Subject: The Brief: FrankenGreece haunts Merkel
From: EurActiv <[email-masked]>
To: [email-masked]
Date: Tue, 21 Feb 2017 16:19:58 +0000

The Brief: FrankenGreece haunts Merkel      subscribe
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    <http://eurac.tv/6Gnm?sid=33541>    Today's EU policy news,
21.02.2017, 5PM

       = *FrankenGreece haunts Merkel* =

      === *By  Frederic Simon <http://eurac.tv/6Grq?sid=33541>* ===

 Old habits die hard in Brussels. Eurozone finance ministers proved that
yesterday by once again kicking the can down the road rather than tackle
Greece’s financial problems head on.

 Small, incremental steps were agreed but the task of dealing with the
structural failures of the single currency were put off for a later date.

  An immediate crisis was delayed until July this year
<http://eurac.tv/6Gmy?sid=33541> but Greece’s fundamental problems
remain. The country is a Frankenstein’s Monster, stitched together with
parts of its dying economy galvanised with the lightning bolts of bailouts.

 This time, the crisis doesn’t stem from market pressure. FrankenGreece
has met its fiscal targets and the country’s budget is back in primary
surplus. It’s alive! At least on paper.

 The euro helped create this monster but now it is Germany, the Victor
Frankenstein of this tale, that is the problem. It refused to bow to IMF
demands to alleviate the country’s debt in return, fearing German
taxpayers will once again bear most of the burden of debt relief.

 It is a familiar story. At the height of the crisis, in 2010, eurozone
leaders kept on delaying hard decisions under pressure from Berlin, which
stuck to the sacrosanct “no bailout” clause of the Maastricht Treaty,
until forced to agree on a first, and then a second rescue package for
Athens.

 In 2013, Angela Merkel tried hard to stop Greece from becoming a campaign
issue in her bid for re-election. She was wary of furious voters who feared
they would once again have to foot the bill for another Greece bailout.

 Time and again, she repeated there was going to be no third rescue package
for Greece. Until her finance minister finally admitted it would have to
happen <http://eurac.tv/6Gmz?sid=33541>, weeks before the general election.

 Merkel is now seeking a fourth term in office. At this stage, nobody is
talking about a fourth rescue package but such things have a habit of
turning up as suddenly as the monster in Mary Shelley’s novel. Could the
same toxic arguments come back to haunt Merkel?

 “I can tell from my experience that Greece is a topic you want to avoid
in a campaign,” Slovak Finance Minister Peter Kazimir tweeted before the
start of yesterday’s Eurogroup, referring to the coming German and Dutch
votes.

 This is a golden opportunity for Martin Schulz, the socialist contender in
the election race, who won’t miss an opportunity
<http://eurac.tv/6GmA?sid=33541> to blame Greece’s woes – and the
eurozone’s more widely – on Merkel’s hardline stance.

 The situation is different this time of course. Reforms of the
eurozone’s governance have been passed, including stricter debt policing
and the European Stability Mechanism, which Germany initially resisted. The
risk of contagion to other countries is now better contained.

 But recent history has proven that such half-measures are short lived. The
Eurogroup needs to bite the bullet and find a pragmatic solution to
Greece’s problems, such debt relief in some form.

      == The Roundup ==

 Commission President Jean-Claude Juncker has warned that Britain will have
to pay  a hefty bill <http://eurac.tv/6GmW?sid=33541> for Brexit.

 EU finance ministers have agreed to  close tax loopholes
<http://eurac.tv/6GmX?sid=33541> allowing multinationals to pay little or
no tax by shifting their profits between jurisdictions. Meanwhile, member
states’ broad definition of tax havens have raised concerns. Check
EURACTIV later for Jorge Valero’s story.

 Reuters reports that Trump chief strategist Steve Bannon had a much  more
Eurosceptic message <http://eurac.tv/6GmY?sid=33541> for Germany’s
ambassador to Washington than Mike Pence had for us in Brussels yesterday.

 Poland is defying European Commission demands for justice reforms. Thanks
to Hungary, it can do so safe in the knowledge that it will not lose
<http://eurac.tv/6GmZ?sid=33541> its Council voting rights as a result.

 Austria is bringing forward new employment rules which prioritise domestic
 workers over immigrants <http://eurac.tv/6Gm_?sid=33541>.

 Romania is still reeling after its government was nearly toppled by mass
protests but some brave individuals have also been standing up to
corruption at a local level <http://eurac.tv/6Gm-?sid=33541>.

 Montenegro is unlikely to call a referendum on its NATO membership
<http://eurac.tv/6Gn0?sid=33541> ratification. Marine Le Pen’s offices
were raided by police over alleged misuse of EU
<http://eurac.tv/6Gn1?sid=33541> funds.

 Eastern Ukraine separatists have started issuing their own passports
<http://eurac.tv/6Gn2?sid=33541>. European countries have warned it is not
in keeping with the spirit of the Minsk agreements.

 International arms deals have hit post-Cold War levels
<http://eurac.tv/6Gn3?sid=33541>, with Germany and France making it into
the top five of global suppliers.

 Its trade deal with Canada is all but secure and the EU is now targeting a
swift end to talks with Japan <http://eurac.tv/6Gn4?sid=33541> about a
commercial pact. Commission sources said they see “no reason” why it
won’t be finished before the end of the year.

 French President François Hollande has called a summit in Versailles
<http://eurac.tv/6Gn5?sid=33541> to debate the future of Europe. He will
meet with his German, Italian and Spanish counterparts to discuss EU
reform.

 Iceland’s president rightly wants to ban  pineapple on pizza
<http://eurac.tv/6Gn6?sid=33541>. We are not afraid to ask the big
questions at The Brief.  Should the European Commission legislate on  this
crunch issue <http://eurac.tv/6Gn7?sid=33541>?  Vote here now
<http://eurac.tv/6Gn8?sid=33541>.

 *Sam Morgan contributed to this Brief*

      == Look out for... ==

 The college of Commissioners is meeting in Brussels tomorrow morning
before Juncker heads to Berlin to have a working dinner with Angela Merkel.
IMF chief Christine Lagarde is seeing Merkel tomorrow as well.

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