Brussels Playbook: Macron on the brink — Dr. Doom on banks — China’s rifles in Russia

Brussels Playbook: Macron on the brink — Dr. Doom on banks — China’s rifles in Russia
Опубликовано: Friday, 17 March 2023 05:27

What’s driving the day in Brussels.



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MACRON ON THE BRINK Share on Twitter Share on Facebook Share on Linkedin Share on Handclap

PENSION REFORM TRIGGERS REBELLION: After weeks of street protests, French President Emmanuel Macron faces a political crisis as opposition groups press for a probable vote of no confidence in his government. Read Clea Caulcutt’s full story here.

Big bazooka: Macron had hoped he could find a majority to support his controversial plan to raise the age of retirement to 64 from 62. But that plan collapsed on Thursday as the hoped-for votes from the center-right Republican party failed to materialize, forcing the government to reach for the so-called 49.3 tool — a legislative bazooka that allows it to ram a bill through parliament without a vote.

High bar: In reaction to the 49.3, some opposition MPs said they would put forward a vote of no confidence. For it to succeed, it needs be approved by an absolute majority in parliament, or at least 289 votes. That’s a high bar; a vote of no confidence has only succeeded once in 52 attempts, in 1962. And Republicans leader Eric Ciotti said he would not back a vote of no confidence.

This situation isn’t unprecedented. Including this occasion, French leaders have resorted to the 49.3 decree dozens of times since the start of the 5th Republic, including both of Macron’s predecessors, François Hollande and Nicolas Sarkozy. Votes of no confidence have come and gone before, too.

A weaker Macron: Yet this one hints that Macron’s domestic agenda is running out of steam, which will embolden his opponents, not least far-right chief Marine Le Pen, who went on the attack Thursday afternoon. “This is a total failure for the government, and a total failure for Emmanuel Macron,” she said.

No third act: Le Pen remains a contender for France’s highest office in 2027. Macron, who’s beaten her twice, won’t be around to do it again. Which raises the question: Who can stop Le Pen from taking power on her fourth attempt, if she goes for it? Despite the popularity of former Prime Minister Edouard Philippe, he hasn’t confirmed a 2027 bid, and Macron isn’t exactly giving him a leg up.

What’s clear: Starting today, France’s political class will be thinking harder about 2027 and who can stand in Le Pen’s way. Europe would do well to pay attention.

CHINESE WEAPONS IN RUSSIA — EUROPE REACTS Share on Twitter Share on Facebook Share on Linkedin Share on Handclap

POLITICO SCOOP — CHINESE FIRM DELIVERED RIFLES TO RUSSIA: Chinese companies, including one connected to the government, have sent Russian entities 1,000 assault rifles and other equipment that could be used for military purposes, including drone parts and body armor, according to trade and customs data obtained by POLITICO, Erin Banco and Sarah Anne Aarup report here.

Europeans react: Speaking to my colleague Stuart Lau, Czech Foreign Minister Jan Lipavský said: “I have been deeply disappointed with China not fulfilling its obligations as a U.N. Security Council permanent member, while facing clear and brutal breach of the U.N. Charter. Nobody, including China, should bolster the Russian aggressor — be it politically or materially.”

Baltic take: Lithuanian Foreign Minister Gabrielius Landsbergis told Stuart: “We should not accept the alliances aimed against European security. It should not be left without consequences.”

View from the EP — ‘Beijing has been warned’: Reinhard Bütikofer, chair of the European Parliament’s China delegation, said: “Any material support for Russia’s aggression against Ukraine from the Chinese side would be a development of an extremely serious nature. China cannot be in doubt about that. There would be very relevant consequences. Information to that effect must therefore be checked with a maximum of care … Troubling intelligence should be shared with the responsible parliamentary bodies and be made transparent for the public. Being caught red-handed would certainly deal a severe blow to China’s international standing. Beijing has been warned.”

Thought that counts: An Eastern European defense official, speaking on condition of anonymity, said while the amount of weaponry revealed in the POLITICO report was just “a drop in the sea,” what’s important is “the fact they [China] did it, that they are willing to allow this to happen.”

MEANWHILE, IN UKRAINE: Doubts are growing about the wisdom of holding the shattered frontline city of Bakhmut against relentless Russian assaults, but Ukrainian President Volodymyr Zelenskyy is digging in and insists his top commanders are united in keeping up an attritional defense that has dragged on for months. Jamie Dettmer and Veronika Melkozerova have the story.

MEANWHILE, IN MOLDOVA: Playbook asked Romanian lawmaker Siegfried Mureşan, chair of a Moldova-focused European parliamentary group, what the EU should do following recent attempts by Russia to interfere in Chișinău’s politics. “Ukraine receives automatic attention and support. We should do the same for Moldova,” he said.

