as many Spitzenkan­di­dats as they want. Field­ing sev­en can­di­dates is appar­ent­ly fine and not dis­qual­i­fy­ing. That’s the view of the Euro­pean Com­mis­sion’s Sec­re­tary-Gen­er­al.

So, all in all, while Man­fred Weber is tech­ni­cal­ly the front-run­ner for the pres­i­den­cy, he’s clear­ly no shoo-in.

Of course, let’s not for­get that Weber has a secret weapon: the threat of the Ger­man demand to put Jens Wei­d­mann at the head of the ECB if Weber does­n’t get the pres­i­den­cy. And it’s hard to think of a bet­ter nego­ti­at­ing posi­tion to be in than hav­ing the cred­i­ble threat that Jens Wei­d­mann will be giv­en immense pow­er if you don’t get your desired job so don’t under­es­ti­mate Weber’s chances.

Here’s an arti­cle about the ensu­ing nego­ti­a­tions over Euro­pean Com­mis­sion pres­i­den­cy that brings up a fun fact about a sig­nif­i­cant new rule for the nego­ti­a­tions with­in the Euro­pean Coun­cil over who to nom­i­nate to be the Euro­pean Com­mis­sion pres­i­dent: In Novem­ber of 2014, the Euro­pean Coun­cil (the group of lead­ers from the mem­ber states) adopt­ed a new “dou­ble major­i­ty” set of rules and this is going to be the first time the Euro­pean Coun­cil has to fol­low those rules dur­ing the selec­tion process of a Euro­pean Com­mis­sion pres­i­dent. As a result, the nego­ti­a­tions are going to be even more com­pli­cat­ed than they were five years ago when the last pres­i­dent was cho­sen. And those nego­ti­a­tions were already pret­ty com­pli­cat­ed.

The way the pres­i­den­cy selec­tion process works, the Euro­pean Coun­cil votes nom­i­nates a can­di­date for the Euro­pean Com­mis­sion pres­i­den­cy and that can­di­date faces a major­i­ty vote in the EU par­lia­ment. And the rules for how the Euro­pean Coun­cil votes changed after Jean-Claude Junck­er was nom­i­nat­ed ear­li­er that year. This is the first pres­i­den­cy nom­i­nee vote under the new rules. Accord­ing to the new ‘Qual­i­fied Major­i­ty Vot­ing’ rules for the Euro­pean Coun­cil that went into effect in Novem­ber of 2014, for nor­mal Coun­cil votes on mat­ters that arise from with­in the Coun­cil a “dou­ble major­i­ty” is required of 55 per­cent of the mem­ber states (16 out of 28, cur­rent­ly) and those mem­ber states rep­re­sent at least 65 per­cent of the EU pop­u­la­tion. But there’s a spe­cial rule for votes on mat­ters that did­n’t orig­i­nate from the Coun­cil. In that case, the ‘rein­forced qual­i­fied major­i­ty’ is required of 72 per­cent of mem­ber states (21 of 28, cur­rent­ly) who col­lec­tive­ly rep­re­sent 65 per­cent of the pop­u­la­tion. And the vote on the nom­i­nee for the pres­i­den­cy falls into that ‘rein­forced qual­i­fied major­i­ty’ cat­e­go­ry with the 72 per­cent mem­ber state thresh­old. In addi­tion, the new rules cre­at­ed a ‘Block­ing Minor­i­ty’ rule where 4 mem­ber states rep­re­sent­ing at least 35 per­cent of the pop­u­lace can block a vote.

Keep in mind that the 65 per­cent pop­u­la­tion require­ment did­n’t exist before. Each mem­ber state got one vote. This under­stand­ably led to the large pop­u­la­tion coun­tries want­i­ng a change to the rules and Ger­many specif­i­cal­ly was demand­ing a sys­tem of pro­por­tion­al rep­re­sen­ta­tion where mem­ber states got seats on the Coun­cil in pro­por­tion to their pop­u­la­tions. The “Qual­i­fied Major­i­ty Vote” sys­tem that was pro­posed as com­pro­mise that rec­og­nized the pop­u­la­tion dif­fer­ences between mem­ber states. And that qual­i­fied major­i­ty vot­ing sys­tem was adopt­ed in late 2014, after Jean-Claude Junck­er was nom­i­nat­ed. So this is the first time we’re real­ly see­ing how it plays out for Euro­pean Com­mis­sion Pres­i­dent which is arguably the most con­tentious deci­sion the Coun­cil makes.

It’s also worth point­ing out that under the new rules the big mem­ber states have more effec­tive pow­er, espe­cial­ly with the 35 per­cent minor­i­ty block­ing rule, but in the case of the Euro­pean Com­mis­sion Pres­i­dent the two biggest coun­tries are divid­ed. Ger­many is strong­ly back­ing Man­fred Weber and Macron is strong­ly anti-Weber. Ger­many and France can com­bine forces if need be to cre­ate a 35 per­cent minor­i­ty block but are fun­da­men­tal­ly at odds over the nom­i­nee. As the fol­low­ing arti­cle notes, there are three vot­ing blocks cur­rent­ly over the ques­tion of the pres­i­den­cy and none of them meet the block­ing minor­i­ty thresh­old alone.

Also keep in mind that the nego­ti­a­tions over of the pres­i­den­cy are fun­da­men­tal­ly inter­twined with the nego­ti­a­tions over the oth­er major posi­tions. In par­tic­u­lar, the next head of the Euro­pean Cen­tral Bank. If Weber does­n’t get the pres­i­den­cy Merkel is going to push Jens Wei­d­mann as ECB chief. That’s the gen­er­al under­stand­ing and arguably the best thing Weber has going for him, espe­cial­ly giv­en France’s gen­er­al dis­like of Wei­d­mann. The nego­ti­a­tions over those oth­er high lev­el EU posi­tions are all part of the nego­ti­a­tions over the pres­i­den­cy. Not offi­cial­ly but implic­it­ly. So the ques­tion over who gets the pres­i­den­cy is real­ly just one deci­sion on a larg­er mega-deci­sion of who gets all the posi­tions in the EU and 21 out of 28 mem­ber states have to agree. Get ready for Hun­gary to be grant­ed king-mak­er pow­ers in the nego­ti­a­tions.

At the same time, keep in mind that the fact the nego­ti­a­tions over the pres­i­den­cy and the ECB are inher­ent­ly inter­twined means that the deci­sion of the next ECB chief is going to be fac­ing a 72 per­cent mem­ber state thresh­old and that may be too high for Wei­d­mann. And that’s anoth­er rea­son not to count Weber out. Weber’s odds of sur­pass­ing the 72 per­cent mem­ber state thresh­old may seem remote but Wei­d­man­n’s odds are prob­a­bly more remote and that sort of helps Weber’s odds because it’s all one big nego­ti­a­tion.

So we might be look­ing at some sort of coali­tion-build­ing clusterf*ck nego­ti­a­tion in the com­ing weeks where all sorts of zany things get agreed to just to find the con­sen­sus nec­es­sary to meet the ‘rein­forced qual­i­fied major­i­ty’ thresh­old of 21 out of 28 mem­ber states. This is the first time where the nego­ti­a­tions over these EU jobs all take place under the new set of vot­ing rules for the Coun­cil so we real­ly have no idea how it’s going to play out. We just know that 21 out of 28 of the mem­bers have to agree to this upcom­ing mega-agree­ment and there is a mas­sive amount of dis­agree­ment and it all needs to be resolve rel­a­tive­ly soon. So these are going to be some intense nego­ti­a­tions:

New Europe

Coun­cil num­bers crunch­ing

By Andri­anos Gian­nou
Euro­pean Affairs Direc­tor, New Europe

Pub­lished 19:54 June 2, 2019
Updat­ed 19:54 June 2, 2019

The hunt­ing sea­son has offi­cial­ly been declared in the after­math of an infor­mal din­ner on 28 May between the lead­ers of the EU after the Euro­pean Par­lia­ment elec­tions, which itself fol­lowed an ear­li­er attempt by four par­lia­men­tary groups – the Euro­pean People’s Par­ty (EPP), the Pro­gres­sive Alliance of Social­ists and Democ­rats (S&D), the Greens/European Free Alliance (Greens/ EFA) and Euro­pean Unit­ed Left–Nordic Green Left (GUE/NGL) – to pre-empt Coun­cil nego­ti­a­tions by recon­firm­ing their resolve for the lead can­di­date process and were backed by a nom­i­nal major­i­ty of 439 mem­bers.

The Euro­pean Coun­cil pro­pos­es a can­di­date to become the pres­i­dent of the Euro­pean Com­mis­sion after tak­ing into account the elec­tions to the Euro­pean Par­lia­ment elec­tions and hold­ing behind-the-scenes nego­ti­a­tions. Insid­ers ques­tion whether a deci­sion will be reached at the 20–21 June meet­ing, and expect talks to drag on due to seri­ous dis­agree­ments.

The rules that gov­ern the vote in the Coun­cil will be test­ed for the first time in the con­text of the elec­tion of the next Pres­i­dent of the Euro­pean Com­mis­sion: the dual major­i­ty sys­tem ‑or dou­ble major­i­ty, as it is wide­ly known in the Euro­pean Quar­ter of Brus­sels- came into force on 1 Novem­ber 2014, and only after the elec­tion of out­go­ing Com­mis­sion Pres­i­dent Jean-Claude Junck­er. The excep­tion allow­ing for the pos­si­bil­i­ty to revert to the applic­a­ble major­i­ty rules pri­or to that date at the request of a Mem­ber State also lapsed on 31 March 2017.

