Let the European Union spend

Paul Taylor, a contributing editor at POLITICO, writes the “Europe At Large” column.  

PARIS — Europe’s budget discipline rules, more honored in the breach than in the observance, are outdated, over-complicated and increasingly misguided.  

The EU would do better to circumvent the Stability and Growth Pact in order to promote public investment in the green and digital economy, rather than waste energy trying to reform a complex legal framework that has always produced more good intentions than compliance. 

Intended to curtail debts and deficits, the pact had to be suspended early in the COVID-19 pandemic, to allow governments to borrow and spend massively to support households and keep businesses on life support during the crisis. An escape clause allowing that emergency spending will remain in force this year and next. 

What happens after that is up in the air. The Commission announced this month that the fiscal rules will be back in 2023. Brussels plans to hold consultations on how to reform the system later this year before making proposals to finance ministers. 

“Consultations” understates the hardball negotiations that are coming. Influential figures such as Italian Prime Minister Mario Draghi, EU Economic and Monetary Affairs Commissioner Paulo Gentiloni and French Europe Minister Clement Beaune have all called for a comprehensive reworking of the rule book to support investment that raises growth, and to differentiate targets by country rather than imposing one-size-fits-all goals. 

‘Paper tiger’ 

Unfortunately, the chances we’ll see a radical reform that draws lessons from what worked during the pandemic — as well as what didn’t during the eurozone debt crisis — are close to zero. The guardians of fiscal orthodoxy in northern Europe will not countenance it. 

Anchored in the 1992 Maastricht Treaty that gave birth to the euro, the rules require governments to keep public debt below 60 percent of Gross Domestic Product and cap their budget deficit at 3 percent of GDP. The reasoning was: since the EU has a macro-economically tiny central budget, and no mechanism for redistributing wealth, each member state of the single currency must maintain sound public finances, to avoid harmful spillovers to its partners. 

The 1997 Stability Pact, adopted under German pressure before the launch of the euro, was intended to give teeth to those limits. It provided for graduated sanctions culminating in heavy fines on countries that repeatedly miss the targets. They have never been applied despite serial breaches by southern European countries and have long since lost any credibility. 

The whole debate, says economist Nicolas Veron of the Bruegel think-tank and the Peterson Institute for International Economics, is “a political theater of the absurd with no consequence. 

“The lesson of the 22 years of the euro’s existence is that sanctions will never be activated and don’t serve as a deterrent even in extreme cases. Hence, all fiscal rules are a paper tiger,” he said. 

Many economists argue that the Maastricht criteria were devised for a bygone era of climbing interest rates, inflation and growth. That’s no longer appropriate at a time when borrowing costs have shrunk, the European Central Bank is vacuuming up government bonds, inflation is durably low and growth potential has also declined. The treaty’s limits simply aren’t realistic today, with Italy’s national debt swollen from 130 to 160 percent of GDP during the pandemic, France’s and Spain’s from below 100 to 120 and Greece’s from 185 to 210 percent.  

Changing the criteria, however, would require amending the EU treaties with the unanimous agreement of every EU government and parliament — unlikely given that defenders of EU fiscal discipline are loathe to abandon the most important weapon in their arsenal. 

Irish Finance Minister Pascal Donohoe, who chairs the Eurogroup of finance ministers, has ruled out calls by experts — including former IMF chief economist Olivier Blanchard — to replace the pact with fiscal standards that set broad objectives tailored to each country, supervised by independent national fiscal boards, rather than enforced by the Commission or EU ministers. 

Austrian model 

Fortunately, there are changes that could be made without amending EU law, or painfully rewriting a treaty. For that, we can thank the Austrians. 

In the 1990s Vienna found a way around the EU debt limits by setting up a state-owned company.  Called ASFINAG, it exists to build and maintain Austrian motorways — a massive project with borrowing equivalent to about 5 percent of GDP. At the time, Austria was struggling to meet the criteria to join the euro, making any kind of spending a subject of nervous scrutiny. 

But the company’s state-guaranteed borrowing on capital markets was not counted as public debt, because it was serviced by dedicated revenue streams, from truck tolls and an annual user fee for cars. ASFINAG even pays a small annual surplus to the state. Clever. 

