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Economy

Post-Merkel, Macron And Draghi Will Try To Ease Europe's Debt Rules

Coalition negotiations in Berlin will make for a period of political uncertainty that French President Emmanuel Macron is keen to exploit. He already has a new Italian partner, with whom he wants to steer the EU in a new direction.

Post-Merkel, Macron And Draghi Will Try To Ease Europe's Debt Rules

Emmanuel Macron welcomes Italy's Prime Minister Mario Draghi during a Summit on financing African economies in Paris

Martina Meister

-Analysis-

BERLIN — In the coming weeks — perhaps even months — a power vacuum will reign in Berlin. But just like their colleagues in the world of science, political observers know that nature abhors a vacuum. It's just a matter of time, in other words, until the void is filled.

Does Germany's recent election mark the end of the country's leadership role in the European Union? Current coalition negotiations — which seem likely to drag on for some time — will force Berlin and Brussels to press pause. Others, in the meantime, won't be inclined to just sit quietly by and wait.

French President Emmanuel Macron sees himself as the natural leader of an EU that has lost the center of gravity that Merkel long provided. Even while her chancellorship was nearing its end, Macron was already preparing to take over the EU Council presidency, which begins in January and coincides with France's own elections.

Italy won't replace Germany

The Elysée Palace is already drawing up Macron's European report card. They recently pointed out that more than half of the 60 proposals the French president put forward in his speech at the Sorbonne in September 2017 have come to fruition.

"That speech formed the backbone of our European policy," says one of Macron's advisers.

Macron will not be alone when he takes on this new leadership role. He has found an ally in Italian Prime Minister Mario Draghi, so much so that, when Draghi was elected earlier this year, the Financial Times speculated about "the EU's new power couple." They spoke of a new power axis between Rome and Paris, to replace the current driving forces of Germany and France. After "Mercron," can we now expect a "Dracron" axis?

Photo of Angela Merkel with flags behind her

July 2, 2019 - Bruxelles, Belgium - Angela Merkel

Panoramic/ZUMA

Draghi will play a key role

Former French Prime Minister Manuel Valls has also spoken of a "key role" for Rome and Paris. "At this stage of the power vacuum, the leadership role within the EU will fall to Macron and Mario Draghi," he said in an interview this past Sunday.

Dominique Moïsi, a French political scientist from the think tank Institut Montaigne, sees things a little differently. "Draghi is a kind of star and he will play a key role, but Italy won't replace Germany," he says.

Another politician who sees this as an "opportune moment" to be seized is Sandro Gozi. In his former role as the Italian government's under-secretary for European affairs, Gozi was tasked with negotiating the Quirinal Treaty, a bilateral agreement between Italy and France, modeled on the 1963 Elysée Treaty between France and West Germany and named after the Quirinal Palace in Rome, one of the three official residences of the Italian President.

That was at a difficult time in Franco-Italian relations, as Luigi Di Maio, Italy's then deputy prime minister, visited France to show support for the yellow vest protesters. The Quirinal Treaty was put on ice and Gozi switched sides, becoming a European advisor at the Elysée Palace. Now he is a member of the European Parliament, representing France.

Draghi's election victory was a stroke of luck for Macron.

"No one in Rome or Paris wants to replace the Franco-German axis, but within the EU we need to strengthen other relationships that complement it and establish new synergies," said Gozi in an interview with Die Welt. He is convinced that "the transformation of the EU will be based on three powers: Germany, France and Italy."

Draghi and Macron looking beyond Maastricht

One thing is certain: Draghi's election victory was a stroke of luck for Macron. In early September, the two had dinner together at a three-star restaurant in Marseille to celebrate Draghi's birthday. They have a lot in common: Both are staunchly pro-Europe, ex-bankers, skilled negotiators and convinced that relaxing the EU's strict national debt policies is unavoidable.

Both were among the signatories, furthermore, of a letter published in the early days of the pandemic in which nine European countries called for a "common debt instrument," which soon became central to discussions around the stability pact.

But Draghi and Macron want to go beyond Next Generation EU, the post-covid economic recovery fund. They think the Maastricht Treaty is no longer fit for purpose and believe that economic and political progress within the EU will only be made possible by relaxing rules around national debt. As the former head of the European Central Bank, which reformed the EU's monetary policy, Draghi seems almost predestined for this role.

With Italy holding the G20's rotating presidency this year, both Draghi and Macron are — or soon will be — in positions of power on the world stage. Rome and Paris hope to finally sign the ambitious Quirinal Treaty before the end of this year.

Gozi believes that close cooperation between France and Italy will ensure these issues will be at the top of the EU's agenda. "It's a response to difficult geopolitical demands," he says.

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Economy

Lex Tusk? How Poland’s Controversial "Russian Influence" Law Will Subvert Democracy

Since creating a controversial commission against "Russian influence", Polish President Andrzej Duda has faced criticism from the United States and the European Union. Duda has since offered to make several changes to the law, but several experts in Brussels remain unconvinced that the law will not become a witch hunt ahead of the upcoming elections.

Photo of President of the Republic of Poland Andrzej Duda

Polish President Andrzej Duda

Piotr Miaczynski, Leszek Kostrzewski

This story was updated on June 8, 2023 at 1:30 p.m. local time

-Analysis-

WARSAW — Poland’s new Commission for investigating Russian influence, which President Andrzej Duda signed into law last week, will be able to summon representatives of any company for inquiry. It has sparked a major controversy in Polish politics, as political opponents of the government warn that the Commission has been given near absolute power to investigate and punish any citizen, business or organization.

And opposition politicians are expected to be high on the list of would-be suspects, starting with Donald Tusk, who is challenging the ruling PiS government to return to the presidency next fall. For that reason, it has been sardonically dubbed: Lex Tusk.

On Wednesday, the European Commission launched legal action against Poland over the highly controversial law. Brussels fears the law could be used to target opposition politicians in the run-up to Poland's general election, which takes place later this year.

Indeed, University of Warsaw law professor Michal Romanowski notes that the interests of any firm can be considered favorable to Russia. “These are instruments which the likes of Putin and Orban would not be ashamed of," Romanowski said.

The law on the Commission for examining Russian influences has "atomic" prerogatives sewn into it. Nine members of the Commission with the rank of secretary of state will be able to summon virtually anyone, with the powers of severe punishment.

Under the new law, these Commissioners will become arbiters of nearly absolute power, and will be able to use the resources of nearly any organ of the state, including the secret services, in order to demand access to every available document. They will be able to prosecute people for acts which were not prohibited at the time they were committed.

Their prerogatives are broader than that of the President or the Prime Minister, wider than those of any court. And there is virtually no oversight over their actions.

Nobody can feel safe. This includes companies, their management, lawyers, journalists, and trade unionists.

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