This means that the elec­tion of the new Pres­i­dent of the Euro­pean Com­mis­sion will require the agree­ment of 72% of Mem­ber States (21 coun­tries, that is) rep­re­sent­ing at least 65% of the pop­u­la­tion, instead of the lighter major­i­ty rule that neces­si­tates 55% of the EU states (mean­ing 16) that rep­re­sent, again, 65% of the pop­u­la­tion, which applies when the Coun­cil acts upon a pro­pos­al from the Com­mis­sion or the High Rep­re­sen­ta­tive. For a block­ing minor­i­ty to be formed, 4 mem­ber states that rep­re­sent 35% of the EU-wide pop­u­la­tion will have to act in uni­son, accord­ing to the Treaty.

...

So far, three camps have emerged: those who have already vehe­ment­ly opposed the win­ning party’s Spitzenkan­di­dat, EPP’s Man­fred Weber, either because of oppo­si­tion to the Spitzenkan­di­dat­en process or per­son­al dis­ap­proval of the Bavar­i­an politi­cian, those strong­ly in favour of his can­di­da­ture ‑essen­tial­ly, his entire polit­i­cal fam­i­ly, the EPP, minus Hungary’s Vik­tor Orbán– and the wait-and-see con­tin­gent.

The first group, made of those that side against the nam­ing of Weber to the posi­tion, cur­rent­ly counts four play­ers: France, Spain, Por­tu­gal, and Greece. Those four states com­bined rep­re­sent 26.28% of the Euro­pean pop­u­la­tion, which means that the fail to sat­is­fy any of the thresh­olds under the rules in place. That side may be fur­ther weak­ened by a like­ly change of gov­ern­ment in Greece after ear­ly par­lia­men­tary elec­tions will take place either on 30 June or 7 July. EPP mem­ber New Democ­ra­cy scored a strong vic­to­ry in the EU elec­tions and is wide­ly expect­ed to win the upcom­ing scruti­ny. Its leader, Kyr­i­akos Mit­so­takis, has deci­sive­ly sided with Weber. With­out Greek Prime-Min­is­ter Alex­is Tsipras on their side, France, Spain and Por­tu­gal will account for 24.71% of the bloc’s cit­i­zens.

When it comes to the sec­ond group, the EPP counts nine heads of state, those of Aus­tria, Bul­gar­ia, Croa­t­ia, Cyprus, Ger­many, Hun­gary, Ire­land, Roma­nia and Latvia, assum­ing that the new­ly-appoint­ed inter­im Chan­cel­lor of Aus­tria, fol­low­ing the col­lapse of the Aus­tri­an People’s par­ty-led gov­ern­ment last week, will fol­low the for­mer Chancellor’s line: Sebas­t­ian Kurz has been known to be one Weber’s most ardent sup­port­ers. The only head of state oppos­ing the Ger­man is Hun­gar­i­an strong­man Vik­tor Orbán, as a result of his tem­po­rary sus­pen­sion from the Chris­t­ian Democ­rats and unfavourable com­ments against him by Man­fred Weber, who said that he will nei­ther need the votes of the Hun­gar­i­ans nor want to become pres­i­dent thanks to their votes.

Assum­ing that Aus­tria sticks with the group, the remain­ing EPP 8 might have dou­ble the num­ber of coun­tries need­ed for a block­ing minor­i­ty to be formed, but only rep­re­sent 25.29% of the bloc’s pop­u­la­tion, falling short of the 35% require­ment. Even if Greece is added, that fig­ure will only rise to 27.39%. They do not meet the Ioan­ni­na com­pro­mise thresh­old either.

The third group, those who have cho­sen to sit on the fence for now, can only be defined as a group for the pur­pos­es of analy­sis, and are not expect­ed to act in con­cert or in a coor­di­nat­ed way.

That leaves the race very much open. There are at least three sys­temic ele­ments that require atten­tion as nego­ti­a­tions advance. First, the nego­ti­at­ing pow­er of the four par­lia­men­tary groups that backed the lead can­di­date, or Spitzenkan­di­dat­en, process on 28 May is dimin­ished by the fact that only two of those are rep­re­sent­ed in the Coun­cil: the Greens/ EFA and GUE/ NGL will not count any head of state among their ranks after the expect­ed depar­ture of Tsipras, who belongs to the lat­ter. Sec­ond­ly, it remains to be seen whether there will be a com­mon line between par­lia­men­tary groups and heads of state that belong to the same fam­i­ly.

Some Prime-Min­is­ters or Pres­i­dents might put nation­al inter­est first, espe­cial­ly when there are three more top jobs at play, that of the pres­i­dent of the Coun­cil, the pres­i­dent of the Par­lia­ment and the head of the Euro­pean Cen­tral Bank. Addi­tion­al­ly, some of them have a per­son­al inter­est in the first one, the pres­i­den­cy of the Coun­cil.

Third­ly, the require­ment for greater com­pro­mise and more inclu­sive dis­tri­b­u­tion of top jobs that the new polit­i­cal real­i­ty defined by the first three-par­ty- or even four-par­ty-major­i­ty Par­lia­ment requires, in par­tic­u­lar in light of the require­ment for par­lia­men­tary approval of the next Com­mis­sion com­po­si­tion, might force all par­ties involved to act dif­fer­ent­ly, towards a more har­mo­nious solu­tion (the EPP’s imme­di­ate reac­tion, to be read as a will­ing­ness to sac­ri­fice every­thing to keep the pres­i­den­cy of the Com­mis­sion for Weber runs counter to the degree of flex­i­bil­i­ty required in such con­text and does not reflect the posi­tion of the vic­tor that the par­ty want to por­tray).

There is a long way to go until the next Com­mis­sion Pres­i­dent will cross the fin­ish line. Still, a com­pro­mise will have to be strick­en. That requires a change of mind­set, adapt­ed to the new con­text. To safe­guard the project, all par­ties involved bet­ter speed­i­ly agree on a new can­di­date. The task ahead ‑pro­vid­ing solu­tions to real con­cerns- is far more crit­i­cal to the Euro­pean con­struc­tion than insti­tu­tion­al, nation­al or per­son­al bat­tles.

———–

“Coun­cil num­bers crunch­ing” by Andri­anos Gian­nou; New Europe; 06/02/2019

“The Euro­pean Coun­cil pro­pos­es a can­di­date to become the pres­i­dent of the Euro­pean Com­mis­sion after tak­ing into account the elec­tions to the Euro­pean Par­lia­ment elec­tions and hold­ing behind-the-scenes nego­ti­a­tions. Insid­ers ques­tion whether a deci­sion will be reached at the 20–21 June meet­ing, and expect talks to drag on due to seri­ous dis­agree­ments.”

The insid­er doubts that the nego­ti­a­tions fill be resolved by the June 20–21 meet­ing in less than three weeks seem like rea­son­able doubts. And none of the exist­ing three blocks can form a 35 per­cent minor­i­ty block thresh­old so there isn’t a group that alone has that big piece of lever­age:

...
This means that the elec­tion of the new Pres­i­dent of the Euro­pean Com­mis­sion will require the agree­ment of 72% of Mem­ber States (21 coun­tries, that is) rep­re­sent­ing at least 65% of the pop­u­la­tion, instead of the lighter major­i­ty rule that neces­si­tates 55% of the EU states (mean­ing 16) that rep­re­sent, again, 65% of the pop­u­la­tion, which applies when the Coun­cil acts upon a pro­pos­al from the Com­mis­sion or the High Rep­re­sen­ta­tive. For a block­ing minor­i­ty to be formed, 4 mem­ber states that rep­re­sent 35% of the EU-wide pop­u­la­tion will have to act in uni­son, accord­ing to the Treaty.

...

So far, three camps have emerged: those who have already vehe­ment­ly opposed the win­ning party’s Spitzenkan­di­dat, EPP’s Man­fred Weber, either because of oppo­si­tion to the Spitzenkan­di­dat­en process or per­son­al dis­ap­proval of the Bavar­i­an politi­cian, those strong­ly in favour of his can­di­da­ture ‑essen­tial­ly, his entire polit­i­cal fam­i­ly, the EPP, minus Hungary’s Vik­tor Orbán– and the wait-and-see con­tin­gent.

The first group, made of those that side against the nam­ing of Weber to the posi­tion, cur­rent­ly counts four play­ers: France, Spain, Por­tu­gal, and Greece. Those four states com­bined rep­re­sent 26.28% of the Euro­pean pop­u­la­tion, which means that the fail to sat­is­fy any of the thresh­olds under the rules in place. That side may be fur­ther weak­ened by a like­ly change of gov­ern­ment in Greece after ear­ly par­lia­men­tary elec­tions will take place either on 30 June or 7 July. EPP mem­ber New Democ­ra­cy scored a strong vic­to­ry in the EU elec­tions and is wide­ly expect­ed to win the upcom­ing scruti­ny. Its leader, Kyr­i­akos Mit­so­takis, has deci­sive­ly sided with Weber. With­out Greek Prime-Min­is­ter Alex­is Tsipras on their side, France, Spain and Por­tu­gal will account for 24.71% of the bloc’s cit­i­zens.

