Updating Europe: can the latest deal overcome set-backs of the last decade?
- July 27th, 2020
- Posted by EU Australia
The French President, Emmanuel Macron, came out of the European Union summit last week all smiles, saying the deal just reached on eventually getting over CORVID-19 was an “historic” game-changer.
It had set up spending forthwith of €750-billion (A$1230-bilion) to repair and re-start the European economy, an act proclaimed by Macron as signalling strong unity, the emergence of not only an economic union, but political and strategic – “sovereign, unified, democratic”.
He pushed on. This agreement had been the most important in European life since the creation of the Euro currency; and it had overcome the set-backs of the break-down that hit Greece and other states after the Global Financial Crisis, or the divisive failures in intra-European relations during the immigration crisis of 2015.
CONFIDENCE IN BILLIONS
What gave him confidence was the size of the deal, as a demonstration of huge confidence, plus the winning formula: the way it was structured to meet the demands of the richer, Northern members for the money to go out as loans, and of the poorer, Southern ones for grants out of an EU budget.
The Politico news service in Brussels summed it up off the communiques (21.7.20):
“DEAL! EU leaders agreed on a ground-breaking plan to jointly borrow €750-billion (A$1230-billion) to respond to the coronavirus pandemic. The EU’s new recovery fund, to be composed of €390-billion (A$640-billion) in grants and €360-billion (A$590-billion) in loans, will be attached to a new €1074-trillion (A$1762-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 (A$2.99-trillion).”
While loan money is cheap on international markets, and Europe is as good a risk as any in these times, it was generally seen as a viable plan.
Macron had found a way, where France and Germany, the two lead powers, pushed for agreement in concert with Charles Michel, President of the European Council, in the chair.
Germany’s Chancellor Angela Merkel firmly agreed on the scale of the achievement: It had taken 90-hours of intense parleying in Brussels, but “extraordinary times call for extraordinary efforts”, she said.
BRITANNIA – NOT THERE
It might have felt still better for those 27 heads of government, to at last be working without the English; to the French, most often, a “perfidious Albion”. The Europeans had wanted the United Kingdom to stay in and will preserve good relations, but this time they may well have heaved a sigh of relief, or given a gallic shrug, over the absence of the “Brexit” man, Boris Johnson — no blurting at the table, and on television, how the UK was so different to them all. It was goodbye to a tradition since 1972 of English leaders playing up to their home gallery, publicly ridiculing, post-negotiation, agreements they had just signed-up on.
British and European officials have reportedly determined to intensify their talks on the UK’s separation from the EU in September, with the transition period for wrapping up a final agreement, and settlement on trade by the end of the year.
“How closely aligned will the UK be with the EU in the future? For the UK sovereignty is key; for the EU the priority is to protect the integrity of its single market… Normally if you do a trade deal you celebrate opening up markets, and making trade a bit freer. This proposed deal is all about the extent to which trade between the UK and the EU will be less free than it was before… Usually if trade negotiations fail, things stay as they are. In this case, though, a breakdown in talks will lead to sudden and substantial changes in the economic relationship between the UK and the EU.”
British trade representatives have been busy world-wide offering one-to-one free-trade or liberalised trade deals with several countries including Australia, and pushing for the holy grail in market access, the United States. They have two handicaps: Agreements they make with countries in a signed-up relationship with the EU, cannot undercut the terms of the EU agreement; and agreements they make with other states, will not be a gain, but mainly a catch-up on what they once had, when part of the EU, wherever those states have EU trade agreements.
COVID-19 – ALWAYS THERE
Nothing is being decided or anticipated without consideration of the pandemic and where it may lead. The disease that concentrates in large cities, in countries with constant large movements of people, in and out, has done much of its most devastating work in Europe – still not finished.
Reports from the German media and economics firm, Statista, regularly update the bad news from 49 states and their dependencies, including Russia and other former Soviet republics in the European zone.
Analysis by Conor Stewart at Statista says that at 24 July there were 2,984,996 confirmed cases of coronavirus (COVID-19) across the whole of Europe since the first confirmed cases in France on January 25:
“Russia has been the worst affected country in Europe with 795,038 confirmed cases, followed by the United Kingdom with 297,146 cases. Spain and Italy have over 270-thousand and 245-thousand cases respectively.
“There have been 207,007 deaths in Europe overall due to the coronavirus (COVID-19) since the first recorded European death in France on February 15. April 4 was the virus’ deadliest day so far in Europe with 5,350 deaths, while on July 24, 404 deaths were recorded. The United Kingdom has the highest number of deaths in Europe at 45,554, as of July 24.”
The graphs show a consistent decline in the number of deaths since the start of May, barring one spike in numbers last June. However fresh data published by The Economist, on 26 July, indicate a kick-up in numbers of cases in recent weeks — still small numbers compared to the epidemic raging in its first phase during April.
Among others, these rises, based on deaths per 100 000, have occurred in Belgium, the United Kingdom, Spain, Italy, France, the Netherlands, Luxembourg, Ireland and Portugal. They are currently worst in Portugal, and in Sweden, the out-rider state which opted for no lock-downs, counting on the build-up of a herd immunity, though so far frustrated, immunity levels not surging ahead of the European norms.