Political Briefing #94/2016

17/11/2016

POLITICS & POLICY

The rise of far-right populist parties in Europe is becoming one of the main concerns for European politicians and institutions. On Thursday, the former President of the European Central Bank (ECB), Jean-Claude Trichet, said that the election of Donald Trump in the US signals rising frustration among the population of industrialized countries. Trichet claimed that the increasing success of far-right parties is linked to the stagnation of living condition of the middle class all over Europe. However, he specified that the European political class and mainstream parties have the tools to tackle this political trend. Notwithstanding the rising criticism voiced by European citizens, Trichet said also that he fully trusts the euro. Likewise, the German Minister of Foreign Affairs, Walter Steinmeier, called for institutions and politicians to consider Donald Trump’s election and Brexit as warning signals.

In the frame of the European Semester process, discussions on budgetary issues are gaining new prominence. According to many experts, the European Commission will take a softer stance on budgetary breaches by Member States in 2017. The EC’s new strategy could be aimed at hindering further gains by populist parties. On Wednesday, the European Commission admitted that Italy is unlikely to face economic sanctions, although a deficit breach is foreseen for 2017. Commissioner Pierre Moscovici argued that the EC will take into considerations the increased need for investments linked to the earthquakes that hit the country recently. Similarly, the Commission seems willing to let off the hook Spain and Portugal. Earlier this year, the Commission warned that it could suspend structural funds for the two countries.

Discussions related to Brexit continue to make the headlines in the UK and across Europe. On Thursday, the Home Affairs Committee released the conclusions of an inquiry into the rise of hate crimes in the UK after the referendum of last June. The Committee claimed that Brexit campaigners intentionally aimed at polarising the debate before the elections “creating an atmosphere where fact didn’t matter”, The Independent reports. Meanwhile, on the occasion of a visit to London, Eurogroup President, Jeroen Dijsselbloem, claimed that Brexit negotiations will last more than the two years foreseen in Article 50. Dijsselbloem also blamed Boris Johnson for holding an unrealistic vision for the UK’s exit from the EU. Earlier this week, Johnson had claimed that the UK will retain access to the European Single Market, while limiting immigration from other member states. Similarly, Carlo Calenda, the Italian Minster of Economic Development, blasted the UK government on Thursday. Calenda said that the UK government needs to explain to the remaining EU member states how Brexit negotiations will proceed.