Eurobloat #0076 • August 2016
August is the month Brussels supposedly goes on holiday. Instead it handed Ireland a thirteen-billion-euro invoice nobody asked for, watched its border deal with Ankara wobble, and started counting how many days you may use your own phone abroad.
Folly of the Month: A small island told it taxed Apple too little
On 30 August the Commission ruled that Ireland had granted Apple up to thirteen billion euros of illegal state aid, and ordered Dublin to claw it back from a company that was perfectly happy where it was. The remarkable part is that Ireland did not want the money: a sovereign state was instructed by Brussels to raise taxes it had chosen not to levy, on the theory that a national tax rate is now a matter for Commissioner Vestager. Margrethe Vestager decided that an effective rate of 0.005 per cent offended her, which is fair enough, except that setting the rate was meant to be Ireland's job, not hers. Tax sovereignty, it turns out, is a generous thing the EU lends you until it disapproves of how you spend it.
1. Turkey threatens to open the gates
On 15 August Turkey's foreign minister Mevlut Cavusoglu warned that the migration deal would be torn up unless Turks got visa-free travel by October, hinting that hundreds of thousands of people in Turkey could simply be waved towards Europe. This is what happens when you outsource your external border to a strongman and call it a triumph: the strongman reads the contract and notices he holds the only copy.
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2. The visa bribe nobody can pay
The same blackmail had a price tag: visa-free access to the Schengen area for seventy-eight million Turkish citizens, promised for June and still undelivered in August because Ankara would not narrow its terror laws. So the EU spent the month trapped between a deal it could not honour and a partner it could not refuse, which is roughly the diplomatic equivalent of having signed a lease without reading it.
3. How many days may you use your own phone?
Reports surfaced in August of a draft Commission scheme to cap "roam like at home" at ninety days a year and thirty consecutive days, lest anyone enjoy abolished roaming charges too enthusiastically. The plan was so absurd that within days of formal publication Juncker personally ordered it withdrawn, which tells you it left the building without anyone sensible reading it first.
4. The data deal held together with string
From 1 August American firms could begin self-certifying under the new EU-US Privacy Shield, the hastily assembled replacement for the Safe Harbour framework that the EU's own court had already struck down. A voluntary American promise, policed by an American regulator, declared adequate by Brussels: nobody seriously expected it to survive contact with a courtroom either, and it would not.
5. Brussels grades Warsaw and starts the clock
August found Poland sitting under a Commission rule-of-law recommendation issued at the end of July, with a three-month deadline to fix its constitutional court to Brussels' satisfaction. The novelty is the EU appointing itself headmaster, marking a member state's domestic institutions and setting homework, while insisting this is not interference in national affairs.
6. A trade deal demoted to satisfy itself
Having spent August preparing CETA for signing, the Commission conceded the EU-Canada agreement was a "mixed" deal needing ratification by every national and regional parliament, including Wallonia's. Brussels insists it had exclusive competence and gave the concession only to keep the peace, which means it surrendered a power it claims to hold to avoid admitting the members might not agree.
7. The central bank as corporate benefactor
Through August the ECB kept buying corporate bonds under the programme it had launched in June, one strand of an eighty-billion-euro-a-month asset-purchase scheme now hoovering up the debt of large multinationals alongside everything else. Quantitative easing for blue chips, financed by savers earning nothing, was sold as monetary policy rather than the largest unaccountable subsidy scheme on the continent.
8. A border force is born on paper
August was the final stretch of legislative haggling for the European Border and Coast Guard regulation, the agency Brussels had decided it needed after its own open-borders Schengen failed. The fix for a Union that could not control its frontiers was, naturally, a new Union body that, where a member state will not act on its own border failings, lets the Council order an intervention and lets the others reintroduce internal checks against it.
9. A Dutch market trimmed to Brussels' taste
On 3 August the Commission cleared the Vodafone and Liberty Global joint venture in the Netherlands, but only after extracting the forced sale of Vodafone's consumer fixed-line business as the price of permission. Two firms wanted to merge their Dutch operations; Brussels agreed, provided it could redraw the map of who owns what first.
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