When it comes to the sec­ond group, the EPP counts nine heads of state, those of Aus­tria, Bul­gar­ia, Croa­t­ia, Cyprus, Ger­many, Hun­gary, Ire­land, Roma­nia and Latvia, assum­ing that the new­ly-appoint­ed inter­im Chan­cel­lor of Aus­tria, fol­low­ing the col­lapse of the Aus­tri­an People’s par­ty-led gov­ern­ment last week, will fol­low the for­mer Chancellor’s line: Sebas­t­ian Kurz has been known to be one Weber’s most ardent sup­port­ers. The only head of state oppos­ing the Ger­man is Hun­gar­i­an strong­man Vik­tor Orbán, as a result of his tem­po­rary sus­pen­sion from the Chris­t­ian Democ­rats and unfavourable com­ments against him by Man­fred Weber, who said that he will nei­ther need the votes of the Hun­gar­i­ans nor want to become pres­i­dent thanks to their votes.

Assum­ing that Aus­tria sticks with the group, the remain­ing EPP 8 might have dou­ble the num­ber of coun­tries need­ed for a block­ing minor­i­ty to be formed, but only rep­re­sent 25.29% of the bloc’s pop­u­la­tion, falling short of the 35% require­ment. Even if Greece is added, that fig­ure will only rise to 27.39%. They do not meet the Ioan­ni­na com­pro­mise thresh­old either.

The third group, those who have cho­sen to sit on the fence for now, can only be defined as a group for the pur­pos­es of analy­sis, and are not expect­ed to act in con­cert or in a coor­di­nat­ed way.
...

And note how the piece indi­cates that the EPP has sent the sig­nal that it wants to keep the pres­i­den­cy at all cost. That’s also going to be impor­tant to keep in mind in all this: the EPP might real­ly, real­ly, real­ly, real­ly want to keep the pres­i­den­cy. It is a very pow­er­ful posi­tion, after all. It’s anoth­er rea­son not to count Weber out. The EU’s right-wing has a way of get­ting its way:

...
Third­ly, the require­ment for greater com­pro­mise and more inclu­sive dis­tri­b­u­tion of top jobs that the new polit­i­cal real­i­ty defined by the first three-par­ty- or even four-par­ty-major­i­ty Par­lia­ment requires, in par­tic­u­lar in light of the require­ment for par­lia­men­tary approval of the next Com­mis­sion com­po­si­tion, might force all par­ties involved to act dif­fer­ent­ly, towards a more har­mo­nious solu­tion (the EPP’s imme­di­ate reac­tion, to be read as a will­ing­ness to sac­ri­fice every­thing to keep the pres­i­den­cy of the Com­mis­sion for Weber runs counter to the degree of flex­i­bil­i­ty required in such con­text and does not reflect the posi­tion of the vic­tor that the par­ty want to por­tray).
...

So it’s some­what unchart­ed waters for the Euro­pean Coun­cil right now. These new rules have been in place since Novem­ber of 2014, so it’s not the first nego­ti­a­tion to required the rein­forced qual­i­fied major­i­ty rule. But it is the first post-par­lia­men­tary pow­er-shar­ing nego­ti­a­tion under the new rules and these are no ordi­nary nego­ti­a­tions. This is when all sorts of deals are involved because that’s what’s required to get all par­ties sat­is­fied. A big giant deal involv­ing lots of dif­fer­ent side-deals that makes enough of the par­ties sat­is­fied. That’s the kind of nego­ti­a­tion that’s under­way right now over the Euro­pean Com­mis­sion nom­i­nee and they have to keep more par­ties sat­is­fied than ever for this deal under the new rules. So it’s prob­a­bly ulti­mate­ly going to be a big­ger deal with more side-deals and sub-nego­ti­a­tions then ever in order to achieve the 21 mem­ber state thresh­old. Which is a pret­ty big deal.

A propen­si­ty for cliff-hang­er mega-nego­ti­a­tions is part of what make EU pol­i­tics so inter­est­ing. And ter­ri­fy­ing. This is going to be a real­ly inter­est­ing and ter­ri­fy­ing month or two com­ing up for EU pol­i­tics.

Here’s an update on the nego­ti­a­tions over who will replaced Jean-Claude Junck­er as the Euro­pean Com­mis­sion Pres­i­dent and the inter­twined nego­ti­a­tion over Mario Draghi’s replace­ment as the head of the Euro­pean Cen­tral Bank (ECB): The EU has tasked six nego­tia­tors with nego­ti­at­ing the upcom­ing nom­i­na­tions for the var­i­ous posts. Recall how Berlin is demand­ing either the Com­mis­sion pres­i­den­cy or the ECB pres­i­den­cy which means any deci­sion that does­n’t result in Man­fred Weber get­ting the Com­mis­sions pres­i­den­cy sort of auto­mat­i­cal­ly results in Jens Wei­d­mann becom­ing the next head of the ECB. So two of the biggest deci­sions to be made are deeply inter­twined, com­pli­cat­ing the nego­ti­a­tions. Now it sounds like nego­tia­tors are inter­est­ed in mak­ing those two inter­twined nego­ti­a­tions less inter­twined by delay­ing the deci­sion over the ECB. The idea is that by sep­a­rat­ing the two deci­sions it might make it eas­i­er to arrive at a deci­sion over the Euro­pean Com­mis­sion pres­i­den­cy.

At the same time, note that we haven’t heard any­thing about Berlin drop­ping its demand for either the Com­mis­sion pres­i­den­cy or the ECB, so it’s unclear why exact­ly delay­ing the ECB nom­i­na­tion would actu­al­ly dis­en­tan­gle these deci­sions oth­er than by remov­ing the urgency fac­tor for the ECB deci­sion. They’ll still be entan­gled deci­sions, but the ECB deci­sion won’t have the same urgency as the pres­i­den­cy deci­sion. That appears to be what we’re actu­al­ly look­ing at. A tem­po­ral sep­a­ra­tion of two still-entan­gled deci­sions which will hope­ful­ly sim­pli­fy the short-term deci­sion over who to nom­i­nate for Com­mis­sion Pres­i­dent.

And as the fol­low­ing arti­cle notes, push­ing back the deci­sion over the ECB could eas­i­ly end up mak­ing it much more of a rushed last-minute deci­sion. That’s because the next oppor­tu­ni­ty for select­ing the ECB chief is dur­ing a meet­ing of the finance min­is­ters on July 8–9, and if it does­n’t hap­pen by then the next oppor­tu­ni­ty is in mid-Octo­ber, two weeks before Mario Draghi’s term at the ECB expires. That’s exact­ly the kind of sit­u­a­tion where deci­sions that would­n’t oth­er­wise hap­pen sud­den hap­pen. Like nom­i­nat­ing some­one as con­tro­ver­sial and dam­ag­ing as Wei­d­mann to a job that impor­tant. So the plan to dis­en­tan­gle the deci­sions over the Euro­pean Com­mis­sion pres­i­den­cy and the next ECB chief does­n’t appear to actu­al­ly dis­en­tan­gle the two deci­sions and could make the upcom­ing ECB deci­sion much more like­ly to be a rushed bad deci­sion. It’s not a great update for the EU:

Bloomberg

EU’s Polit­i­cal Twister Seen Delay­ing Choice of New ECB Pres­i­dent

* Gov­ern­ments are said to be focus­ing on EU Com­mis­sion first
* Late deci­sion on ECB could unnerve investors amid weak econ­o­my

By Jan Bratan­ic, Jean­nette Neu­mann, and Bir­git Jen­nen
June 5, 2019, 6:22 AM CDT

Euro­pean Union lead­ers could push their deci­sion on the next Euro­pean Cen­tral Bank pres­i­dent into July or lat­er as they focus on appoint­ing the bloc’s top polit­i­cal posi­tions.

The nego­ti­a­tions over who gets the most pow­er­ful posts are espe­cial­ly tricky as they’ve nev­er come up at the same time before. With a June sum­mit just two weeks away, the empha­sis appears to be on reach­ing a deal over the Euro­pean Com­mis­sion pres­i­den­cy, accord­ing to EU offi­cials who spoke on con­di­tion of anonymi­ty.

Delay­ing the nam­ing of a suc­ces­sor to ECB Pres­i­dent Mario Draghi would go some way to dis­en­tan­gling the appoint­ment of an inde­pen­dent cen­tral banker from the polit­i­cal horse-trad­ing. The risk is that it unset­tles investors over the sum­mer when mar­ket liq­uid­i­ty is thin and glob­al eco­nom­ic risks are mount­ing. Draghi’s term ends on Oct. 31 and the front-run­ners to replace him have wide­ly dif­fer­ing views on how much stim­u­lus the euro zone needs.

If lead­ers don’t take a deci­sion this month, the talks are like­ly to be punt­ed to finance min­is­ters who meet on July 8–9. They could ease investors’ nerves by com­ing up with a sin­gle nom­i­nee for the ECB pres­i­den­cy, with lead­ers call­ing an extra­or­di­nary sum­mit to approve it. After that though, the sum­mer break means the next oppor­tu­ni­ty is like­ly to be a sum­mit in mid-Octo­ber, just two weeks before Draghi leaves.

Germany’s Turn

The offi­cials not­ed that nation­al polit­i­cal con­sid­er­a­tions will still influ­ence the even­tu­al choice with France and Ger­many, as the EU’s biggest economies, each stak­ing a claim to one of the posi­tions. The ECB has nev­er had a Ger­man pres­i­dent and there is grow­ing inter­nal pres­sure on Chan­cel­lor Angela Merkel to change that.

The EU has charged six nego­tia­tors with dis­cussing the posts, and they’ll meet for din­ner in Brus­sels on Fri­day. Lead­ers will hold a sum­mit on June 20, where the polit­i­cal jobs — pri­mar­i­ly a suc­ces­sor to Jean-Claude Junck­er as com­mis­sion pres­i­dent and Don­ald Tusk as pres­i­dent of the coun­cil of lead­ers — could be unveiled.