Mureşan also urged the Commission to form a separate unit devoted to Moldova within DG NEAR. Though not at imminent risk of invasion, Moldova remains in Moscow’s crosshairs, he said: “We should be aware that the Russian federation will do all they can to enable regime change in Moldova.”

BANK BUST Share on Twitter Share on Facebook Share on Linkedin Share on Handclap

FEARS OF EU BANKING CRISIS: European Central Bank chief Christine Lagarde brushed off fears of financial contagion Thursday when she raised interest rates by 0.5 percent just hours after Switzerland bailed out Credit Suisse. But the market reaction was telling, with the share prices of major European banks, among them Germany’s Deutsche Bank and France’s Société Générale, spiraling downward.

Déjà vu: Analysts are divided on whether Lagarde is making a mistake by driving up interest rates, Izabella Kaminska reports. “Markets are a confidence game, and confidence is in very scarce supply,” said Marc Ostwald of ADM Investor Services. “There are numerous risks: widening eurozone government spreads, the return of Japan risk premium and there’s still a risk of U.S. debt ceiling drama.”

DOCTOR DOOM WEIGHS IN: Nouriel Roubini, professor emeritus at the Stern School of Business of New York University — aka Dr Doom — warned in an interview with Izabella that “underwater” bonds, which lay at the heart of the sudden downfall of Silicon Valley Bank, could cause any instability in the U.S. or European banking sectors to quickly spiral into a rout. Pension funds, asset managers and other large investors are also at risk, he warned.

Straw, meet camel’s back: Any other shock could have a similar domino effect, Roubini warned. “Official data of the FDIC [U.S. Federal Deposit Insurance Corporation] said there are $620 billion of unrealized losses on securities and the capital of banks in the U.S. is $2.2 trillion, so the average U.S. bank has about a third of its tier one capital at risk,” he told POLITICO, referring to a metric that indicates how easily a bank can absorb losses on its financials.

Europe is hardly better off. The EU, and specifically Switzerland, were among the first places in the world to push ahead with negative interest rates, meaning the sensitivity of local bond portfolios to rising interest rates was likely to be much larger. Bank profitability on the Continent has also been much lower, putting further strain on capital buffers and, by extension, the value of bank shares. Read Izabella’s full story here.

GEORGIA IN FOCUS Share on Twitter Share on Facebook Share on Linkedin Share on Handclap

GEORGIANS WEIGH IN ON EU’S ‘FOREIGN AGENT’ PLANS: After Playbook reported that the European Commission is seeking input on a possible “foreign agent” bill, Georgians got in touch to report how the story was going over in their country — where massive protests against a similar bill forced the government to withdraw it earlier this month.

Not now, please: “The timing was really very bad for us,” said Sopho Verdzeuli, a lawyer and activist with Komentari, a platform backed by the Friedrich Ebert Foundation, which is in turn backed by Germany’s Social Democratic Party. “Of course, our government has already started to use this [the EU plans] as an example.”

Verdzeuli pointed to differences between the EU’s work and what was planned in Georgia. While the EU referred to specific risks from countries like Russia and China, Georgia’s ruling party had not specified a security reason for its law … The Georgian bill targeted media, which does not appear to be a focus of the EU … And by branding anyone who works with an organization whose funding is more than 20 percent foreign as “an agent of foreign influence,” the Georgian bill aimed to stigmatize media workers and activists, whose groups are largely funded from abroad. “This is totally different,” Verdzeuli said.

BROWDER SLAMS EU: Billionaire businessman and Putin-critic Bill Browder has turned his focus to a new target — Tbilisi — as he urged the EU to sanction those responsible for the alleged mistreatment of former President Mikheil Saakashvili, whose health is deteriorating rapidly in a Georgian hospital.

“The EU is thought of as being the most humane and moral of all the country groupings, but they don’t want to uphold human rights and they’re not using the Magnitsky Act. I think it is a complete utter failure on their part not to do this, not to use this tool,” he told Suzanne Lynch. Listen to the full interview on this week’s EU Confidential podcast.

Background: Browder, who was once the biggest foreign investors in Russia but now is a marked man after falling foul of Putin’s regime, has led a global campaign to sanction human rights abusers. His efforts culminated in the Magnitsky Act, named after his former lawyer Sergei Magnitsky, who died aged 37 in a Russian prison in 2009.