“It was created to circumvent the pact and allow investment,” recalls Franz Nauschnigg, the economist who helped devise the scheme. “It’s self-financing and gave us a very modern highway network much more cheaply that if you’d done it through public-private partnerships.” 

Germany’s Bundesbank, a stickler for fiscal rectitude, challenged this off-balance-sheet borrowing vehicle at the EU Statistics Office. But Eurostat upheld the Austrian model’s exemption from the “general government debt” calculation. Berlin has since adopted a similar system for German motorway construction and maintenance via a company called Autobahn GmbH. 

“You could do the same to fund public investment in smart energy grids, solar parks, trans-Mediterranean electricity cables or high-speed broadband,” said Nauschnigg, who has presented his ideas in Brussels, Paris, Berlin and Rome. “It could be done EU-wide, or by creating a system of national ASFINAGs which link together.” 

The idea of bracketing more public investment out of budget constraints has gained traction in the campaign for September’s German elections, as politicians debate whether and when to reactivate the constitutional “debt brake” that severely limits government borrowing.  

The Greens, running neck-and-neck with the conservative CDU/CSU in opinion polls, have proposed a €500 billion public investment fund for the transition to clean, renewable energy. The center-left Social Democrats, while advocating an early return to the so-called “schwarzer Null” debt limit, also want to exempt certain categories of investment from the calculation. 

All these schemes aim to avoid repeating the mistakes of the EU’s response to the euro zone crisis, when synchronized austerity caused public investment to collapse, triggering a double-dip recession, reducing growth potential and aggravating a shortfall in private sector investment. 

What’s not to like?  

Well, the changes are bound to trigger a fight over what constitutes good and bad debt. Some countries, such as France, have long advocated excluding defense equipment purchases from the debt calculation, for example. Others argue that education spending is the most growth-enhancing investment of all — and should be exempted. 

Fiscal hawks, meanwhile, warn that financial markets — the ultimate arbiters of the sustainability of a country’s debt — will not be hoodwinked for long by creative accountancy.  

As conservative German MEP Markus Ferber puts it, “Debt is debt. Of course it matters whether I borrow to pay for a nice holiday or to buy a car to get me to work. But I caution against starting a public debate on good and bad debt. We have to look at the reality of debt sustainability.”  

The fundamental problem, said Ferber, is that countries like France and Italy did not reduce their debt in good times and will struggle when interest rates rise again. That’s a fair point, and Europe will continue to need sensible rules for balancing current expenditure with revenues. But it must not prevent the EU from bypassing obsolete debt ceilings to promote vital public investment.

EU not using N Ireland to punish UK for Brexit, EC vice-president claims

European Commission vice-president Maros Sefcovic has rejected an accusation that the European Union (EU) is using Northern Ireland to punish the United Kingdom for Brexit.

DUP leader Edwin Poots claimed the region is being used as a “plaything” by Europe, with more checks on goods from Britain at ports per week than take place in Rotterdam once grace periods end.

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EU provides emergency assistance to flood victims in Sri Lanka

Following the devastating floods which struck Sri Lanka in mid-May, the European Commission is providing €80,000 (close to Rs. 19.5 million) in humanitarian funding for emergency assistance.

The aid will benefit 7,500 people in some of the most affected areas in the districts of Colombo, Galle and Gampaha.

The EU funding supports the Sri Lanka Red Cross Society in delivering emergency relief to the most affected families, including those who are currently living in temporary shelters or evacuation centres, as well as to people returning home after water levels have receded. The support focuses on providing access to clean water and sanitation, particularly through cleaning the contaminated wells. First aid and medical services will also be provided, along with hygiene awareness sessions, to avoid the spread of waterborne diseases, as well as the coronavirus. Affected people will also receive household items and kitchen sets such as bed sheets, torches, cooking pots and kitchen utensils.

The funding is part of the EU’s overall contribution to the Disaster Relief Emergency Fund (DREF) of the International Federation of Red Cross and Red Crescent Societies (IFRC).

