Ridd Case: Federal Court Delivers Devastating Blow To Free Speech In Australia
In this newsletter:
1) EU Leaders Slash Climate Funding To Save Coronavirus Recovery Plan
GWPF News, 21 July 2020
GWPF News, 21 July 2020
2) EU Leaders Slash Climate Budgets By Tens Of Billions To Cover Coronavirus Recovery Package
The Independent, 21 July 2020
3) Ridd Case: Federal Court Delivers Devastating Blow To Free Speech In Australia
Gideon Rozner, Institute of Public Affairs, 22 July
4) Matthew Lynn: Europe’s Coronavirus Rescue Fund Is Dead On Arrival
The Spectator, 21 July 2020
The Spectator, 21 July 2020
5) Ambrose Evans-Pritchard: Europe's €750bn Recovery Fund Is An Economic Pop-Gun - But A Political Howitzer
The Daily Telegraph, 21 July 2020
6) Britain Close To Abandoning Hope Of Brexit Trade Deal
The Daily Telegraph, 22 July 2020
The Daily Telegraph, 22 July 2020
7) Meanwhile ... China’s Coronavirus Recovery Drives Massive Boom In Coal Plants
South China Morning Post, 21 July 2020
South China Morning Post, 21 July 2020
8) And Finally: US Culture Wars Escalate As Wall Street Journal Staff Attack Their Own Opinion Pages
The Daily Telegraph, 22 July 2020
Full details:
1) EU Leaders Slash Climate Funding To Save Coronavirus Recovery Plan
GWPF News, 21 July 2020
After four days of bitter wrangling, EU leaders have struck a deal on a coronavirus recovery package after they agreed to cut climate funding by more than half.
According to Reuters, the Just Transition Fund (which intends to wean member states of using fossil fuels) will only receive 17.5 billion euros from the EU recovery fund and budget – down from the 37.5 billion euros set aside the original proposal.
The EU’s heads of government agreed on a €750bn package aimed at funding post-pandemic efforts to revive Europe’s economies which are facing mass unemployment and a deep recession.
According to news reports, nearly half of all climate funding from the EU’s 2021-2027 budget will be handed out to farmers.
In recent days, the European Court of Auditors has criticised the European Commission’s accounting tricks of so-called climate funding. It revealed that the Commission substantially overestimated the amount it spent on preventing global warming — by handing out billions of euros in cash subsidies to farmers, simply counting these agricultural subsidies as ‘climate funding’.
EU Eyes Cuts To Green Transition Fund In Late Bid To Strike Recovery Deal
BRUSSELS (Reuters) – Cuts to climate funding were on the menu as European Union leaders sat down to negotiate over dinner, aiming to clinch a deal after four days of summit wrangling over a huge stimulus plan to help rebuild their coronavirus-hit economies.
EU Council President Charles Michel presented a new proposal to the 27 leaders on Monday evening before talks resumed, tabling cuts to climate change schemes as part of a bid to rework the overall package into something all countries could agree to.
The proposal earmarked 30% of both the EU budget and a new 750 billion euro coronavirus recovery fund for climate protection, and said all spending must comply with a principle to “do no harm” to EU green goals.
But it slashed the size of the EU’s Just Transition Fund, its flagship pot of money to help wean countries off fossil fuels.
The Just Transition Fund will now receive a combined 17.5 billion euros from the EU recovery fund and budget – down from the 37.5 billion euros set aside in a previous proposal.
Full story
2) EU Leaders Slash Climate Budgets By Tens Of Billions To Cover Coronavirus Recovery Package
The Independent, 21 July 2020
Nations compromise with arrival of proposals decimating climate and science funds
European Union leaders are set to slash tens of billions of euros from funds aimed at preventing catastrophic climate breakdown (sic), after agreeing on a coronavirus recovery package after almost five days of difficult talks.
The Brussels summit brought 27 leaders face to face after five months of remote diplomacy, in which time the pandemic brought existing cracks across the bloc into sharp focus.
