Political briefing #79/2016

22/09/2016

POLITICS & POLICY

The refugee crisis continues to make the headlines all over Europe. In particular, the Hungarian referendum of October 2 is under the spotlight. Hungarian citizens will be called to express their preference over the migrant resettlement scheme established by the European Commission to deal with this crisis. Although the referendum is not legally binding, an anti-EU result would certainly increase Hungary’s Prime Minister Viktor Orban’s chances to negotiate some sort of renationalization of EU powers in this area. However, Nordic European countries recently called for the EU to take measures against Hungary’s attempts to escape its obligations to register migrants as per the Dublin regulations.

In the meantime, EU institutions are trying to partner up with countries that share external borders with the Union to tackle the migrant issue. Yesterday, the EU revealed that it is helping Serbia deal with migration flows through training and specialist equipment. Meanwhile, Claude Moraes and Ska Keller, two MEPs, while visiting Beirut, called for EU member states to take in more refugees from the Middle East. On Wednesday, French authorities also kicked-off the construction of a 4-meter high and 1-km long wall to insulate the RN16 highway that connects the port of Calais port to the infamous “jungle” refugee camp. After a 14-year old migrant died in an attempt to get across the Channel, Britain’s anti-slavery commissioner claimed that children in Calais must get fast-track scheme to reach the UK. Yesterday a boat packed with 450 migrants capsized in the Egyptian Mediterranean waters, causing the death of 42 people. The accident shows that Egypt is turning into an ever greater departure point for migrants to reach the EU.

Themes such as austerity, investment policies, and debt restructuring have resurfaced in European public debates after the EU’s southern members gathered in Athens on September 9 for the so-called Club Med meeting. On Wednesday, on the occasion of an exclusive interview for Reuters, Greek PM Alexis Tsipras spoke about the necessity of debt relief for his country after years of harsh reforms. He called for Europe to “push ahead, irrespective of the internal issues and the electoral processes in each country”. “We must look at common interests and not issues at a micro-political level”, he added. Earlier this month, the President of the Eurogroup, Jeroen Dijsselbloem, said that EU investors were expecting more action from the Greek government in order to move ahead with the bailout program. Indeed a second review of enacted reforms is foreseen for the end of October. In the meantime, the Greek parliament approved another major privatization plan concerning a part of Athens’s former airport. The approval of the law exposed tensions within the Syriza government. A recent poll suggested that the conservative New Democracy party is now ahead of Tsipras’s party by 7.1% in terms of voters’ preferences.

Greece is not the only country to be involved in the austerity/investment debate. On Tuesday, September 20, The Commission urged the Portuguese government to take concrete actions to reduce its current budget deficit by €450 million in order to reach the targets agreed with Brussels. The cuts would amount to 0.25% of the country’s GDP. Moreover, as widely reported, Italian PM Matteo Renzi took issue with the EU austerity course after the informal EU summit of September 17 in Bratislava. His general remarks however disguised criticism directed at Germany’s stance on the matter. Interestingly, as Die Welt reports, Renzi got unexpected backing by economists of Deutsche Bank’s US offices Peter Hooper and Torsten Slok. They argued that “Europe could soon become aware that monetary policy is simply not enough”, adding that “[t]o get the economy back on track a fiscal policy scrapping deficit rules might be needed”. In a similar vein, the OECD called for more deficit-financed growth. Deficit spending became a main concern for French politicians as well, as they are approching the Presidential election campaign of 2017. Whereas French Finance Minister Michael Sapin defended the country’s effort to keep public finances in order over the past few years, the conservative opposition blamed the government’s budgetary plans for 2017 as “unattainable and unrealistic”.