Between 12 and 14 May, the southwest monsoon weather conditions and cyclone Tauktae caused heavy rainfall in large parts of Sri Lanka, triggering widespread flooding in nine low-lying districts in Central and North Western, Sabaragamuwa, Southern and Western provinces. The districts of Colombo, Gampaha and Galle were the worst-hit areas. According to information released by the national Disaster Management Center on 17 May, more than 43,000 people have been affected and almost 15,000 houses have been damaged, some of them destroyed. Heavy rain continues in these regions as another cyclonic storm, Yaas, has formed over the Bay of Bengal. The floods comes as Sri Lanka is struggling to cope with a third wave of the coronavirus pandemic.

The European Union together with its Member States is the world’s leading donor of humanitarian aid. Relief assistance is an expression of European solidarity towards people in need around the world. It aims to save lives, prevent and alleviate human suffering, and safeguard the integrity and human dignity of populations affected by natural disasters and man-made crises.

Through its European Civil Protection and Humanitarian Aid Operations (ECHO), the European Union helps over 120 million victims of conflicts and disasters every year. For more information, please visit ECHO’s website.

The European Commission has signed a €3 million humanitarian contribution agreement with the International Federation of Red Cross and Red Crescent Societies (IFRC) to support the Federation’s Disaster Relief Emergency Fund (DREF). Funds from the DREF are mainly allocated to “small-scale” disasters – those that do not give rise to a formal international appeal.

The Disaster Relief Emergency Fund was established in 1985 and is supported by contributions from donors. Each time a National Red Cross or Red Crescent Society needs immediate financial support to respond to a disaster, it can request funds from the DREF. For small-scale disasters, the IFRC allocates grants from the Fund, which can then be replenished by the donors. The contribution agreement between the IFRC and ECHO enables the latter to replenish the DREF for agreed operations (that fit in with its humanitarian mandate) up to a total of €3 million.

Why EU Report Calling for Regime Change in Russia is Last Ditch Effort to Save the Bloc’s Relevance

An EU document compiled by MEP Andrius Kubilius, a former prime minister of Lithuania, declares Russia a “threat” and calls for deterring it through different means, including Russia’s expulsion from the Society for Worldwide Interbank Financial Telecommunication (SWIFT), halting the Nord Stream 2 project, and stepping up sanctions against the country. It specifically targets the Russian government, proposing to launch international probes and trials against it as well as setting up “EU tribunals”.

On top of this, the EP draft urges the EU to be prepared “not to recognise the parliament of Russia” after the upcoming 2021 legislative elections in the country and to ask for “Russia’s suspension from international organisations with parliamentary assemblies”, based on a premise that Russia’s democracy does not correspond to European values and its election system cannot be trusted.

The document employs self-righteous, aggressive, and undiplomatic language and is calling for nothing short of regime change in Russia, deems Professor Glenn Diesen from the University of South-Eastern Norway.

Sputnik: The European Parliament has put forward a set of measures targeting the EU’s cooperation with Russia and called to halt the Nord Stream 2 project. Does the EP’s stance really reflect that of respective nations in this institution? Whose interests are really being pursued, in your opinion?

Glenn Diesen: The report does not accurately represent the EU or its main member states. It is put together by Andrius Kubilius, who is a member of the European Parliament, a former prime minister of Lithuania, and an ardent Russophobe. It would, for example, be unthinkable for the German government to refer to the “Kremlin regime” and “Putin’s war against the people of Russia”.

This is the hyperbolic and undiplomatic language of Kubilius. The brazen call for pursuing regime change in Russia by establishing EU tribunals to police Russia in cooperation with Bellingcat and open call to launch a propaganda channel is also unlikely to be the official position of major EU member states such as Germany, France, or Italy.

The main contribution of the Baltic States and Poland has always been to steer the EU towards confrontation and containment of Russia. The attempt to mobilise the EU against Russia is a risky strategy as major EU member states must increasingly deal with Russia in bilateral arrangements for pragmatic ties, which makes the EU less relevant.

Sputnik: The European Parliament’s draft was written ahead of Russia’s September parliamentary elections and calls upon the EU to be “prepared not to recognise the parliament of Russia and to ask for Russia’s suspension from international organisations” if elections “are recognised as fraudulent”. Based on what criteria would the EP decide whether Russia’s elections are fair or not? If Russia employed the same tactics and did not recognise the EP or that of any European country, how would the EU evaluate such actions?

