CER Bulletin Issue 138 | June/July 2021
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CER Bulletin Issue 138 | June/July 2021 Macron’s Europe By Charles Grant Hurrah for the conference on the future of Europe! By Camino Mortera-Martinez Can the EU set a global rulebook for Big Tech? By Zach Meyers Macron’s Europe by Charles Grant Alongside Germany, France has often shaped the EU’s agenda. Recently, French influence has grown, and if President Emmanuel Macron is re-elected in April 2022 – likely, though not certain – he will be Europe’s pre-eminent leader for several years. One reason is that Macron is brimming with So, if Macron wins re-election, he will have ideas on the future of Europe, which he more heft than the new German chancellor. The pursues energetically. The Brussels institutional economic and political travails of Italy and Spain machinery feeds off ideas. Macron’s predecessor, limit their influence, and in any case both quite François Hollande, came up with fewer schemes often line up with France on EU policy. Poland is and initiatives and was a quieter voice in the in trouble for not respecting the rule of law and so European Council. cannot set the EU’s agenda. A second reason is Brexit. The UK led the France will use its EU presidency in the first half of EU’s economic liberals in resisting France’s 2022 to promote its ideas on Europe. Fortunately penchant for protectionism and an active for Macron, many of the key people in Brussels industrial policy. Now the Dutch sometimes are sympathetic to France. Ursula von der Leyen, try to lead the Nordic, Baltic and other the Commission president, Charles Michel, the pro-market countries, but with less authority European Council president, and Josep Borrell, the than did the British. High Representative for foreign policy, owe their jobs to Macron’s support. They are at the very least A third reason is Chancellor Angela Merkel’s open to French thinking. In Frankfurt the president impending retirement. Her track-record in of the European Central Bank, Christine Lagarde, crafting compromises helped to make her happens to be French. So are some important the European Council’s most respected leader. officials in Brussels, including Thierry Breton, the Germany is already distracted by the campaign commissioner for the internal market, and Olivier for September’s general election, after Guersent, the director-general for competition which the formation of a new coalition policy. In the European Parliament, too – which government may take two or three months. France has previously not taken very seriously Then the new chancellor – whether Armin – the French have become more influential. Laschet or Annalena Baerbock – will need Macron’s MEPs are the largest component of the time to establish themselves as a substantial centrist Renew Europe formation, one of the three figure in EU politics. groups that run the Parliament. [email protected] | WWW.CER.EU CER BULLETIN ISSUE 138 | JUNE/JULY 2021 Those inside the French government argue platforms behave responsibly. The French doubt – with some justice – that it is not their they can conclude the Digital Markets Act and machinations and string-pulling that ensure Digital Services Act – which they strongly support French influence, but rather the fact that the – during their presidency, but expect to make world is changing. COVID-19 and the new good progress on both. They expect this pair to emphasis on the need for resilient supply set global standards for the regulation of Big Tech. chains have made more people sympathetic to Macron’s idea of ‘strategic autonomy’. Broadly The French like Joe Biden’s plans for a minimum defined, the term means that Europe develops rate of taxation for large companies. The US is not only the capacity to pursue its own interests also working on an OECD-wide tax that would in defence and security, but also safeguards apply to most of the world’s largest multinationals its independence in areas like energy, trade, – whether digital giants or not – and replace financial services and critical technologies. the unilateral taxes that several countries have imposed on the revenues of digital giants. The The French are happy that the Commission is French worry that this could still allow some digital increasingly willing to stand up to China on firms to avoid proper taxation, and have not yet economic issues. Thus the Commission has decided whether to support the Commission’s produced a policy paper on the need for the EU own plans for an EU-wide digital levy – in addition to gain better access to supplies of rare earths to whatever the OECD agrees. If they do support (currently dominated by China). It has proposed the Commission they could annoy the US. legislation that could exclude foreign firms (for example, from China) that receive distortive The second priority is to show that the EU subsidies from taking part in European public can make a difference to climate change by procurement or from acquiring European firms. implementing a carbon border adjustment The EU’s foreign investment screening regulation mechanism (CBAM). The French know that many has been in operation since October 2020. The of Biden’s people oppose a CBAM, and that this Commission has become more supportive of alone will cloud the views of some European industrial policy, for example by encouraging leaders, including in Germany. But the French are Franco-German efforts to foster an electric-vehicle not deterred. battery industry. And its trade policy now places greater emphasis on reciprocity and the ability to The French talk of creating a climate club that act unilaterally against unfair practices. All these would include the OECD countries and others steps reflect French priorities. that adopt effective emission-reduction policies. Trade between the club’s members would avoid Some of the Nordic and Baltic countries are carbon-related charges, but goods from countries uncomfortable with these shifts – but many with laxer climate policies, like India, China and member-states go along with a lot of French Russia, could face them. Apparently the OECD ideas. German opinions are divided but some likes this plan, while US climate envoy John key figures such as Peter Altmaier, the economy Kerry, though initially sceptical, is now willing to minister, agree with the French on the need for consider it. But French officials insist that the EU ‘European champions’. The leaders of Germany’s should not wait for the OECD before pressing Green party seem to like the idea of increasing ahead with a CBAM. Europe’s strategic autonomy. The EU will need to find about €15 billion a year In foreign policy, too, French ideas often prevail. to repay the debt that is funding the RRF. Both Take the European Peace Facility, a new fund a CBAM and a digital levy are candidates to over which – because it is outside the EU budget provide the EU with fresh ‘own resources’, as is – the European External Action Service and the Emissions Trading Scheme. The CBAM could the member-states have more sway than the in theory be decided by qualified majority, as Commission. France will probably ensure that a an environmental measure – but any matter big chunk of the money goes to its priority of the concerning own resources would require Sahel, for example to train and equip troops. unanimity. French officials say the first three months of Macron will probably have to battle both their EU presidency must produce ‘concrete American and European opponents to get his way deliverables’, to help Macron to win re-election. on the CBAM and digital taxes. But, as one former They talk of progress on European defence, adviser notes, “his chutzpah and self-confidence making a success of the Recovery and Resilience are extraordinary”. Facility (RRF) and starting to reform the EU’s fiscal rules. But they mention two priorities in particular. Charles Grant One is to show that the EU is making digital Director, CER @CER_Grant Hurrah for the conference on the future of Europe! by Camino Mortera-Martinez If done right, the conference on the future of Europe can help bring about meaningful reform in the EU – even if that means changing the treaties. At first sight, the conference on the future of The conference’s main strength should be as a Europe, an EU-wide consultation lasting nearly platform for citizens who may otherwise remain a year, may not seem the most straightforward unheard. A mostly digital conference may boost way to generate change and boost democracy. the participation of digital natives and people In fact, with three presidents and a complex generally used to interacting through a screen. governing structure made up of over 400 But it will discriminate against less digitally able people, the conference may not seem the most people, like the elderly, and against those living straightforward way of doing anything at all. in rural or remote areas with shaky internet Many think that is the point of the exercise. And connections. A predominantly digital format yet, with a few tweaks, the conference could end also makes it hard to engage with local civil up challenging everybody’s exceedingly low society groups who may raise issues that are expectations – and become the first step towards important to many people, and who already much needed reform in the Union. normally struggle to get a hearing in Brussels. Aware of this bias, the Commission has hired a The conference’s main, and most overlooked, private company to randomly select 108 citizens problem is timing. It should have started at the who will represent the voice of ordinary people. beginning of 2020 and finished in spring 2022. But that alone will not be enough to ensure the But the COVID-19 pandemic intruded and the conference reaches out beyond urban, educated start of the exercise had to be delayed.