Mediaboss Marketing

BRUSSELS The good news for Europe is that the worst of the pandemic is beginning to ease. This week deaths in Italy hit a nearly two-month low. And the German leader Angela Merkel announced that schools, day care centers and restaurants would reopen in the next few days.

But the relief could be short-lived.

The European Commission released projections on Wednesday that Europes economy will shrink by 7.4 percent this year. A top official told residents of the European Union, first formed in the aftermath of the Second World War, to expect the deepest economic recession in its history.

To put this figure in perspective, the 27-nation blocs economy had been predicted to grow by 1.2 percent this year. In 2009, at the back of the global financial crisis, it shrank by 4.5 percent.

Its a grim reminder that even if the virus dissipates, the economic fallout could pressure the world economy for months, if not years.

In China, where the outbreak has subsided in recent weeks, the factories that power the global supply chain have been fired up. But with few global buyers for its goods, its economy has been slow to recover.

In the United States, where the growth of new cases in the hardest-hit areas shows signs of slowing and there is a push to lift lockdowns, there are also signs that a recovery may be elusive. The government on Friday is set to release the monthly employment report, and some forecasts predict a loss of more than 20 million jobs in April a number that would wipe out a decades worth of job gains.

A prolonged European recession, a second wave of the virus or an anemic economic recovery would spell added misery for many Europeans, and hurt companies, banks and people the world over. The crisis is also reigniting political divisions between a wealthier north and a poorer south, threatening to break the brittle balance between divergent nations with inextricably linked economies.

A recovery will probably start unevenly in the second half of the year, Paolo Gentiloni, European commissioner for economy, said at a news conference after the release of the forecast, which comes out four times a year. But by the end of 2021 the countries of the European Union will be in worse shape than they were just two months ago, before the coronavirus started ripping through the continent. U.S. gross domestic product fell at a 4.8 percent annual rate in the first three months of the year, and some economists believe it will contract at an annual rate of 30 percent or more in the current quarter.

The danger of a deeper and more protracted recession is very real, the head of the commissions economic unit, Maarten Verwey, said in the forecasts foreword.

A resurgence of the virus after the end of lockdowns would shave a further 3 percentage points off economic performance this year, he said.

The economies of Italy and Spain, two of the countries hardest hit by the disease, will most likely shrink by over 9 percent each this year, and Italys economy will be particularly slow to recover, Mr. Gentiloni said.

Greece, which had started turning a corner after a decade of economic calamity, will be worst-hit in the union, according to the forecasts, losing 9.7 of its economic output this year. Poland would suffer the least, with a 4.5 percent recession.

And unemployment will most likely average 9 percent in the bloc, the European Commission said, from 6.7 percent the year before.

The blocs biggest economy, Germany, will also be hammered, suffering its worst recession since World War II, set to shrink by 6.5 percent, but it is expected to recover relatively quickly. France, the second-largest economy, is expected to contract 8.5 percent this year.

The severe downturn in Europe will have major repercussions for United States growth and jobs because the two economies are intimately connected.

The European Union and the United States are each others largest trading partners, exchanging goods and services worth $1.3 trillion last year. European companies like Daimler, BMW or Siemens employ more than four million people in the United States, according to U.S. government figures.

China will also suffer. The European Union is second only to the United States as a customer for Chinese goods.

As grim as the economic outlook appears, the greater danger to the world economy may be the risk that the euro common currency could be undermined by the deepening rifts between its members and their leaders. That almost happened in the early years of the last decade, but was averted when the European Central Bank, the euros Federal Reserve, used its monetary firepower to prevent Greece, Italy and Spain from becoming insolvent.

The central bank is again flooding the eurozone with credit and buying the bonds of eurozone governments to keep their borrowing costs from spinning out of control. But the central banks ability to rescue the euro again may be constrained after a ruling Tuesday by Germanys highest court.

The German Constitutional Court issued an ultimatum to the European Central Bank, saying it must show that the side effects of the bond buying do not outweigh the economic benefits. The court threatened to bar Germanys central bank, the Bundesbank, from taking part in the stimulus program, which would be a serious breach of European unity.