Glenn Diesen: The key question is if the EU assessment of Russian parliamentary elections will be motivated by geopolitical interests or altruistic efforts to elevate liberal democratic values. The simple answer is that Brussels perceives these two objectives to be interlinked as strengthening the EU vis-à-vis Russia is believed to be good for liberal democratic values.

The language in the document indicates that they have already decided to declare the Russian parliamentary elections to be fraudulent. The purpose of doing so is also explicitly outlined in the document, which is to instigate protests within Russia and to expel Russia from international institutions.

Good arguments can be made to include democracy and human rights into the realm of international politics, which was introduced with the Helsinki Accords in 1975. However, it can also be exploited to establish an international system based on sovereign inequality.

It is implied that democracy and human rights legitimises the West to interfere in the domestic affairs of Russia, support coups, and to use military power unlawfully, while Russia has no legitimate influence beyond its own borders. Promoting democracy and human rights as a geopolitical instrument and hegemonic norm is counter-productive as Russia is increasingly signalling that democracy and human rights can no longer have a place in international security discourse.

The Helsinki Accords specified that “sovereign equality” was a key principle, which now appears to be incompatible with how democracy and human rights are used in international relations. Moscow is thus making it clear it does not need or desire EU approval for its own elections as the EU is an adversary and not a moral authority.

Sputnik: The EP draft calls for creating “EU tribunals” and launching investigations into alleged crimes committed by the governments of Russia and Belarus. Who provided them with the legitimacy to conduct such inquiries? What political goals do they want to achieve through this initiative, in your opinion?

Glenn Diesen: There is no clause in international law that provides the EU with the authority to represent the Russian people. This is why the reference to international law is increasingly replaced with that of a “rules-based international system”, which implies exemption from international law to the extent it is legitimised by liberal democratic values.

One could argue that this is well-intentioned and in service of higher ideals, although it undeniably implies sovereign inequality. This self-assigned socialising or civilising role of the EU divides the continent into political subjects versus political objects, or an EU teacher versus a Russian student.

The document from the EU Parliament argues that these “EU tribunals” will conduct investigations with Bellingcat, which many leaks ago was exposed as a government-funded organisation that spreads disinformation to weaken NATO adversaries. However, the main point to be made is that Russia demands sovereign equality. The EU’s “external governance” over Russia is rejected as the EU would also not accept if Russia exerted similar influence in the territory of the EU.

Sputnik: In your article you noted that the EP document openly discusses nothing short of a regime change plan. What’s behind this belligerent stance and its timing? What risks is this approach fraught with for Europe and international stability in general?  

Glenn Diesen: There is currently a divide in the EU and the wider West. Some argue that the hostilities towards Russia must be scaled back, while others are arguing to stay the course. Those calling to cultivate a more benign approach to Moscow recognise that the anti-Russian sanctions have failed as it has pushed Russia to reduce its economic ties with the West and instead form a strategic partnership with China. These concerns are now openly expressed in Berlin and Paris, and it is also the reason why Biden is reaching out to Moscow.

The people calling to stay the course and pursue regime change in Russia do not necessarily believe these objectives are achievable or that even the anti-Russian policies will result in any policy change in Russia, but they consider the containment of Russia as an objective in itself and a source for reviving unity in the West.

This approach is an exercise in self-harm as it is based on wishful thinking as opposed to the realities of a new international distribution of power. Case in point, the lesson of Nord Stream 2 (and the cancelled South Stream) should be that the countries positioning themselves as a frontline with Russia will be circumvented and thus have their own relevance reduced. If the EU seeks unity under an anti-Russian policy by cancelling Nord Stream 2, then the EU itself would become less relevant as the cheap Russian gas required economic competitiveness would eventually be redirected towards China and the East. Ambitions to instigate a coup in Russia or isolate Russia economically and politically is leading to the collapse of the Helsinki Accords and Russia’s economic decoupling from Europe, which is not good for the EU or international stability.

