Eurobloat #0121 • May 2020
A pandemic is a terrible thing to waste, and in May 2020 Brussels did not waste a second of it. Within a single month the Commission asked to borrow three quarters of a trillion euros in its own name, the ECB declared that no mere national court could question it, and everyone paused to light a candle for the seventieth birthday of the whole arrangement.
Folly of the Month: Three quarters of a trillion euros, charged to a card nobody can see
On 27 May the Commission unveiled NextGenerationEU, a plan to borrow 750 billion euros on the markets in the EU's own name, lifting the own-resources ceiling to two per cent of gross national income and handing out 500 billion of it as grants that the recipients would never repay, with the remaining 250 billion offered as loans. The genius of the scheme is that no member state has to find the money now, which is another way of saying the bill has been posted to a future that cannot vote. To service it, the Commission helpfully proposed brand new EU-level taxes, because the surest way to make a temporary emergency permanent is to attach a revenue stream to it. A crisis, it turns out, was exactly what was needed to do the one thing the treaties were always supposed to forbid.
1. The court in Karlsruhe says the quiet part out loud
On 5 May the German Federal Constitutional Court ruled that the ECB's bond-buying and, remarkably, the Court of Justice's blessing of it, were ultra vires and not binding in Germany, calling the Luxembourg reasoning "simply not comprehensible." For one giddy moment a national court reminded Brussels that powers are granted, not assumed, which is presumably why the EU later opened infringement proceedings against Germany for the offence of noticing.
2. The ECB answers to no one, and would like that in writing
On 5 May the European Central Bank responded to the German judgment by declaring that it takes note of the ruling, remains fully committed to its mandate, and answers to the Court of Justice alone rather than to any national court. It is a bracing constitutional theory: a bank that creates money for an entire continent insists that the parliaments and courts of its member nations may not ask it to explain itself.
3. Paris and Berlin invent the coronabond they swore they never would
On 18 May Merkel and Macron proposed a 500 billion euro fund of joint EU debt handed out as grants that beneficiaries would not repay, the first time Germany had agreed to let Brussels borrow collectively. Years of solemn vows that this could never happen were dissolved in a single video call, and the Frugal Four were left to discover that "never" had quietly been redefined as "until it is convenient."
4. Luxembourg orders Hungary to open its transit zones
On 14 May the Court of Justice ruled that holding asylum seekers in the Röszke transit zone on the Serbian-Hungarian border amounted to unlawful "detention," obliging Budapest to dismantle the arrangement. A member state guarding its own frontier was overruled from afar, and a Court with no border of its own decided how everybody else should manage theirs.
5. Farm to Fork promises to grow less food, on purpose
On 20 May the Commission adopted its Farm to Fork and Biodiversity strategies, pledging to cut pesticide use by half, slash fertiliser use by a fifth and put a quarter of farmland under organic production by 2030. Setting binding continental targets to reduce agricultural output during a crisis about supply chains is the kind of thinking that only flourishes far from a farm.
6. State aid for thee, but the rules are ours
On 8 May the Commission expanded its temporary framework to let governments inject equity into their own struggling companies, having first built the rulebook that forbade them from doing so. Brussels graciously suspended its own restrictions, attached fresh conditions on dividends and reporting, and presented the loosening of a cage as an act of generosity.
7. A website to tell you whether you may go on holiday
On 13 May the Commission produced a tourism and transport package and the Re-open EU portal, thirty indicators across thirty borders, to coordinate a "gradual" reopening of internal frontiers it had spent decades insisting must never close. Having presided over the chaos of every country shutting its own doors in March, Brussels offered the continent its considered solution: a dashboard.
→ single-market-economy.ec.europa.eu
8. The Parliament wants its own taxes, and says so
In its May resolution on the recovery plan the European Parliament demanded a battery of new "own resources," including a digital levy and a carbon border charge, to fund the borrowing spree. The body whose chief complaint is that it lacks power has concluded, as ever, that the remedy for every problem is more money flowing directly to itself.
9. Seventy candles, blown out from a safe distance
On 9 May the EU marked the seventieth anniversary of the Schuman Declaration, the date it had pencilled in to launch its Conference on the Future of Europe before the pandemic spoiled the party. Locked-down citizens were treated to commissioners and officials reflecting at length on shared values, proving that whatever else a crisis interrupts, it never interrupts the EU's appetite for a sermon about itself.
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