France and Germany take the lead on the recovery of Europe
Europe is a colourful continent in terms of policies and outcomes. It is essential to stay updated on how these policies may impact your work to build better regulatory frameworks, enhance your message and enhance communication with stakeholders.
Here you can find a summary of the major European political updates of this week.
French-German Initiative for the European Recovery from the coronavirus crisis
On 18 May, French President Emmanuel Macron and German Chancellor Angela Merkel presented a joint proposal for the European economic recovery plan. The plan provides for the Commission to take on debt of €500 billion and to transfer this money to the states, regions and sectors that have been most affected by the coronavirus pandemic. Many details still need to be worked out, such as the conditions of indebtedness and reimbursement, and the conditions that will surround the allocation of this money. Nonetheless, the broad agreement, outlining a recovery plan financed by a common debt of the European states, issued by the Union and spent through the European budget, is in itself promising. However, opinions on this initiative vary as it will involve immense borrowing from the EU budget.
Scotland and Northern Ireland have announced further gradual easing of lockdown measures, bringing restrictions more in-line with England. The Welsh Government continues to toe a more stringent COVID-19-combatting path and First Minister Mark Drakeford has suggested Wales is in the ‘health first’ category, distancing himself from Johnson’s ‘stay alert’ message. Further developments on contact tracing can be seen, as the devolved nations are jointly focussed on introducing an integrated ‘test and trace’ programme at the beginning of June. The UK Government has recruited 21,000 contact tracers, predominantly workers laid off in the hospitality sector, who will be trained and overseen by 7,500 healthcare professionals. NHS Scotland’s contact tracing technology is on trial this week, and 600 Scottish NHS staff have been lined up as initial tracers. The Scottish Government does not intend to run the NHS proximity app, instead operating a manual tracing programme. The Welsh Government will recruit 1,000 staff recruited from local authorities and will integrate data into UK-wide digital platforms such as the NHS app and central data processing system.
There are two main relevant updates from the national political landscape. Firstly, a dilemma is currently seen in regards to setting the date for the second round. This was initially scheduled for 22 March, following the first round of 15 March, but was postponed because of the country's confinement. The Government has until 27 May to choose between holding a second round in June or playing it safe and waiting. Secondly, on 19 May, 7 members of parliament from the presidential party defected, reducing its number of members to 288. While the party held absolute majority for the past 3 years, it now falls 1 member short of achieving this. The members that left did so in order to form a new group called "Ecology, Democracy, Solidarity", which currently comprises 17 members of the parliament.
On COVID-19, French health authorities have not detected signs of resumption of the epidemic 10 days after the end of lockdown. Professor Geneviève Chêne, director of Public Health France, warned however that it is too early to draw a first assessment of the partial opening of the society.
The Federal Constitutional Court decided on 19 May that the mass surveillance of the Federal Intelligence Service (BND) abroad violates basic rights. The Court in Karlsruhe ruled in favour of a constitutional complaint against the BND law. This law must be revised by the end of 2021 at the latest. Regarding further long-term impact of the current crisis, the Corona Cabinet of the Federal Government discussed on 20 May the consequences of the coronavirus outbreaks in German slaughterhouses and possible stronger regulation of the meat industry. Higher penalties for breaches of health and safety regulations are currently being discussed.
The President of the European Central Bank (ECB) Christine Lagarde declared that the Bundesbank must continue to participate in bond purchases by the central bank - despite the restrictive ruling by the Federal Constitutional Court. Lagarde referred to the treaty under which all national central banks in the euro area must participate fully in the decisions and implementation of monetary policy. She further stated that national central banks in the euro area are independent and may not take instructions from their respective governments. Earlier this month, the Federal Constitutional Court had criticised ECB’s purchases of government bonds worth billions as partially unconstitutional.
Portugal has exited the State of Emergency and entered the State of Calamity since 4 May, which will now be extended until 31 May with slightly “looser” measures. Prime Minister António Costa has also announced that the Government is drafting a Supplemental Budget that will be associated to a social and economic emergency programme but is waiting for clear data on the macroeconomic status and EU mechanisms.
The European Commission has published on 20 May a European Semester Spring Package. This includes country-specific recommendations, and there are seven recommendations for Portugal to recover economically from the crisis. This includes strengthening the health system’s resilience and promotion of investment in green and digital transition.
You can find more information on European news in our EU national elections heatmap, where we provide an overarching perspective with key political insight for individual countries. Make sure to check it here.