Wednesday, June 20, 2018

That’s Mr. President to you: Manu is not amused.

MESEBERG IN 20 SECONDS: The Union’s two biggest countries did nothing short of bridging the two banks of the stream of the EU’s economic and fiscal policy at their summit in Meseberg on Tuesday. The list of measures France and Germany support includes a eurozone budget (for those in love with detail and nuances: “within the framework of the EU,”) and a new role for the eurozone’s ESM bailout fund (name t.b.d.): It should serve as a backstop for banks and countries in need of cash in the short term.

So easy: Angela Merkel may have shrunk Emmanuel Macron’s eurozone budget from massive to a pilot project, but Manu’s still happy. “No Franco-German agreement had ever been reached on the eurozone,” he tweeted. “What do we have today? No eurozone budget. What are we going to have tomorrow? A eurozone budget.” Merkel’s take, only slightly less enthusiastic, here: “We are, broadly speaking, opening a new chapter.” The Meseberg declaration here.

Jean-Claude Juncker’s take: “I am very pleased with the Franco-German paper. This will allow European progress,” the European Commission president told reporters in Meseberg late Tuesday (Reuters has more). “I think that’s a very balanced proposal.” Will the new budget be inside or outside the EU budget? Read the paper “to the millimeter,” Juncker suggested, and you’ll see there is no clear definition. “Overall, this is an important contribution to European progress in many places.”

Matthew Karnitschnig has the full write-up here.

GOOD MORNING. There’s an old rule among euro crisis hacks: The more disappointed economists and think tankers are about a given policy proposal, the better the chance for political agreement among EU governments. The Meseberg declaration itself lacks detail, but it’s almost as if the Franco-German couple was so at ease with each other, they decided to troll the commentariat.

Otherwise, why would this sentence be in there? Merkel and Macron vowed “to start working on the possible introduction of euro CaCs with single-limb aggregation.” I asked a few eminent economists to translate that piece of poetry into layman’s English. One of them was watching Russia vs. Egypt (must have had the same kind of luck in his office sweepstake as I did, but clearly more enthusiasm for it). Another stopped working on CaCs a little while ago and couldn’t remember how many limbs meant what. A third was drinking Champagne and couldn’t be bothered. Fair-weather friends indeed.

Answer (I hope you’re satisfied with mine): Next time a euro country faces a sovereign debt crisis, banks and other private bond-holders will have to pay too and won’t be bailed-out by the taxpayer — call it a haircut. Believe it or not, but coucou, Italy — take that as a coded signal to Via XX Settembre (the Treasury), which will need to be explained to the country’s political supremos at some point soon.

MIGRATION

MACRON TO THE RESCUE: There’s more to the Meseberg meeting: Merkel gave Macron a eurozone budget; he reciprocated with a promise to support her in finding a European solution to her most pressing domestic issue — a battle over migration with her Bavarian frenemies of the CSU. Concretely: He’s going to take back migrants from Germany who previously registered in France. More broadly: There’s going to be another Franco-German bridge over that torrent called migration at next week’s summit.

Germany takeaway: It became harder on Tuesday for the CSU and friends to oust Merkel.

Evidence: The CSU is unhappy with Meseberg, the ministers present at the table included.

VERBATIM: Andrea Nahles, the leader of the SPD — Merkel and Horst Seehofer’s third coalition partner — was in Brussels Tuesday. Our own Vassili Golod was among the reporters she spoke to. What on earth is going on? That’s a question Nahles said she has had to answer more than once during her visit. “Many of my colleagues asked me: ‘What’s up with you guys in Germany?’ Europe’s message for Berlin is: ‘Please come to your senses again,’” she said. “I’m looking forward to passing it on to my arguing coalition partners, the CDU and CSU.”

