Decision to ban AstraZeneca constitutes an act of political panic that will be hard to undo. Will lead to thousands of more deaths, longer lockdown, lower economic growth, and give people a rational reason to oppose European integration. -
Ursula von der Leyen's loose talk about export bans has so far had only one tangible effect: UK is now doing deals to keep the entire vaccine supply chain in the country.
Eurogroup deal is not good for Italy and southern Europe. As so often before, we see an Italian finance minister agreeing to a deal that is ultimately not in his country’s best interest. Momentum for coronabonds is fading.
Why does everybody in Brussels seem to buy into the notion that zero-tariff deal requires regulatory alignment on grounds that UK is geographically close? This is mad. -
Italy, Spain folded. Recovery plan will be the German version: a temporary increase in EU budget, through guarantees, then leveraged, disbursed as loans. EU doesn’t do macro. Only credits.
it appears von der Leyen did not consider supply chain shortages likely to arise for EU vaccine producers in the event of an export ban to UK. Looks like another Art 16 episode. -
Big tactical mistake by Italy and Spain to agree Art 122 as legal basis for recovery fund. The way the EU works, this will ensure that most of the money will come in the form of credits. -
Really weird seeing Germany discrediting AstraZeneca, and then considering Russian vaccine that does not meet any EU standards. Looks like they are panicking.
Absolutely unbelievable that EU finance ministers are considering Jeroen Dijsselbloem for Lagarde’s old job at the IMF. He shares responsibility for some of the biggest macro policy errors of our time. -
Smear campaign in Germany against AstraZeneca has been hugely successful. As people can't choose their vaccine, many are now not turning up for appointments.
Merkel is not only defending the slow rollout of vaccines. She is actively celebrating it as a European way of doing things. This will go down as perhaps her biggest political misjudgement. -
Have the buffoons who seek a vaccine export ban considered that a vaccine trade war would end up killing Europeans as well, and also kill the 2021 summer holiday season at a massive economic cost? -
EU leaders are back to their usual habit of talking privately to Putin to secure their own gas deals. The EU's unity over Ukraine is an optical illusion that will become increasingly hard to maintain. -
There is a group of German politicians in the pocket of the Kremlin, like Gerhard Schroder. This has always been so. What is perhaps less known is that one of them is Armin Laschet, the new CDU leader.
Other real bullet is the German court's explicit accusation that ECJ transgressed its competences, and is therefore to be ignored. Will open floodgates. This is the German version of Brexit.
So Germany after all signalled that it would not let UK military planes use German air space. That and Biden's small invasion, even after its retraction, are messages that will encourage Putin. -
we have reached the moment where EU is becoming more scared of an unconditional Brexit extension than a no-deal Brexit. I don’t think Macron is bluffing. Even in Germany the mood is shifting.
Big news from failed European Council is that the south is finally ganging up against the north. Last time, everybody wanted to be on good terms with Merkel. No longer so. -
Eurogroup deal is not good for Italy and southern Europe. As so often before, we see an Italian finance minister agreeing to a deal that is ultimately not in his country’s best interest. Momentum for coronabonds is fading.
The swiss Nein to the framework agreement with the EU is Brexit all over: the issues were freedom of movement and dynamic alignment. EU keeps doubling down, and gets the same results. -
EU's focus on Erdogan is far too narrow. He is playing a bigger game. Not confronting Turkey is probably the biggest failure of EU diplomacy right now.
Italy, Spain folded. Recovery plan will be the German version: a temporary increase in EU budget, through guarantees, then leveraged, disbursed as loans. EU doesn’t do macro. Only credits.
EU working on plans where member states guarantee EU debt which is then lent back to member states. Sole purpose is to create illusion of EU involvement. EU member states in the end still responsible for their debt. -
Europeans did not see it coming when Trump got elected in 2016. They misjudged Brexit. And this year they misread US politics once again. A clear pattern. -
Italy, Spain folded. Recovery plan will be the German version: a temporary increase in EU budget, through guarantees, then leveraged, disbursed as loans. EU doesn’t do macro. Only credits.
EU is always willing to pay lip service to human rights, but in the end always ends up colluding with abusive regimes to protect exports. That's also the spirit of the EU/China investment pact
The nine countries calling for a eurobond should consider issuing a eurobond among themselves - and then get the ECB to buy it. ECB can hardly refuse. -
It is hard to overestimate how desperate Germany is for Nord Stream 2 to come online. If not, Russia could retaliate by cutting off existing supplies, and trigger an immediate energy emergency. Germany is already dependent on Russia for energy.
Spain's decision to forego loans from recovery fund makes sense. Why go for a conditional loan when there is no shortage of unconditional ones? There is a glut of EU lending. Not needed. -
German economic strategy is unbelievably toxic: double down on fiscal surpluses and export-led growth, frustrate EZ reforms, undermine competition policy. This, not Trump or Putin, is the engine of the EU's existential crisis.
Now China is threatening restrictions on German car imports. The world has discovered that it is easy to blackmail Germany and the EU because of their addiction to net exports.
Merkel and Macron seriously misjudged the revolt of the Baltic states and Poland at yesterday's European Council. Idea of resuming high-level talks with Putin at this point is wrong on so many levels. -
what will become obvious in Italy but is not yet reflected in the media coverage, is just how the small the recovery fund fund is in relation to the fall in GDP.
