EU

Duncan Robinson

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After months of agonising, the European Commission’s investigation into internet platforms is set to arrive with a bit of a whimper.

Fears of an all-encompassing inquisition into internet platforms – with commission officials bursting into the offices of Facebook and Google like a Monty Python sketch – have not come to pass.

Monty Python

"Nobody expects the European Commission."

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By Mehreen Khan Read more

Duncan Robinson

Although the Commission has yet to propose the bulk of its digital single market reforms, in the Council the teams are already lined up.

On the one side are those member states who will welcome the proposals, which are aimed at boosting crossborder trade online. Read more

Jim Brunsden

By Mehreen Khan in London

The International Monetary Fund’s latest recommendations on Greek debt relief have leaked.

Yesterday, ahead of the latest meeting of eurozone finance ministers on May 24, the IMF repeated it would take part in Greece’s €86bn bailout only if its European partners could prove “the numbers add up”.

A key part of this calculation is for the fund to be fully assured that Greece’s debt mountain is finally placed on a sustainable downward trajectory. Read more

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Gold prices down, sterling sharply up, bookies chalking Brexit at the longest odds since the campaign began (around 3/1). Has the Remain side in Britain’s EU referendum campaign made a decisive breakthrough?

Money is certainly moving against Brexit. A mini-trend of moderately better polls for the pro-EU side was buttressed on Wednesday by an ICM phone survey putting Leave 18 points behind. Referendum campaigns can break sharply as the public begin to seriously engage. Remain campaigners will be hoping this is that moment. Indeed after firing-off their big guns – the US president, macabre Treasury reports, Bank of England recession warnings – they may also be thinking: what took so long?

If a lead is sustained, two factors potentially play a role. ICM picked up a swing to Remain among Conservative voters, with around 60 per cent backing David Cameron’s position. They are still open to changing their minds, but for now the increasingly vicious Tory infighting seems to be encouraging a bit more loyalty to their prime minister. The second is that Remain are faring well on the economic argument – and that is where Mr Cameron thinks he will clinch the vote.

Now for the caveats. The Ipsos MORI poll on Wednesday could be an outlier. And even if it isn’t, why believe it? Pollsters called the last UK and Israeli elections dead wrong. Even pollsters are wary of polls these days. A debate over phone (better for Remain) versus online surveys (better for Leave) rages on in Britain. And in any event predicting behaviour in this vote is hard because there is no good quantifiable precedent. Read more

Jim Brunsden

Britain: 2016

Should an extraterrestrial land on Earth tomorrow and decide to base his decision on where to live solely on economic forecasts provided by the European Commission, there’s a fair chance they’d pick the UK.

In country-specific recommendations published yesterday for almost all EU countries, Britain comes out looking pretty good, with a “dynamic” economy, “strong” household balance sheets and a banking sector whose resilience “continues to improve.” Even the risks to the economic outlook are presented as being contained, or mitigated by the government’s “wide-ranging” reform agenda.

All well and good. The only perplexing thing is, how does this fit with the altogether less peppy assessment that the EU Commission made this time last year? What could be happening to change their view? Read more

Duncan Robinson

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Europe’s leaders have squabbled over nearly every policy aspect of the refugee crisis, apart from one: deportation. Read more

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By Aleksandra Wisniewska

In March, Europe’s leaders gambled their political futures, diplomatic credibility and the lives of hundreds of thousands of migrants on a deal with Turkey.

After two months of raking over the terms of the deal, a simple question can be asked: has it worked on the ground? These four charts demonstrate the good, the bad and the ugly of the situation on the frontline of Europe’s refugee crisis.

The refugee crisis, at least when it comes to the Aegean, shows signs of abating. Arrivals to Greek islands dropped significantly from an average of 2,000 per day to under 100.

This does not mean Europe’s migration crisis has gone away. Read more

Peter Spiegel

Monday was supposed to be the day when eurozone finance ministers flew to Brussels for an emergency eurogroup meeting (just their first of 2016!) to agree a way forward on Greece’s star-crossed €86n third bailout. But despite weeks of intensive talks, negotiators are no closer to a deal then they were when they were sent back to Athens two months ago.

Last night, Christine Lagarde, the International Monetary Fund chief, sent a letter to all 19 finance ministers ahead of the Monday meeting with her demands: drop all the talk about new austerity measures and quickly agree a plan for debt relief so that a deal can be met before a possible Greek default in July. We got a hold of the letter, and have posted a news story on its contents here. But as is our practice at the Brussels Blog, we thought we’d offer up an annotated version of the full text, sent to national capitals last night:

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The three EU chieftains– Jean-Claude Juncker, Donald Tusk, and Martin Schulz – swapped the corridors of power in Brussels for the halls of Rome’s Capitoline Museums on Thursday night, but the magnificent setting only seemed to deepen their gloom about the state of European integration.

