o te la fan?
By FLORIAN EDER
with ZOYA SHEFTALOVICH
DEAL! EU leaders agreed on a groundbreaking plan to jointly borrow €750 billion to respond to the coronavirus pandemic. The EU’s new recovery fund, to be composed of €390 billion in grants and €360 billion in loans, will be attached to a new €1.074 trillion seven-year budget, the Multiannual Financial Framework (MFF), on which heads of state and government also reached unanimous agreement — bringing the total financial package to €1.82 trillion.
WHITE SMOKE: “Good morning everyone,” Michel said at a press conference that started just before 6 a.m. “We did it! Europe is strong. Europe is united!” Speaking alongside Michel, European Commission President Ursula von der Leyen said that while the EU is often accused of doing “too little, too late,” that charge can’t stick this time. “We negotiated four long days and nights, more than 90 hours, but it was worth it,” she said.
MUTTI AND MANU: German Chancellor Angela Merkel is “very happy” with the deal and relieved that leaders managed to reach an agreement, she said during a joint press conference with French President Emmanuel Macron. She said extraordinary times call for extraordinary efforts — noting that the summit was also of “extraordinary” length. Macron, for his part, hailed the fact that a mechanism has been put in place to raise common debt. “I want everyone to measure the distance traveled in two months … in two months we were able to build a consensus,” he said. “The recovery plan is a historic change of our Europe and eurozone.”
GOOD MORNING. As of the wee hours of the morning, we officially witnessed the longest-ever EU summit since records of their length began. The Nice summit, back in 2000, which also featured four days and four nights of negotiations, is now second only to the corona one by a few hours.
Look, folks, we appreciated your efforts to give each generation of EU correspondent their own well-deserved historic and superlative summit. Been there, done that, thanks for making it just a bit longer than Nice. (Consolation prize: Those folks got to hang out at one of those bars with a view of the Mediterranean; we got the beauties of the Rue de la Loi.)
THE ART OF THE BUDGET DEAL, STEP BY STEP: Michel had put out his new compromise proposal, or negotiating box, Monday night, to be discussed over a dinner of cream of carrot soup, loin of cod with sauce vierge and a lemon cake. A break was called for “a limited number of technical adjustments” shortly after 11 p.m. A new negotiating box emerged before talks resumed. Michel announced a deal at 5:31 a.m., with chocolate eggs in everybody’s garden. Here’s what people discovered …
RULE OF LAW LEFT OUTSIDE THE BUDGET: The rule of law doesn’t seem that much of a problem any more for the frugals — unanimity makes for give and take, generally speaking, in Council. Hungary got what it wanted — actually, it got everything it wanted.
What’s left of a rule of law mechanism: “A regime of conditionality to protect the budget and Next Generation EU will be introduced,” the Council conclusions said — with possible sanctions to be adopted by a qualified majority in the Council. The text adds: “The European Council will revert rapidly to the matter.”
The German presidency promised to advance the EU disciplinary process under Article 7 hanging over Hungary instead. “The German Council presidency has pledged to take this process forward as far its competencies allow,” German government spokesman Steffen Seibert said. Note that a decision under Article 7 requires unanimity — one of the reasons originally that leaders sought a sharper weapon. (Parliament’s latest warning here.)
FRUGALS OVER THE MOON: The Frugal Four became the Frugal Five over the course of the weekend, a senior diplomat said late on Monday, and that may have been because “we started off on this discussion already months ago together with some other member states.” This group, the diplomat said, “increased in size by 25 percent. And I think the group of countries, who had a similar interest in this combination of issues and decided in the meetings of the European Council to really stick together and not be allowed to be tackled individually by the presidency, really gave the results we can now see in the nego box.” The frugals’ rebates are also there to stay.
DUTCH EVEN HAPPIER: Michel’s proposal includes several key concessions to Dutch PM Mark Rutte. Chief among them: The Netherlands gets to keep a bigger portion of the customs revenue that comes through Europe’s largest seaport, Rotterdam, meaning a reduced amount will flow into the EU’s coffers. The rule of law? Not enough of a reason to disagree, in the end.
