The Brief: A ‘plan B’ for the grand bargain

The Brief is EURACTIV's evening newsletter.

Summer is over but winter is yet to come. The rentrée to meetings in broken English and hundreds of unread emails is seen by some as a window of opportunity.

Or at least that is the case for Jean-Claude Juncker and the European Commission President’s inner circle, as he is expected to tell MEPs during the state of the union address on 13 September.

Britain’s exit from the EU progressed this week in slow motion. But one collateral effect of Brexit is Angela Merkel’s resolution to push for further integration of the eurozone, as Juncker would say. Her 17-point lead in the polls ahead of the 24 September general election, and her rival Martin Schulz’ support on the issue, mean this is sure to be central to the campaign.

But Merkel is still the chancellor of Germany, where taxpayers are against giving money to profligate and uncompetitive southern member states, the argument says.

Mutti‘s brother in arms to complete the reform of the 19-member eurozone, French President Emmanuel Macron, presented yesterday his long-awaited labour market reforms.

France aims to have its ‘Hartz’ moment fifteen years after the plan was unveiled in Germany to unlock the potential of the EU’s powerhouse.

If Macron succeeds, the impact will go far beyond turning his country into Europe’s second power. It will be the stepping stone toward the ‘grand bargain’ the eurozone has been waiting for between the northern guardians of fiscal discipline and the southern champions of shared protection when the next turbulence comes.

Juncker, Macron and Merkel’s views on a budget for the eurozone, the finance ‘superminister’ or a European Monetary Fund may not totally overlap. And this renewed attempt to boost the single currency zone could end up being nothing more than empty words, as we have seen many times in the past.

Some truly believe that this time will be different because Merkel cannot let the opportunity embodied by Macron go to waste, even if she needs to bring on board the highly sceptical Liberals as a coalition partner.

But a Plan B must be ready in the pipeline. And the only initiative in the arsenal with sufficient weight is the completion of the banking union.

Instead of offering a laundry list of proposals in Strasbourg on 13 September, or wasting energy in scraps like the securitisation proposal, Juncker could leave a greater legacy behind if he focused until the end of his mandate on doing whatever is necessary to pass the European Deposit Guarantee Scheme. This would require not only all his skills, charm and hard work in Berlin, but also a good deal of progress on cleaning up the banks’ books.

It would not be the major leap forward many expect today, but completing the banking union once and for all would still be the biggest step in the right direction since the launch of the euro.

The Roundup

Finland is turning away from Russian coal and looking at…homemade nuclear power. But as neighbouring Sweden closes down its plants, the region could face supply shortages.

Ahead of the elections, “solar barons” in the Czech Republic are getting their feathers ruffled by announcements of new taxes on the photovoltaic sector.

In the latest on Poland’s row with the Commission over its deteriorating rule of law, Dutch Commission Vice-President Frans Timmermans gets called “stupid”. But he doesn’t take it too personally.

The battle for raising the minimum wage in Serbia is an uphill struggle. Did you know it is currently lower than the EU’s lowest minimum wage (Bulgaria, with €200 per month)? Guess who’s got the highest (at €2,000).

Is Kazakhstan undergoing real democratisation or is it simply a publicity stunt? With a constitutional reform strengthening the parliament and judiciary, it would seem so. But Europe is keeping its cool, Kazakh diplomats lament.

Fipronil is nothing new – only the latest in a series of pesticide scandals that are intrinsic to intensive agriculture and that should trigger Europe to go organic. Written by Pesticide Action Network (PAN) Europe’s Martin Dermine.

Glyphosate is next on the list of controversial chemicals, as research suggests it may be carcinogenic. But French conservation farmers say that a ban would force them to till the soil and free more carbon emissions. Just what the Commission wants to hear, as it prepares to extend its licence.

Brexit talks aren’t budging. The biggest sticking point is the bill the EU will present to the UK. The third round of talks ended in Barnier’s “impatience” as the UK refuses to come up with any figure but some details have been cleared – British pensioners in Spain can now sigh with relief.

Even in the troublesome age of Trump and Brexit, there is still hope for sustainable production and trade, provided that they become more inclusive. Trade experts Arancha González of the International Trade Centre and Christian Ewert of the Foreign Trade Association explain why.

Look out for …

The working party on terrorism meets for the first time in Tallin on Monday. Emmanuel Macron receives Finance Commissioner Pierre Moscovici for a tête-à-tête on Monday.

Views are the author’s.

Subscribe to the brief

Subscribe to our newsletters

Subscribe