Eurobloat #0123 • July 2020
July 2020 was the month the European Union sat through five days and four nights of summit so that it could borrow money on the markets for the first time, then dress up a plastics levy as solidarity. The frugal four went home with bigger rebates, Apple kept its thirteen billion, and the Commission asked whether companies might please scan your encrypted chats for the children. Centralisation never sleeps.
Folly of the Month: A 750 billion euro debt and a brand new EU tax to match
After a marathon summit from 17 to 21 July, the leaders agreed that the Commission should borrow up to 750 billion euros on the markets, 390 billion of it handed out as grants no member ever has to repay directly. The interesting part is the repayment: the Parliament was furious that the deal did not go far enough on what it calls own resources, the polite Brussels term for taxes levied at EU level over the heads of national treasuries. The first of these, a levy on non-recycled plastic packaging, was waved through to start on 1 January 2021. So the Union now has its own borrowing, the beginnings of its own taxes and a Parliament demanding more of both, all settled while the cameras filmed exhausted prime ministers congratulating themselves on solidarity.
1. The plastics tax nobody voted for
The non-recycled plastic packaging levy, sold as an environmental measure, is in plain terms a new EU revenue stream calculated on national waste figures and payable to Brussels. The Parliament's only complaint was that the plastic contribution alone "will not do the trick" and that more EU-level taxes are needed. The principle, that the Union should raise its own money rather than ask members for it, was the quiet victory of the month.
2. The Commission would like to read your encrypted messages
On 24 July the Commission unveiled its strategy on child sexual abuse, which floated asking firms to detect and report illegal material inside end-to-end encrypted communications. The stated hope was a "technical solution" that scans your private messages while somehow preserving the encryption that makes them private. This is the seed from which years of Chat Control would grow, planted with the most unanswerable of justifications.
3. The court that broke transatlantic data and called it privacy
On 16 July the Court of Justice struck down the EU-US Privacy Shield in the Schrems II judgment, declaring American surveillance law incompatible with EU rights and stranding the more than five thousand companies that relied on it. Standard contractual clauses survived, but only with vague new "supplementary measures" that no firm could define. A masterclass in invalidating the practical arrangement while leaving everyone to guess at the lawful one.
4. Brussels loses thirteen billion it never should have claimed
On 15 July the General Court annulled the Commission's order that Apple repay thirteen billion euros to Ireland, ruling that Margrethe Vestager had simply failed to prove her case. Ireland, the supposed victim of the lost taxes, had fought alongside Apple to refuse the money. A reminder that the Commission's grandest tax raid on a member state was built on an argument the judges found wanting.
5. The frugal four prove that resisting Brussels still works
Austria, Denmark, the Netherlands and Sweden spent the summit haggling and went home with their rebates fattened, the Dutch annual cheque rising to 1.9 billion euros and the Austrian one doubling. The pan-EU grant pot was duly trimmed from 500 billion to 390 billion to pay for their reluctance. The lesson, that holding out against more Europe yields results, was not the one the federalists wanted taught.
6. Reform plans to be graded by qualified majority
Buried in the recovery deal was the arrangement that national recovery and reform plans must be approved by other governments, by qualified majority rather than unanimity. The Netherlands wanted a veto for each capital; it got a committee instead. So the Union now marks the homework of its own members, and a single country can no longer say no.
→ cnbc.com
7. Money tied to "rule of law", as defined in Brussels
The same summit agreed in principle that access to EU funds should depend on respecting the rule of law, a mechanism to be fleshed out later in the year. In practice this hands the Commission and a qualified majority a lever to withhold a member's money over disagreements that Brussels gets to define. Solidarity, it turns out, comes with conditions written by the paymaster.
8. Five days of sermons to discover the obvious
On 28 July the Council issued grave conclusions on Hong Kong, expressing concern at Beijing's new security law and agreeing a package of measures including export limits and scholarships. Strongly worded concern is the Union's signature export, and on China it remains the only one delivered on time. The actual sanctions other powers imposed were nowhere to be found.
9. A consultation to regulate the internet
Through July the Commission ran the public consultation that would feed the Digital Services Act, its plan to "harmonise" how online platforms police content across the bloc. The framing was Big Tech accountability; the substance was a new layer of EU rules over what may be said and seen online, with the largest platforms answering to Brussels. The questionnaire closed on 8 September, and the leash was being measured.
→ digital-strategy.ec.europa.eu
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