May 24. 2024. 6:53

The Daily

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The Brief — It’s all kicking off

From Paris and London to Tunis and Cape Town, it’s all kicking off. People are taking to the streets for a wave of strikes and public protests.

Protest is a healthy sign of democracy but there is not much that is healthy about the current climate.

Despite the disparate locations, there are several constant factors: a sense that the political process is failing or has failed, and the effects of a crippling cost of living crisis that is leaving millions unable to pay for fuel, food or shelter.

The prospects of a new global economic and financial crisis are prompting a concerted effort from the international community to address the high level of sovereign indebtedness before it becomes an existential crisis.

The UN has mooted the prospect of a 30% haircut on the private and publicly held debts which it says would free up close to $150 billion in debt repayments over the coming five years that could instead finance economic support and poverty reduction measures.

However, while Western leaders agree that ‘something must be done’, there is no clear leadership to define what that will be and who will drive it through. French President Emmanuel Macron – ironically, given the massive public backlash to his pension reforms – has been one of the leaders on this, promising to host a summit on debt relief in June.

Part of the delay in moving forward on debt relief is who should be liable for haircuts.

The United States insists that China must be part of a global debt relief programme. China retorts that despite Western accusations of ‘debt trap diplomacy’, only 12% of the external debt of African countries is owed to Chinese lenders, compared to 35% to Western private lenders.

The likes of the World Bank and the United Nations have estimated that around 50 countries around the world are vulnerable to debt distress or insolvency this year.

Most of the countries are in the Global South but their fortunes are closely linked to Europe’s.

Should Tunisia be forced to default, or its autocratic government collapse, that could lead to increased economic migration to Europe at a time when the EU is preparing to offer new financial incentives for southern neighbourhood states to increase control of their borders. In other words, to keep migrants away from Europe as much as possible.

The political process gets distressed when politics moves into the streets because people have basically lost confidence in government and governance and the institutions of government.

“The next thing that you see is these institutions collapsing,” a senior UN official warned EURACTIV last week, adding that “this is the domino effect that we need to prevent from happening”.

The EU has been relatively quiet in these discussions, and it needs to find its voice. With Macron under pressure at home, the World Bank in the process of changing its leadership, and the US and China consumed by geo-political rivalries, the EU is an obvious broker.

It needs to step up.

The Roundup

In the early hours of Tuesday, negotiators from the European Parliament and EU member states agreed on a common text for an anti-coercion instrument to help the bloc fight off attempts of economic coercion from third countries.

Member states gave their final approval on Tuesday (28 March) to a regulation that will ban the sale of carbon-emitting cars and vans after 2035, finalising one of the most controversial elements of the EU’s Green Deal.

Russia has successfully redirected all its crude oil exports affected by Western sanctions over Ukraine to “friendly” countries, Energy Minister Nikolai Shulginov said on Tuesday (28 March), while still a decline in oil and gas output this year.

The UK government raised on Tuesday the terrorism threat level in Northern Ireland to “severe”, ahead of an expected visit by US President Joe Biden to mark the 25th anniversary of a landmark peace accord.

Charging infrastructure for clean vehicles will be ramped up across the EU following an agreement by legislators on Tuesday, paving the way for an increase in zero-mission vehicles.

The fall in the quantity of renewable energy used in the transport sector, which dipped under 10% thanks largely to a change in how statistics are calculated, shows that the cap placed on waste biofuels is “nonsensical”, industry has said.

A new opinion from the EU food safety agency (EFSA) has found 10 nitrosamine substances, found in many processed foods, to be carcinogenic, concluding current exposure levels are a ‘health concern’ for all ages.

A company partly owned by French energy giant EDF has won the tender to build the country’s largest offshore wind farm off the coast of Normandy, the Energy Transition Ministry announced on Monday (27 March).

Members of the European Parliament that make up the Internal Market and Consumer Protection committee adopted on Tuesday (28 March) a non-binding resolution asking the European Commission to urgently reconsider its approach to standardisation in the light of the James Elliott case.

Look out for…

  • Commission President Ursula von der Leyen participates in the second Summit for Democracy, co-hosted by US President Joe Biden, and leaders of Costa Rica, Netherlands, Republic of Korea, and Zambia, via videoconference.
  • Commissioner Vice-President Margaritis Schinas receives the Minister for European Affairs of Italy Raffaele Fitto.
  • Neighbourhood and Enlargement Commissioner Olivér Várhelyi participates in the College meeting.
  • Cohesion and Reforms Commissioner Elisa Ferreira will address the Portuguese Conselho de Estado (State Council) at the invitation of the President of the Portuguese Republic.

[Edited by Zoran Radosavljevic]