Glenn Diesen is the author of “Russian Conservatism: Managing Change under Permanent Revolution” (2021), “Great Power Politics in the Fourth Industrial Revolution: The Geoeconomics of Technological Sovereignty” (2021), “Russia in a Changing World” (2020), “The Decay of Western Civilisation and Resurgence of Russia: Between Gemeinschaft and Gesellschaft” (2018), and “Russia’s Geoeconomic Strategy for a Greater Eurasia (Rethinking Asia and International Relations)” (2017).

EU vows support for ‘democratic’ Belarus

The EU’s top diplomat said on Friday that the European Commission stands ready to support a future democratic Belarus, as more sanctions were imposed over an international flight being forced to land in Minsk.

Eighty-eight people, including President Lukashenko, and seven legal entities have already been sanctioned with an EU travel ban and asset freeze in response to political repression in the country.

“This plan, up to €3 billion, reflects the European Union’s commitment to support Belarusian people once Belarus embarks on a democratic transition,” Josep Borrel said.

Belarus opposition leader Sviatlana Tsikhanouskaya also spoke with acting Dutch Prime Minister Mark Rutte in The Hague on Friday.

The meeting came as the international community continued to condemn the diversion of a Ryanair flight to Minsk last Sunday so that Belarusian police could arrest an opposition journalist.

“We will do everything to protect individuals in Belarus from the impact of these sanctions,” Rutte said. “But that will not always be easy. But we have to do everything to get to the regime; to Lukashenko and his people. We can only do that through targeted sanctions.”

In talks with Lukashenko on Friday, Russian President Vladimir Putin played down the flight incident.

He accused the EU of “double standards”, recalling an incident in 2013 when a plane from Moscow carrying former Bolivian president Evo Morales was forced to land in Vienna.

Belarusians isolated by flight ban

Journalist Roman Protasevich and his girlfriend Sofia Sapega were arrested after the Ryanair jet’s crew was told to land by Belarusian flight controllers last Sunday, officially over a bomb threat.

The EU has denounced the incident as akin to air piracy and has since banned flights from Belarus, and on Europe-based airlines to avoid Belarusian airspace.

This, however, has also left dissident Belarusians with few options to get out of the country if they want to remain in the EU.

Belarus tightened restrictions at its land border in December. Those willing to cross must explain their reason, such as work, medical care or education, and can only do it once every six months.

“Shutting the borders turns Belarus into a can of rotting preserves,” rights group organiser Tatsiana Hatsura-Yavorska told AP. “We are being turned into hostages.”

More than 35,000 people have been arrested in Belarus after millions took part in pro-democracy protests last summer. Ms. Hatsura-Yavorska added: “The authorities have scaled up repressions in recent months to incite the atmosphere of fear.”

Thousands Rally in Ljubljana Weeks Before Slovenia Takes The EU Presidency

Thousands rallied in Slovenia’s capital Friday against right-wing Prime Minister Janez Jansa, reflecting mounting pressure on the government weeks before the country takes over the European Union’s rotating presidency.

Some 20,000 people gathered at a central Ljubljana square to demand that the government step down and early elections be held. Several workers’ unions and opposition parties joined the demonstration.

Critics accuse Jansa of assuming increasingly authoritarian ways similar to those of his ally, Hungary’s hardline Prime Minister Viktor Orban.

They claim that Jansa’s government has pressured Slovenian media and spurred hate speech, while mishandling the coronavirus crisis and curbing social dialogue in the traditionally moderate Alpine nation.

Jansa denies accusations

Jansa, a veteran politician who has served twice in the past as prime minister, has dismissed the accusations as a leftist conspiracy. Earlier this week, he survived an impeachment motion filed by the opposition in parliament.

Jansa came to power last year after the previous, liberal prime minister stepped down. He is also known for prematurely congratulating former U.S. President Donald Trump while vote count was still underway during the presidential election last November.

The protesters on Friday shouted “Elections now,” waving Slovenian and labor union flags and banners. One banner read “Death to Fascism, Freedom for all.”

Many participants wore face masks in line with pandemic rules.