The coronavirus is already producing an economic shock in Europe more severe than the one that followed the financial crisis in 2008.

It is clearly more massive, and it is going down more steeply, Clemens Fuest, the president of the Ifo Institute, one of Germanys leading economic think tanks, said during an online presentation Wednesday.

The pandemic could have ramifications for politics and society that are impossible to predict. The economic dislocation caused by the 2008 financial crisis helped fuel far-right populist movements in Germany, Italy and France.

Europes best hope is that economies will bounce back quickly, in what economists optimistically call a V-shaped recession, as lockdowns are eased.

Already, factories have resumed production in much of Italy, and Germany this week allowed hairdressers to begin receiving customers again. France will begin gradually ending its lockdown next week.

But many restrictions remain, including bans on large public gatherings. And no one knows yet whether the virus will reappear with a vengeance as public life resumes.

The fresh set of figures will pile pressure on European leaders to conjure up a brave joint response to the recession to ensure the recovery isnt lopsided, hurting the joint currency and spawning more political unrest in the weaker economies.

Although the leaders have approved a half-trillion euros worth of measures that effectively call on wealthier nations to subsidize the recovery of worse-hit poorer ones, they have been criticized for not going far enough.

The persistent divide poses a threat to the single market and the euro area yet it can be mitigated through decisive, joint European action, Mr. Gentiloni said.

Matina Stevis-Gridneff reported from Brussels, and Jack Ewing from Frankfurt.

Continued here:
E.U. Is Facing Its Worst Recession Ever. Watch Out, World. - The New York Times

There are two things a quarantined European will reliably find when he goes online for news in this age of the coronavirus: first, the clucking of local pundits at how the Trump administration has managed the epidemic in the United States; second, unmistakable evidence that every one of the major countries of Western Europe, with the exception of Angela Merkels Germany, is doing worse.

The coronavirus epidemic has turned Europeans against one another. In early March, Germany, one of the few countries with the manufacturing capacity to equip its citizens with medical masks, canceled plans to export protective gear. This infuriated Italy, which was then at the most desperate stage of its own epidemic. Italy in turn became the scapegoat in a wave of Spanish newspaper storiesabout various Iberian fashionistas who had brought Covid-19 back from Milans Fashion Week (also canceled, but too tardily); about Venices Carnival (halted, but only once it was underway); and about the Valencia fans who fell sick after traveling to Milan for a Champions League soccer match against Atalanta, the team of the heavily infected Italian city of Bergamo.

In Barcelona, Quim Torra, president of the autonomous (and nationalist) government of Catalonia, sought to close off the border between his region and the rest of Spain. He failed. Spains politically vulnerable Socialist prime minister, Pedro Snchez, sniffing a stratagem for Catalan independence, soughtand gota centralization of emergency authority in Madrid. The Catalans were left to grumble that they were heading into a plague yoked to Europes least competent government. That, alas, was an accurate assessment of Spain for much of the spring. By the end of April, its death rate had reached 510 per million. But then the virus took off in divided, decadent Belgium, paralyzed by its own subnational power structures. As April turned to May, deaths there reached a world-beating 633 per million, more than three times the American rate. Meanwhile, almost-forgotten border checkpoints had been reestablishedbetween France and Germany, Austria and Italy.

Facing their largest challenge since World War II, Europes countries are performing poorly. The Brussels-based European Union, the one institution with a track record of coordinating emergency responses continentwide, has been casting about aimlessly for a strategy. Right now, Europe needs regulatory harmonizationwhich is just what Brussels is good at providing. But Europe also needs leaders who can boost morale and stir up sentiments of shared sacrificeand these are the specialty of nationalist democracies. Europes nations were built on family ties, regional languages, and horrific wars in which everyone shed blood together. The sense of belonging is emotional, intense. Since its consolidation as a political unit after 1992, the EU has sought to transcend and abolish that kind of emotional kinship in favor of a politics of global capitalism and expert planning. Democratically inclined citizens often find this kind of politics frustrating even when global capitalism and expert planning are working splendidly. Right now, they are not.

