Sander Tordoir

Chartbook 411 The twilight of Macronisme: Jean Pisani-Ferry's cri de cœur. A decoration ceremony is like a funeral oration with a right of reply.

I was moved by this tribute to Jean Pisani-Ferry's remarkable acceptance speech for the Legion d’honneur.

Profoundly courageous for Jean to take the occassion to reflect on our collective failings in international trade and climate policy, and EU integration

adamtooze.substack.com/p/chartbook-...

Would agree with Nils — this isn’t your typical wrangling as the sausage gets made.

COM, member-states, and EP are negotiating with what machine the sausage factory will be equipped— in some ways if there’s a factory at all, or we keep producing chickens.

I like that

Or as Nils says far more politely than me.

If the EU budget reform fails Europe should get more serious about multi speed integration - the defence center of gravity is moving north and east: industrial and innovation policy can be built on top of that.

🫠

haha. Just the title of the FT piece!

If the European Parliament goes ahead with this here’s my proposal:

The EU budget is slashed to 0.9% of GDP, covering the interest burden for RRF and Ukraine loans gets taken out of CAP and Cohesion.

Scandis, Germany and the Netherlands put together our own industrial policy fund.

Fair? Agreed.

If this goes through, Berlin, the Hague, Scandinavians and other frugals will take a hard line: insist that budget will be capped at 1% of GDP.

And they’ll be right: no need to be constructive if EU budget spending modernisation is dead.

EP will have done itself and the Union a disservice.

If they slash agriculture out of the NRPPs then the S&D will take out social money and we end up with no change whatsoever to the budget allocation.

NRPPS are the vehicle to let redeployment of funds happen to R&D, defence and other prios.

Mamma Mia.

To placate the farm lobby, the EPP is considering an amendment that would scupper the entire EU budget reform.

If agri gets an exemption from the EU budget overhaul, social and other spending categories follow and modernisation goes out the window.

A EPP disaster in the making.

European strategic autonomy is in German hands As Berlin inevitably becomes the EU’s dominant military power, its billions could either build or blur Macron’s vision of European defense.

Berlin & Paris need to “establish a pattern for the upcoming boom years, and double down on their political commitment to cooperation in defense innovation, training and procurement. The window of opportunity is narrow — afterward, there will only be room to implement the decisions already made.”

Someone needs European money

Well that’s interesting albeit not completely surprising. Complete autarky in chip production is pretty hard.

A lot of European money for Hungary was frozen. And economy isn’t doing well. don’t know why SAFE did go through exactly.

Hungary needs the cash ;)

The SAFE instrument, whereby the EU level provides loans to member-states to ramp up defence, has been more of a success than I had anticipated. The uptake by member-states is huge.

And, of course, profoundly driven by the threat perception of Russia (see Baltics!).

Great chart from Daniel Kral.

They are rather sizeable hence the 'catchy title' ;)

Brussels backs Trump-style tariffs on cheap Chinese steel New measures would protect industry, but some countries fear that curbing low-cost imports could drive up prices

Brussels backs Trump-style tariffs on Cheap Chinese steel.

www.ft.com/content/8e84...

Would add to @maxbergmann.bsky.social observations that the G7 finance ministers statement from last night was strongly worded.

That means the US is on board to an extent - a diplomatic victory bought at considerable cost (EU-US trade deal), but a win for the EU nonetheless.

Hugely important perspective from Max.

The EU may not be directly seizing the Russian assets. The link to the Russian bank deposits in Euroclear is political I think.

But the glass is still more than half full - 140 billion in Ukraine funding is as big a deal as it sounds.

So much of the coverage of the EU is hyper-micro. It's all about the sausage making. So story out of Copenhagen European Council is "dithering," "all talk, no action," nothing fully agreed, etc. It's an effing meeting! Take a step back... they are moving on Eurobonds/frozen Russian assets. 1/

Haha. I do love espresso….

I support the EUs FTA efforts with Mercosur India Indonesia. They solidify trade ties, avoid further trade wars, and secure supply.

But too often they are presented as the way out of Europes stagnation.

All these FTAs only eke out a few decimals of growth.

The continent needs internal demand.

Hit by Trump tariffs, rest of world races to forge new trade alliances U.S. President Donald Trump's import tariffs have breathed life into dormant free trade talks across the globe and driven alliances at an unrivalled pace between partners seeking to offset lost exports to the United States.

Some observations from side in Reuters on whether Europe can help forge a trade order without the two 800-pound economic gorillas.

The slew of Brussels trade diplomacy suggests yes - but Europe like Japan and others still need to replace lost US/Chins demand.
www.reuters.com/world/china/...

@sandertordoir.bsky.social, chief economist at the @centreeuropeanref.bsky.social, said Europe could lead a 'rest of the band' group, but noted that it and others such as Japan ran trade surpluses and so needed buyers, not more sellers.

buff.ly/lBiwp4H

The pro-EU Party of Action & Solidarity has crushed the pro-Russia Patriotic Electoral Bloc in the Moldovan election.

It won 51 seats - an outright majority.

Moldova is now on a trajectory towards EU membership.

A very bad night for Putin, who targeted Moldova with a wave of election propaganda.

Yup

An observation by Brad that chimes with Alan Beattie‘s:

„If I were the US farm lobby I’d be baffled and dismayed at this point. Long given a privileged position in US trade policy (…) it is not a big feature of [Trumps] current trade strategy beyond notional pledges to buy soyabeans.“

Yeah watch the most exposed regions is the lesson I think!

I agree Christoph, I’m sure that would get me crucified by the climate culture warriors in Germany.

Only way out is industrial policy, European demand, and working w partners like Japan Korea the UK.

Seems silly to then target fossil fuel tech….

It is a dramatic story.

Ingolstadt, one of Germanys auto bastions, is warning that trade tax/local business tax income (key for local govs) is down by 70% from peak as the industry withers.

The second China shock was always going to show up in geographically concentrated pockets of Germany.