Mon. Jan 24th, 2022

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The Netherlands’ new cabinet will introduce itself to its EU counterparts in the coming weeks, but Covid-19 could stop new liberal finance chiefs. Sigrid Kaag make it to Brussels for Monday’s Eurogroup. We profile Kaag and whether she can overthrow years of Dutch resistance to the EU’s economic integration.

Speaking of glass ceilings, says Ursula von der Leyen, President of the European Commission the Financial Times she is hopeful that Berlin’s new government will abandon long-standing opposition to rules to promote female representation in corporate boardrooms.

In Spain, Madrid’s Conservative leader Isabel Díaz Ayuso has filed a lawsuit against the socialist government of Pedro Sánchez over a decision to prioritize four regions in the first installments of EU recycling funds.

And while Westminster is digest by Prime Minister Boris Johnson’s “bring your own booze” closure “employment”, Brexit Negotiator Liz Truss takes her EU counterpart Maros Sefcovic away from the hustle and bustle to an estate in Kent for a two-day stay to iron out their differences.

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Liberal vs Ordoliberal

The Netherlands’ new finance minister has started life in her job in conditions that are virtually 2022: in quarantine and with police security guarding her home, writes Mehreen Khan in Brussels.

Sigrid Kaag, former leader of the Dutch Liberal Democrats (D66), was the only minister who was not present at the Netherlands’ cabinet inauguration this week, after testing positive for Covid-19 days earlier. Instead, her curse was done in ceremony over video call.

In another sign of our time, additional police security and surveillance cameras were installed around Kaag’s house yesterday after a man waving a burning torch threatened her home last week. This is the latest case of intimidation and violence targeting Dutch ministers during the pandemic.

As the country’s first female finance minister and a sought-after internationalist, as well as pro-European, Kaag provoked many objections from her political opponents on the far right, who often erupted against her “cosmopolitan elitism”.

The 60-year-old polyglot, who is married to a Palestinian and has children of mixed race, also spoke strongly about racism in the Netherlands – which makes her a hate figure for the anti-Islam politician Geert Wilders.

But Kaag’s political opponents could not stop her from taking D66 to a surprise boom in elections last March, which turned years of stagnant support into becoming the second largest party in the country behind Mark Rutte’s right-wing VVD. Kaag celebrated the election triumph by dancing on the tables – literally.

The place of the Ministry of Finance is a switch for the former UN diplomat, who served as Minister of Trade and then Minister of Foreign Affairs in the last government. She will take over the financial position from the hawk Christian Democrat Wopke Hoekstra, who made his name in Brussels. lead an alliance of smaller northern countries to stifle French plans for fiscal federalism.

Kaag’s instincts are likely to be less hostile on issues such as budgetary reforms, joint EU lending and fiscal risk-sharing. Her presence around the Eurogroup table should help rebuild trust with southern capitals they have often found in Hoekstra’s line of fire. In a subtle act of trolling, Hoekstra becomes the Netherlands’ new chief diplomat as Minister of Foreign Affairs.

It remains an open question how far Kaag can lead an intellectual revolution in the Dutch Ministry of Finance, to overthrow his stubborn ordoliberalism and deep-seated suspicion of ever closer economic union. Significantly, the new coalition agreement made only vague statements about the future of the Stability and Growth Pact and the EU’s pandemic recovery fund.

Kaag could be forced to miss her first Eurogroup meeting next Monday in Brussels, as her quarantine should only end the day before. Even if she does, her fellow ministers and the rest of Brussels will probably have to wait a while longer before the Netherlands reveals its hand on the future of the eurozone.

Chart of the day: Tout est nickel

Line graph of LME 3-month price ($ per ton) showing that nickel reached its highest price in 10 years

The cost of nickel, used in batteries for electric vehicles, rose by as much as 4 percent yesterday to a 10-year high of $ 22,745 per tonne. The metal has risen 12 percent in the past month due to rising demand for EV and declining global inventory levels. (Read more)

See you in court, Pedro

The EU’s € 800 billion coronavirus recovery fund, an epoch-making attempt to transform the bloc’s economy, is on its way to the courts in Spain, writes Daniel Dombey in Madrid.