With some diplomats fearing talks over a record €1.1trn budget and €750bn coronavirus stimulus could be “make or break” for the bloc, the distance between the aims of four so-called frugal nations – led by the Netherlands – and other member states, finally began to diminish on Monday, albeit at the cost of environmental schemes.
During a dinner meeting on Monday night, European Council president Charles Michel unveiled new proposals which tabled cuts to climate crisis schemes in a bid to rework the package into something all countries could agree upon, following days of Dutch-led dissent.
Full story
3) Peter Ridd Case: Federal Court Delivers Devastating Blow To Free Speech In Australia
Gideon Rozner, Institute of Public Affairs, 22 July
The Institute of Public Affairs has expressed its dismay at the judgement in the case of James Cook University (JCU) v Peter Ridd, in which the Federal Court of Australia overturned the earlier decision in the Federal Circuit Court, which held that Dr Peter Ridd was unlawfully dismissed by JCU.
“This judgement is a devastating blow against mainstream Australians, against freedom of speech and against freedom of speech on climate change,” said Mr Rozner.
“Alarmingly, this decision shows that contractual provisions guaranteeing intellectual freedom do not protect academics against censorship by university administrators. The time has come for the Morrison Government to intervene.”
“This has been Australia’s David vs Goliath battle. Dr Peter Ridd on one side backed by thousands of ordinary Australians, and JCU on the other side who secured some of the most expensive legal representation in the country in Bret Walker SC to stifle the free speech of one of its own staff.”
Dr Peter Ridd, a professor of physics at JCU, was sacked by the university for misconduct for questioning in the IPA’s publication Climate Change: The Facts 2017 the climate change science around the Great Barrier Reef and for public statements made on the Jones & Co Sky News program.
“We understand that Dr Ridd is now considering his legal options in relation to a challenge in the High Court of Australia. If he does decide to take up that fight, the IPA – as well as thousands on mainstream Australians – will continue to support his fight for freedom of speech on climate change,” said Mr Rozner.
“James Cook University has engaged some of the most expensive legal representation in the country to stifle the free speech of one of its own staff, despite crying poor about university funding in the wake of coronavirus. It creates a massive chilling effect for any academic engaging in public debate in Australia,” said Mr Rozner
“James Cook University’s shameful actions prove without doubt there is a crisis of free speech at Australian Universities. Many academics are censured, but few are prepared to speak out and risk their career, particularly if faced with the prospect of legal battles and possible bankruptcy.
“The case has identified a culture of censorship when it comes to challenging claims surrounding climate change and the Great Barrier Reef. JCU to this date has never attempted to disprove claims made by Dr Ridd about the Great Barrier Reef,” said Mr Rozner.
Listen to The Heretic: Inside Peter Ridd’s fight for freedom of speech on climate change at www.ipa.org.au/TheHeretic
4) Matthew Lynn: Europe’s Coronavirus Rescue Fund Is Dead On Arrival
The Spectator, 21 July 2020
Arch-federalists will hail this as a ‘Hamilton Moment’. In truth, the Recovery Fund is likely to be dead on arrival.
Just imagine what would happen if real money was at stake. Over the last four days, the leaders of the European Union have been furiously haggling over their Coronavirus Rescue Fund. France’s President Macron has been banging the table angrily, the Dutch have taken on the role vacated by the British of the ‘bad Europeans’, and the Germans have been cautiously digging into their wallets to pay for the whole thing. In the end, however, they came up with a deal.
Arch-federalists will hail this as a ‘Hamilton Moment’ – a decisive step towards a more united Europe where the richer states help rescue the poorer, distributing money around the continent in a moment of ‘solidarity’. And while there is an element of truth in that – the EU will, for the first time, borrow money itself – no one should fall for the hype.