Continued here:
Can the European Union Survive a Pandemic? - The New Republic

German and Italian leaders Angela Merkel and Giuseppe Conte earlier this year. Photo: Kay Nietfeld/DPA/PA Images

The European Unions response to the coronavirus pandemic has been marked by insufficient acts of coordination and solidarity. Member states have turned inwards, closing their borders and curtailing medical exports. Italy has felt abandoned by its fellow Europeans while the attempts to craft a common fiscal response to the crisis has revived the well-rehearsed north-south battles over solidarity and sovereignty.

This feeble and fragmented response, coming on the heels of multiple other crises that the EU has endured in the past decade, has hastened the already prevalent narratives of growing disunity and inevitable decline. The grimmest projections predict a collapse of the monetary union or an eventual disintegration of the EU. A more common view portrays the EU as a powerless entity that has little to offer to its citizens. Its dwindling influence over world affairs, the argument goes, will further wither away with each crisis.

Yet this narrative is too quick to predict the erosion of the EU. It also rests on an outdated view of what power means in todays world. There is an important aspect to the EUs unity and global influence that remains robust, relevant, and largely unaffected by the crisesthe unilateral ability to regulate global markets.

The EU regulations influence the everyday lives of individuals around the world. They affect the food we eat, the air we breathe and the products we produce and consume. Few realise that EU standards determine the default privacy settings on our iPhones or the type of speech that Twitter will delete as unacceptable. They also determine how timber is harvested in Indonesia, how honey is produced in Brazil, what pesticides cocoa farmers use in Cameroon, what equipment is used in dairy factories in China, what chemicals are used in plastic toys in Japan, as well as how much privacy is afforded to internet users in Latin America.

Despite its well-known inefficiencies, through its regulations, the EU wields unique and highly penetrating power to unilaterally transform global markets, making Brussels a major force in the global economy. All the EU needs to do is to regulate the single market. In search for scale economies and other benefits of uniform production, multinational companies often voluntarily standardise their global operations around the most stringent standard, which is typically the EUs. As a result, powerful global companies ranging from Google and Facebook to Unilever and Dow Inc., design their products to meet European standards.

Regulatory power persists even when many traditional tools of influence have become less deployable. Military power is particularly costly to leverage; few would characterise the US-led wars in Afghanistan or Iraq as examples of successful deployment of power. Economic clout leveraged though sanctions or conditional loans is similarly difficult to project as it can easily be undermined by other governments. In comparison, unilateral regulatory power relies on companies self-interest, allowing the EU to forgo costly coercion and difficult cooperation in projecting its influence globally.

The EUs regulatory strength is also largely unaffected by crises because of its technocratic nature. The commission bureaucrats remain focussed on their assigned regulatory domains without being distracted by the broader crises, allowing the agenda to flourish even when a major political or economic shock hits its core. For example, neither the refugee crises nor the Brexit referendum derailed the GDPR, the EUs stringent data privacy regulation. The commission will similarly likely go ahead and unveil an ambitious Digital Services Act later this year. The pandemic may lead the EU to rethink how to balance the individual right to privacy with the need to harness technology to trace public health emergencies. But Brussels is unlikely to scale back its regulatory ambitions, or allow unmitigated digital surveillance to be entrenched as the new normal.

This regulatory supremacy is not only largely shielded from crises; it may well grow through them. Since the euro crisis, ambitious efforts to reinforce the eurozone architecture have taken place. Brussels has gained rather than lost powers. Migration crises similarly led to the strengthening the role of Frontex, the common European Border and Coast Guard Agency.

Brexit offers another example of how sticky the EUs power is and how this may grow through crises. The UK is struggling to untangle itself and reclaim regulatory sovereignty, with many UK businesses prone to follow EU standards long after UK departure, due to the proximity and importance of the EU market. Meanwhile, after leaving, the UKs pro-market voice will be gone from the table where EU regulations are set. This will open the door for more interventionist regulatory standards advocated by member states such as France and Germany. Brexit may therefore lead to more, rather than fewer, EU regulations emanating from Brussels to London.

