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Issue #14

Issue #14


Merkel and the Recovery Fund Maelstrom

Croatia move over! Angela Merkel and her team have officially arrived in Brussels to take over the reins of the EU Council Presidency. Merkel’s first stop in the European capital was at the European Parliament, where she presented MEPs with Germany’s priorities for the EU in the near future (and sported a pretty cool mask with the German EU Council Presidency logo).  Given the German Presidency’s official slogan, “Together for Europe’s recovery,” it’s unsurprising that Merkel’s speech focused mainly on… the European Recovery Fund! The proposed fund would allocate 750 billion Euros towards economic recovery after COVID-19, 500 billion in grants, and the remaining 250 billion in loans. The five main areas that Merkel wants to target with this fund are fundamental rights, solidarity & cohesion, climate change, digitization, and Europe’s role in the world. Merkel wants to reach a final agreement by the end of July, something that will prove incredibly challenging given all 27 member states must sign off. The largest obstacle to unanimity? Trying to convince northern European countries to share a common debt with southern EU countries. It will likely take more than Merkel repeating “solidarity” and “sticking together” over and over in her speeches to actually reach a consensus.

Don’t be so frugal, Mark!

Trying to make progress towards the mentioned consensus, Merkel met with Netherlands Prime Minister Mark Rutte in Berlin on Thursday. They bilaterally focused on the EU Recovery Fund (see above). This was an important meeting, as Rutte and the Netherlands are part of the so-called “frugal four”, meaning four Member States of the North objecting grants for the South and favoring credits only. Although Rutte advocated for a frugal EU where Member State’s contributions shouldn’t increase because of Brexit and Corona, reading between the lines showed that some progress might be realistic. Merkel and Rutte both argued capital stemming from the recovery vehicle must be used to achieve structural reforms in all EU Member States, so that in the event of another crisis, such measures are not necessary again. Bottom line: the Netherlands still don’t like the grants, but they also know that Member States with collapsing economies mean less exports for them. What will be critical for acceptance by the Netherlands is domestic policy. Rutte faces an election and fears voters might favor euro-critical and right-wing parties if he concedes too much to Merkel. Plus point: Currently high approval ratings for Rutte because of good crisis management, meaning it could look good for the EU Recovery Fund.

Show some Love! #LoveIsNotTourism

This week, there was a wave of love in the EU. While a travel ban for third countries like the USA continues, many politicians, both EU- and Member State-level, throughout the whole EU and various political parties urged their governments to abandon the travel ban not just for spouses but also unmarried couples desiring to see each other again. Searching for #LoveIsNotTourism you can read many heart-warming stories about people wanting to come together with their loved ones again. Countries like Denmark and Austria have already followed suit. So far, German Interior Minister Horst Seehofer (CSU) hasn’t come forward but inter-party pressure is increasing.

What is definitely beautiful about this, is the spirit that suddenly emerged in the EU. In times of crisis and increasing political rivalries, it became obvious what is REALLY important for everyone. We think quickly implementing this exception provision in all Member States would be a good last step prior to the political summer break. Being together with your loved ones throughout the summer will be important for the well-being of all EU citizens and definitely help overcome this crisis. #LoveIsNotTourism

Find out who unexpectedly became Eurogroup President in the PDF:

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It’s been ​a very, very weird few months. So much changed. Processes are different, and things we didn’t know existed three months ago are suddenly the center of attention.  #zoomfatigue

Governments and Parliaments all over the world faced and responded to challenges never seen before. Thanks to the pandemic, they’ve been handling health-related, economic, and societal problems like nobody’s business. Honestly, I’ve never seen the legislative apparatus working so fast.

Considering the regulatory output of the last months, the amount of money spent, and the aid programs installed, I don’t think Members of Parliament have ever deserved a summer break more. MPs in Berlin began their summer break last week, and the representatives in Brussels just concluded their final week of plenary sessions before the break. Both sets of elected officials will return for sessions in late August/early September. 

Looking at the output we delivered over the last week, and the expected decrease of political happenings in the next months, we decided we would treat ourselves to a summer break as well. We are curious if you want Krautshell to return (if you do, please let us know in the survey above). Until then, we’ll use the time of open EU borders for some vacationing before the Corona autumn wave hits (yes, we’re that stupid…). We hope you get to do the same! 

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