Golden Age of EU is Over! Macron and Merkel Can’t Seem to Get Along!
Meanwhile, what about Merkel? What's she busy with and who does she have apart from Macron?
Mikhail Antonov with the details from Berlin.
Free competition, equal market access for manufacturers, and low prices for consumers. By declaring these pretty principles earlier this week the EU Commission struck a blow against the largest business project in recent years. No, we're not talking about gas. We're talking about high-speed trains. The European leaders in this field, the French Alstom and the German Siemens have been preparing to merge their assets for the last two years. Brussels disrupted the deal.
Margrethe Vestager, European Commissioner: «Our investigation showed that a merger of the two companies would significantly decrease competition on the high-speed train market».
High-speed trains are the most capital-intensive industry in terms of technology and infrastructure. The market is brutally fighting for billions. The merger was supposed to help confront competitors from the USA, Japan, and China. The companies got their knuckles rapped. Their plans aren't consistent with European laws.
Edouard Philippe, Prime Minister of France: «This is a bad decision. It's a major step backward for European industry. As I see it, the decision was made based on incorrect source data. That's as clear as day».
Peter Altmaier, Minister of Economy and Energy of Germany: «Do we want China and the USA to dominate the market? Or do we have our own ambitions to participate in the competition? That'll be possible only under one condition the merging of the assets of the two companies».
Their disappointment is great but they're the ones who wrote those laws. Last Friday, Europe tried to extend its application to a project involving third-party countries. Now, we're talking about the Nord Stream 2. Amendments to the EU gas legislation were supposed to put the EU Commission in charge of the construction and operation of pipelines. It would've been able to leave the pipeline empty if it wanted to. Berlin wasn't happy about the idea. Last Thursday, one day before the vote, the Germans were in a panic. The French president had announced his support for the amendments which made it harder for Germany to defend its interests. But something suddenly happened. The next morning, Merkel was relieved to announce that the issue had been coordinated.
Angela Merkel, Chancellor of Germany: «We've reached an agreement on the EU gas legislation. It was only possible thanks to the close cooperation between Germany and France.»
The amendments to the gas legislation were adopted but national governments are in charge of its implementation. Germany retained the ability to regulate its relations with Gazprom on its own. France's final position could've been influenced by the EU Commission's refusal to approve of the merger of Alstom and Siemens which was also announced on Friday.
Vengefulness and blackmail have become the driving force and instruments of the policies of the European states against each other and Brussels. Macron's demarche shortly before the vote on the amendments to the gas legislation accompanied by his refusal to attend the security conference in Munich might've been caused by his desire to mess with Merkel because she's always stepping on his toes.
Macron came to power as the conduit of the ideas that have been guarded by the German Chancellor and the EU financial institutions after the European debt crisis. Less power to trade unions, more power to employers, curb the budget deficit, and adopt labor and tax reforms. Macron had been implementing this unpopular policy behind the veil of flashy pan-European initiatives until the growing taxes and rates blew up France and the president was caught right in the middle between Merkel with her concept of finance and economics and what the streets of Paris think about life, marching under the slogan «take away and split».
Jean-Claude Regnier, protest leader: «Large European corporations earn astronomical revenues and split the dividends between their shareholders. A mere 10% of the population owns 80% of the money supply and assets which is absolutely unacceptable. The Yellow Vests demand fair policies and just distribution of wealth in every country».
David Kela, economist: «The Yellow Vest crisis is the consequence of the disappointment on the part of French society that doesn't agree with Emmanuel Macron's policies aimed exclusively at meeting the demands of the EU. Macron is trying to attract capital and company investments by lowering the taxes for the richest. That doesn't meet the needs of the people because to finance the initiative the middle-class has to pay more taxes».
After canceling the wealth tax in order to stop the capital outflow from France Macron has to consider restoring it now. Not only will it look inconsistent, but it also won't guarantee that the middle-class and the poor will forgive him. But he'll definitely get in trouble with the rich. The French president is troubled by the fact that neither Merkel nor the EU, whose interests he seems to be defending, can help him in his misfortune that might destroy his entire career.
Moreover, Merkel can afford to be stubborn in her demands because her personal prospects in politics are determined and limited to 2021. Besides, the Germans aren't as rebellious as the French, even though the decrease of the living standards and quality of life can be seen in Germany as well. Fewer and fewer people can afford a nice apartment, a car, and taking a vacation twice per year. More and more people live paycheck to paycheck.
Jens Berger, economist: «We must keep in mind that rent and electricity are extremely expensive in Germany. A small apartment costs 400 euro per month. Add the money spent on consumer staples and basic needs. Ultimately, you run out of money by the end of the month. Now, people are beginning to realize that after they pay off their loans and mortgages that their kids face the same problems. Even if their kids get a decent education their salaries are still so small that they have to ask their grandparents for help».
Gesine Lötzsch, former leader of Die Linke: «Our current expectations for the German economy aren't as high as in previous years. The main question that Germany must answer is what the basis of our economy must be. Germany really depends on its exports. That's why the deterioration of our relations with other states slowly begins to affect our country. It's enough to recall Brexit and the current state of the dialogue with the US».
Dependence on the international situation is the weak spot of the German economy. And the situation is negative today. The German government was forced to decrease the forecast of the annual GDP growth from 1.8% to 1%, which basically means stagnation. This decreased the expectations of the entire European economy.
Trump's America and China are imposing a harsher competition on Germany and the EU. In addition, the US is openly protectionist. The adoption of the new «every man for himself» rule is accompanied by dramatic changes in the social and even cultural context. The only thing that remains unchanged is the way that the EU establishment thinks and acts. This week has shown that they're most enthusiastic about breeding bans and restrictions.
Mikhail Antonov, Alexander Korostelev Irina Kudesova, Denis Lisitsyn, and Andrey Putra Vesti: News of the Week.