The region of Madrid, Spain’s economic power station, announced yesterday that it has launched a lawsuit against the national government for distributing funds to four regions “without any explanation” as to why others were not included.

The Supreme Court case is the latest clash between Isabel Díaz Ayuso, the Conservative leader of the greater Madrid region, and Pedro Sánchez, Spain’s Socialist Prime Minister. They have previously argued over coronavirus restrictions. This fight ended with Díaz Ayuso’s emphasis re-election in a flash poll last May.

Madrid are now complaining about what he says is the unfair use of € 9 million in recovery funds to subsidize Navarre, Valencia, Extremadura and the Basque Country – the first three of which are all socialist-led.

The issue may matter more than the relatively small amounts involved indicate. Spain’s regions will play a major role in deciding the fate of the once-in-a-lifetime opportunity represented by the recovery fund. The country’s regions are on track to be big winners of the fund, which receives about € 21 billion from Spain’s € 70 billion grants.

The Madrid action underlines Díaz Ayuso’s status as perhaps Sánchez’s fiercest enemy within the opposition People’s Party. This is not necessarily good news for party leader Pablo Casado, who has been battling with Díaz Ayuso for much of the last few months over control of the PP’s Madrid machinery, and who slipped the ballot boxes as the feud continued.

Chevening charm offensive

Chevening House in the Kent countryside will be the setting today for British Foreign Secretary Liz Truss’s latest round of Brexit talks with her European Commission counterpart Maros Sefcovic. Andy Bounds in Brussels.

This is the first personal meeting between the two after Lord Frost, the belligerent former Brexit minister, cease before Christmas with a broad side against the government’s Covid and tax policies.

The two will try to find common ground on post-Brexit trade frictions between Britain and Northern Ireland, with Truss hoping for the atmosphere of her 17th-century “grace and favor”. estate south of London will charm Sefcovic to further concessions.

The commission says suggestions made in October will cut customs checks in half and other food and animal checks by 80 per cent, but London says that is not enough. “I will present practical, reasonable solutions that start from these fundamental principles, with a view to a plan for intensive negotiations,” Truss said.

Talks will be spread over three sessions with plenty of time for walks on site. Tonight, the delegations are eating at a pan-British festival of Scottish smoked salmon, Welsh lamb and Kent apple pie. Perhaps the Northern Ireland contribution will be saved for a famous Ulster fry breakfast.

Officials briefed on the talks believe the UK’s proposals are similar to those already tabled and rejected by the EU, including a self-certification system that will only exempt goods destined for Northern Ireland from checks.

Truss will also try to shift the debate to a bright new future on foreign policy and research collaboration. But Sefcovic, a solid Slovak who has more than a decade of mastering the little ones of Brussels behind him, is likely to bring the discussion back to sausages and supermarket supplies.

What to watch today

  1. Russia-Ukraine talks continue today at OSCE in Vienna

  2. British Foreign Secretary Liz Truss receives EU Brexit commissioner Maros Sefcovic

  3. EU foreign ministers meet for informal council in Brest, France

  4. Dutch Prime Minister Mark Rutte meets with German Chancellor Olaf Scholz in Berlin

Remarkable, quotable

  • Search for Putin: The head of the International Energy Agency accused Russia suffocated gas supplies to Europe at a time “of heightened geopolitical tensions”, implying that Moscow was producing an energy crisis for political purposes.

  • Royal case: A civil lawsuit accusing Britain’s Prince Andrew of sexually abusing one of Jeffrey Epstein’s accusers will be allowed to proceed, a judge in New York ruled. The prince’s lawyers failed to convince the judge that their client was covered by a confidential 2009 settlement.

  • All square: French Conservative Valérie Pécresse agrees with President Emmanuel Macron in the second round of April’s presidential election, according to the latest poll by Elabe, Reuters reports.

  • Austrian passport: Sarah Ebner of the FT write about her journey to obtain an Austrian passport, after Vienna changed its laws allowing descendants of Holocaust survivors to apply for citizenship.

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