POLITICS & POLICY
The October 2 Hungarian referendum on the European migrant relocation scheme is approaching. As expected, recent polling reveals a strong popular opposition to the EU’s relocation system in the country. Hungary’s PM Viktor Orbán promised countries along the borders of the EU military assistance to fight immigration. In addition, he pushed for the establishment of a giant refugee city in Libya with the aim of keeping migrant flows under control. These declarations were released on Saturday in Vienna, at the margin of a meeting of EU member states dealing with the Balkan route. On Monday, Slovakian Prime Minister Robert Fico defined the idea of migration quotas as “politically finished”. In the meantime, in France, in what appeared a desperate attempt to regain popularity, Francois Hollande pledged to shut down the “Jungle” refugee camp of Calais. The French President of the Republic also urged the UK to do more to help France tackle the situation.
The development of Brexit continues to be one of the main concerns for European politicians and institutions. Over the weekend, Prime Minister Theresa May took issue with Boris Johnson, the UK Foreign Affairs Secretary. The bone of contention was the timing of the Brexit negotiations: while on Sunday Johnson claimed that Article 50–the Lisbon Treaty clause regulating exit from the European Union–should be triggered by May 2017 at latest, Downing Street replied that there are no specific details about when the clause will be activated yet, so also confirming that the decision remains the PM’s prerogative. Meanwhile, the President of the European Central Bank Mario Draghi warned, on Monday, about the economic consequences of long lasting negotiations. At the same time, Draghi emphasized the resilience of the EU economy in the face of the Brexit shock. In France, Philip Cordery, an MP in charge of European affairs for the Socialist party, warned that almost every country could follow the British example and go for a membership referendum as a consequence of growing populism.
The politics of austerity are back in the spotlight. In Greece, the Civil servants’ union, ADEDY, took issue with the Government’s plan to privatize state organizations, among which the Public Power Corporation, Attica Metro and the Hellenic Vehicle Industry. The new privatization bill plays an important role in the frame of Greece’s third bailout. Meanwhile, in Thessaloniki, the second biggest city of Greece, bus drivers have been on strike for ten days claiming three months of unpaid wages. To make matters worse, the European Commission’s vice-President Vladis Dombrovskis said that the Syriza government is now expected to introduce harsher austerity measures than it would have been necessary because of its populist stance in 2015.
However, even in Germany the lack of public investments continues to be at the heart of political discussions. In particular, the Social Democratic party vowed to invest €9 billion on the modernization of public schools between 2017 and 2021 in a bid to make education chances more equal across the country. In the UK too austerity is a matter of contention between political parties. In Scotland, the Scottish National Party and the Labour party clashed on the approval of the annual budget. The Labour party accused the SNP to approve a Westminster-forced austerity budget and pushed instead for an increase in the tax rates for higher earners to protect public services. In Liverpool, during the Labour party conference that saw Jeremy Corbyn winning the second leadership contest in a year, the austerity debate overlapped with the Brexit issue. Emily Thornberry, the shadow Foreign Secretary, vowed to replace the foreseeable funding shortfalls for rural areas provoked by Brexit with a £10 billion plan up to 2020.
“It is has been scientifically proved that monetary policy has no sustainable effect neither on economic growth, nor on employment levels […] When it comes to economic development, fiscal policies and productivity are key factors to keep in mind”.
Edward Prescott, winner of the Nobel Prize for Economics in 2004
Source: Die Welt, 26.09.2016
The increase in unemployment in France between July and August 2016.
Source: Handelsblatt, 26.09.2016
The daily amount that the European Commission is ready to provide to refugees in Turkey through a pre-paid debit card system.
Source: Die Welt, 26.09.2016
Photo Credits CC Thierry Kennes