Eurobloat #0110 • June 2019
June 2019 was the month the Union remembered it was less a club of friends than a schoolmaster with a ruler. It graded Italy's homework, struck down Poland's law and Germany's toll, switched off the Swiss stock market, and found a spare afternoon to outlaw the cotton bud.
Folly of the Month: Pay the toll or lose your stock exchange
At the end of June, Brussels let the recognition of Switzerland's stock exchange lapse, the so-called equivalence that allowed EU trading venues to trade roughly 250 Swiss shares. The technical decision had nothing to do with markets and everything to do with bullying Bern into signing a wider institutional treaty it did not want. The Swiss, being a functioning democracy that consults its citizens, declined to be rushed, so the Commission flicked the switch and dared the London Stock Exchange to delist UBS. It is a curious advertisement for the Single Market that the surest way to be locked out of it is to remain free and self-governing.
1. The Commission marks Italy's budget and finds it wanting
On 5 June the Commission concluded that a debt-based excessive deficit procedure against Italy was warranted, dangling fines of up to 0.2 per cent of GDP, around 3.5 billion euros, for the crime of spending its own money. Rome was duly summoned to show extra fiscal effort, and by July the threat quietly evaporated, which tells you the whole exercise was theatre. The lesson for elected national governments is plain: the budget is yours to write and Brussels' to grade.
2. The Court of Justice overrules a national parliament's law
On 24 June the Grand Chamber ruled in Commission v Poland that Warsaw's law lowering the retirement age of Supreme Court judges breached EU law, the first final judgment of its kind. Whatever one makes of the Polish reform, the precedent is the prize: Luxembourg now claims the last word on how a member state organises its own courts.
3. The straw, the cotton bud and the cutlery are outlawed
On 12 June the Single-Use Plastics Directive was published in the Official Journal, banning plastic straws, cotton buds, cutlery, plates and stirrers across a continent of 450 million people. Twenty years of treaty-making and an army of commissioners, and the great achievement on display is the prohibition of the drinking straw.
4. Upload filters come into force
The Copyright in the Digital Single Market Directive entered into force on 6 June, with its notorious Article 17 obliging platforms to police everything users post. Sold as protection for artists, it hands the machinery of automated content-scanning to whoever controls the filter, and quietly conscripts every website into the censor's office.
5. Draghi promises yet more free money
At the ECB's Sintra forum on 18 June, Mario Draghi signalled fresh stimulus and rate cuts, sending the German ten-year bund yield to minus 0.30 per cent for the first time in history. A decade after the crisis the central bank's answer to a slowing economy was, as ever, to print more and charge savers for the privilege of lending to governments.
6. Germany's motorway toll is struck down
Also on 18 June, the Court ruled that Germany's planned car vignette was indirect discrimination on grounds of nationality, because German drivers got a matching tax rebate while foreigners simply paid. Berlin had legislated, Austria had sued, and Luxembourg had the final say over a domestic road charge that never collected a single euro.
7. A trade deal twenty years in the making
On 28 June, at the G20 in Osaka, the Commission announced political agreement on the EU-Mercosur deal after two decades of talks. A bloc that prides itself on speed and unity needed twenty years to agree to sell more cars to South America, and even then left the small matter of ratification for later.
8. Leaders deadlock over who gets the top jobs
The European Council of 20 and 21 June broke up without agreeing who should run the Commission, forcing Donald Tusk to recall the leaders for an emergency all-nighter from 30 June. The spitzenkandidat process the voters had been promised was junked, and the job ultimately went to Ursula von der Leyen, a name that had not even been on the ballot.
9. The monthly homework round of infringements
On 6 June the Commission issued its routine infringements package, taking legal action against a sweep of member states for failing to bend their national law to Brussels' satisfaction. It is a standing reminder that the relationship is not partnership but supervision, delivered punctually every month like a parking ticket.
Postscript
A fitting month: Brussels switched off a free country's stock market, graded a member state's budget, overruled a parliament and a court, and banned the straw. Britain, watching this from the exit, could be forgiven for feeling vindicated.
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