The trio was in the Italian capital ahead of Friday’s ceremony to deliver the prestigious Charlemagne award to Pope Francis at the Vatican. But first they had to debate the future of Europe at a time when it appears to be in serious jeopardy amid the rise of populism, weak economic growth, and, the migration crisisRead more

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Another big Brussels week on migration is upon us. The flow of migrant boats to Greek islands has almost stopped, but Brussels is only in the foothills of the political trek to make the Turkey deal stick and the EU asylum system work properly. The European Commission will try to chivvy the pace on Wednesday with three contentious initiatives on visas, borders and asylum rules.

1. An overhaul of the Dublin asylum system

This revamp of the EU’s asylum rules is well-flagged but still hot politics. A Commission discussion paper last month raised two main reform options – and we understand the final proposal will be a blend of the two. So the first EU country an asylum seeker enters would still handle their claim (a crucial Dublin principle for immigration-wary northern states and the UK). But if a frontline state receives 150 per cent more claims than its set asylum capacity, a quota system automatically kicks in to distribute migrants around Europe (which is more to the liking of Greece and Italy). It is a halfway house that leaves plenty for EU states to fight about. There is perhaps even some fodder for Brexit campaigners (the question of whether Britain can stay in Dublin but remain exempt from automatic burden sharing will not be answered in the proposal). Read more

Peter Spiegel

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Barack Obama arrived last night in the British capital, where he is expected to give his full-throated support for the UK to remain in the EU – an intervention that is as highly anticipated as it is fraught with political danger. There is no set-piece speech the White House has engineered; instead, the US president has offered up an op-ed in today’s Daily Telegraph, and administration officials say he will speak “as a friend” if he is asked about the issue during his two-day stay. Which is something of a foregone conclusion, particularly with a Downing Street press conference set for this afternoon. Read more

Jim Brunsden

Wolfgang Schäuble’s destiny is to be a man who keeps having to listen to people talking about things he doesn’t want to hear about.

Germany’s finance minister, together with his counterparts from around Europe, will gather in Amsterdam on Friday to discuss, among other things, the future of the Banking Union — the major policy push undertaken by the euro area over the last few years to centralIze how it oversees its banks.

But like a band with growing musical differences, ministers can’t agree on what the next steps of the project should be, with Mr Schäuble playing the role of the blues purist who wants the group to move away from grand concepts and get back to basics.

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Peter Spiegel

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There has been no shortage of reasons for outrage over last month’s refugee return deal between the EU and Turkey that, for now, has slowed the influx of migrants into Greece to a trickle. The UN believes the expulsion of migrants arriving in Greece may be illegal under international law. Human Rights Watch yesterday found the deportations “riddled with abuse”. Others have been more upset about the sweeteners given to Ankara in exchange for its cooperation in the crackdown, including €6bn in new aid and the unfreezing of negotiations over Turkish membership in the EU – which nearly upended Cypriot reunification talks and has given Brexiteers a new tool to scare UK voters.

But there may not be an issue as politically sensitive as the EU concession to provide Turkish nationals visa-free travel in Europe as early as June. Yesterday Dimitris Avramopoulos, the EU’s migration commissioner, said Brussels will issue a progress report on May 4 outlining how far Ankara has gone in meeting 72 benchmarks required before the short-term visits can be allowed. “No visa liberalisation can be offered if all benchmarks are not met,” he intoned at a midday news conference.

There is increasing nervousness in several EU capitals, including Paris and Rome, that Turkey may actually clear those hurdles – or, if they’re close, the European Commission will give Ankara a pass and force national governments to decide what to do about the visa deal. That would be awkward for domestic politics in several EU countries; critics are already complaining that a refugee crisis that has caused an anti-immigrant backlash in some quarters because of the high number of Muslims arriving in Europe will have to be solved with a Turkey deal that will allow even more Muslims to travel to Europe. Some governments have begun looking at measures that would allow them to hedge their promise to Ankara, including safeguard clauses, extra conditions or watered down terms. But Ahmed Davutoglu this week made it clear: if there’s no visa-free travel deal, “no one can expect Turkey to adhere to its commitments.” Read more

Jim Brunsden

Meeting room in the Dutch maritime museum where finance ministers will gather on Friday

Coming to terms with painful truths can take a long time, and the EU’s struggle to acknowledge an original sin built into its banking regulations is a case in point.

It’s a problem that dates back decades, and that finance ministers are going to tentatively grapple with at an informal meeting in Amsterdam this week. It centres on the regulatory treatment of sovereign debt, and we’ve got our hands on the options paper prepared for ministers by the Dutch presidency and posted it here.

While the subject may sound arcane, it’s extremely politically charged. The latest ructions over how to treat bank holdings in government debt are fanning the already hot flames of discord between Rome and Berlin, with Brussels as ever squeezed uncomfortably in the middle.

So what’s the problem? The EU has highly detailed legislation covering different aspects of banks’ activities, in order to ensure that institutions have enough financial reserves to cope with the risks that they are taking with their investments.