‘Young people are ignored’

Pija Zorman said she came to Ljubljana for the protest from Kranj, about 25 kilometres (15 miles) away. The 29-year-old said she joined the rally because of a “lack of perspective.”

“We, the young people, are ignored,” said Zorman.

Slovenia is set to assume the presidency of the 27-member EU in July.

Jansa has come under EU scrutiny over allegations of media pressure in the country, including abolishing state funding for Slovenia’s only news agency, the STA.

This article has been adapted from its original source.

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Polish Presidential Aide Dubs Nord Stream 2 ‘Gas Bomb Placed Under European Integration’

Krzysztof Szczerski, the head of the Polish presidential office’s international policy bureau, has stated that the White House waiving sanctions against the operator of Nord Stream 2 is “based on an erroneous assessment of reality”.

Speaking to the news network Polskie Radio, Szczerski described the Nord Stream 2 gas pipeline project as “a gas bomb placed under European integration”.

“Indeed, this project will or can blow up the European Union”, he asserted, expressing concern over the completion of Nord Stream 2, which he said would enable Europe to receive more gas from Russia.

The Polish presidential aide claimed that the joint operation of Nord Stream 1 and Nord Stream 2 will result in “Germany’s dependence on Russian [gas] supplies, which will mean Moscow’s political influence on the EU’s foreign policy and economy”.

“Each gas pipeline has its own valve, which means that it can be closed on the Russian side. So, from the moment of the project’s completion, Western Europe or the EU will have to take into account that they may lose access to the Russian gas when they deal with decision-making”, Szczerski added.

The remarks followed the aide telling Polskie Radio last week that the White House’s recent decision not to slap sanctions on the operator of Nord Stream 2 was “not entirely consistent”.

US Scraps Sanctions Against Nord Stream 2 Operator

He spoke after the Biden administration announced that it would lift sanctions on Swiss-based Nord Stream 2 AG, the Russian-led project’s operator, and its chief executive Matthias Warnig, explaining the move was in Washington’s national interests.

The White House press pool cited President Joe Biden as saying that US sanctions against Nord Stream 2 AG would be counterproductive for European relations. Shortly after, however, the US administration imposed sanctions against 13 Russian vessels and three entities linked to the construction of the Nord Stream 2 pipeline.

The Russian-led gas project, which is currently over 90-percent complete, aims to lay a 745-mile twin pipeline to transport gas from Russia directly to Germany via the Baltic Sea, passing through the territorial waters of Denmark, Finland, and Sweden.

Washington is a vocal opponent of the project, as well as Berlin’s alleged dependence on Russian natural resources, as it seeks to export more US liquefied natural gas (LNG) to Europe. In 2019, the White House introduced sanctions on Nord Stream 2, forcing Swiss company Allseas to abandon it. After a year-long hiatus, construction was resumed by the Russian pipe-laying vessel Fortuna in late 2020.
Russia views the US sanctions against Nord Stream 2 as an example of unfair competition meant to boost US LNG exports, calling the pipeline a purely economic project that should not be politicised.

Greece presents EU Digital COVID Certificate – European Council President Charles in attendance (video)

The presentation of the European digital certificate EU Digital COVID Certificate by the Minister of Digital Government, Kyriakos Pierrakakis, took place at the premises of the National Network of Technology and Research Infrastructures (EDYTE) on Friday morning with the presence of Greek PM Kyriakos Mitsotakis, the President of the European Council, Charles Michel, Vice-President for Promoting our European Way of Life Margaritis Schinas and Minister of Digital Government, Kyriakos Pierrakakis.

PM Kyriakos Mitsotakis, after thanking the attendees, said that he is proud of the work done by the Ministry of Digital Governance and as a whole. He said the pandemic was an accelerator of digital developments.

“We needed a tool for transportation since Greece relies on tourism,” said the prime minister. “We have developed the digital certificate in cooperation with the Commission. You saw the presentation is very simple and contains all the necessary elements needed for someone to move and be welcomed by each country,” he said.

The President of the European Council, Charles Michel, praised the initiatives of Kyriakos Mitsotakis for the adoption of the digital certificate, saying that after the negotiations, the EU will be able to implement it in the coming weeks.