Ger­many is push­ing for Man­fred Weber to be head the com­mis­sion, while France is back­ing Brex­it chief nego­tia­tor Michel Barnier.

The Ger­man and French con­tenders for the ECB have tak­en rad­i­cal­ly dif­fer­ent stances over mon­e­tary pol­i­cy, mak­ing the deci­sion crit­i­cal for investors try­ing to judge when inter­est rates will start to rise — or if more stim­u­lus might be added.

Bun­des­bank Pres­i­dent Jens Wei­d­mann has been a fre­quent crit­ic of the ECB’s bond-buy­ing pro­grams, which could deny him the sup­port of south­ern Euro­pean gov­ern­ments. Two offi­cials said there is resis­tance to him get­ting the job.

Bank of France Gov­er­nor Fran­cois Villeroy de Gal­hau has posi­tioned him­self as a cen­trist, back­ing cur­rent mea­sures, but also argu­ing for a review of whether banks need some relief from neg­a­tive inter­est rates. Benoit Coeure, a French mem­ber of the ECB’s Exec­u­tive Board, was a dri­ving force behind QE.

One offi­cial said it’s up to France and Ger­many to reach agree­ment over the next two to three weeks, and while France isn’t fun­da­men­tal­ly opposed to a Ger­man at the helm of the ECB, it doesn’t want Wei­d­mann in that post.

Two offi­cials said the race is basi­cal­ly between those two nations, with one see­ing only a 20% chance of a com­pro­mise can­di­date from a third coun­try. Two offi­cials named the Nether­lands as an option in that case — Dutch cen­tral bank Gov­er­nor Klaas Knot is also seen as inter­est­ed in the job. Finnish Gov­er­nor Olli Rehn and his pre­de­ces­sor Erk­ki Liika­nen have also sig­naled a will­ing­ness.

...

———–

“EU’s Polit­i­cal Twister Seen Delay­ing Choice of New ECB Pres­i­dent” by Jan Bratan­ic, Jean­nette Neu­mann, and Bir­git Jen­nen; Bloomberg; 06/05/2019

“Delay­ing the nam­ing of a suc­ces­sor to ECB Pres­i­dent Mario Draghi would go some way to dis­en­tan­gling the appoint­ment of an inde­pen­dent cen­tral banker from the polit­i­cal horse-trad­ing. The risk is that it unset­tles investors over the sum­mer when mar­ket liq­uid­i­ty is thin and glob­al eco­nom­ic risks are mount­ing. Draghi’s term ends on Oct. 31 and the front-run­ners to replace him have wide­ly dif­fer­ing views on how much stim­u­lus the euro zone needs.”

As we can see, for some rea­son delay­ing the ECB deci­sion is being por­trayed as dis­en­tan­gling the deci­sion from Euro­pean Com­mis­sion pres­i­den­cy. And yet there’s no indi­ca­tion at all that the under­ly­ing demands that entan­gled these deci­sions in the first place have gone away. Berlin still wants Man­fred Weber as Com­mis­sion pres­i­dent and still wants a Ger­man head­ing the ECB. And accord­ing to the sources for this arti­cle, these deci­sions are ulti­mate­ly going to be be decid­ed by France and Ger­many. So basi­cal­ly noth­ing has changed except the tim­ing, with the ECB deci­sion poten­tial­ly get­ting pushed back to mid-Octo­ber, just two weeks before the end of Draghi’s term:

...
The nego­ti­a­tions over who gets the most pow­er­ful posts are espe­cial­ly tricky as they’ve nev­er come up at the same time before. With a June sum­mit just two weeks away, the empha­sis appears to be on reach­ing a deal over the Euro­pean Com­mis­sion pres­i­den­cy, accord­ing to EU offi­cials who spoke on con­di­tion of anonymi­ty.

...

If lead­ers don’t take a deci­sion this month, the talks are like­ly to be punt­ed to finance min­is­ters who meet on July 8–9. They could ease investors’ nerves by com­ing up with a sin­gle nom­i­nee for the ECB pres­i­den­cy, with lead­ers call­ing an extra­or­di­nary sum­mit to approve it. After that though, the sum­mer break means the next oppor­tu­ni­ty is like­ly to be a sum­mit in mid-Octo­ber, just two weeks before Draghi leaves.

Germany’s Turn

The offi­cials not­ed that nation­al polit­i­cal con­sid­er­a­tions will still influ­ence the even­tu­al choice with France and Ger­many, as the EU’s biggest economies, each stak­ing a claim to one of the posi­tions. The ECB has nev­er had a Ger­man pres­i­dent and there is grow­ing inter­nal pres­sure on Chan­cel­lor Angela Merkel to change that.

...

One offi­cial said it’s up to France and Ger­many to reach agree­ment over the next two to three weeks, and while France isn’t fun­da­men­tal­ly opposed to a Ger­man at the helm of the ECB, it doesn’t want Wei­d­mann in that post.

Two offi­cials said the race is basi­cal­ly between those two nations, with one see­ing only a 20% chance of a com­pro­mise can­di­date from a third coun­try. Two offi­cials named the Nether­lands as an option in that case — Dutch cen­tral bank Gov­er­nor Klaas Knot is also seen as inter­est­ed in the job. Finnish Gov­er­nor Olli Rehn and his pre­de­ces­sor Erk­ki Liika­nen have also sig­naled a will­ing­ness.
...

Yep, the big plan is to poten­tial­ly push the deci­sion over the ECB replace­ment back to mid-Octo­ber, which is exact­ly the kind of cir­cum­stance that could help push through a high­ly con­tro­ver­sial nom­i­nee like Jens Wei­d­mann.

So is it pos­si­ble that we’re look­ing at a sce­nario where France gets to pick a Euro­pean Com­mis­sion pres­i­den­cy in exchange for Wei­d­mann head­ing the ECB and this move is in antic­i­pa­tion of that deal? Per­haps, but as the fol­low­ing arti­cle notes, there’s no hard and fast rule that says France and Ger­many have to split this deci­sion and it’s tech­ni­cal­ly pos­si­ble for the cen­tre-right EPP to get the num­bers it needs for a rul­ing coali­tion in the EU par­lia­ment with­out Macron’s fac­tion. And that means we’re in a sit­u­a­tion where Macron might not have to join his fac­tion of the par­lia­ment into a coali­tion with cen­tre-right EPP and if that hap­pens it’s entire­ly pos­si­ble Angela Merkel could decide to teach Emmanuel Macron a les­son and ice France out entire­ly. How like­ly is such a sce­nario? Well, Macron has pledged to block Weber so the start­ing points for these nego­ti­a­tions aren’t great for com­ing to a res­o­lu­tion.

At the same time, as the arti­cle nots, for the EPP’s Weber to get nom­i­nat­ed for the pres­i­den­cy he’s going to need a major­i­ty vote on the Euro­pean Coun­cil (which then push­es the vote to the par­lia­ment) and right now Weber does­n’t appear to have the required Coun­cil back­ing. So the cen­tre-right EPP appears to have the num­bers it needs for the Com­mis­sion pres­i­den­cy with­in the par­lia­ment but not on the Coun­cil and Macron remains com­mit­ted to block­ing Weber so each side can still effec­tive­ly veto the oth­er. Also keep in mind that one of the like­li­est alter­na­tive con­sen­sus nom­i­nees for Com­mis­sion Pres­i­dent is Mar­grethe Vestager, a mem­ber of Macron’s Lib­er­al (lib­er­tar­i­an) ALDE coali­tion which only adds to Macron’s bar­gain­ing pow­er.

It’s all an impor­tant part of the con­text for the above push to dis­en­tan­gle the Com­mis­sion pres­i­den­cy from the ECB job. Because while the move might be sold as mak­ing these com­pli­cat­ed deci­sions eas­i­er, what’s like­ly going to actu­al­ly hap­pen is the pushed-back ECB deci­sion will still be large­ly part of the nego­ti­a­tions over the rest of the jobs but also much more vul­ner­a­ble to hard­ball tac­tics imposed by the urgency of the need to make a choice. And right now, giv­en the extreme messi­ness of the nego­ti­a­tion land­scape, hard ball tac­tics are def­i­nite­ly going to be on the agenda(s):

Politico.eu

EU con­ser­v­a­tives see path to pow­er, pres­sur­iz­ing Macron and Lib­er­als

Cen­ter-right politi­cians say French president’s group can join coali­tion and claim a top job, or face iso­la­tion.

By David M. Her­szen­horn and Maïa de La Baume

6/5/19, 8:36 PM CET

Updat­ed 6/6/19, 9:55 PM CET

The cen­ter-right politi­cians who have long ruled in Brus­sels now see a clear path to hold­ing onto pow­er — turn­ing the fight over the EU’s top jobs into a two-per­son con­test: Ger­man Chan­cel­lor Angela Merkel vs. French Pres­i­dent Emmanuel Macron.

And they expect Merkel to win, of course.

If Macron, who is work­ing with Euro­pean Lib­er­als to build a new pro­gres­sive force, proves unwill­ing to cut a deal that lets the cen­ter-right Euro­pean Peo­ple’s Par­ty (EPP) claim the Euro­pean Com­mis­sion pres­i­den­cy, the con­ser­v­a­tives are hop­ing Merkel will help steam­roll him and instead form a coali­tion with the cen­ter-left Social Democ­rats and the Greens.