Germany made itself dependent on Russia for energy and on China for telecoms. This is what informs German foreign policy right now. Don't be fooled by changing rhetoric.
The tragedy of EU is that it will only offer real concession in Brexit negotiations when a no-deal Brexit looks certain. At that point, it might be too late. -
It is probably best to look at the new Conte administration as another technical government - Monti-style. These governments end up radicalising the electorate.
EU messed up its vaccine strategy, and doesn't want to admit it. Instead of playing the blame game, how about just solving the problem and build production capacity?
EU’s demand of full regulatory alignment and access to UK fishing waters for tariff-only deal is unreasonable - and unsustainable too. EU unity would not hold if that position was pushed to limits.
Dutch parliament has declared China's suppression of the Uighur Muslims a genocide - a challenge to the EU's pro-China consensus that disguises itself as pragmatism.
German papers report that the German interior minister is about to dismiss the head of the cyber security agency over Russia connections. In our public story, we wonder whether this is connected to the railway sabotage.
Eurogroup deal is not good for Italy and southern Europe. As so often before, we see an Italian finance minister agreeing to a deal that is ultimately not in his country’s best interest. Momentum for coronabonds is fading.
Conflict between EU and Germany is not about primacy of EU law. It's much worse. Karlsruhe regards itself as the arbiter of where EU's competences start and end. -
Interesting that Germans, for the first time, believe that no-deal is possible. Previous assumption was that House of Commons would frustrate it. Negotiations now more likely.
The financial crisis is not going to be limited to the UK. In our main story this morning, we argue that the euro area is where the house is most likely to burn. -
If EU agrees to standard state aid clauses like those in EU/Japan or UK/Japan treaty, there will of course be a deal. If not, my expectation is that Boris Johnson will walk.
Germany has no intention to pass reforms as a condition for receiving money from recovery fund. Also using most of the money for existing projects. It is as if the rules were intended only for other countries.
Be wary of EU headline numbers. Eurogroup package is not €550bn. Recovery plan won’t be €1.5tr. Adds categories that cannot be added - lending capacity, credits, grants. Purpose is to impress the gullible.
UK's refusal to grant diplomatic status to EU mission in London is silly and vindictive. What this is telling us is that there will be no strategic relationship between the two sides for the foreseeable future.
Europe's sovereign debt crisis never really ended. It got covered up by QE. When QE ends, the only thing that can save Italy is productivity growth. If that does not happen, the debt crisis will rear its ugly head. -
If the EU fails to respond to the Belarus crisis adequately, it will have to confront a new form of euroscepticism - one that opposes it on moral grounds. -
In our public story we look at a report that runs counter to many Brexit narratives. The UK is leading the EU in tech investment by a large margin, and the gap is widening.
A blockade constitutes an act of war. Johnson's accusation yesterday is probably the biggest verbal escalation in the Brexit wars we have seen to date. Not an environment conducive to a deal. -
In our public story we talk about Olaf Scholz' desperate attempt to deflect attention away from his duplicitous manoeuvres to frustrate arms sale to Ukraine, and discuss the possible reasons.
German energy policy has been a mess under Merkel. Now it is being squeezed from two sides: US pressure to drop Nordstream 2 and Brussels pressure for a 55% CO2 reduction target. Germany is not prepared for this. -
the main effect of the entire second referendum campaign has been to increase the probability of a no-deal Brexit - which is now very high. Whatever you might think of its merits, it was first and foremost a tactical miscalculation.
Looking at the list of changes under any Brexit deal scenario, one is reminded of how much was lost by the Remainers' refusal to support a softer version of Brexit.
Good news is that AstraZeneca is back in Germany from today. Bad news is that it comes with a health warning. What is the point of that, considering that people don't have a choice? Vaccines are not cigarettes. -
Unsurprisingly, that photo-op with Erdogan turned into yet another PR disaster for EU diplomacy. Michel and von der Leyen should have cancelled their visit after Erdogan's latest crackdown.
Not surprised to hear that Downing Street is doubling down on Brexit transition deadline. Covid-19 makes a WTO Brexit relatively less costly because most of the costs are already incurred.
Russia is filling the Nord Stream 2 pipeline, and cutting throughtput of other pipelines. This is completely unsurprising - the price the EU pays for letting Germany pursue selfish interests. -
There are many ways of not solving the problem. EU goes through them one by one: Blame games, empty threats, smear-campaign, who-gets-what discussions. How about just focusing on the problem itself? -
Cummings' story is another reminder - after 2nd referendum debate - that we journalists should not mix up what we want to happen with what we expect to happen.
Dutch parliament has declared China's suppression of the Uighur Muslims a genocide - a challenge to the EU's pro-China consensus that disguises itself as pragmatism.
The EU excels at solving political problems, but not actual problems. The habit of kicking the can down the road has found its limits during a pandemic. -
Germany has no intention to pass reforms as a condition for receiving money from recovery fund. Also using most of the money for existing projects. It is as if the rules were intended only for other countries.
In my latest column I argue that the EU got its vaccination strategy wrong because it did kind of a Brexit deal with the pharma industry: losing sight of the picture in turn for some insignificant short-term gain.
EU’s €1.5tr recovery fund will be scam unless it is fully funded and the money is earmarked to support investments that would otherwise not be made. Not going to happen. -
Remainers made one strategic error after another: Project Fear, rejection of May’s deal, 2nd ref campaign, and futile fight to take no-deal off the table. It’s checkmate now. -