Wednesday, 19 May , 2021

EU sharply divided

ECB tensions resurface as pandemic second wave builds

By For a while, the European Central Bank seemed to be pulling together through the coronavirus outbreak. We really ought to have known better.
The second stage of the pandemic is reviving a familiar split within the ECB over policy. A German-led bloc of monetary hawks sees yet another attempt to saddle it with the debts of Southern Europe. The rest of the institution frets that foot-dragging will endanger the economic recovery if the health crisis worsens.
Those tensions are bubbling up within weeks of the euro hitting a two-year high against the dollar, which threatens to hurt European exports. The U.S. currency has slid as the virus has driven the Federal Reserve to slash its interest rates to zero.

Council and Parliament warn of budget delays as talks stall

By The European Parliament and the German presidency of the Council of the EU are pointing fingers at one another as the specter of an EU budget delay looms closer.
“We observe with concern that the number of different blockades in the budget negotiations is increasing rather than decreasing,” said a spokesperson for the German presidency on Tuesday. “The timetable is increasingly slipping. It is becoming increasingly likely that the EU budget and the recovery fund will be delayed,” the spokesperson added.
The European Parliament’s consent is required in order for the bloc’s new €1.074 trillion seven-year budget to come into effect — and the legislature’s negotiating team accused the German presidency of being inflexible in the ongoing talks.

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Commission report finds many EU nations fall short on rule of law

By Several EU nations are failing to meet the bloc’s minimum standards on fundamental principles of rule of law, including judicial independence, media freedoms, anti-corruption measures and basic governmental checks-and-balances, the European Commission said Wednesday.
In its first comprehensive assessment of rule-of-law conditions, published Wednesday, the Commission predictably raised serious questions about Poland and Hungary, countries that have faced disciplinary procedures in Brussels because of longstanding alleged violations of basic democratic principles.
But the report also painted a troubling portrait of many other countries falling short of minimum standards, which are a basic requirement of EU membership.

Germany seeks breakthrough on linking EU payouts to rule of law

By Germany on Monday floated a compromise plan on linking payouts of EU funds to respect for the rule of law, aiming to defuse a highly emotive dispute that threatens to hold up approval of the bloc’s €1.82 trillion budget-and-recovery package.
Berlin, as the current presidency of the Council of the EU, put forward a plan that many observers saw as a watering down of a European Commission proposal from two years ago. It would set a higher bar for withholding payouts and use a narrower definition of what would represent unacceptable behavior.
To stand a chance of success, any compromise has to appeal to multiple, very different constituencies. Poland and Hungary, accused by EU institutions of undermining the rule of law, are wary of any measures that could restrict their access to EU cash and have threatened to block the budget and recovery package until they are satisfied with rule-of-law measures.

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