CRYING VICTORY? Grants are at €39o billion. That’s a fair bit lower than the €500 billion originally proposed, and … err … quite a bit higher than the €0.00 the frugals said they wanted in grants. Most potential recipients took it as a silent victory.
THE FAMOUS BRIBE FOR NORTHERN FINLAND: When it comes to regional development funding, the plan includes an extra €1.55 billion allocation for the Czech Republic, €650 million for Germany, €600 million for Poland, €350 million for Slovenia, and €200 million for Belgium and Bulgaria. The sparsely populated northern areas of Finland would get an additional €100 million.
BRITS ARE OUT … BUT VERY KEEN: Here’s a little reminder that real people have real hope to profit from the EU budget, even in the most unlikely places. Britain’s no longer part of the EU budget circus … but some Brits are regretting it. Sixty-one percent of respondents to a poll conducted for the anti-Brexit Best for Britain group said they want to remain a member of the EU’s landmark Erasmus program, including a narrow majority of Conservatives and 47 percent of Leave voters.
Not such a strange idea: Two-thirds of the respondents in the representative survey of some 1,600 participants, previewed exclusively by Playbook, even want to stay in the Horizon research and innovation program. Almost three-quarters of respondents agreed that scientific cooperation with EU countries “is beneficial for all involved.” Naomi Smith, the Best for Britain CEO, told Playbook “this is a striking example of Britons seeing the pragmatic value in cooperating with Europe on science, research and developing employment opportunities,” adding that EU countries should “keep the door open to British participation.”
TECTONIC SHIFTS: Any budget time is crunch time in terms of power — which becomes even more obvious when it comes to talking about the EU purse once every seven years. Here’s Playbook’s take on what is going on …
1. Home alone, without Mutti: Austria’s Chancellor Sebastian Kurz stressed it at several occasions in the past weeks: He was defending positions he shared with Berlin until a very short time ago. Merkel’s new close alliance with Macron in their fight for the substantive recovery package left the frugals on their own, in a defensive battle against the biggest-ever EU budget cash splash.
“After four days of negotiations we were able to reach a good result for the #EU and #Austria on the #MFF and the #RecoveryInstrument. Thank you to all colleagues, especially to the #frugals!” Kurz tweeted in the early hours of Tuesday.
2. Berlin giving up the middle ground? There’s an impression among the Nordics that Merkel has moved away from a traditional German position in the middle of the Continent (and the middle ground in the debate). Let alone the times when Germany was perhaps silent, but silently on their frugal side, and when Britain was still in the game to take all the blame for being stubborn. It’s cold out there — and Rutte’s and Kurz’s performances over the past days is not something people will forget soon.
3. What if Merkel wanted something different: One letter, written in March, caused shock and awe in Berlin. The problem for Germany was less that nine countries were calling for euro/corona bonds — for “a common debt instrument” in any event — but that France had signed the letter. Viewed from Berlin, that indicated Paris was abandoning the delicate balance of it being sympathetic with the south but not fully siding with it.
4. Fast forward two months: The recovery plan was a Franco-German joint proposal — also for the sake of it being a joint proposal. It’s also their deal — and “it is quasi doubling the EU budget for the next three years,” Macron said at his joint press conference with Merkel on Tuesday morning. Old truth, reinstated: Without France and Germany working together, not much is possible in Europe, he said.
5. Meanwhile, in the south: For a long time — ever since he took office in June 2018, really — Italian Prime Minister Giuseppe Conte has played with fire domestically any time he decided to openly be a Europhile. It never paid off, because the opposition smelled and used one key weakness: Conte was never central to EU decision-making before this mega-summit.
6. Consider this, in Vienna and The Hague: Now, officials and diplomats stressed how long prime ministers from the region were in meetings with Macron and Merkel. Six hours, they counted on Sunday, two on Monday. Here’s photographic evidence, shared by Greece’s Kyriakos Mitsotakis, the prime minister of a country that some years ago was considered to be the main problem, not one of those invited to solve one.
Here’s what I’m saying: There is a fair amount of honest and earnest pride among leaders from the south that it was up to them to bolster and support an initiative put forward by Europe’s two bigwigs.
