Political Briefing #88/2016

Published in

EuVisions

6 min readOct 25, 2016

POLITICS & POLICY

The CETA agreement between the European Union and Canada is practically dead. On Thursday, the Prime Minister of the Belgian region of Wallonia, Paul Magnette, held a key speech in front of the Regional Parliament outlining the reasons behind his refusal to sign the international trade deal. In reply to his critical stance, the European Institutions extended the deadline for a final agreement until October 24. However, on Monday, the Belgian Prime Minister, Charles Michel, admitted that as a result of internal divisions his country will not able to sign the CETA deal. According to many international experts the failure of the negotiations with Canada could also further jeopardize the Transatlantic Trade and Investment Partnership (TTIP), which the EU is negotiating with with the United States.

On Monday, in an interview to La Repubblica, Italian MEP Alessia Mosca said that “without an agreement on CETA, the EU itself has no future”. However, on Tuesday, in what has been considered a rather unexpected move, the Canadian Prime Minister, Justin Trudeau, decided nonetheless to travel to Brussels for the official signature, scheduled for October 27. Trudeau and the President of the European Council, Donald Tusk, decided to keep in touch over the next days in a bid to find a solution to the deadlock.

In other news, Spain is making the headlines all over Europe. The political deadlock that has characterized the country’s political system for the last ten months came to an end on Monday, as the Socialist party (PSOE) decided to lift its veto on a Conservative minority government. The long awaited decision came at the end of a party conference that left the PSOE split in two.

However, there is no room for celebrations in Madrid, as the European Central Bank and the European Commission immediately put pressure on the forthcoming government. As a result of the sixth post-programme surveillance visit to the country, the ECB published an official press release stating that “the [Spanish] structural reform agenda needs to be resumed once a government with full legislative powers is in place in order to further rebalance the economy, reduce unemployment and raise Spain’s productivity and growth potential”. Over the summer the Commission had let Spain and Portugal off the hook over their budgetary deficit breach. Recently, Spain’s Finance minister De Guindos said that the new government will need to save up to €5.5 billion in 2017 to meet Brussels’s requests.

The approval of the Italian budget law remains a source of tensions between national and European institutions. In the frame of the European Semester procedures, the European Commission rejected the budget law forwarded by Rome last week. The bone of contention is a 0.1% deficit increase foreseen by the Italian institutions. Officially, the increase is aimed at tackling the migrant crisis and financing a national plan for infrastructure, after a major earthquake hit the country’s central regions last August. But Brussels claimed that Italy has no further room for flexibility, as it already benefited from a €19 billion margin last year, which the Commission agreed to in a move to ease off the domestic difficulties of the government. However, on Sunday Italy’s Finance Minister, Carlo Padoan, raised the political stakes. He claimed that EU institutions need to choose between approving the Italian budget and encouraging a “Hungarian” approach to the issue of migration — thus destroying any notion of solidarity within the EU.