**Alfred Kammer, director, European Department, International Monetary Fund, is joining POLITICO Live’s Finance Summit on March 23 in Paris to discuss the future of European Finance. Register today!**

BELGIUM’S #METOO MOMENT Share on Twitter Share on Facebook Share on Linkedin Share on Handclap

METOO CALL IN BRUSSELS PARLIAMENT: Several members of the Brussels parliament — particularly from Ecolo and the Greens — are calling for stronger rules against sexual harassment and better protection of victims in politics. The calls come after Schaerbeek’s former education councilor, Michel De Herde of the DéFI party, was detained last month over suspicions of child rape and possession of child pornography. He was previously accused of sexual harassment, the Brussels Times reported.

Some 120 women signed an open letter calling for a “me too” reckoning in Belgian politics, demanding better protection of elected representatives who are victims of sexual harassment or assault, such as through a code of conduct, a charter to combat sexual harassment, and a framework for reporting complaints or counselling. But, “nothing is happening,” Greens MP Lotte Stoops told Playbook’s Ketrin Jochecová. “If a victim shares their story and nothing is happening, it’s like a second victimization.”

‘Medieval’ attitudes: Stoops, one of the co-authors of the letter, asked for a progress update during a meeting of the Brussels parliament’s home affairs committee earlier this week. “Some of the members of the other parties expressed themselves in a very medieval way during the meeting,” she said, adding that the debate got very heated. “They were laughing at the issue and dismissing it. You can see that they were never in a place of a victim,” she said.

Making it personal: But Emmanuel De Bock, a DéFi MP who was present at the debate, accused the proponents of the campaign for change of having a “personal vendetta.” In a statement, he wrote: “One would expect a little more reserve in this matter from those who are obviously pursuing a personal vendetta, or simply wish to take the place of those they are targeting.”

Government response: Bernard Clerfayt, a DéFi minister in the Brussels government, said in a written statement: “The government has no intention of creating an independent body for inappropriate behavior … Nor does the government intend to establish a code of conduct for local and regional administrations. I do not see the added value of such a code if it merely recalls principles that already apply to everyone.”

IN OTHER NEWS Share on Twitter Share on Facebook Share on Linkedin Share on Handclap

HAPPENING TODAY — NATO NEWS: Finnish President Sauli Niinistö travels to Turkey to meet with his counterpart Recep Tayyip Erdoğan, amid expectations Erdoğan will deliver his verdict on Finland’s bid to join NATO.

SELMAYR CAN MAKE IT ANYWHERE (BUT NOT IN NYC): Following our reporting that Martin Selmayr was on the shortlist to become EU ambassador to either the U.S. or the United Nations, a senior Commission official familiar with the applications process told Playbook his chances of success were “almost zero.” Selmayr, a former Commission secretary-general who famously pushed for Europe’s stronger ties with Gazprom, is currently stationed in Vienna.

FRANKENSTEIN’S MONSTER — SUBSIDY RACE TO THE BOTTOM: Brussels officials are growing increasingly exasperated with businesses demanding more state cash, and threatening — if they don’t get it — to quit Europe and relocate to America, report Barbara Moens, Joshua Posaner, Samuel Stolton and Karl Mathiesen.

SCHOLZ REBUKES BIBI: German Chancellor Olaf Scholz issued rare criticism of the Israeli government Thursday, expressing “great concern” over planned judicial reforms that have sparked protests, Hans von der Burchard reports.

QATAR’S BID FOR MANCHESTER UNITED: U.K. government figures say they would privately welcome Qatari investment into Manchester United, as the club’s owners consider a £4 billion bid from a member of the Middle East state’s ruling class, Stefan Boscia reports. But in an opinion piece for POLITICO, British sports writer David Goldblatt and Co-Director of FairSquare Projects Nicholas McGeehan argue that Brussels should join the dots between Qatargate and Manchester United.

WESTERN BALKAN CALL: Countries in the Western Balkans have had to live with unresolved issues and disputes for far too long, and the time for bold decisions has arrived, writes Wolfgang Ischinger, the president of the Munich Security Conference Foundation, in an opinion piece for POLITICO.

FRIDAY FEATURES: Host Aggie Chambre explores the best and worst political U-turns of recent times — and ponders how and why certain politicians get away with abrupt changes of heart, in this week’s Westminster Insider podcast. Meanwhile, in the Declassified humor column by Paul Dallison, oranges on pizza are the final straw for Hungary.

AGENDA Share on Twitter Share on Facebook Share on Linkedin Share on Handclap

— Finnish President Sauli Niinistö travels to Turkey to meet with President Recep Tayyip Erdoğan.

— EU High Representative Josep Borrell and Commissioner Olivér Várhelyi in North Macedonia for the 16th EU-North Macedonia Stabilization and Association Council; press conference with PM Dimitar Kovačevski at 11:30 a.m.; doorstep with President Stevo Pendarovski at 5:30 p.m. Watch.