As he said, it is a great achievement of Europe and guarantees the free movement of citizens.

The certificate is expected to be a major boost for European citizens’ travel, thus providing a major boost to tourism, which is an important source of revenue for several EU countries, including Greece.

The EU Digital Covid Certificate will be issued by the national authorities and will be available in digital or printed form for those who have been fully vaccinated, have a negative PCR test, or have a certificate of recovery from coronavirus.

European Council head says process of implementing sanctions against Belarus is launched

The European Union has begun work on the introduction of new sanctions against Belarus due to the incident with the plane landing in Minsk, but it is too early to say which sectors they will cover, the head of the European Council Charles Michel told at a press conference following the EU-Japan summit.The process of implementing the sanctions has been launched. The issue of sectoral sanctions will be analyzed by the relevant structures, now it is too early to talk about a specific sector, he said, answering a question from journalists whether the restrictions will affect the potash industry.Earlier, the head of EU diplomacy, Josep Borrell, said that the foreign ministers of the 27 EU countries will discuss on Thursday in Portugal during an informal meeting of the EU Council how to implement economic and sectoral sanctions against Belarus due to the incident with the plane landing in Minsk on 23 May.

European Union’s Covid-19 recovery fund gets unanimous green light

BRUSSELS: The national parliaments of Austria and Poland approved Europe’s huge post-virus coronavirus recovery fund on Thursday, the last of the 27 EU member states, paving the way for ratification.
“With the positive votes of the Austrian and Polish parliaments today, the 27 member states finalised the parliamentary approval process,” European Budget Commissioner Johannes Hahn said on Twitter.
Officials previously said that if member states gave the go-ahead to the plan, money for the 672-billion-euro ($820-billion) package of grants and loans could “start to flow in July”.
This will be a year on from the European Union‘s historic decision to pool debt to fund the recovery package.
What once seemed like a hugely ambitious exercise, however, has been dwarfed by the United States‘ adoption of a $1.9-trillion infrastructure plan.
The US has also surged ahead with coronavirus vaccinations, meaning its economy will emerge from lockdowns faster than those in Europe.
But EU chiefs have remained upbeat and optimistic. “Our objective is to approve all the plans by the summer,” European Commission president Ursula von der Leyen said earlier.
Spain and Italy are expected to see the biggest injections of funds as part of their roughly 70-billion-euro plan, followed by France with 40 billion euros.
The path to putting the plan in place has seen European Commission officials in difficult discussions with national governments on the criteria that spending plans must meet.
Each plan has had to assign at least 37 per cent of funds to measures that better the environment or fight climate change.
Another 20 per cent is supposed to finance the transition to a more digital economy.
The hope is that as European output picks up after a year of Covid and lockdown woes, it will herald a rash of spending in insulating buildings, railway transport, electric vehicle charging points and high-speed internet.
“The objective is that the funds start to be paid this summer,” Commission Vice President Valdis Dombrovskis said at a meeting in Lisbon on Saturday.
He promised that efforts would be made to try to speed up the assessment process.
“We are working as quickly as possible but these are complex evaluations,” he nevertheless warned.

Last EU parliaments set to back recovery fund, first EU debt issue in mid-June

… The last parliaments in the European Union were set on Thursday to … raising national guarantees to the EU budget, paving the way … already done so. The EU legislation raises the upper limit … technologies. The ratification of the EU law will enable the European …

EU privacy watchdog to investigate EU institutions’ use of Amazon, Microsoft cloud services

By Foo Yun Chee

BRUSSELS (Reuters) – EU privacy watchdog EDPS opened on Thursday two investigations into EU institutions’ use of cloud computing services provided by Amazon and Microsoft, concerned about the transfer of Europeans’ personal data to the United States.

The European Data Protection Supervisor (EDPS) said one of the investigations will focus on the use of Microsoft Office 365 by the European Commission.

The EU watchdog said EU bodies were relying more and more on cloud-based software and cloud infrastructure or platform services from large U.S. ICT providers which are subject to legislation that allows disproportionate surveillance activities by the U.S. authorities.

“Following the outcome of the reporting exercise by the EU institutions and bodies, we identified certain types of contracts that require particular attention and this is why we have decided to launch these two investigations,” EDPS head Wojciech Wiewiorowski said in a statement.