7. Make your own conference on the future, would you? Of course, Italy’s far-right populists of the League criticized the outcome of the summit in a message distributed to journalists, hours before there was even a result: in short, they want more money from the EU. Meanwhile, far-right populists in the north such as Dutch Geert Wilders would much prefer not to give any money to other EU countries. What of they sorted it out among themselves?
ARMENIA VS. AZERBAIJAN … RUSSIA VS. TURKEY: The deadliest fighting in years between Azerbaijan and Armenia risks becoming a new flashpoint in a growing rivalry between Russia and Turkey, as the ostensible partners signal support for opposing sides in a strategic energy corridor. Ayla Jean Yackley has the story from Istanbul.
BUSY BELGIAN SUMMER: Belgium could face another election if a coalition government isn’t formed in 50 days’ time, the leader of the French-speaking Socialist Party said late Monday. “We have about 50 days to find a solution, failing which we will have to call a new election,” Paul Magnette said after the Belgian king tasked him with looking for possible coalition solutions, along with another party leader, Bart De Wever of the nationalist N-VA, the largest party in the Dutch-speaking region of Flanders.
NO BULL: The vast majority of Spain’s bullfighting events over the summer have been canceled as a result of the coronavirus crisis. After years of decline, this could be the end of the whole industry. Guy Hedgecoe has the story from Madrid.
TRADING BRITAIN: Meet the man tasked with landing a trade deal with the U.S. for the U.K.: Oliver Griffiths, a high-ranking civil servant with a track record of getting what he wants in Whitehall — and, crucially, of understanding the Washington psyche. Emilio Casalicchio has this profile.
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THE CONFERENCE PROJECT: For Guy Verhofstadt, the planned Conference on the Future of Europe should aim at one thing, urgently: “Europe is paralyzed by the need for unanimity,” the liberal MEP and former Belgian prime minster tweeted. “High time to start the Conference on the future of Europe to abolish it!” Should it ever eventuate, Verhofstadt is a candidate to head up the conference, according to his successor as chairman of the liberal group in Parliament: “I fully think he could be a very good president of this conference, or anyway part of the leadership of that conference,” Dacian Cioloş told Playbook.
Campaigning for Guy: “I saw that the Council also agreed that it should be a strong European personality. We have such a strong European personality in our group,” Cioloş said, referring to the Council’s recently agreed position that the conference should be led by an “eminent European personality as its independent and single chair.” Meaning, by common understanding in the Council, someone who is not a member of any EU institution. Alas, the institutions have yet to agree on a common position on the conference.
NEW ROLES AT THE COUNCIL … FOR DONALD TUSK’S TRUSTED OFFICIALS: From September 1, Piotr Serafin, Donald Tusk’s head of Cabinet when he was president of the European Council, will head the directorate for transport, telecoms and energy in Council. Preben Aamann, spokesman of both Tusk and his predecessor Herman Van Rompuy, was appointed head (of unit) of Council’s press office, effective last week. Both appointments figure in a staff note, obtained by Playbook. There’s more in it.
Joining from the capitals: In mid-September, Nicole Bayer will start as Council’s media and communications chief in a director’s rank. Bayer is a senior official in Austria’s chancellory, where she heads the EU and international affairs unit. Alexandre Pichon, a senior official at France’s interior ministry, will become the Council’s director for safety and security, from October. Back in June, Council appointed Slovakia’s EU Ambassador Peter Javorčík as the new director-general for transport, energy, environment and education, starting in October.
(Inter-)institutional careers: Economist Olaf Prüßmann was promoted to become director for economic and financial affairs after 10 years as head of unit where he dealt with things including the Eurogroup. And Agriculture Commissioner Janusz Wojciechowski needs a new deputy head of Cabinet, with Catherine Geslain-Laneelle‘s impending move to Council — she was promoted to a director’s rank in the DG for agriculture and health, effective in September.
EEAS moves: Over at the External Action Service, Kai Holst Andersen replaces Jean-Marc Pisani as head of division for operations in an acting capacity. Holst Andersen was previously Greenland’s deputy minister responsible for foreign affairs, and rejoined the EEAS in 2017.