As EPP offi­cials describe it, such a coali­tion would allow them to claim the Com­mis­sion pres­i­den­cy, the EU’s top job, for Man­fred Weber, the EPP can­di­date, while award­ing the Par­lia­ment pres­i­den­cy to the Greens, and giv­ing the Social Democ­rats a choice of either the Euro­pean Coun­cil pres­i­den­cy or the posi­tion of high rep­re­sen­ta­tive for for­eign affairs.

If Macron and the Lib­er­als get on board, the Coun­cil pres­i­den­cy would go to them. If not, Merkel could be gen­er­ous and effec­tive­ly let the French des­ig­nate the next pres­i­dent of the Euro­pean Cen­tral Bank, or she could teach the upstart Macron a les­son and ice out the Lib­er­als.

Whether the con­ser­v­a­tives’ the­o­ry will fly will become clear in the weeks ahead. Accord­ing to the EU’s new par­lia­men­tary math, at least the num­bers would add up.

The EPP is set to con­trol 179 seats; the Social Democ­rats 152 seats and the Greens 74 seats, for a total of 405 — com­fort­ably above the 376 need­ed to form a major­i­ty. Macron’s new lib­er­al-pro­gres­sive group, which has yet to choose a name for itself, is set to hold 109 seats.

Weber, who is try­ing to sell his grand plan for the EU’s future lead­er­ship to the oth­er groups, made clear at a news con­fer­ence on Wednes­day that he views the Greens as deserv­ing of a prize giv­en their strong elec­tion gains, and he specif­i­cal­ly offered to take up issues impor­tant to them in invit­ing them to join his major­i­ty coali­tion.

“The EPP is sim­ply ready to imme­di­ate­ly start with a very com­pro­mise-ori­ent­ed style,” Weber said. “We see that, for exam­ple, the Green Par­ty cel­e­brat­ed a suc­cess in the elec­tion.

“That’s why the envi­ron­men­tal issues, cli­mate change issues, must be includ­ed, and the EPP is ready to talk with the Greens about these issues,” Weber said. “And I hope ALDE and the Social­ists will also be ready now to talk with us.”

But to get to a vote in Par­lia­ment on the next Com­mis­sion pres­i­dent, Weber would first have to be nom­i­nat­ed by the Euro­pean Coun­cil, where cur­rent­ly the num­bers are stacked against the con­ser­v­a­tives.

Six EU lead­ers, appoint­ed as coor­di­na­tors for their pan-Euro­pean par­ties with­in the Coun­cil, will meet in Brus­sels on Fri­day night to begin their delib­er­a­tions over can­di­dates for the bloc’s top jobs.

The con­ser­v­a­tives are bet­ting that the Social­ist coor­di­na­tors, Span­ish Prime Min­is­ter Pedro Sánchez and Por­tuguese Prime Min­is­ter António Cos­ta, will rec­og­nize that the only way they can secure a big prize is by back­ing an EPP-led coali­tion.

But bull­doz­ing the pres­i­dent of France may prove impos­si­ble. Hav­ing the sup­port of Ger­many and France, the EU’s largest coun­tries, is gen­er­al­ly seen as essen­tial for any incom­ing Com­mis­sion chief. While Merkel and then-British Prime Min­is­ter David Cameron ini­tial­ly opposed Jean-Claude Junck­er for Com­mis­sion pres­i­dent in 2014, it is unclear that he could have won had Merkel not ulti­mate­ly come around.

For his part, Macron, see­ing the same math, has under­tak­en an aggres­sive out­reach cam­paign to the Social­ists in hopes of iso­lat­ing the EPP in exact­ly the way the con­ser­v­a­tives aim to iso­late him.

With Merkel’s gov­ern­ing coali­tion cur­rent­ly in a pre­car­i­ous posi­tion in Berlin, it’s unclear just how much polit­i­cal strength she will be able to bring to Brus­sels in sup­port of the EPP. Merkel remains the EU’s most influ­en­tial nation­al leader, but she has declared that this is her last term and already relin­quished lead­er­ship of her par­ty, the Chris­t­ian Demo­c­ra­t­ic Union (CDU). If her coali­tion col­laps­es, she could face retire­ment soon­er than expect­ed.

...

Macron mys­tery

Macron has made clear that he wants to block Weber, but it’s not clear who he ulti­mate­ly wants to become Com­mis­sion pres­i­dent.

One fre­quent­ly men­tioned con­ser­v­a­tive alter­na­tive to Weber is the EU’s Brex­it nego­tia­tor, Michel Barnier. Because Barnier is French, it would be dif­fi­cult for Macron to vote against him. But Élysée Palace offi­cials have sent sig­nals recent­ly that Macron con­sid­ers Barnier part of an old gen­er­a­tion of EU lead­ers that needs to be replaced.

If Weber is blocked, the Social­ist nom­i­nee, Frans Tim­mer­mans, is like­ly to be tor­pe­doed in retal­i­a­tion by the con­ser­v­a­tives, leav­ing the field wide open.

Anoth­er urgent ques­tion is what the Greens, who stand to con­trol 74 seats in Par­lia­ment, will demand in exchange for join­ing a coali­tion in the leg­is­la­ture, giv­en their votes are absolute­ly cru­cial to form­ing a pro-EU major­i­ty that does­n’t include both the con­ser­v­a­tives and the lib­er­als. At a meet­ing Wednes­day evening of par­ty group lead­ers, the Greens pushed for draw­ing up a sub­stan­tive pol­i­cy plat­form and urged the cre­ation of work­ing groups to focus on spe­cif­ic pol­i­cy areas. It’s not expect­ed to be an easy or quick process.

“We are walk­ing on eggs,” said one Green offi­cial. “Some groups are yet to be formed.”

The Greens, this politi­cian said, would be adamant in demand­ing “one or sev­er­al” green Com­mis­sion­ers — a request that will require help from one or more nation­al cap­i­tals.

The politi­cian said he has “mixed feel­ings” about the abil­i­ty of the four pro-EU groups to find com­mon ground. The politi­cian ques­tioned how com­mit­ted the oth­ers would be to envi­ron­men­tal caus­es.

“From one side, we have dec­la­ra­tions of faith in the three oth­er groups that they stand for defend­ing the envi­ron­ment,” he said. “On the oth­er side, I believe the reac­tion risks being ‘those Greens, they are expen­sive.’”

How­ev­er, the lead­ers of the four main pro-EU groups issued a state­ment after their meet­ing declar­ing they agreed to work togeth­er to define “a com­mon ambi­tion for the next leg­isla­tive peri­od,” which would be a plat­form for the next Com­mis­sion pres­i­dent. They aim to have drawn up the pro­gram by the time EU lead­ers meet to dis­cuss the top jobs on June 20 and 21.

With both Lib­er­als and Greens hav­ing made gains in the elec­tion, an agree­ment on a com­mon pol­i­cy pro­gram between three or four groups could prove extreme­ly dif­fi­cult, though some offi­cials said they detect­ed a greater will­ing­ness for com­pro­mise.

So far, the con­ser­v­a­tives are demon­strat­ing the cohe­sion and dis­ci­pline that has helped them con­trol the top EU jobs for decades.

They reelect­ed Weber over­whelm­ing­ly on Wednes­day, if only tem­porar­i­ly because they hope he will be ele­vat­ed to Com­mis­sion pres­i­dent. The vote, how­ev­er, also brought some atten­tion Weber could have done with­out as it high­light­ed that Hun­gar­i­an Prime Min­is­ter Vik­tor Orbán’s Fidesz par­ty — although sus­pend­ed from the EPP alliance of par­ties — remains active in the par­lia­men­tary group and vot­ed in sup­port of Weber.

The EPP group also elect­ed vice pres­i­dents who are expect­ed to vie for top jobs. Este­ban González Pons, a Spaniard, is among the con­tenders to lead the group if Weber steps aside. González Pons, a vice chair of the EPP and a for­mer spokesper­son of the Pop­u­lar Par­ty in the Span­ish sen­ate, has been an MEP since 2014.

Esther de Lange, a Dutch MEP, is also said to cov­et the group leader post, while Mairead McGuin­ness, an Irish MEP, is regard­ed as a poten­tial can­di­date for Par­lia­ment pres­i­dent.

The com­plex­i­ty of the ear­ly nego­ti­a­tions offers a pre­view of just how dif­fi­cult it will be to man­age the new Par­lia­ment, in which the tra­di­tion­al cen­ter-left and cen­ter-right par­ties have lost scores of seats com­pared with five years ago, and far-right, nation­al­ist and pop­ulist forces have gained sub­stan­tial ground and will con­trol some 200 seats, though they are divid­ed among mul­ti­ple groups.

Weber, at his news con­fer­ence, insist­ed the EPP is the par­ty pre­pared to lead the way. “We are unit­ed,” he said. “We have a good plan. We are ready for nego­ti­a­tions. We are ready for com­pro­mise. And that is our offer.”

———–

“EU con­ser­v­a­tives see path to pow­er, pres­sur­iz­ing Macron and Lib­er­als” by David M. Her­szen­horn and Maïa de La Baume; Politico.eu; 06/05/2019

“If Macron, who is work­ing with Euro­pean Lib­er­als to build a new pro­gres­sive force, proves unwill­ing to cut a deal that lets the cen­ter-right Euro­pean Peo­ple’s Par­ty (EPP) claim the Euro­pean Com­mis­sion pres­i­den­cy, the con­ser­v­a­tives are hop­ing Merkel will help steam­roll him and instead form a coali­tion with the cen­ter-left Social Democ­rats and the Greens.”

