Eurobloat #0075 • July 2016
Brexit was barely a fortnight old, the Slovaks had just inherited the rotating presidency, and the Commission spent July 2016 proving the leavers right: waiving fines while threatening to seize funds, handing your data to American spies with a straight face, and insisting that the answer to a continent edging away was, as ever, more Europe.
Folly of the Month: Spain and Portugal escape the fine, but not the leash
For years the eurozone rulebook promised iron discipline: break the deficit limit and pay up to 0.2 percent of GDP. So when Spain and Portugal duly broke it, the Commission concluded on 27 July that this was an excellent moment to charge a fine of precisely zero euros. Pierre Moscovici explained that sanctions, even symbolic ones, would not be understood by a public already full of doubts, which is a novel theory of law enforcement: the rule applies until applying it would be unpopular. Having spared the cash, Brussels then floated suspending the two countries structural funds instead, so the punishment was not abolished, merely upgraded from a fine they could pay to a hostage they could not.
1. The Privacy Shield: surveillance with a friendlier logo
On 12 July the Commission adopted the EU-US Privacy Shield, the replacement for the Safe Harbour deal a court had just struck down, and declared European data safe in American hands once more. The campaigner Max Schrems, who had demolished the last version, predicted a round trip back to Luxembourg, which is exactly where it ended up four years later. A framework built to survive a court challenge that lasted precisely until the next court challenge.
2. A record cartel fine, paid by the buyers
On 19 July the Commission fined DAF, Daimler, Iveco and Volvo/Renault a record 2.93 billion euros for fixing truck prices for fourteen years. Brussels took its applause for the largest cartel penalty ever, then moved on, leaving the hauliers who actually overpaid to chase compensation through the courts themselves. The fine flows to the EU budget; the victims get a press release.
3. Two more charge sheets for Google
On 14 July the Commission posted Google a double helping of objections, one reinforcing the shopping case and a new one over AdSense advertising restrictions. Brussels cannot build a search engine, so it has settled for the next best thing, which is writing the manual for how everyone else must run theirs. The investigation was already older than some of the start-ups it claimed to be protecting.
4. The crypto crackdown arrives, just in case
On 5 July the Commission proposed dragging virtual currency exchanges and wallet providers under the anti-money-laundering rules and ending the anonymity of those swapping digital coins for real ones. A technology most officials could not define was nonetheless an urgent menace requiring the customer due diligence Brussels applies to everything that moves. Identify yourself first, innovate later, if at all.
5. Tax harmonisation by another name
On 12 July the Council adopted the Anti-Tax Avoidance Directive, five binding rules on interest, exit taxes, foreign companies and abuse that every member state must now copy into national law. Direct taxation was supposed to stay a national matter; this is the EU writing the tax code and calling it coordination. Member states kept their flags and surrendered the fine print.
6. CETA caught trying to skip the parliaments
Fresh from a referendum about who governs whom, Juncker briefly informed leaders that the Canada trade deal could take effect without any national parliament voting on it at all. On 5 July, after the obvious uproar, the Commission relented and proposed CETA as a mixed agreement requiring ratification across the bloc. A useful glimpse of the instinct: the democratic step is optional until someone insists on it.
7. The EU discovers it has a defence policy
On 8 July, at the NATO summit in Warsaw, the presidents of the Council and Commission signed a joint declaration with NATO pledging cooperation on hybrid threats, cyber, maritime operations and capability building. An organisation that already shelters under an American-led alliance signing a solemn document about doing more of what the alliance does is the EU at its most ceremonial: a signature in search of an army.
→ nato.int
8. Pooling the borders nobody is guarding
On 6 July the Parliament backed the new European Border and Coast Guard by 483 votes to 181, handing the agency formerly known as Frontex the power to deploy pooled teams when a member state cannot cope. The cure for an open-borders system that failed is, naturally, a larger Brussels agency to manage the failure. National authorities keep the day job; the EU keeps the override switch.
9. The court is asked to bless mass data retention
On 19 July the Advocate General delivered his opinion in the Tele2 and Watson cases, suggesting that blanket retention of everyone phone and location records might be lawful so long as the safeguards were nice enough. The reflex was telling: keep the records of the entire population first, and argue about the conditions afterwards. The full court would later go further and rein it in, which tells you how far the opening bid had strayed.
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