Author: Vedran Obućina

Analyst, journalist specializing in the Western Balkans and Middle East domestic and foreign affairs

German EU presidency

In the second half of 2020, Germany holds the presidency of the Council of the European Union. Many Europeans believe Berlin will be successful in managing the forthcoming economic crisis, while others see hegemonic power in it.
German EU presidency

(©eu2020.de)

Some say that Europe is lucky that at the onset of the corona crisis the presidency will be taken by Europe’s largest economy. This gives hope that the Member States will be able to quicker catch up with the economic progress. The task of the presidency is to get Europe out of the COVID-19 crisis. That is why the priorities are to jointly stimulate economic recovery, strengthen internal cohesion and act together through foreign policy. The main activities can be seen in the presidency calendar, which resembles German efficiency.

All eyes are on Germany

Germany is the largest member state of the Union. Due to its geographical position in the middle of Europe, its population and economic strength, it has an important role to play in encouraging the continuation of European integration. Also, Germany is the innovation leader of the world and will use its position for the European agenda. The fact that the SARS-CoV-2 has not disappeared yet is also important when planning the next six months, and the primary task is to declare the subjugation of the virus. Restoring the free movement of people and goods within the European Union and removing restrictions in the Schengen area are the objectives that will ensure that the EU’s founding principles are upheld. Restoring normality within the Community will also help to return to border crossings and the issuance of visas.

The presidency logo is a Möbius ribbon that symbolizes an innovative and united Europe representing a blend of different people and interests. This geometric shape is an example of a one-sided surface that has the shape of a loop with only one edge and one side, which makes it impossible to distinguish the top and bottom of the loop, either inside and out. The person responsible for this sign is August Ferdinand Möbius (1790-1868), a mathematician from Leipzig and a descendant of the reformer Martin Luther. This symbolically accentuates continuity and that is why Germany starts its presidency in form of TRIO, given that after Germany it will be chaired by Portugal and then Slovenia. Berlin also faces the long-term goal of the Community, 2021-2027, rapid preparation of the budget, in conjunction with the Recovery Fund. Economic recovery, concentration and competitiveness are the main goals for increasing investment. This is especially true in light of digital development and the environment.

TRIO’s major goals

In terms of economic policy, the TRIO sees the future of the Union’s competitiveness and growth in the full return of the single market to the ways it functioned before the COVID-19 crisis. TRIO emphasizes the importance of “removing remaining unjustified obstacles”, including in the area of the services market, as well as the implementation of single market rules. Following the joint statement of the ministers in charge of the internal market, adopted in June 2020, TRIO will monitor the European Commission’s report on barriers to the single market and the implementation of the action plan (known as the March Package): “Identifying and removing barriers to the single market” and “Long-term action plan to better implement and ensure the application of single market rules”. Following the conclusions of the EU Council adopted in February 2020, TRIO supports better regulation, so that “reducing adaptation costs and administrative burdens will also be high on the agenda”.

The TRIO wants to restore confidence in the single market, which has been undermined as many countries have imposed a series of temporary restrictions on the freedom of movement of goods and services as a result of the COVID-19 pandemic. Administrative burdens arising from European as well as national regulations will continue. Continued digitization could also contribute to this.

Following the spirit of the German-French manifesto, the German-led TRIO seeks effective and fair competition and a link between the single market and industry. Special attention will be paid to the digitalisation of industry, services and administration, the development of data infrastructure, investments in artificial intelligence and the 5G network, data protection, consumer privacy, as well as the development of European digital sovereignty.

Europe is preparing for 5G investment as a basis for progress, and decision-making will also depend on national security issues (mainly due to the continuation of the Huawei case). It is part of the digital transformation that attaches increasing importance to consumer protection as well as the protection of personal data. The key role of developing (digital) skills to prevent waves of mass unemployment has been recognized, especially as more work will be done by robots. Continuous learning will become even more relevant, and that is exactly what many countries are chronically lagging. Therefore, these states should use this European agenda to reduce their weaknesses as soon as possible.