Vesting the EU with more powers may well be the ultimate response to the coronavirus pandemic as well. Today, the EU has limited powers to regulate public health, which remains a prerogative of the member states. Post-crisis, member states might conclude that joint diagnosis, testing, procurement of medical supplies, exchange of critical information, and joint research on developing a vaccine are needed to keep Europeans safe in the future.

The challenges the EU faces today should not be underestimated. But this pandemiclike the other crises before itdoes not need to signal the EUs weakness nor its unraveling. The bloc has repeatedly proven its ability to survive, and even grow, through difficult circumstances. Nation states alone cannot fight a global pandemic, manage migration flows, mitigate climate change or respond to the financial crises that shake the deeply intertwined global economy. The strength of the European regulatory state provides a crucial ballast for Europe to weather storms, and the post-pandemic world may well be marked by a more, rather than less, powerful EU.

Anu Bradford is Henry L Moses Professor of Law and International Organisation at Columbia and author of The Brussels Effect: How the European Union Rules the World (OUP)

Continued here:
Why the European Union is not doomed to fail - Prospect

Over the past months, no tangible advances have been made on democracy and human rights in Nicaragua. Repression by security forces and pro-government armed groups of political opponents, demonstrators, journalists, civil society organisations and members of the Catholic Church has continued.

In light of this, the Council decided today to include six persons in the list of natural and legal persons, entities and bodies subject to restrictive measures, namely a travel ban and asset freeze. These measures target individuals responsible for serious human rights violations in Nicaragua and are designed not to harm the Nicaraguan population.

The measures follow the EUs consistent position that it will use all its instruments to support a democratic peaceful and negotiated solution to the political crisis in Nicaragua. This was notably outlined in the framework for targeted restrictive measures adopted by the Council on 14 October 2019.

The EU expects the Government of Nicaragua to abide in their entirety by the commitments made in the March 2019 agreements with the opposition. There are three main areas in which tangible progress needs to be made:

The EU recalls that the COVID 19 pandemic reinforces the need for international cooperation and the EU is ready to assist Nicaragua in these difficult times. In this challenging period, the compliance with human rights should not be forgotten and must be at the core of any action.

The EU reaffirms its commitment to support the Nicaraguan people, including by helping strengthening the rule of law and supporting economic and social development for the most vulnerable.

Read more:
Declaration by the High Representative Josep Borrell, on behalf of the European Union, on Nicaragua - EU News

Read this article in German.

Germany will be taking over the presidency of the European Union in less than 60 days. Even a few months ago it looked as if climate neutrality, Brexit and the negotiations over the future EU budget framework were going to be the key topics of the German Council presidency. Now, the presidencys agenda will be dominated by the Covid-19 pandemic and its grave consequences for social cohesion, the economy and the idea of a borderless Europe. The Croatian government, which currently holds the presidency, was hit between the eyes by the impact of the pandemic. It had to give up its carefully planned presidency agenda in favour of crisis management.

The German federal government has more preparation time to bring the EU out of the crisis during its Council presidency with ideas and effective negotiation management. It has to take the opportunity to help shape the new start for Europe, which it set itself as a goal in the 2018 coalition agreement. The current crisis, which has pushed the European economies into economic and societal distress, requires decisive handling by Germany. The aspiration for a future-oriented EU policy has to be implemented in reality. The following subjects should be at the forefront of the Council presidency: First, coordinated efforts to overcome the crises, second, joint reconstruction with a strong EU budget and, third, the initiation of a dialogue about a future Europe that is resilient in the face of crises.

The last German EU presidency in 2007 was played out in calmer waters. The most important point on the agenda was agreement on a reform of the treaty after the failure of the constitutional treaty process. Thirteen years later and the circumstances at the outset of the Council presidency are different. The Covid-19 pandemic has not only revealed our vulnerability to a virus. It has also again shone light on the fact that the EU is not sufficiently resilient to crises when the going gets tough. In March, we saw countries going it alone and uncoordinated restrictions at a time when the virus was spreading across Europe at high speed. Hitherto, strict border controls have been upsetting the operation of the EUs internal market. They put the achievements of a borderless Europe on hold.

