Tue. Dec 7th, 2021


Good morning and welcome to Europe Express.

The European Parliament’s plenary session in Strasbourg will once again go into hybrid mode this week, amid a rise in Covid-19 cases in France and with Belgium implementing a four-day telecommunications culture from today.

Regardless of the format, European Commission President Ursula von der Leyen will have to ask MEPs tomorrow about the results of last month’s EU summit, which included a discussion on Poland on the rule of law. After the FT saw the letters sent to Warsaw and Budapest on Friday, we will unpack what they contain and ask why some MEPs are still dissatisfied with the commission.

Meanwhile, France’s fight against migrant camps earlier this month appears to have done little to deter people from Channel to the UK. We will examine the latest events of the weekend and look at their impact on French-British relations.

And with COP26 now behind us, we will look at the task of translating Europe’s ambitious climate plan in concrete legislation, a task seems as complicated as agreeing on the bloc’s seven-year budget.

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Small step for the rule of law

Brussels has taken a first preliminary step in a process that could lead to financial sanctions for Hungary and Poland over fraud and corruption linked to EU money, but the incremental move has angered those who think the commission is simply buying for itself time, write Mehreen Khan in Brussels.

The FT saw the two messages sent to Poland and Hungary’s envoys to the EU last week, setting out questions for Warsaw and Budapest about possible judicial and procurement corruption to be answered within the next two months.

The letters, signed by the commission’s chief budget officer, are a first step towards action under the bloc’s new supremacy mechanism, which could punish countries that misuse EU taxpayers’ money by freezing funds. At stake for Poland and Hungary are access to billions of EU budget cash, which is a significant part of their national GDP. (This mechanism was the reason why Warsaw and Budapest stopped an agreement on post-EU recycling money for several months.)

Commission President Ursula von der Leyen is under sustained pressure from the European Parliament and within parts of her own college to deploy the mechanism due to Warsaw’s judicial reforms and Budapest’s respect for EU values ​​and anti-corruption laws.

However, these letters do not formally activate the mechanism. They are a precursor to taking the formal legal action if Poland and Hungary are unable to gather sufficient answers within the two-month deadline.

For those who want Brussels to get tough after years of strained relations with Viktor Orban and Poland’s ultranationalist PiS, Friday’s move simply ensures that real pressure will not be exerted until the new year. “The letters will now mean that no further steps will be taken and the process will be delayed until at least mid-January,” said Daniel Freund, a Green MP.

A pending ruling by the European Court of Justice, asked by Poland and Hungary to preside over the legality of the mechanism, which emerges over any conditionality instrument of the law. Commission officials said they would wait for the Luxembourg ruling before formally proceeding with a trigger. An initial EHJ opinion on the mechanism is set for December 2, with the final verdict likely to be printed in early 2022.

Frustrated MEPs have launched legal action against Brussels for the delays. However, the commission’s position has the support of member states that gave von der Leyen a motion of confidence in its approach at a leaders’ summit last month.

While critics argue that Poland and Hungary have won a postponement, it is also unlikely that another pot of cash – recovery fund money for both capitals – will also be approved by Brussels within the next two months. At best, the state of purgatory can act as a de facto financial punishment, even if sanctions remain far away.

Chart of the day: UK indicators

Line Manager of Purchasing Managers' Index, Under 50 = a majority of businesses reporting a contraction showing that UK services activity is expected to show resilience

A survey of British business activity taking place tomorrow will provide a snapshot of how the economy has fared in recent weeks. Last month, the IHS Markit Purchasing Managers’ Index showed improved growth momentum. While analysts expect a delay in November, a positive surprise could feed into expectations whether the Bank of England will raise interest rates in December. (More here)

Back to the channel

Hundreds of migrants continued their efforts over the weekend to cross the Channel from northern France to southern England in small vessels, despite last week’s closure by French police of which Interior Minister Gérald Darmanin set up an illegal camp near called the harbor of Dunkirk, write Victor Mallet in Paris.

Friday night and until Saturday, French lifeboats and coastguard vessels 243 saved migrants in trouble in bad weather in the Channel, according to the Maritime Prefecture responsible for the Channel and the North Sea.