Following the Paris Climate Agreement and the European Green Plan, the goal is that the EU will become climate neutral by 2050 with the concept of a circular economy (which will significantly boost the transformation of European industry). Although the proposal is not elaborated in detail, the issue of taxation in the digital economy is mentioned (which can be seen as an announcement of a possible European digital tax).

When it comes to social policy, the plan discusses the minimum income related to unemployment benefits and the determination of the minimum wage, and among the social priorities is strengthening the protection of health at work, protection of workers from precarious and flexible forms of work. Given the development of artificial intelligence, investment in skills through vocational and lifelong learning will play an important role so that workers can adapt to changes in the labour market.

Germany seeks to further develop the (German and European) model of the social market economy. Although a strong social policy is not at odds with the market economy, i.e. only in it is it financially possible and sustainable, the question arises as to whether concrete proposals mean an increase in the powers of the Union. It is still unclear whether a „formula” is planned for regulating the European minimum (which the European Socialists are already looking for, and which the Liberals oppose). Secondly, Germany is striving for a green economy. Although such a direction is not necessarily at odds with the market economy, except with the classic model of curbing the role of the state, the important question remains how much the green agenda will cost taxpayers, or what regulatory restrictions could be introduced. There is no plan to encourage the reduction of CO2 emissions through private investment and private sector innovation, but EU programs will play an even greater role in strengthening the role of the public sector in investing in a better environment.

The foreign policy

Regarding the foreign policy of the Union, and subsequently at the Zagreb Summit, TRIO supports the opening of negotiations with Albania and Northern Macedonia and confirms the EU perspective of enlargement to the entire Western Balkans. Special emphasis will be placed on the promotion of democracy, the rule of law, freedom of the media and the strengthening of resistance to misinformation. The reform of the World Trade Organization (WTO) is supported to strengthen the multilateral order based on the rules and the international regime for resolving investment disputes. At the same time, work will continue on ambitious bilateral agreements (of the EU with third countries) on free trade and investment protection, while ensuring a level playing field and improving access to public procurement (primarily in the context of relations with China). The greatest emphasis will continue to be placed on the transatlantic partnership and trade relations between the European Union and the United States. This is essential for strengthening NATO’s European pillar.

Fighting the crisis

An important step envisioned by the German government led by Angela Merkel is to persuade Member States to accept the recovery fund through various national reconstruction plans which will not be in the realm of European Commission’s decision but would be decided by a qualified majority in the EU Council, consisting of governments. In this way, the EU Council would easily check if individual countries’ reforms and investments are in line with EU priorities. Such a policy suits Germany, Benelux and Scandinavia, less so Central and Southeast Europe, as well as those in Southern Europe, including economic powers of Italy and Spain. Ms. Merkel has already mentioned in Brussels that Community should be taken literally.

She knows that Germany faces key choices: either EU must begin to prepare for a slow disintegration and a clear break-up of the Eurozone, or it will have to gather all its forces to save the plans for European integration and the single European currency, the second largest savings currency in the world.

The Franco-German plan for European recovery will allow Europe to free itself of the British burden. It is less intergovernmental and more federal. In other words, the time when a whole group of European countries will jointly enter into debt is not far. In this sense, German Europe, which many succumbed to during the EUR crisis, is not an option for Ms. Merkel. The chancellor chose European Germany and in this respect, the French, Italians, Spaniards and Greeks should show that they can grow without over-indebtedness and avoiding customer-type waste.

While the Union has political concerns about Russia, economic concerns are related to China. This is especially true for Germany, which complaints about unfair competition from China and non-transparent public procurement (while Chinese firms easily access the German and European procurement markets, the reverse is not true).

There are many European public policies, and above are just a few important ones mentioned. Every presidency, including the German one, contains several topics that Europe needs to continue or have yet to discuss. As the EU was not ready to contain the pandemic crisis, it is in the interests of all of the Member States to be better prepared for such shocks in the future. Better mutual support and rapid joint procurement of defense equipment will be part of the plan in the future.

Vedran Obućina is an analyst and a journalist specializing in the Croatian and Middle East domestic and foreign affairs. He is the Secretary of the Society for Mediterranean Studies at the University of Rijeka and a Foreign Affairs Analyst at The Atlantic Post.

(©eu2020.de)

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