In the meantime, the EU has found its way, step by step, back to coordination and solidarity. Patients are being flown out of overcrowded Italian and French hospitals into other EU countries and vital medical equipment is being distributed and jointly procured. The European Council came to an agreement on 23 April 2020 over aid and reconstruction measures and schedules for loosening the restrictions. The German government should use these schedules as guidelines for its presidency so that the loosening of prevention measures is carried out in a coordinated way and internal European borders can be opened again soon. Because then cross-border aid can flow, the security of supply in the EUs internal market can be restored and the fundamental freedoms for European citizens can be safeguarded.

Alongside overcoming the crisis, Germanys EU presidency is also facing a difficult task to moderate the discussions on financing the upcoming Multiannual Financial Framework (MFF) of the EU and bringing these to a conclusion by the end of the year. The agreement of the European Council on a financially robust reconstruction fund is, in combination with the next MFF, an important cornerstone for European recovery. But there was already a considerable amount of time pressure in negotiations about the future financial priorities of the EU before the Covid-19 outbreak. Even a specially convened summit meeting in February was barely able to make progress on the EUs financial issues.

The past weeks have shown that the EU is not resilient to crises because its member states have put taking national action above European problem solving.

It makes complete sense that the financing of Europes reconstruction should be anchored in the EU budget. Democratic control of the distribution of the funds can only be ensured by the European Parliament. But that increases the complexity of the MFF negotiations, which, in the face of the loss of the UKs contribution and new political requirements, were already challenging even before the coronavirus pandemic. Germany is facing the challenge of bringing about a quick agreement to raise the future EU budget framework to far more than 1 per cent of the Gross National Income (GNI) of EU member states and to connect this to the political priorities. Considering the current crisis, the distribution of funds must, in addition, be made more flexible in the future seven year budget period and new sources of income must be identified for the EU budget.

The European Commission had already submitted many ideas, such as the European financial transaction tax or a European minimum tax, in its first MFF draft proposal. In the meantime, these also found favour with Germanys Chancellor Angela Merkel. The Commission also announced a proposal to increase the own funds ceiling from 1.2 to 2 per cent of GNI to generate money for the reconstruction fund on the capital market with the additional resources. While the idea is welcome, it will be difficult to structure its implementation. This is because it is not only the Council that has to unanimously agree on increasing own funds but all national and individual regional parliaments must also each approve the decision by majority.

The past weeks have shown that the EU is not resilient to crises because its member states have put taking national action above European problem solving. Dealing with the collapse in solidarity and dialogue about Europes future must therefore come back into political focus. The conference on the future of Europe promised by Commission President Ursula von der Leyen offers the possibility for countries to look beyond their own noses and to openly tackles issues which have been stagnating for years between governments such as the issue of institutional reforms or of voting rights during the European elections. By the same token, future European priorities and the way there should be at the heart of discussions.

It is important that this dialogue is pursued jointly by Europeans and national politicians but also citizens. The European Parliament, the European Commission as well as numerous stakeholders within society have proposed their ideas for issues and for shaping an EU-wide dialogue. Only the Councils position on a future conference is still missing. Even if the conference cannot start as planned on Europe Day 2020 because of physical contact restrictions: the previous weeks have made it very clear that the debate on the future of Europe is, more than ever, necessary.

The two year process must therefore start after the end of the restrictions on physical contact, in the winter of 2020-21 at the latest, if it is to present results by the time of the European elections in 2024. Regrettably, no word on the conference is mentioned in the first draft of the priorities of the German EU presidency. Here it would be important for the German government to change course and anchor a look into Europes future in the presidencys programme. Europe cannot be rebuilt solely via new funds and aid packages. Broad dialogue close to the citizens is needed for a new start in a crisis-resilient Europe!

Original post:
Germany has a lot on its plate during the EU Council presidency - IPS Journal