EU news focus

EU news focus: 30.08.-05.09.2013: Remembering WW2, economic improvement, European Citizens’ Initiatives, Syria, the telecoms

EU News Focus

Internal affairs

Remembering and forgiving: Hollande and Gauck in Oradour-sur-Glane

70 years after the massacre of 642 inhabitants of Oradour-sur-Glane, a small French village, by a SS division, the commemorations were marked by the presence of Joachim Gauck, the German President, on the side of François Hollande, the French President. It was the first official visit of such a highly-ranked German dignitary to the ruins of the village that remains a memorial of Nazi barbarism during World War II. Mr Gauck, who was born during the war, insisted on the fact that today’s Germany is different from Nazi Germany and that it stands at the victim’s side. Mr Hollande praised the capacity of today’s German officials to recognise the crimes committed in the past and underlined the symbolic importance of Mr Gauck’s visit, which confirmed that French-German friendship was “a challenge to history and an example for the entire world”. Mr Gauck thanked his counterpart (as representative of the French people) for the will of reconciliation. Both Presidents also made allusion to current events: Mr Hollande declared that such a commemoration ceremony, with French and German dignitaries side by side, was “a promise to defend human rights each time they are violated, whether in a close place or far away”; Mr Gauck stated that today’s Germany wants “to build Europe, not dominate it”. Mr Gauck’s visit was seen as a new symbol after the meetings of De Gaulle and Adenauer in Colombey-les-Deux-Eglises, in 1958, and of Mitterrand and Kohl in Verdun, in 1984.

Related to the topic of Nazi crimes, the German justice announced this week that 30 former Auschwitz Nazi guards could be prosecuted, despite their old age. Justice officials are now taking a new approach, not focusing only on whether the person has personally committed crimes, but starting proceedings also against people who contributed to the management of the concentration camps.

Sources: Le Monde, Der Spiegel, BBC (Oradour, German justice), El País.

Economy

The economic situation in Europe

Some good economic news arrived for Europe, but there were also grounds for refraining from celebrating too quickly an end of Europe’s economic woes.

On the positive side, the Eurozone returned to growth in the second quarter of 2013 with a rate of 0.3%. Furthermore, the PMI (Purchasing Manager’s Index) in manufacturing rose from 50.3 in July to 51.4 (a number above 50 is an indicator of future growth). Therefore, Eurozone factory orders reached their highest level since May 2011. Markit, which publishes the index, indicated that France was the only Eurozone country not to enjoy the improvement. The economy should continue to grow, as the Markit index for new orders climbed to 53.3. Other data showed the EU as a whole had reached a half-yearly trade surplus (€35 billion) in the first semester of 2013, the first time since 1999. Germany, the UK, Italy and Spain were the main contributors to the improvement compared to a year earlier.

However, this improvement in the economic situation was not yet verified on the job market, with employment numbers continuing to decline. Eurozone unemployment remained close to its record high, at a rate of 12.1%. Analysts indicated that there may be a slight temporary improvement due to seasonal factors, but no long-lasting changes. In Germany, retail sales in July were slightly below expectations and unemployment was nearly stable (there was a marginal increase). Analysts expect that economic recovery would take some months to translate into additional hires.

Finally, Portugal, although facing “a terrible year” in the words of its Prime Minister, Pedro Passos Coelho, finally emerged from recession, showing the strongest second-quarter growth rate in the EU, ending two and a half year of formal recession. Exports and tourism particularly contributed to the economic improvement. The PM declared that growth numbers were the positive result of his government’s austerity policy and warned that the crisis was not yet over, with the unemployment rate still over 16%.

Sources: BBC (PMI index, Germany), The Guardian, The Economist, El País, La Tribune.

Note: It is good news that the EU finally formally comes out of recession. However, as the Portuguese PM rightly puts it, “the crisis is not yet over”. Several challenges stand ahead of European leaders: fostering the recovery, helping to translate growth in job creation, and creating the appropriate framework to prevent such a deep crisis to happen again anytime soon. It is important that the good news spur governments’ efforts to continue on the road of structural reform (both at national and European level), rather than letting them be tempted by loosening the path of change.

Citizenship

8 European Citizen Initiatives (ECI) will expire in two months

The ECI was introduced by the Lisbon Treaty and gives citizens the right to ask the Commission to make a legislative proposal, provided they gather 1 million signatures within 12 months. Furthermore, the minimum number of signatories must be met in 7 Member States. Of the 17 ECIs currently gathering support, 8 have only two more months to reach the thresholds. Only one is already satisfying the requirements – “Water and Sanitation are a human right! Water is a public good, not a commodity!” –, and another is close to the goal – “One of us” (for a ban on research on human embryo). Three do not communicate about their situation and three others are pretty far from the target and will probably fail.

Source: Agoravox, official register of ECIs.

Note: For more information about current ECIs and how to start one, visit the Commission’s website dedicated to the ECI! Your voice makes a difference! You can help change Europe!

International Relations

Syria (again…)

This week again, Syria dominated the headlines and will therefore be the topic of the “international relations” section of our newsletter.

