The Weekly Vulcan View For The 31st Of November To The 7th Of December Featuring Analysis Of The Latest EU Developments

VULCAN VIEW– KEY EVENTS THIS WEEK:

 
GERMANY
CDU elects new party leader
For the first time in 18 years Angela Merkel  did not run for re-election as leader of her party. This decision, which she announced in November, prompted three members of the party to run for the position. After her farewell speech for which Angela Merkel received minutes of standing ovations, almost 1000 delegates voted to select her successor.
 
In the end Annegret Kamp-Karrenbauer was able to claim victory. After a second round of voting because no one candidate reached a majority during the first round, she won with 517 votes to 482 before her main opponent, Friedrich Merz.
 
Sometimes referred to as Merkel’s protégée Annegret Kamp-Karrenbauer, (shortened to AKK) follows a more centrist political philosophy than her nearest rival.  The former head of the small state of Saarland has been active in politics for several decades. She has been a strong advocate for advancing digitalisation, strengthening the social state and uniting the party to combat the rise of far-right political groups such as the AfD.  Even in the controversial question of refugees and asylum seekers AKK closely aligns herself with the policies pursued by Angela Merkel.

 
 
EUROPEAN UNION
Digital tax – EU finance ministers thwart deal
During this week’s meeting of the Finance Ministers of the EU, France and Germany began a last-minute effort to forge agreement on a digital tax. Due to heavy opposition, mainly by Ireland and the Nordic countries, France and Germany have amended the proposal. Originally the intention was to impose targeted taxes on over 140 tech companies. The new tax plan would exclude tech giants such as Apple and Amazon.  This may overcome the differences that currently exist among the finance ministers.

With the new scheme, a 3 per cent tax on mainly advertising sales, would mostly impact companies such as Facebook and Google.
 
France’s Finance Minister has said that he would “give himself until March” to reach a deal. If negotiations should be unsuccessful, France will continue to impose such a tax on a domestic basis.  Other countries such as Spain, Britain and Italy have also indicated they will proceed with their own digital tax laws should no agreement be reached at EU level. 
 
If successful in Brussels, the measure would be implemented in the beginning of 2020.
 
 
FRANCE
France’s domestic struggles overshadow COP24 summit
Violent demonstrations have erupted in France in response to the government’s proposal to introduce a fuel tax.  President Macron took to social media to say that while he respected the protesters and their demands, he will “never accept the violence”.  The idea behind the fuel tax, which would see an increase in the price of gasoline, was to improve France’s environmental credentials. During his campaign for the highest office in France and since his election, President Macron has advocated a strong position for climate change.
 
However, in response to the protests, the French government has decided to suspend the proposed tax, which was supposed to come into effect early next year.  This decision has put a damper on the COP24 climate summit currently taking place in Poland. The climate summit, which is part of a global set of conferences, sees leaders from across the world come together to further negotiate limiting global warning.  France has been at the forefront in Europe of tackling  climate change issues. Now its retreat on the fuel tax has opened the door for other nations that have been experiencing backlash in their own countries to slow down their implementation.

 
BREXIT
Tensions are rising before the Parliament vote on the Brexit Deal
Prime Minister May has had yet another trying week in Westminster. Just days before parliament is set to vote on the Brexit deal, which has been signed off by her cabinet and the EU, Mrs. May suffered further blows on the floor of the House.  Even before she had a chance to speak in front of the MPs about the Brexit deal, parliament sent a strong message.
 
For the first time in history, the parliament passed a motion to find government in contempt of parliament. This now means that Mrs May and her cabinet will have to hand over the legal opinion it received from Attorney General regarding the Brexit deal.
 
Parliament’s reaction to the Brexit deal and in particular to Prime Minister May’s handling of the Brexit deal so far, mimics the reaction of the country.
 
Many voices inside parliament and outside are calling for a second referendum. Up until now Mrs May had been opposed to such an undertaking but as it becomes clearer that her Brexit deal will not pass in Westminster, momentum may grow.  However, an internal leadership election within the Conservative party remains the most likely outcome, followed by the possibility of a general election. 

 
ROMANIA
Inside Brussels – Romanian Presidency 
In less than 30 days, the Romanian government will take over the top seat at the Council of the European Union.  In the past few months the Romanian government has had many domestic problems, with President Iohannis calling for government to step down only last month due to the level of unpreparedness in Bucharest for this Presidency.
 
Usually this alone would be enough to create fears for the ability of the government to manage affairs during the Presidency. Unfortunately, this is not the only problem for the Presidency.
 
European Affairs Minister Victor Negrescu, the former MEP who left the European Parliament to take over the ministerial position resigned just six weeks before the Presidency starts.  Romanians in Brussels claim that there is a shortage of experienced policymakers in Romania to deal with the incoming policy work and the large recruitment campaign is not attracting much attention from those in Brussels.
 
Georga Ciamba, a career diplomat, will oversee the remaining planning as the new European Affairs Minister.  The appointment came just a few days before a bigger government reshuffle in November that saw the defense minister quitting and a dozen ministers switching portfolios or entering the Cabinet.  Priorities for the Presidency include Brexit, Migration and Digitalisation. The chaos within the Romanian Government is ominous for the prospect of getting many outstanding legislative files across the line ahead of the European Elections in May.  
 

Compliments of Vulcan Consulting, a member of the EACCNY