Macroleon’s EU strategy marches on !

On the evening of Tuesday 21st July 2020 President Macron was interviewed during the main evening news bulletin on TF1 – the principal commercial television channel in France. Mr Macron looked happy, relaxed and relieved. He had that morning finished a crucial marathon EU summit called to determine the Budget plan for 2021-2027, including a significant financing to relaunch the European economy following the Covid 19 crisis.

He was keen to point out to French viewers that the “historic” decisions taken were a direct result of his EU policy as presented when he was elected in 2017 and pursued systematically ever since.

President Macron emphasized that the agreement reached represented the substance of the Franco- German project announced on 18th May this year to relaunch Europe. That Franco-German co-operation and initiative was the only way to take the EU project forward. Without agreement on that axis, the EU could not advance [note the strategic reality in play here].

France will benefit from 40 billion euros of the 750 billion relaunch package agreed, ranking third in the order of biggest beneficiaries after Spain and Italy. Mr Macron explained that the cost of this was not going to be borne by the French at all, but by

  • a totally new EU level facility to borrow money
  • the introduction of EU level taxes on American tech giants like Google, Apple, Facebook, and Amazon
  • by taxing failure to comply with regulatory norms for the environment

Ergo the EU is wonderful because now that the EU is becoming even more integrated, the French taxpayer benefits without having to pay out !  A win-win scenario.

Macron is right, however, to claim credit for himself.

Having watched his meteoric rise from nowhere in terms of public profile, I can say that his plans for the EU are indeed working out as he intends. Previous blogs have covered his other projects along the way. This latest EU agreement represents an historic first in giving the EU as an institution the ability to raise money independently of its member states, both by direct taxes [gently introduced on big business – not the average European] and by direct borrowing on the international markets.

Note that this completely contradicts the assertions of Remain campaigners both during and after the Brexit campaign. They flatly denied that the EU was a Super State, federalist project despite all the emerging evidence both before June 2016 and in the years since. 

With the good fortune characteristic of his life and career, he has had an aging and waning German Chancellor to charm and out manoeuvre in order to get what he wants. Circumstances like that are a great help. But it is not all circumstance as critical as those are – remember MacMillan’s pertinent comment “events, dear boy, events“.

Macron has all the attributes of the successful politician. He has endless and effortless charm; he is extremely intelligent and highly educated; he has a pertinent grasp of the strategic and how to play it; he is eternally optimistic and this optimism helps him spin all he says to make his ideas and plans look like the only game in town worth watching and playing.

He is the consummate politician, make no mistake. And this agreement bears all the hallmarks of his political handling which includes:

  • taking and keeping the initiative
  • setting out the plans and procedures on his own terms, not opponents
  • obliging everyone to work within the terms and parameters he has set
  • persuading the media to represent opponents in a negative light [the sensible and cautious so-called “Frugal Four” – sometimes Five countries –  were designated as responsible for holding up the Salvation of Europe !]

But the reality is that this means the inevitable introduction of EU level taxes on European citizens, going into EU level coffers, for EU level projects regardless of the individual nation states. This is the same EU which for two decades has failed to have its financial accounts approved by its own auditors.

The reality is that this all important supranational level which dictates to member governments their laws and their policies, will now be subject to the vagaries of international lending and any associated conditions.

The reality is that the EU must resort to borrowing to finance the deficit left by UK exit as well as to carry forward the precious Federal State project of EU level Security and Military forces. This becomes even more significant because in order to get this Budget agreed, Macron had to buy off the Frugals by reducing their de facto EU contributions [via the Rebate mechanism which brought such opprobrium on the UK]. In other words, the people who are net payers into the EU pot, are now to have their contributions reduced – how then is the resulting revenue deficit to be off-set ?

As the Op-Ed piece for RT cited on the link below points out [perhaps a little too jaundiced-ly] this historic Budget agreement  does nothing to actually solve the underlying issues in the EU, either financial or social.

The truth is also that this agreement between heads of government remains a proposal until it passes the EU parliament and until it also wins approval from each of the 27 individual member States. A major hurdle, especially with the Green lobby voicing concerns.

But the truth is also that Macron being the clever politician he is, his Project represents the only option available. His Project was the only initiative taken in the first place, and that project has set all the terms on which the whole matter is being discussed. His project and no other has been agreed against considerable opposition – how could any other proposal stand any chance at all ?

By not having the initiative, the Parliament is – as usual – faced with accept the Deal Done or be responsible for the mess which results otherwise: we have to do something and something now because the economic consequences of the Covid 19 Crisis won’t wait for us to debate endlessly. 

Ditto the problem faced by the individual member States.

That’s why Macron set the Agenda.

Ray Catlin

Below are several links reference the EU Budget Summit outcome. They make interesting reading, as much for what they don’t point out as what they do actually mention.

For the official Elysee Palace statement on the Budget agreement, see

https://www.elysee.fr/emmanuel-macron/2020/07/21/jour-historique-pour-leurope

In each of the following 3 links there is no mention of the historic and landmark nature of the new Budget Proposal as claimed [correctly] by President Macron: –

https://www.france24.com/en/20200721-eu-leaders-edge-closer-to-striking-deal-on-covid-19-recovery-plan

https://euobserver.com/economic/148997

https://www.reuters.com/article/us-eu-summit/eu-reaches-truly-historic-deal-on-pandemic-recovery-after-fractious-summit-idUSKCN24M0DF

The distinctive RT Op-Ed piece [ attributing too much to German hegemonic claims and not enough to French] is at https://www.rt.com/op-ed/495499-eu-covid-19-bailout-ponzi/

And the inevitably polarised views of the UK Daily Telegraph and the UK Guardian are respectively at

https://www.telegraph.co.uk/business/2020/07/22/eu-leaders-sacrificed-ideals-tainted-accord-makes-little-economic1/

https://www.theguardian.com/world/2020/jul/21/eu-summit-deal-what-has-been-agreed-and-why-was-it-so-difficult

Lastly a revealing showcase Remain piece from the Guardian by a former adviser to Macron before he became President at

https://www.theguardian.com/commentisfree/2020/jul/22/recovery-deal-eu-unifying-economic-boost-integration