It’s shap­ing up to be quite a show­down: If Macron does­n’t join with the EPP, the EPP wants Merkel to steam­roll him and form a coali­tion with just the Greens and Social­ists instead. It’s a sce­nario the com­po­si­tion of the new par­lia­ment allows for but the pol­i­tics will still get messy:

...
As EPP offi­cials describe it, such a coali­tion would allow them to claim the Com­mis­sion pres­i­den­cy, the EU’s top job, for Man­fred Weber, the EPP can­di­date, while award­ing the Par­lia­ment pres­i­den­cy to the Greens, and giv­ing the Social Democ­rats a choice of either the Euro­pean Coun­cil pres­i­den­cy or the posi­tion of high rep­re­sen­ta­tive for for­eign affairs.

If Macron and the Lib­er­als get on board, the Coun­cil pres­i­den­cy would go to them. If not, Merkel could be gen­er­ous and effec­tive­ly let the French des­ig­nate the next pres­i­dent of the Euro­pean Cen­tral Bank, or she could teach the upstart Macron a les­son and ice out the Lib­er­als.

Whether the con­ser­v­a­tives’ the­o­ry will fly will become clear in the weeks ahead. Accord­ing to the EU’s new par­lia­men­tary math, at least the num­bers would add up.

The EPP is set to con­trol 179 seats; the Social Democ­rats 152 seats and the Greens 74 seats, for a total of 405 — com­fort­ably above the 376 need­ed to form a major­i­ty. Macron’s new lib­er­al-pro­gres­sive group, which has yet to choose a name for itself, is set to hold 109 seats.

Weber, who is try­ing to sell his grand plan for the EU’s future lead­er­ship to the oth­er groups, made clear at a news con­fer­ence on Wednes­day that he views the Greens as deserv­ing of a prize giv­en their strong elec­tion gains, and he specif­i­cal­ly offered to take up issues impor­tant to them in invit­ing them to join his major­i­ty coali­tion.

“The EPP is sim­ply ready to imme­di­ate­ly start with a very com­pro­mise-ori­ent­ed style,” Weber said. “We see that, for exam­ple, the Green Par­ty cel­e­brat­ed a suc­cess in the elec­tion.

“That’s why the envi­ron­men­tal issues, cli­mate change issues, must be includ­ed, and the EPP is ready to talk with the Greens about these issues,” Weber said. “And I hope ALDE and the Social­ists will also be ready now to talk with us.”
...

But the num­bers that back up a strong-arm­ing tac­tic against Macron only add up in the EU par­lia­ment. It’s a dif­fer­ent sto­ry on the Coun­cil. And that’s part of why bull­doz­ing Macron may not be pos­si­ble. And Macron is mak­ing his own play for cre­at­ing a coali­tion with­out the EPP, although he can’t do it with the Social­ists and Greens alone. But Macron can still block a coali­tion from form­ing so pre­sum­ably Macron’s nego­ti­at­ing tac­tic revolves around offer­ing puta­tive coali­tion part­ners bet­ter bar­gain­ing pow­er in their col­lec­tive nego­ti­a­tions with the EPP. It’s too bad these nego­ti­a­tions take place in secret because this would be quite a nego­ti­a­tion to watch:

...
But to get to a vote in Par­lia­ment on the next Com­mis­sion pres­i­dent, Weber would first have to be nom­i­nat­ed by the Euro­pean Coun­cil, where cur­rent­ly the num­bers are stacked against the con­ser­v­a­tives.

Six EU lead­ers, appoint­ed as coor­di­na­tors for their pan-Euro­pean par­ties with­in the Coun­cil, will meet in Brus­sels on Fri­day night to begin their delib­er­a­tions over can­di­dates for the bloc’s top jobs.

The con­ser­v­a­tives are bet­ting that the Social­ist coor­di­na­tors, Span­ish Prime Min­is­ter Pedro Sánchez and Por­tuguese Prime Min­is­ter António Cos­ta, will rec­og­nize that the only way they can secure a big prize is by back­ing an EPP-led coali­tion.

But bull­doz­ing the pres­i­dent of France may prove impos­si­ble. Hav­ing the sup­port of Ger­many and France, the EU’s largest coun­tries, is gen­er­al­ly seen as essen­tial for any incom­ing Com­mis­sion chief. While Merkel and then-British Prime Min­is­ter David Cameron ini­tial­ly opposed Jean-Claude Junck­er for Com­mis­sion pres­i­dent in 2014, it is unclear that he could have won had Merkel not ulti­mate­ly come around.

For his part, Macron, see­ing the same math, has under­tak­en an aggres­sive out­reach cam­paign to the Social­ists in hopes of iso­lat­ing the EPP in exact­ly the way the con­ser­v­a­tives aim to iso­late him.

With Merkel’s gov­ern­ing coali­tion cur­rent­ly in a pre­car­i­ous posi­tion in Berlin, it’s unclear just how much polit­i­cal strength she will be able to bring to Brus­sels in sup­port of the EPP. Merkel remains the EU’s most influ­en­tial nation­al leader, but she has declared that this is her last term and already relin­quished lead­er­ship of her par­ty, the Chris­t­ian Demo­c­ra­t­ic Union (CDU). If her coali­tion col­laps­es, she could face retire­ment soon­er than expect­ed.
...

And note part of the dynam­ic that might lead the way to Mar­grethe Vestager, a mem­ber of Macron’s ALDE coali­tion, being cho­sen as a com­pro­mise can­di­date: if the Social­ist don’t back Weber the EPP will retal­i­ate by not back­ing the Social­ists’ Frans Tim­mer­mans. So the deci­sion for the Social­ists is either Weber or a Macron-offered can­di­date. And Vestager just might be the can­di­date Macron offers. If Macron forces the EPP into accept­ing a non-Weber com­pro­mise can­di­date as part of some sort of ALDE/EPP grand bar­gain, Vestager is prob­a­bly one of the only poten­tial com­pro­mise can­di­dates in that sit­u­a­tion giv­en her rel­a­tive pop­u­lar­i­ty. And Macron’s camp is also one of the pri­ma­ry oppo­nents of a Wei­d­mann term at the ECB. So if Macron wins in his anti-Weber cam­paign and Vestager is the com­pro­mise can­di­date, Macron is going to be a lot more like­ly to com­pro­mise on his oppo­si­tion to Wei­d­mann or a sim­i­lar can­di­date at the ECB. It’s a messy new polit­i­cal bar­gain­ing land­scape that’s unprece­dent­ed for the EU and a result of the his­toric loss­es the cen­ter par­ties expe­ri­ence a few weeks ago:

...
Macron mys­tery

Macron has made clear that he wants to block Weber, but it’s not clear who he ulti­mate­ly wants to become Com­mis­sion pres­i­dent.

One fre­quent­ly men­tioned con­ser­v­a­tive alter­na­tive to Weber is the EU’s Brex­it nego­tia­tor, Michel Barnier. Because Barnier is French, it would be dif­fi­cult for Macron to vote against him. But Élysée Palace offi­cials have sent sig­nals recent­ly that Macron con­sid­ers Barnier part of an old gen­er­a­tion of EU lead­ers that needs to be replaced.

If Weber is blocked, the Social­ist nom­i­nee, Frans Tim­mer­mans, is like­ly to be tor­pe­doed in retal­i­a­tion by the con­ser­v­a­tives, leav­ing the field wide open.

...

The com­plex­i­ty of the ear­ly nego­ti­a­tions offers a pre­view of just how dif­fi­cult it will be to man­age the new Par­lia­ment, in which the tra­di­tion­al cen­ter-left and cen­ter-right par­ties have lost scores of seats com­pared with five years ago, and far-right, nation­al­ist and pop­ulist forces have gained sub­stan­tial ground and will con­trol some 200 seats, though they are divid­ed among mul­ti­ple groups.

Weber, at his news con­fer­ence, insist­ed the EPP is the par­ty pre­pared to lead the way. “We are unit­ed,” he said. “We have a good plan. We are ready for nego­ti­a­tions. We are ready for com­pro­mise. And that is our offer.”
...

As we can see, the many dif­fi­cult deci­sions of who to select for the dif­fer­ent EU-lev­el posts after the 2019 elec­tions have been made all the more dif­fi­cult by the fact that they’re being made in a new coali­tion pol­i­tics land­scape where the EPP and Social­ists can’t form of major­i­ty by join­ing forces for the first time and a large coali­tion needs to be made. It’s a rather chal­leng­ing coali­tion build­ing peri­od com­pared to past EU elec­tions.

But there is one very good piece of news about this coali­tion build­ing puz­zle: the Greens are look­ing like pos­si­ble king-mak­ers. Although it’s pos­si­ble for the EPP and Social­ists to form a gov­ern­ment coali­tion with Macron’s alliance and not the Greens so it’s pos­si­ble we could see an EPP/Macront/Socialist gov­ern­ing coali­tion form which lim­its the Greens’ nego­ti­at­ing pow­er. But at least the Greens did well enough to have a good deal of lever­age in these nego­ti­a­tions. The bad news is that the two main fac­tions court­ing the Greens are the EPP’s eco­nom­i­cal­ly bro­ken pro-aus­ter­i­ty fac­tion and Macron’s some­what more humane eco­nom­i­cal­ly bro­ken pro-aus­ter­i­ty fac­tion. It’s that less-than-inspir­ing selec­tion of coali­tion part­ners that puts us on ‘Bad Grand Bar­gain’ Watch.