The flow of thousands of migrants, many from the Middle East and Afghanistan, through France and beyond to the United Kingdom has long been a source of controversy between Paris and London, although the tone of the discussions calm down in recent days following the closure of the Dunkirk camp and a video meeting between Darmanin and his British counterpart Priti Patel.

French President Emmanuel Macron said France needed to step up cooperation with the British, even though they were “swinging between partnership and provocation”.

He said in an interview with the local newspaper La Voix du Nord that he would seek to introduce reforms to the migration system when France holds the EU presidency in the first half of next year.

“If the [migrants] “Whoever wants to go to Britain has family there, it’s about regrouping families,” Macron said. “But if they are victims of human trafficking, we need to break that system.”

French officials say 31,500 migrants have left the north coast of France so far this year, and 7,800 have been rescued while seven have died or disappeared. Last week, French sports and clothing retailer Decathlon said it would no longer sell kayaks at its stores in Calais and Grande-Synthe near Dunkirk because they had been used by migrants for dangerous attempts across the Channel.

Secret migration to France and other EU countries is a hot topic in the campaign already underway for next year’s French presidential election, with far-right prospective candidate Éric Zemmour calls for migrants to be “sent home”.

Green Gordian knot

Brussels’ Green Deal legislative blitz has barely gotten off the ground, but already appears to be one of the most complex contiguous packages of measures ever undertaken in the EU, writes Mehreen Khan.

Unlike most of the legislation proposed by the European Commission, the group has more than a dozen green measures – baptised “Suitable for 55” – runs the risk of falling into a bean-counting exercise over where the best emissions across countries and sectors can be reduced.

“Nothing will be agreed until everything is agreed,” said one senior diplomat, reflecting the mantra that characterized the bloc’s Brexit negotiations.

The green package is a unique proposal for legislators in the council and parliament. The 13 separate files, ranging from targets for renewable energy, transport regulation and new carbon taxes, were complexly designed by the commission to add to the magic figure of a 55 percent reduction in CO2 emissions by 2030.

But as lawmakers begin to make progress with the low-hanging fruit in Fit For 55, some realize that it may be impossible to agree on views on laws when the future of others is in the air. If parliament or council decides to water down some measures, “the shortfall will have to be made up for by strengthening other parts”, a commission official warned.

The biggest bottleneck in the whole package is a plan to extend the EU’s carbon pricing system to consumer-oriented sectors such as cars and buildings. The expansion has the support of Germany and the Netherlands, but has met with resistance from France and southern EU countries to punish poorer households that will have to bear higher costs.

If the expansion of the emissions trading scheme is scrapped, the burden of emissions cuts will have to shift to other sectors.

One diplomat said the divergent nature of the laws meant that the negotiations on Fit For 55 “would end like the EU budget” – a reference to last-minute negotiations where countries negotiate their payments and commitments.

To help unblock talks, some countries have asked Brussels to provide its secret formula for picking up emissions from each piece of legislation. But as with budget talks, the commission is unwilling to disclose its calculations for fear of encouraging more horse trading over a package of measures in which it says “balance” is key.

What to watch today

  1. The European Parliament returns (in part) to Strasbourg for its full session

  2. Parliament’s Internal Market Committee votes on the Digital Markets draft law

. . . and later this week

  1. EU affairs ministers meet tomorrow in Brussels

  2. EU and Asian leaders take part in video conference on Thursday and Friday through video conference

Remarkable, quotable

  • EU-Belarus negotiations: Ingrida Simonyte, Prime Minister of Lithuania said that talks between EU officials and Belarusian representatives on how to improve the situation of migrants gathered at EU borders should be held “in coordination with Latvia, Lithuania and Poland to avoid partial solutions that do not lead to” a significant improvement will not result from the situation ”.

  • Covid riots: Dutch cities including Rotterdam and The Hague was seized by violent protests against the closure over the weekend – and even initially peaceful protests in Brussels got out of hand yesterday, forcing the police to deploy water cannons and tear gas.

  • Bulgarian President: Exit polls in Bulgaria indicate that incumbent Rumen Radev is the clear winner in the country’s presidential run-off. Radev is seeking a second term of five years in the largely ceremonial post.

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Today’s Europe Express team: mehreen.khan@ft.com, victor.mallet@ft.com, valentina.pop@ft.com. Follow us on Twitter: @MehreenKhn, @VJMallet, @valentinapop.





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