Market leader Amazon, Alphabet unit Google and Microsoft dominate the realm of data storage worldwide, fuelling concerns in Europe over the risk of surveillance by the United States.

Such worries prompted Europe’s highest court last year to toss out a transatlantic data transfer deal known as the Privacy Shield following a long-running dispute between Facebook and Austrian privacy activist Max Schrems.

(Reporting by Foo Yun Chee)

Roma in Italy forced to leave, crisis calls for EU action European Union

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Covid-19: European Union takes on AstraZeneca in court over vaccine deliveries

The European Union took on vaccine producer AstraZeneca in a Brussels court on Wednesday with the urgent demand that the company needs to make an immediate delivery of Covid-19 shots the bloc insists were already due.

AstraZeneca’s contract signed with the European Commission, the EU’s executive arm, on behalf of member states foresaw an initial 300 million doses for distribution among all 27 countries, with an option for a further 100 million.

The doses were expected to be delivered throughout 2021. But only 30 million were sent during the first quarter.

Deliveries have increased slightly since then but, according to the European Commission, the company is set to provide only 70 million doses in the second quarter. It had promised 180 million.

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EU lawyer Rafael Jafferali told the court that the company now expects to deliver the total number of doses by the end of December, but he added that “with a six-month delay, it’s obviously a failure.”

His main argument is that AstraZeneca should have used production sites in the bloc and the UK for EU supplies as part of a “best reasonable effort” clause in the contract.

He said that 50 million doses that should have been delivered to the EU went to third countries instead, “in violation” of their contract.

Jafferali has said that the company should use all four plants listed in their contract for deliveries to the EU.

He also accused the company of misleading the European Commission by providing data lacking clarity on the delivery delays.

“The information provided by AstraZeneca did not allow us to fully understand the situation before mid-March 2021,” he said.

The EU has insisted its gripes with the company are about deliveries only and has repeatedly said that it has no problems with the safety or quality of the vaccine itself.

The shots have been approved by the European Medicines Agency, the EU’s drug regulator.

While the bloc insists AstraZeneca has breached its contractual obligations, the company says it has fully complied with the agreement, arguing that vaccines are difficult to manufacture, and it made its best effort to deliver on time.

Lawyers for the company will address the court later Wednesday (local time).

As part of an advanced purchase agreement with vaccine companies, the EU said it invested 2.7 billion euros (NZ$4.53 billion), including 336 million euros, to finance the production of AstraZeneca’s serum at four factories.

The long-standing dispute drew media attention for weeks earlier this year amid a deadly surge of coronavirus infections in Europe, when delays in vaccine production and deliveries hampered the EU’s vaccination campaign.

Cheaper and easier to use than rival shots from Pfizer-BioNTech, the AstraZeneca vaccine developed with Oxford University was a pillar of the EU’s vaccine roll-out. But the EU’s partnership with the firm quickly deteriorated amid accusations it favoured its relationship with British authorities.

While the UK made quick progress in its vaccination campaign thanks to the AstraZeneca shots, the EU faced embarrassing complaints and criticism for its slow start.

Concerns over the pace of the roll-out across the EU grew after AstraZeneca said it couldn’t supply EU members with as many doses as originally anticipated because of production capacity limits.

The health situation has dramatically improved in Europe in recent weeks, with the number of Covid-19 hospitalizations and deaths on a sharp downward trend as vaccination has picked up.

About 300 million doses of vaccine have been delivered in Europe – a region with around 450 million inhabitants, with about 245 million already administered.

About 46 per cent of the EU population have had at least one dose.

In total, the European Commission has secured more than 2.5 billion of vaccine doses with various manufacturers. It recently sealed another major order with Pfizer and BioNTech through 2023 for an additional 1.8 billion doses of their Covid-19 shot to share between the bloc’s countries.

Following Wednesday’s hearing, a second one is slated for Friday, with a judgment to be delivered at a date to be announced. In addition to the emergency action, the European Commission has launched a claim on the merits of the case for damages for which a hearing hasn’t yet been set by the court.

AP