Adding to the high stakes nature of these nego­ti­a­tions is the fact that it’s tied into the par­al­lel nego­ti­a­tions over the ECB pres­i­den­cy which could lead to dis­as­ter if it results in the nom­i­na­tion of some­one like Jens Wei­d­mann as ECB chief as part of the grand bar­gain. If not Weber then Wei­d­mann. That’s kind of the expec­ta­tions that are being set and they don’t appear to be dis­si­pat­ing. And while the deci­sion over the ECB might be pushed back until Octo­ber that’s not real­ly going to dis­en­tan­gle it from the nego­ti­a­tions over the Com­mis­sion pres­i­den­cy. They can’t be dis­en­tan­gled that eas­i­ly. That’s all the sys­tem works. It’s all one big nego­ti­a­tion. And so far that nego­ti­a­tion is mak­ing Man­fred Weber’s chances for the pres­i­den­cy look­ing like a big ‘maybe’ leav­ing Jens Wei­d­man­n’s chances at the ECB in ‘maybe’ ter­ri­to­ry too.

You have to hand it to EU pol­i­tics, it isn’t bor­ing. It’s not a fea­ture.

Here’s an update on the ongo­ing high stakes nego­ti­a­tions over the top jobs for the EU: The 28 nation­al lead­ers recent­ly met in Brus­sels for secret nego­ti­a­tions over who gets what job. Not sur­pris­ing­ly, no agree­ment was reached and the plan is for anoth­er meet­ing on June 30th. Cru­cial­ly, it appears that Man­fred Weber’s prospects for the EU Com­mis­sion Pres­i­den­cy are con­tin­u­ing to dwin­dle. And since Angela Merkel has made it clear that Berlin had bet­ter get either the EU Com­mis­sion Pres­i­den­cy or the head of the ECB, Weber’s dwin­dling prospects means Jens Wei­d­man­n’s bid for the head of the ECB is only get­ting stronger. So the EU appears to be get­ting clos­er to suc­cess­ful­ly nego­ti­at­ing itself into an eco­nom­ic dis­as­ter:

Reuters

EU aims to com­plete top jobs jig­saw puz­zle on June 30

Gabriela Baczyn­s­ka, Jan Strupczews­ki

June 19, 2019 / 5:07 PM / Updat­ed

BRUSSELS (Reuters) — Euro­pean Union lead­ers will meet again on June 30 to seek agree­ment on who should inher­it the bloc’s top jobs — includ­ing the head of its cen­tral bank — after fail­ing to get a deal in talks drag­ging into the small hours on Fri­day.

The 28 nation­al lead­ers meet­ing in Brus­sels for secret delib­er­a­tions — no aides or phones allowed — remained at odds over who should next steer the EU, with French Pres­i­dent Emmanuel Macron block­ing Ger­man Chan­cel­lor Angela Merkel’s pick.

“There was no major­i­ty for any can­di­date,” chair­man Don­ald Tusk told a news con­fer­ence. “We will meet again on June 30.”

The promi­nent posi­tions, includ­ing the head of the Euro­pean Cen­tral Bank (ECB) and the EU’s exec­u­tive Euro­pean Com­mis­sion, lead the bloc’s poli­cies on issues rang­ing from mon­e­tary pol­i­cy to migra­tion and Brex­it to trade.

Ger­man, French, Span­ish, Ital­ian and Dutch lead­ers are aim­ing to pre­pare a deal on the pack­age of the five senior EU jobs when they trav­el to Japan on June 28–29 for a G20 sum­mit of major glob­al economies.

For the Euro­pean Union, the Com­mis­sion pres­i­den­cy is a piv­otal role. The body acts as the bloc’s com­pe­ti­tion watch­dog, over­sees nation­al bud­gets and pro­pos­es poli­cies from cli­mate change to tech reg­u­la­tion — big areas as mem­ber states strug­gle with a range of chal­lenges at home and abroad.

The bloc’s top jobs — includ­ing the head of the Euro­pean Coun­cil tasked with craft­ing com­pro­mis­es between mem­ber states, whose par­tic­u­lar inter­ests often vary — are all chang­ing hands lat­er this year after an EU-wide elec­tion.

Pow­er cen­ters Berlin and Paris clashed over who should take over at the helm of the Com­mis­sion, with Merkel back­ing com­pa­tri­ot Man­fred Weber, a deputy head of her cen­tre-right sis­ter par­ty CSU.

Macron pushed to block Weber over lack of gov­ern­ment expe­ri­ence. Paris and Madrid want more promi­nent EU post­ings for lib­er­al and social­ist can­di­dates after a change of the par­lia­men­tary guard.

‘ELECTING A POPE IS EASIER’

Any new Com­mis­sion chief must not only get the back­ing of a clear major­i­ty of — or, prefer­ably, all — nation­al lead­ers but also be accept­ed by the new Euro­pean Par­lia­ment, which will sit for the first time on July 2.

Nation­al lead­ers want to have their pro­pos­al on the jobs puz­zle ready before that and put it to the cham­ber, which votes on laws pro­posed by the Euro­pean Com­mis­sion.

“We sug­gest the per­son, but we def­i­nite­ly don’t want to see a cri­sis with par­lia­ment, to real­ize that what we sug­gest is not being accept­ed,” Merkel said. “This wouldn’t be good for the work of the Com­mis­sion in the next five years.”

The new­ly elect­ed leg­is­la­ture has refused to ral­ly behind Weber, even though he heads the biggest fac­tion there, the Euro­pean People’s Par­ty (EPP). This should give Merkel enough grounds to drop him, diplo­mats said.

“Weber’s claim is implod­ing. The Par­lia­ment is more divid­ed than before and has missed the boat. And EPP nation­al lead­ers are turn­ing their back on him as well,” said a senior EU diplo­mat. “If the Ger­mans lose Weber, the French don’t get the job either, it’s tit for tat.”

Seek­ing to nar­row a wide gen­der gap in the bloc’s lead­er­ship is also a fac­tor in a com­plex race that seeks to bal­ance out par­ty pol­i­tics and region­al influ­ence in the EU. The fifth promi­nent post­ing up for grabs is the EU’s chief diplo­mat.

Oth­er names in the frame include French­man Michel Barnier, cur­rent­ly the EU’s Brex­it nego­tia­tor, Denmark’s Mar­grethe Vestager, cur­rent­ly the bloc’s top com­pe­ti­tion offi­cial, and Belgium’s care­tak­er Prime Min­is­ter Charles Michel.

Vestager — pre­vi­ous­ly pub­licly praised by both Merkel and Macron — could help avoid a tug-of-war between the nation­al lead­ers and the Euro­pean Par­lia­ment as the lib­er­al fac­tion there has pro­posed her for the Com­mis­sion chief.

Macron, how­ev­er, sug­gest­ed after the sum­mit that no more par­lia­ment can­di­dates would be con­sid­ered.

...

“It’s quick­er to elect the pope very often than it is to fill these par­tic­u­lar posi­tions,” Irish Prime Min­is­ter Leo Varad­kar quipped.

———-

“EU aims to com­plete top jobs jig­saw puz­zle on June 30” by Gabriela Baczyn­s­ka, Jan Strupczews­ki; Reuters; 06/19/2019

“For the Euro­pean Union, the Com­mis­sion pres­i­den­cy is a piv­otal role. The body acts as the bloc’s com­pe­ti­tion watch­dog, over­sees nation­al bud­gets and pro­pos­es poli­cies from cli­mate change to tech reg­u­la­tion — big areas as mem­ber states strug­gle with a range of chal­lenges at home and abroad.”

As the arti­cle makes clear, the Euro­pean Com­mis­sion pres­i­den­cy is a piv­otal role giv­en the wide range of pow­ers the Com­mis­sion has, includ­ing over­see­ing nation­al bud­gets. Whether or not the EU decides to impose anoth­er round of bru­tal aus­ter­i­ty in the next eco­nom­ic down­turn will depend heav­i­ly on who is lead­ing the Com­mis­sion. And right now, it’s look­ing like Man­fred Weber is not going to be that per­son with even the EPP nation­al lead­ers appar­ent­ly sour­ing on him:

...
The new­ly elect­ed leg­is­la­ture has refused to ral­ly behind Weber, even though he heads the biggest fac­tion there, the Euro­pean People’s Par­ty (EPP). This should give Merkel enough grounds to drop him, diplo­mats said.

“Weber’s claim is implod­ing. The Par­lia­ment is more divid­ed than before and has missed the boat. And EPP nation­al lead­ers are turn­ing their back on him as well,” said a senior EU diplo­mat. “If the Ger­mans lose Weber, the French don’t get the job either, it’s tit for tat.”
...

If Weber can’t get the nation­al lead­ers from his own par­ty to back him that’s more or less the end of his bid. Maybe. We can’t ignore Weber’s secret weapon in these nego­ti­a­tions: the like­li­hood of Jens Wei­d­mann get­ting the top ECB post if Weber is reject­ed. A grow­ing like­li­hood that Wei­d­mann is clear­ly keen on max­i­miz­ing by com­plete­ly lying about his past oppo­si­tion to the ECB poli­cies that pre­vent­ed the implo­sion of the euro­zone in order to make his bid more palat­able:

Finan­cial Times

Wei­d­mann soft­ens stance on Draghi’s stim­u­lus poli­cies
Bun­des­bank president’s shift on open mar­ket trans­ac­tions could enhance ECB job chance

Claire Jones in Sin­tra
June 19, 2019, 9:22 am

Jens Wei­d­mann has soft­ened his stance on some of the Euro­pean Cen­tral Bank’s most con­tro­ver­sial poli­cies, in a bid to alle­vi­ate con­cerns about his suit­abil­i­ty for the most pow­er­ful role in Euro­pean eco­nom­ics.