— Council President Charles Michel meets German Chancellor Olaf Scholz in Berlin at 9 a.m.

— European Parliament President Roberta Metsola visits Malta.

— Irish PM Leo Varadkar in the U.S. for a meeting with Joe Biden and St. Patrick’s Day celebration at the White House.

— Commission VP Valdis Dombrovskis in Riga, Latvia, for the opening of the Baltic-Nordic EU Conversations 2023.

— Commission VP Margrethe Vestager in Brasilia, Brazil; meets with Vice President of Brazil Geraldo Alckmin.

BRUSSELS CORNER Share on Twitter Share on Facebook Share on Linkedin Share on Handclap

BEST OF LUCK TO A BRUSSELS LEGEND: Colleagues past and present paid tribute to Florian Eder — the author of this very newsletter between 2018 and 2021 — as he announced he would be leaving POLITICO Towers at the end of next month to pursue an exciting new opportunity. “Florian was one of the very first employees of POLITICO Europe before our launch in 2015,” wrote our editor in chief, Jamil Anderlini, in a note announcing the news. “He has shaped many aspects of our newsroom, not least our approach to covering the Brussels bubble. He has been a mentor and a guide to many.”

Hear from Florian: “I look back to the past eight years at POLITICO with pride at what we’ve built together and with gratitude for many opportunities,” Florian wrote in his own note. “These years were the most memorable, and the best of my career, and I’m neither simplifying nor exaggerating. I want to thank you all for the good company, for the hard work and the fun we had.” We’ll miss you Florian!

SPOTTED … at the Irish Embassy’s St. Patrick’s Day do on Thursday: Philippe Blanchard from Teneo, Michelle Gibbons from the European Brands Association; Jennifer Rankin from the Guardian; Brian Glynn from the EEAS; Kaenas O’Connor from the Council of the EU; David O’Sullivan, EU sanctions envoy; Nicholas Whyte from APCO; Leo Flynn from the Commission legal service; Miriam Driessen-Reilly of European Economic and Social Committee and Institute of International and European Affairs; Darren Ennis of Vodafone; David Harmon from Huawei; Jennifer Brown from Commission’s DG BUDG; Méabh McMahon from Euronews; and POLITICO’s own Suzanne Lynch and Aoife White.

ST. PATRICK’S DAY IN BRUSSELS: Lots happening to celebrate Ireland’s national day in Brussels today and into the weekend. The Irish Embassy has a guide to all the events.

Happening today: Manneken-Pis will don his traditional Irish outfit, with Dublin’s Ambassador to Belgium Kevin Conmy, as well as a piper from the Irish defense forces, attending the official unveiling at 11:30 a.m.

Happening Saturday: The annual St. Patrick’s Day Parade will kick off at the Halles Saint-Géry from 1:30 p.m. … There will be traditional Irish music and a jazz band from 2 p.m. … The black-tie Irish ball is also back on, after a three-year hiatus.

Next week, you might want to check out the Scéal Eile Irish Film Festival, or Dylan Moran’s comedy.


Fiesta Latina … kicks off in Brussels today and run through the weekend. Featuring parades, concerts and Latin American food trucks. Program.

Water days: Activities connected to the theme of water — exhibitions, guided tours, nature walks, lectures and cruises — are happening for the Brussels Water Days festival. Runs until March 26.

BIRTHDAYS: MEPs Marion Walsmann and Patrizia Toia; Former MEP Lola Sánchez Caldentey; Autorité de la concurrence’s Benoît Cœuré; Anti-Money Laundering Authority Task Force’s Olivier Salles; Anna Katrami of HaDEA; European Commission’s Daniel Giorev. St Patrick’s Day.

CELEBRATING SATURDAY: MEP Nuno Melo; Former MEPs Marco Dreosto, Bill Etheridge and Anna Hedh; European Parliament’s Chris Williams; Euros/Agency’s Martin Wittenberg; European Commission’s Anna De Marchi; Bloomberg’s Kate Hunter; President of Georgia Salome Zourabichvili; U.S. Trade Representative Katherine Tai.

CELEBRATING SUNDAY: MEPs Susanna Ceccardi and Clara Ponsatí Obiols; European Parliament’s James Maher; Former European Commissioner and Italian PM Mario Monti; Bruegel’s Giuseppe Porcaro; EPC’s Fraser Cameron; Éda Pogany from Syngenta; Former Prime Minister of Georgia Giorgi Gakharia.

THANKS TO: Jakob Hanke Vela, Suzanne Lynch, Playbook reporter Ketrin Jochecová and our producer Grace Stranger.

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