Following Barack Obama’s decision to wait for Congress’ approval before launching any military intervention in Syria, François Hollande, the French President, who had been very tough and openly supported strikes, seemed a bit isolated. A French general even declared that Obama’s U-turn showed a huge contempt for France. He insisted that an intervention was necessary to preserve the credibility of the Western powers which are the guarantors of the international balance and stability. He asserted that it was useless to have a nice army if we give the image of weak democracies and that the UK had lost its status of credible military power following the Parliament’s rejection of military action.

In any case, the decision of the British and American leaders to consult their Parliaments had an impact in France, where a debate was also held, though without a vote which is loudly demanded by the opposition, though that very same opposition did not advocate a debate two 2 years ago, when President Sarkozy decided to intervene in Libya (to be fair, Mr Hollande’s behaviour is also the contrary of his stance when he was in the opposition). Such a vote would be an institutional innovation in France, where the Gaullist tradition set that foreign and defence policy belongs to the “exclusive domain” of the President. During the debate, the government presented a report asserting that the chemical attacks in Syria could be carried by no one else than the Assad regime. Earlier, the French government had also made public a report by its intelligence services accusing the Syrian regime of having already used several time chemical weapons against its own population in the recent months.

Speaking about the European reaction to the Syrian crisis, the French MEP Arnaud Danjean, vice-President of the EP subcommittee on security and defence, stated that the EU shall not be unfairly accused of being inaudible (which it is…), because the Member States are the ones competent on military matters and only military options are being considered. However, he would like Europe to adopt a common diplomatic position. This would require that Member States play the game and adequately consult each other and work together. He indicated that an operation should ideally be supported by a UN resolution or, at least, by a Western coalition supported by the Arab League.

Elmar Brok, President of the EP’s foreign affairs committee condemned the use of chemical weapons and recalled that a military action alone would not solve the problem: he stated that negotiations to find a political solution would still be needed, and he criticised Russia’s and China’s uncooperative attitude in the UN Security Council. EP President Martin Schulz also warned against taking action quickly without a united international community and definitive results from the UN report.

Sources: Le Monde (Obama’s U-turn, Danjean), BBC, El País, European Parliament.

Industry/Technology/Business

Movements on the telecom market

Two big moves were announced in the recent days: Microsoft will buy Nokia’s mobile phone business for $7.2 billion (€5.4 billion) and Verizon Communications will pay $130 billion to buy Vodafone’s 45% stake in Verizon Wireless.

Microsoft’s move is an attempt to become more competitive on the market for smartphones and tablets, where it lags far behind Google and Apple. Around 32,000 Nokia staff, including its CEO, Mr Elop, will join Microsoft in 2014. Mr Elop is even tipped as a favourite to take Steve Ballmer’s succession, when the latter will step down as CEO of Microsoft next year. Mr Ballmer declared that the deal aimed at shifting his company’s focus on devices and services, but Microsoft’s shareholders coldly welcomed the deal, with Microsoft’s share falling by more than 5%. On the contrary, investors considered it was a good deal for Nokia, whose share rose by more than 35%. Nokia will now get some financial strength again (Microsoft has $77 billion cash reserves) and will focus on “network equipment manufacturing, mapping and location services, and the development and licensing of technology”. Nokia shareholders and regulators still have to approve the deal.

As to the Verizon-Vodafone deal, it will be the second biggest in the history of the telecoms industry. Verizon, one of the two dominant operators on the American mobile market, wanted to gain full control of its mobile operations. This deal will leave the British operator with lots of cash and several options to use it: pay some dividends to shareholders, reduce its debt, buy stakes in other companies (both in Europe and in emerging markets), and invest in new technologies to improve its services (with the possibility to consequently increase its revenues). The end of the joint venture had been considered for some time, but until recently, Vodafone wanted to keep its stake in Verizon Wireless, a highly lucrative business.

Sources: The Economist (Microsoft/Nokia, Verizon/Vodafone), BBC, Corriere della Sera, NY Times, NY Times Dealbook.

Note: If you are interested in the European telecoms market and its current troubles and evolutions, there is an interesting article by The Economist of June 29th, 2013.

Next week…

The European Parliament will hold its first post-holidays plenary session, in Strasbourg. It has also disclosed its priorities until the end of the year. In September, it will vote on the 2014-2020 EU financial framework. This vote will also have an incidence on the reform of the Common Agricultural Policy (CAP). Furthermore, the President of the Commission, José Manuel Barroso, will pronounce the State of Union speech, outlining his priorities for 2014. Moreover, the EP’s civil liberties committee is currently investigating the PRISM scandal (a report is expected at the end of the year).

On the Council side, the ministers for Agriculture have an informal meeting from the 8th to the 10th of September in Vilnius. The Ministers for Economic and Financial affairs (ECOFIN Council) will meet on September 13th and 14th.

From the 9th to the 12th September, the EU Youth Conference and a meeting of the Directors General for Youth Affair take place in Vilnius. As indicated on the Presidency’s website, “the meeting involves delegations from 28 Member States, representatives of the European Youth Forum, representatives of the General Secretariat of the EU Council, in charge of youth matters, representatives of International Youth Organisations, EU candidate countries and the countries of the European Economic area”.

Sources: EP website, Lithuanian Presidency of the Council.

Pierre-Antoine KLETHI

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