No great expectations: Nahles said she does not expect a holistic EU decision on migration at the EU summit next week. But she is hoping for voluntary, bilateral agreements between European countries (as per the Franco-German deal above). She’s in the Merkel camp on this issue: “There is much more at stake than just the result of the next election in Bavaria. All this damages Germany’s reputation in Europe.”

RUE DE LA LOI VS. RUE DE LA LOI: Who came up with the “regional disembarkation platforms” idea in the draft conclusions for the European Council next week, handed out on Tuesday to delegations? (The idea is to create centers outside the EU where officials could quickly differentiate between refugees in need of protection and economic migrants who would potentially face return to their countries of origin.) David Herszenhorn has the story.

We compared versions: There was nothing on migration in the set of conclusions the Council sent round on Friday. The Commission’s input, delivered on Monday morning (which Playbook has seen) filled the void with an appraisal of the Commission’s own proposals on the matter, the “disembarkation” one included, which was originally hashed out by Juncker and U.N. High Commissioner for Refugees Filippo Grandi in late April, a Commission official said.

The Council picked and chose, but left open the part on the reform of the Dublin asylum rules, which the Commission noted was initiated in 2015 and “is an essential part of the comprehensive European approach.” Council President Donald Tusk was in Stockholm and Madrid Tuesday, will be in Rome today and in Vienna, Budapest and The Hague on Friday. He’ll be consulting like mad, we’re told by diplomats, about the chance of saving the mere mention of Dublin in his next set of draft conclusions.

So far, there are only euphemisms: The draft text includes only an indication in square brackets that language on the Dublin Regulation is still to come: “As regards internal migration policy much progress has also been achieved thanks to the tireless efforts of the Bulgarian and previous presidencies. [p.m. Dublin.]”

Our translation: Nothing has been achieved on internal migration policy, despite the efforts by all kinds of people for the past three years.

PLAYBOOK INTERVIEW

GURRÍA SPEAKS: We sat down with Secretary-General José Ángel Gurría Tuesday morning, right after he briefed the European Parliament’s ECON committee on the OECD’s analysis of what and how to do better in Europe.

The reports: Considering the extensive consultation with the OECD’s 24 European members, in principle, EU countries should get behind the proposals set out in the two reports released Tuesday. At a glance for you busy folks — amidst football, summitry and government crises — here.

Executive summary: “In a way what you see here is the voice of all the members together, basically saying on the integration: yes, there’s more, we need more,” Gurría said, summarizing his detailed reports. “On the question of the EU budget: Hopefully there is room to have a bigger budget. On the question of trade: Hopefully we can resolve the issue through multilateral work rather than trade tensions.” And he knows that’s not going come as a surprise. “Is this particularly original or courageous? No. Unexpected? No,” Gurría said.

The fine print: “But what about the banking union? What we are saying is: Create a common fund; create a resolution fund,” he said. That’s not reinventing the wheel, but “it is the first time after the crisis when these things are being discussed again, because now you can afford the luxury of discussing these things rather than just having a hose and holding it towards the fire and saying: ‘The house is on fire! The house is on fire! Put out the fire!’ Now you have choices.”

Speaking of choices: “Now this is why it’s important that these leaders meet. Because you have to choose — and the choices are going to affect the next generation of Europeans. It’s not as simple as if you don’t like it today, you correct it tomorrow.”

POLICY PEARLS

LET’S PICK JUST ONE: Amidst the legislative frenzy in Parliament as it attempts to get through the flurry of Commission proposals before the end of the term, there are some famous ghost files that have been lingering in Parliament or Council for years.

One of them is expected to take a decisive step today in Parliament’s environment and health committee (the trilogue is done), and we thought we’d flag it. Granted, you may not even remember the day Tonio Borg, the former health commissioner, presented the regulation on veterinary medicinal products (it just so happened to coincide with the very day Juncker named his team of commissioners back in 2014.)