The rules cover everything from mortgage lending to complex trading in derivatives, but they have one glaring loophole, namely that many of the normal requirements, such as capital rules and exposure limits, don’t apply to banks’ purchases of European governments’ own debt. Read more

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When the European Commission first opened up proceedings to examine whether Poland had violated European norms, it said they would wait until constitutional scholars at the Council of Europe examined the situation first. Well, it’s been a month since the Council slammed the new government in Warsaw – and Frans Timmermans, the Commission vice-president in charge of rule-of-law issues hasn’t done anything yet. The European Parliament yesterday did its best to make sure he doesn’t forget.

MEPs yesterday voted 513 to 142 in favour of a motion censuring Poland’s right-wing, conservative Law and Justice (PiS) government and ordering it to reverse changes to the country’s top court that have left it paralysed. As procedural slaps on the wrist go, it was relatively strong. And while it is legally little more than a strongly-written letter, it also called on the Commission to push ahead with its unprecedented probe into Warsaw’s “threat to constitutional democracy” – which technically could result in sanctions. Read more

Peter Spiegel

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Alexis Tsipras, the Greek prime minister, in between meetings at his office last week

When Wikileaks published a transcript last week of a private teleconference between top International Monetary Fund officials discussing Greece’s bailout, the thing that got Athens the most worked up was a prediction made on the call by the IMF’s European chief Poul Thomsen: he forecast there would be no decision on the programme’s way forward until Greece ran out of money in July. Yesterday, bailout negotiators left Athens after yet another fruitless week of talks. And while they vowed to resume negotiations during the IMF’s spring meetings in Washington, which start on Friday, the differences between the main players remain so wide that Mr Thomsen’s prediction may not be too far off the mark.

For those who only follow the Greek crisis episodically, the fact that the eurozone is facing yet another make-or-break bailout deadline may seem baffling. Wasn’t the Grexit car wreck avoided last July after a series of all-night summits ended with a €86bn rescue deal? Yes and no. The July deal gave Greece €13bn of the €86bn almost immediately, after Athens agreed to quickly pass an overhaul of its value-added tax system and make cuts to pension benefits. But much of the heavy lifting was put off until the new bailout’s first quarterly review – including, critically, a decision by the IMF on whether to participate in the bailout at all.

Casual followers may read the words “first quarterly review” and assume that such a review would be completed at the end of the first quarter. Which, in the case of the new Greek programme, would have meant October. But it has become an unfortunate custom that “quarterly” reviews of Greek bailouts can actually stretch over several quarters – the fifth quarterly review of the second Greek bailout went on for nearly a year. The current “quarterly” review has now gone on for about six months after the first quarter ended. Read more

Christian Oliver

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Margrethe Vestager, the Commission's competition chief, and her mobile phone

It often seems that the European Commission’s only real game plan regarding Brexit is to hope that there won’t be any unfortunate spats involving the UK right in the middle of campaign season. That won’t be possible, and there is every sign an imminent decision over whether to allow consolidation among British mobile phone network operators could turn into a political football.

Margrethe Vestager, the EU antitrust chief, has been known to argue that cutting the number of players from four to three in any one market saps competition and, in the case of telecommunications, allows companies to increase phone bills. Her hard-line stance on a 4-to-3 Danish telecoms merger last year suggests she’s also looking to block the £10.5bn purchase by CK Hutchison’s Three of Telefónica’s O2. Or at the very least, she will impose stinging concessions.

In less combustible times, the politics would be more navigable. Ofcom, the UK regulator, has already announced it is hostile to the deal. Just this morning, Britain’s competition and markets authority weighed in, writing to Ms Vestager that the merger a “significant impediment to effective competition” in the UK’s mobile phone market. Ms Vestager could quite easily argue that she represents the sort of “more competitive Europe” that David Cameron, the British prime minister, says he wants. She could argue she is simply protecting the little guy from big corporates who will put his phone bills up. Read more

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  © REMKO DE WAAL/AFP/Getty Images

Back in 2005, it was Jean-Claude Juncker who caught the mood after Dutch and French voters spurned a draft EU constitution. “Europe is not in crisis: it is in deep crisis,” he declared. He has gone from Luxembourgish premier to European Commission president since then – and the Dutch are back to saying No. This time team Juncker relayed that the president was just “sad” about the rejection of the Ukraine trade deal. And for europhiles that pretty much sums it up.

This has been a long journey. Referendums on European issues, from the 1970s on, largely acted as a rite of passage: membership, enlargement, monetary union. They then morphed into more wide ranging political guarantees for eurosceptic voters (in Denmark, Britain or France) wary of where pro-European politicians may lead them. Some would call them a reality check.

More recently they have grown to be not just domestic political matters, but negotiating tools or instruments of coercion abroad. This is the weaponisation of referendums and a few EU leaders have been accused of the tactic: Greece’s Alexis Tsipras over bailout terms, Britain’s David Cameron to win a better deal, and Hungary’s Viktor Orban over migration quotasRead more