Austria and Germany: A harmonious couple, at odds on EU issues

However, German Chancellor Angela Merkel did not want to confirm yesterday, in response to a question from a journalist, that Germany would also veto the current proposal requesting member states to pay 1.11% of their GDP. EPA-EFE/FILIP SINGER [FILIP SINGER/EPA]

Austria’s Federal Chancellor Sebastian Kurz visited German Chancellor Angela Merkel on Monday (3 February). While the atmosphere was harmonious, the two did not meet eye-to-eye on several EU issues, including the budget and proposals to revive Operation Sophia. EURACTIV Germany reports.

Almost a month after his inauguration as Austrian Chancellor, Sebastian Kurz paid his inaugural visit to his German counterpart, Angela Merkel.

The two presented themselves as a harmonious couple, cracking jokes and emphasising their close working relationship. For instance, Kurz underlined that Germany is by far Austria’s most important trading partner, saying how pleased he was about the many German guests at Austrian ski resorts.

However, at the European level, the two do not agree on every issue.

On the EU budget, the pair agreed that the proposal currently on the table would be too costly for their respective taxpayers, yet Merkel showed more willingness to compromise.

“I have already seen press conferences with the two, where there was more tension,” said Paul Schmidt, Secretary-General of the Austrian Society for European Politics.

Yet, especially when it comes to climate policy, Merkel and Kurz are perfectly aligned, stating that they wanted to act together in support of the European Green Deal. “No leaf fits between the two” on climate policy, Schmidt told EURACTIV in an interview.

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Austrian Chancellor Sebastian Kurz has formed what is now his second ruling coalition, this time between his conservative ÖVP party and the Greens, replacing the interim government of experts. Although the new government is set to make Austria a climate pioneer, there are question marks as to how long the new alliance is likely to last. EURACTIV Germany reports.

Merkel shows more openness on EU budget

There was also unanimity on what Merkel said was the longest topic of discussion – the EU budget. However, agreement there was only apparent on the surface. Although both reject the current budget proposal, they took different positions on the matter.

According to the current proposal, member states should pay 1.11% of their GDP to the EU, a number which Kurz appears fixated on. But for Austria, anything over 1% is “unacceptable”, Kurz said in a radio interview on Saturday.

Vienna will veto this figure, he said, noting that he had support from other net contributors, including Germany.

However, Merkel was less definitive on the EU budget. Questioned by a journalist, she refused to say whether Germany would also veto the proposal requesting member states to pay 1.11% of their GDP to the EU budget.

“It will then depend very much on what this money is spent on,” said the Chancellor, referring to EU support for research and for less developed regions in eastern Germany.

According to Schmidt, this showed that Merkel has a more flexible position: provided the budget served German interests, Merkel might be willing to agree to the 1.11% proposal, he said.

In Saturday’s radio interview, however, Kurz affirmed that all other four net contributors – Germany, Sweden, Denmark and the Netherlands – shared Austria’s position and would reject the 1.11% proposal.

A few hours later, Kurz updated his Facebook page and only listed Sweden, Denmark and the Netherlands as supporters this time.

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“Different priorities” on sea rescue

Another EU hot potato on which the pair do not see eye-to-eye is immigration. Kurz and Merkel have a fundamentally different opinions about Operation Sophia, an EU military mission aimed at neutralising refugee smuggling routes in the Mediterranean.

Following a meeting of EU foreign ministers, EU chief diplomat Josep Borrell proposed reviving the EU’s military mission in order to monitor the Libya arms embargo that was agreed recently in Berlin.

But while Germany supports the idea, Austria is strictly against.

EU vessels would have to rescue shipwrecked migrants fleeing Africa, Kurz said, warning that patrolling EU boats could soon be seen by refugees as a “ticket to Europe”. This could encourage people to undertake the dangerous journey and lead to renewed deaths in the Mediterranean, he said.

Merkel replied that it would be better if state organisations were to take over sea rescue operations, rather than private ships, as is currently the case.

But, as she said, “we are setting the priorities differently here, it has to be said.”

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EU Financial Transaction Tax: Merkel regrets Austrian position

Opinions also differed on the EU Financial Transaction Tax (FTT). Here, Austria opposes a proposal by German Finance Minister Olaf Scholz of the Social Democratic Party (SPD).

Technically, Austria cannot block the proposal. Indeed, the tax is being discussed under a special “enhanced cooperation” procedure, where at least nine EU member states can adopt EU regulations which only apply to them.

Ten countries are so far involved in the FTT, so if Austria were to opt-out, the remaining nine could still agree. However, it would, of course, be a setback if Austria did not participate, and there is a risk that other countries might opt-out.

According to Kurz, the main criticism is that the current proposal does not punish big speculators, but rather small investors. Merkel only commented that the Austrian position was regretted and that negotiations would continue.

Yet, there was still unity on possible EU reforms.

For Merkel, an EU treaty change could be an option, as long as it accelerates decision-making processes and strengthens Europe’s role. In response, Kurz smiled briefly, looked into the audience and simply said: “I agree with that.”

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Fifteen EU member states insisted on Saturday (1 February) that the EU budget for 2021-2027 should maintain the level of the previous one “in real terms”. EURACTIV’s partner Lusa reports.

[Edited by Frédéric Simon]

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