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The Defiant Deficit Edition

6 June 2019

1. Story of the Week

What happened?

Fresh off a compelling win at the European Parliament elections a mere fortnight ago, Italy’s interior minister, and far-right-troll-leader-in-chief, Matteo Salvini started testing the patience of the outgoing European Commission. The problem? Italy’s decade long budget deficits which are threatening to sink not just the Italian economy but sweep across Europe like a tragically foreseeable tsunami you can’t run or hide from. The gun finally sounded on Wednesday as the Commission made real on its warnings to put Italy under the EU approved scary sounding ‘Excessive Deficit Procedure’.This essentially means the Commission will be putting Italy on notice with the potential to be fined, but possible action can take months to materialise, if at all.

Why it matters

Besides the risk of calamitous economic catastrophe, the issue at hand is that Salvini is “only” a mere coalition partner while the head honcho/puppet in command, Italian Prime Minister Giuseppe Conte (who is from the governing partner the 5-Star Movement) has taken a more conciliatory tone towards the Commission’s friendly suggestions that Italy gets its fiscal house in order. Salvini is testing to see how far he can push both the willingness of his European partners to avoid a potentially mutually destructive standoff while also wanting to take the reins of Prime Minister for himself as he rides high in the polls. Moreover, the EU’s power to actually punish Member States for breaking fiscal discipline is notoriously weak as several countries in the past have been under the ‘Excessive Deficit Procedure’ without noticing any real consequence from the Commission. And unlike Greece who felt the full force of Madame Merkel’s “erst sparen, dann kaufen” speeches, Italy is simply too big to deal with lest there be any economy left for the survivors. Add to that the fact that Prime Minister Conte has threatened to quit over the dispute, Italy, and by consequence, all of Europe, might be in for more excitement than we bargained for.

The takeaway

After 10 long years of economic recovery unemployment rates have fallen to a historic low in the EU, except for Italy, Spain, and Greece where large swaths of people still feel the brunt. The EU’s fiscal rules introduced with the Euro, hated by both left-and right-wing economists, were meant to keep thrifty tax-and-spend countries in check but has done little of that. Disliked by the former for neutering the role of the public sector and loathed by the latter for intervening in national domestic affairs. That fight is now spilling into new domains like the public debate over who should be the next head of the European Central Bank, previously considered an obscure dinner topic except for the most eager students of monetary policy. After a decade of austerity, some winds are changing and with green waves and far-right surges, the EU’s fiscal rules might have to change with the times. Add to that the ambition of centrists like President Macron who wants to give the EU meaningful budget meaning that we might all have to add a separate line for EU taxes when doing the annual declaration in just a few years.

2. Tweets of the Week

3. Numbers of the Week

2035

The year by which Finland aims to become carbon neutral. Climate change begins to dominate the public policy debate following several reports from the UN stating that the Earth has until 2030 to prevent irreparable damage and others saying that the world will end altogether by 2050. The new centre-left leaning Finnish government wants to be among the first to avoid armageddon by doing away with fossil fuels as part of its progressive policy towards the future.

63

The percentage of MEPs will be newcomers in the new European Parliament. As new MEPs started flowing into Brussels the past weeks, there will be more fresh faces than that in 2014 when only 50% were newcomers. An estimated total of 494 MEPs (thanks Ryan Heath!) will be gracing the halls of Brussels and Strasbourg with wide-eyes and clear hearts. Plenty of fresh and young blood for the lobbyists to feed on in the next five years

75

The number of years since the 6 June 1944, the morning of which D-Day occurred. The seminal moment in WWII which is seen as the largest-ever joint military operation was the starting point of the eventual liberation of Nazi-controlled Europe. World leaders including US President Trump, French President Macron and the Queen of England gathered in Portsmouth in the UK yesterday to commemorate the invasion of Normandy which took 7,000 ships, 132,000 men and 12,000 aircraft to carry out the saving of around 400 million Europeans (population at the time) from fascism.

A Message From Our Partners

The EFF — European Future Forum held its first general assembly at the European Parliament in Brussels, bringing together a large variety of NGOs and civil society organisations to share their projects with each other, workshop new initiatives and improve their communication skills and methodologies.

The EFF is the first European Communication and Project Development Network. It is open to any organisation and individual. For more information, visit their website.

4. Quotes of the Week

“The most lethal and organized attack against civilian population the ICC had jurisdiction over in its entire history,”

The condemnatory statements from a human-rights lawyer, Juan Branco, over the EU’s migration policy in the Mediterranean. The lawyer who formerly worked in the International Criminal Court, alleges that the EU’s ‘Triton’ operation has, among other things, knowingly put 40,000 people in camps in Libya where their human rights have been abused. The 243-page case is being filed to the ICC. EU Spokeswoman Natasha Bertraud did not directly address the lawsuit but defended the EU’s record of saving lives in the Mediterranean.

“Tear down walls of ignorance and narrow-mindedness, for nothing has to stay as it is.”

The rousing conclusion to Angela Merkel’s commencement address at Harvard University. The German chancellor took the chance to make veiled jabs (in German) at US president Donald Trump in front of the graduating class of one of the US most prestigious academic institutions. She alluded to the figurative walls in the political rhetoric of late to the actual Berlin wall of which she grew up on the Eastern side. She also addressed free trade and climate change as priorities for a crowd who will likely dominate the worlds of business, politics, and academia in years to come.

“I become a Euroskeptic at least once a day”

The words of the outgoing President of the Commission Jean-Claude Juncker. Clarifying the oft-mischaracterised condition of ‘Euroscepticism’ as opposed to anti-Europeanism or even Europhobia, the President outlined that a healthy skepticism is always welcome whereas the other forms of cynicism are purely destructive. Part of his own skepticism might come from the fact that he has not had an official residence in the past 5 years, instead of shacking up in a 50m2 hotel apartment when in Brussels.

5. Video of the Week

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