Kiran Bowry | In 2015, the European refugee crisis awoke Germans from a long and comforting slumber that Angela Merkel had lulled them into with her political style. The term “asymmetric demobilization” came to be known as a way of describing the German chancellor’s shrewd strategy of sitting on the fence and thereby winning elections. Merkel weakened her political competitors by avoiding controversial issues and, in doing so, choking off debate. Simultaneously, she adopted popular policy stances of her opponents and demobilized their potential voters.
Nick Ottens (Atlantic Sentinel) | After eleven years in power, Mark Rutte is suddenly vulnerable. The long-ruling Dutch prime minister won his fourth election in a row in March, but botched coalition talks have thrown doubt on his future. What started with suspicions Rutte had tried to get rid of a critical lawmaker turned into a wider question about his credibility. But discontent in other parties about Rutte’s longevity also plays a role. Before I dive in, let me remind you I’m a member of Rutte’s political party and voted for him in March. So this is not going to be an unbiased analysis, and the reason I’m publishing it as an opinion story…
Hans-George Betz (Via Fair Observer) | There is an unwritten rule in politics: If you are incompetent, at least you should not be corrupt. It seems nobody ever informed the German Christian Democrats that this was the way of things. How else to explain why Christian Democratic MPs thought it was perfectly fine to take advantage of Germany’s COVID-19 crisis to line their own pockets? In German, we have a word, “Raffzahn,” to refer to somebody who cannot get enough, never satisfied with what they have. In the concrete case, a member of the German Bundestag from the Christian Democratic Union (CDU) pocketed €250,000 ($298,000) in commissions for brokering a deal involving the procurement of FFP2 face masks by the federal and the state governments.
Dina Bajramspahic via Macropolis | In 2020, none of the six countries of the Western Balkans has made progress in the process of European integration. It is true that they could have done more, but this still begs the question of whether the process itself “is working” if no one is making progress, and many countries have not been making progress for years, decades even. Bad moves on both sides have led to mutual mistrust, which is reflected in reforms.
Piergiacomo Braganti (Wisdom Tree) | Entrusting Mario Draghi, former governor of the European Central Bank, to form an institutional Government had the immediate and visible effect of pushing the 10 Years BTP/German Bunds spread below 100 bps, at the lowest level since 2015. It revamped investors’ interest in Italian banks.
European Views | With EU-Russia relations at rock bottom following the arrest of dissident politician Alexei Navalny, a vicious crackdown on protesters, and the expulsion of several EU diplomats from Russia, imposing sanctions on the country should be a no-brainer for Brussels. Indeed, the Kremlin’s chronic flouting of international rules and norms, particularly as regards human rights, presents a fitting opportunity to put the EU’s newly minted Magnitsky-style sanctions regime to good use for the first time.
Intermoney | Days ago, Helge Braun, a close associate of Angela Merkel, proposed reforming Germany’s constitutional limit on public debt. This is an issue facing great resistance within key sectors of the CDU/CSU, making it difficult for it to go beyond the status of a mere proposal, but whose mere proposal represents a turning point. This debate will gain momentum after the September elections.
Gilles Moec (AXA Group Chief Economist) | In Rimini in August 2020, Mario Draghi gave a speech which in retrospect could well define his action. Draghi called for a reform of the European economic framework. This will be crucial for Italy, and hence for the fate of the whole monetary union. A structural reform platform primed by public spending will need time to prove itself to the markets. The fiscal surveillance system needs to evolve. As President of the ECB, Draghi did wonders thanks to Angela Merkel’s silent support (her refusal to criticize him for his unorthodox monetary policy). As, potentially, head of government of the Euro area’s third largest economy, he will have to get explicit support for a new framework.
CaixaBank Research (Álvaro Leandro | What consequences the agreement for the UK exit from the EU will end up having remains to be seen and will depend on how trade and foreign investment between the UK and Europe evolve, as well as London’s prevalence as an international financial hub. In Europe, the impact will be mixed across the different economies, depending on their trade and financial links with the United Kingdom.
Over the weekend, Mario Draghi has managed to obtain a broad majority to form a new coalition government in Italy after winning the support of the Five Star Movement and the ultra-right-wing League. His nomination is a try to turn the country around the virus-induced crisis, since he is a widely respected figure for his important role during the European debt crisis. The yield of the Italian 10-year bond fell last week -11 bps to 0.53% on the expectation of greater political stability in the country (vs. a high of 0.75% this year).