POLITICS & POLICY

The EU is increasingly dealing with concerns and matters of contention coming from multiple directions. First, worries are increasing over security in France after the terrorist attack in Nice on Thursday night. This has not prevented French President François Hollande to travel to Portugal and Ireland: last week’s attack has provided further incentives to promote an initiative aimed at reinforcing the foundations of the EU, starting from European solidarity in the area of defence, a subject long blocked by Britain.

Great apprehension is also coming from Turkey. The news of the coup attempt that took place on Friday night triggered initial political reactions in favour of the democratically elected government of Recep Tayyip Erdoğan: European Council President Donald Tusk immediately wished for the restoration of the constitutional order. Yet, Erdoğan’s return in control of the country has gone hand-in-hand with a strong retaliation, targeting more than 50,000 people in the army, police and judiciary, as well as in universities and schools. This initiative, along with the declaration of the state of emergency and Erdoğan’s announcement of his willingness to reintroduce the death penalty, casts doubts on Turkey’s entry into the EU in the foreseeable future. This is also confirmed by a joint statement by the EU foreign ministers, urging Erdoğan to respect the law and human rights in dealing with defeated coup plotters, and warning that reinstating the death penalty would likely end Ankara’s EU membership bid. However, the EU might not have too much of a stranglehold on Turkey, as worries rise among European politicians and diplomats over the sustainability of the EU-Turkey migration deal: the lack of respect for the rule of law and civil liberties may prevent Turkey from meeting the EU’s legal requirements for allowing visa-free travel, which is a key component of the deal.

Further concerns derive from Northern Europe, and particularly from the UK. New British Prime Minister Theresa May has travelled to Berlin and Paris to begin bilateral discussions with France and Germany, which are expected to play a crucial role in shaping the terms of the Brexit debate during the next months. Indeed, Angela Merkel has agreed on providing the UK with extra time – until the end of the year – to give legal notice of UK’s desire to quit the 28-member bloc. However, not all member states seem to share this conciliatory attitude towards the UK, despite the fact that not much can be done to force May to activate Article 50 sooner. The French government has further stressed that negotiations over Britain’s future relationship with the rest of the EU should begin as soon as possible, in order to reduce uncertainty and its potentially harmful effects on economic growth and investment. Polish Foreign Minister Witold Waszczykowski has criticised Germany’s approach to European policy after the UK’s vote to leave the EU was announced, claiming that this could increase the probability of a “domino effect” on other countries. Furthermore, this criticism comes at a time of increasing east-west tensions, as the European Commission has decided to stick to reform existing rules on so-called “posted workers,” aiming to smooth wage differences among member countries, notwithstanding the fierce opposition of eastern European member states and Denmark.

Finally, concerns come from southern European countries. The European Parliament appears to be taking action in order to soften the sanctions on Portugal and Spain for breaching the Stability and Growth Pact, which the Juncker Commission is expected to impose on 27 July: the European Parliament can make use of the rules stipulating that MEPs have the right to request a “structural dialogue” any time there is a proposal to suspend EU funds. Yet, worries are not just focused on the Iberian peninsula. Indeed, the Italian banking sector is increasingly becoming a matter of concern in Brussels. Matteo Renzi must convince Brussels and skeptical member countries, led by Germany, to let Italy inject money into a banking sector in dire need of repair by July 29, the date in which EU banking regulators are widely expected to say that Monte dei Paschi di Siena (MPS) will need an emergency injection of capital, thus sounding the starting gun on a rescue package not just for MPS but for the entire Italian banking sector.


THE STATEMENTS

“Everybody has an interest that [Brexit] is prepared carefully, that the positions are clear – and I think it’s fully understandable that a certain amount of time is needed for that”.

Angela Merkel, German Chancellor.

Source: Politico, 20/07/16.

“Turkey is a candidate country and a key partner for the European Union, and therefore the EU remains committed to working together with democratic, inclusive and stable Turkey to address our common challenges”.

Maroš Šefčovič, European Commission Vice President.

Source: Politico, 20/07/2016.

“The UK must abide by the four freedoms if it wants to be part of the single market. None of them can be separated from the other”

François Hollande, President of the French Republic.

Source: Politico, 21/07/2016.


NUMBERS

€6 billion

The increase in corporate taxes to which the Spanish government has committed in order to avoid EU sanctions.

Source: EurActiv, 18/07/2016

€5 billion

Monte dei Paschi di Siena’s outstanding junior debt, almost 65% of which was sold to retail clients.

Source: Politico, 21/07/2016

23.94%

The projected reduction in payments for cohesion in the EU’s draft 2017 budget compared to the previous year.

Source: EurActiv, 22/07/2016


Photo Credits CC: Európa Pont



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