The Bun­des­bank pres­i­dent has in the past opposed the ECB’s bond-pur­chas­ing pro­grammes, which were imple­ment­ed dur­ing the region’s finan­cial cri­sis to alle­vi­ate strains on the econ­o­my and finan­cial sys­tem. But he told told Ger­man week­ly Die Zeit on Wednes­day that the pro­grammes fell with­in the cen­tral bank’s man­date.

...

Mr Wei­d­mann is seen as a fron­trun­ner to replace Mario Draghi as ECB pres­i­dent lat­er this year, but his dis­sent on sev­er­al ele­ments of the cen­tral bank’s cri­sis response has under­mined his cam­paign in the eyes of south­ern mem­ber states, includ­ing Spain and Italy.

Yet his chances of secur­ing the job are wide­ly thought to be grow­ing; Angela Merkel’s bid to secure Man­fred Weber in the posi­tion of Com­mis­sion pres­i­dent has fal­tered, lead­ing to sus­pi­cions that the Ger­man chan­cel­lor will focus her efforts on the ECB job. Ger­many is yet to hold the top role at the cen­tral bank.

In a clear bid to appease his crit­ics, Mr Wei­d­mann said on Wednes­day that the ECB’s Out­right Mon­e­tary Trans­ac­tions (OMT) pro­gramme had been “deter­mined to be legal” by the Euro­pean Court of Jus­tice. He added that it was “cur­rent pol­i­cy”.

OMT was designed in the sum­mer of 2012 to ful­fil Mr Draghi’s pledge to do “what­ev­er it takes” to save the euro­zone from eco­nom­ic col­lapse. It allowed the ECB to buy bonds in poten­tial­ly unlim­it­ed quan­ti­ties to com­bat mar­ket spec­u­la­tion of a messy break-up of the cur­ren­cy union.

The pro­gramme has act­ed as a nuclear deter­rent — the ECB has not yet need­ed to use it because it has large­ly con­vinced investors that it is will­ing to act as a lender of last resort to the region’s gov­ern­ments, if need­ed.

Mr Wei­d­mann was the only mem­ber of the ECB’s 25-strong board to vote against the pro­gramme in 2012 and angered top ECB offi­cials when he appeared in the Ger­man con­sti­tu­tion­al court to argue against the OMT. The Bun­des­bank also con­sis­tent­ly briefed Ger­man and inter­na­tion­al media against sev­er­al ele­ments of the ECB’s cri­sis response.

But Mr Wei­d­mann told Die Zeit on Wednes­day that his “rea­son­ing was not legal”.

“Of course, a cen­tral bank must act deci­sive­ly in the worst-case sce­nario, but giv­en its inde­pen­dence, there should be no doubt that it is act­ing with­in the frame­work of its man­date,” the Bun­des­bank pres­i­dent said, in an about-turn from his pre­vi­ous strong oppo­si­tion to the pol­i­cy.

A spokesper­son for Mr Wei­d­mann said the state­ment was in line with ear­li­er views expressed by the Bun­des­bank pres­i­dent.

At the time, he sug­gest­ed the pro­gramme lay out­side the ECB’s man­date as it con­tra­vened EU rules on mon­e­tary financ­ing of euro­zone gov­ern­ments.

“I see a num­ber of argu­ments against the pro­gramme. They include sta­bil­i­ty pol­i­cy prin­ci­ples and the ques­tion of whether the cen­tral bank has a demo­c­ra­t­ic man­date for a mea­sure of this kind,” Mr Wei­d­mann said in an inter­view with the Neue Zürcher Zeitung in Sep­tem­ber 2012.

In that inter­view he sug­gest­ed lia­bil­i­ty risk among euro-area tax­pay­ers. That is some­thing only par­lia­ments are allowed to do, and the res­cue pack­ages are the right tools for the job.”

Mr Draghi said on Tues­day that OMT had the same impact as quan­ti­ta­tive eas­ing pro­grammes in the Unit­ed States and the Unit­ed King­dom, which have helped boost growth and infla­tion by low­er­ing the cost of bor­row­ing for gov­ern­ments and encour­ag­ing investors to buy riski­er assets.

And in a clear rep­ri­mand of the Bun­des­bank president’s con­duct, Mr Draghi said that some nation­al cen­tral banks’ fail­ure to com­mu­ni­cate the ECB’s mes­sage to the pub­lic had helped to stoke the rise of anti-Euro­pean pop­ulism.

———-

“Wei­d­mann soft­ens stance on Draghi’s stim­u­lus poli­cies” by Claire Jones; Finan­cial Times; 06/19/2019

“Yet his chances of secur­ing the job are wide­ly thought to be grow­ing; Angela Merkel’s bid to secure Man­fred Weber in the posi­tion of Com­mis­sion pres­i­dent has fal­tered, lead­ing to sus­pi­cions that the Ger­man chan­cel­lor will focus her efforts on the ECB job. Ger­many is yet to hold the top role at the cen­tral bank.”

It’s kind of amaz­ing: of all the con­tenders for the ECB, Jens Wei­d­mann prob­a­bly faces the most reis­tance, and for good rea­son. And yet his chances keep grow­ing thanks to Man­fred Weber’s flail­ing bid. In response, Wei­d­mann has tak­en his pub­lic charm offen­sive to the next lev­el: bla­tant white­wash­ing of his own track record as the lead­ing oppo­nent of the ECB’s emer­gency pro­grams designed to avoid the implo­sion of the euro­zone’s finan­cial mar­kets. Wei­d­mann con­sis­tent­ly opposed these pro­grams and con­sis­tent­ly argu­ing they weren’t even con­sti­tu­tion­al­ly legal. But now he wants to assure the pub­lic that, actu­al­ly, he approves of these pro­grams and always has:

...
In a clear bid to appease his crit­ics, Mr Wei­d­mann said on Wednes­day that the ECB’s Out­right Mon­e­tary Trans­ac­tions (OMT) pro­gramme had been “deter­mined to be legal” by the Euro­pean Court of Jus­tice. He added that it was “cur­rent pol­i­cy”.

OMT was designed in the sum­mer of 2012 to ful­fil Mr Draghi’s pledge to do “what­ev­er it takes” to save the euro­zone from eco­nom­ic col­lapse. It allowed the ECB to buy bonds in poten­tial­ly unlim­it­ed quan­ti­ties to com­bat mar­ket spec­u­la­tion of a messy break-up of the cur­ren­cy union.

The pro­gramme has act­ed as a nuclear deter­rent — the ECB has not yet need­ed to use it because it has large­ly con­vinced investors that it is will­ing to act as a lender of last resort to the region’s gov­ern­ments, if need­ed.

Mr Wei­d­mann was the only mem­ber of the ECB’s 25-strong board to vote against the pro­gramme in 2012 and angered top ECB offi­cials when he appeared in the Ger­man con­sti­tu­tion­al court to argue against the OMT. The Bun­des­bank also con­sis­tent­ly briefed Ger­man and inter­na­tion­al media against sev­er­al ele­ments of the ECB’s cri­sis response.

But Mr Wei­d­mann told Die Zeit on Wednes­day that his “rea­son­ing was not legal”.

“Of course, a cen­tral bank must act deci­sive­ly in the worst-case sce­nario, but giv­en its inde­pen­dence, there should be no doubt that it is act­ing with­in the frame­work of its man­date,” the Bun­des­bank pres­i­dent said, in an about-turn from his pre­vi­ous strong oppo­si­tion to the pol­i­cy.

A spokesper­son for Mr Wei­d­mann said the state­ment was in line with ear­li­er views expressed by the Bun­des­bank pres­i­dent.

At the time, he sug­gest­ed the pro­gramme lay out­side the ECB’s man­date as it con­tra­vened EU rules on mon­e­tary financ­ing of euro­zone gov­ern­ments.
...

It’s a pub­lic rela­tions strat­e­gy that’s so absurd­ly decep­tive that even Mario Draghi had to pub­licly issue a bare­ly veiled diss:

...
Mr Draghi said on Tues­day that OMT had the same impact as quan­ti­ta­tive eas­ing pro­grammes in the Unit­ed States and the Unit­ed King­dom, which have helped boost growth and infla­tion by low­er­ing the cost of bor­row­ing for gov­ern­ments and encour­ag­ing investors to buy riski­er assets.

And in a clear rep­ri­mand of the Bun­des­bank president’s con­duct, Mr Draghi said that some nation­al cen­tral banks’ fail­ure to com­mu­ni­cate the ECB’s mes­sage to the pub­lic had helped to stoke the rise of anti-Euro­pean pop­ulism.
...

As we can see, Wei­d­mann is clear­ly try­ing to mar­ket him­self as Biz­zaro Wei­d­mann. And it might work. Not because his Bizarro pub­lic rela­tions cam­paign will win a skep­ti­cal pub­lic over but because Angela Merkel is demand­ing either Weber or Wei­d­mann and Weber’s own pub­lic rela­tions cam­paign has large­ly failed.

So Wei­d­mann might final­ly get his dream job despite being wide­ly loathed for good rea­son thanks to the EU’s weird pow­er pol­i­tics dynam­ics that could make him a win­ner by default. It’s a reminder that sto­ries about dreams com­ing true aren’t nec­es­sar­i­ly inspir­ing sto­ries.