Bottom line: The rules for the use of so-called reserve antibiotics on animals will be tightened to stop bugs developing antibiotic resistance. Can you guess why the file didn’t move for two years in Council? Both the pharma and the farmers’ lobbies were involved in delaying or watering it down. (So were some free traders: The new rules oblige importers to comply with parts of the European rules.)

ECONOMIC FEMINISM: WECAN, or “Women Enablers Change Agent Network,” (yes, that’s one of those names made to fit an acronym) on Tuesday called for the public sector to replicate the private sector’s best practice of having women rule. (We’re biased here — POLITICO in Brussels is in female hands, business-wise.) WECAN also complained about the state of play in the Commission, Parliament and Council — all run by men.

“We were quite close to having a women as president of the European Parliament — but then something happened,” said Parliament Vice President and Green MEP Heidi Hautala (speaking of the networking hurricane, Antonio Tajani), Vassili Golod writes in to tell us.

BREXIT’S FUTURE IS NOW

BRUSSELS EXPATS, THIS IS FOR YOU: Britain’s ambassador to Belgium, Alison Rose, won plaudits for bravery when she faced frustrated and sometimes angry U.K. expats in leafy Tervuren on Tuesday evening, but may regret her decision not to “hide away in the embassy” until December 2020 (when the Brexit transition period would end). “There is nothing that I have heard tonight that reassures me,” was the verdict of one of the 50-odd Brits who gathered in the British School of Brussels to hear the ambassador’s update on the state of the Brexit talks. (POLITICO’s Stephen Brown was among them, and wrote in to tell us all about it.) “It’s worrying that there’s no plan for ‘no deal.’”

Questions from the floor (in a schoolroom decked with flags of the world) reflected worry about issues like onward free movement in the rest of the EU, the rights of EU spouses to move back to the U.K., and long-term expats’ rights to vote in U.K. elections. On the latter, Rose was able to point to progress in U.K. legislation, but on many points she had to answer that it was “part of the future relationship discussions.” Is it, really? “I understand people’s concerns but we think it’s important to let people know what’s been agreed and what still has to be agreed,” the ambassador told Stephen.

BREXIT GROUNDHOG DAY FOR THERESA MAY: Today, the U.K.’s House of Commons will vote on an amendment to the European Union (Withdrawal) Bill that will effectively determine whether government or parliament will dictate the course of Brexit in the event that May fails to strike a deal with the EU by January next year. Sound familiar? “It’s the biggest parliamentary crisis on Brexit that Theresa May has faced since the last parliamentary crisis on Brexit that Theresa May faced,” write Annabelle Dickson and Charlie Cooper.

Customs union after all? Charles Grant, the director of the Centre for European Reform think tank, reckons Theresa May will request membership of the customs union for U.K. goods, but not services. His op-ed here.

AROUND THE CONTINENT

SPAIN — WHO IS PEDRO? Want to figure out new Spanish Prime Minister Pedro Sánchez? Look at Justin Trudeau, write Kait Bolongaro and Diego Torres, who break down the policy and style similarities between the two leaders.

Speaking of Trudeau: Canada will become the first Group of Seven nation to legalize cannabis.

BRUSSELS’ NEW ILLIBERAL HEADACHE: Liviu Dragnea, president of Romania’s ruling Social Democrats (PSD), may be running the country without being prime minister, like Poland’s Jarosław Kaczyński, but he doesn’t care for the comparison, he told our own Carmen Paun in an interview. Check out the full must-read profile here.

ON THE SUBJECT OF BRUSSELS’ HEADACHES: EU farmers are furious that Ukraine’s top poultry oligarch is evading tariffs and ramping up chicken exports by using an ingenious interpretation of Brussels’ trade deal with Kiev, reports Emmet Livingstone.

TRUMPWORLD

A FAMILY ARRIVES AT THE US BORDER. HERE’S WHAT HAPPENS NEXT.

US QUITS UN HUMAN RIGHTS COUNCIL: The Trump administration accused it of being biased against Israel and giving cover to rights-abusing governments.