In truth, the Recovery Fund is likely to be dead on arrival. Here’s why:
First, it is too small. The EU likes to spin big numbers, but the headline €1.5 trillion (£1.35 trillion) includes its normal spending for the next seven years. And the loans hardly count. After all, Italy or Greece can borrow money themselves if they need to. The only significant number is the ‘grants’, which the so-called ‘frugal four’ scaled back from €500 billion to €390 billion (£450 billion to £350 billion). Out of a total EU GDP of €15 trillion (£13.5 trillion) that is not exactly chicken feed, but neither is it a game-changer. On top of that, the ‘rebates’ offered by the frugal four mean it will be even less in real terms, because they will claw some of that money back. In macro terms, it is not going to make much difference.
Next, it has hardly been an amicable agreement. The money has been squeezed out of the frugal four countries after a bitter argument, and so nothing more is likely to be forthcoming. Even worse, the Dutch secured an ‘emergency brake’ on spending, so they will be able to argue for years about how Italy or Greece use the money. Member states will also potentially be able to veto spending by other countries. That is a recipe for turning every bailout and infrastructure project into a pan-European row. If you are Dutch or German journalist with a taste for Eurosceptic clickbait, the next few years are going to be a lot of fun.
Thirdly, very little has yet been said about how the debt will be repaid. If you borrow money, you have to have some sort of mechanism to pay it back one day. The EU has plans for a plastics levy, but apart from that there is just some waffle about green and digital taxes. Those will be hard to agree, even harder to collect, and may well hurt the recovery as much as the extra spending helps it.
Even more worryingly, the shiny new EU bonds might end up rated as junk, or close to it. Why? Because every member state is ultimately on the hook for the money, so the ratings agencies may decide, quite rightly, that the EU bond has the same rating as Greek or Italian debt. Finally, the distribution of the money looks as if it will be completely political, with far more spent on grand French industrial projects in ‘green industries’ such as batteries for electric cars than rescuing small businesses in Italy and Spain.
Full post
5) Ambrose Evans-Pritchard: Europe's €750bn Recovery Fund Is An Economic Pop-Gun - But A Political Howitzer
The Daily Telegraph, 21 July 2020
The European Commission is now bordering on totalitarian in constitutional terms, mostly unchecked by any meaningful parliamentary oversight
The macroeconomic value of the EU’s €750bn Recovery Fund lies somewhere between modest and trivial. Part of it is reshuffling money that would have been spent anyway. The rest is spread thin over many years.
The significance is political. The fund is a profound change in the structure and character of the European Project. The Commission will have powers to raise large funds on the capital markets for the first time and to direct how the spending is allocated, turning this strange hybrid creature into an even more extraordinary institution.
Where else in the world does a single unelected body have the ‘right of initiative’ on legislation, and the executive powers of a proto-government, and the spending prerogatives of a parliament, all wrapped in one?
It is Caesaropapist, bordering on totalitarian in constitutional terms, mostly unchecked by meaningful parliamentary oversight. Montesquieu must be turning in his grave.
So yes, it matters. Emmanuel Macron was right to call the deal struck in the early hours of this morning an “historic” moment for Europe. But whether it is also an historic mistake - une fuite en avant, as the French say - remains to be seen.
The pure fiscal component has been whittled down from €500bn to €390bn, and even that figure is not quite what it seems. The money will be stretched out to the mid-2020s, amounting to less than 0.6pc of GDP annually.
A big chunk will go to Eastern Europe, lightly touched by the pandemic so far. Some money is going to regions in Germany or other states well able to finance their own needs.
If the aim is to prevent an asymmetric recovery that leaves Italy and Club Med marooned - and therefore renders monetary union unworkable - it is a blunt tool. There will be an ‘emergency brake’ if states are deemed to be dragging their feet on reforms (policed by the Commission, further increasing the power of Brussels), and a mechanism to cut funding to those breaching the ‘rule of law’. This will be a big source of coming friction. It is political nitroglycerine on a long fuse.
None of the grants will arrive until next year. The package is therefore useless as Covid disaster relief. In the meantime the European Central Bank is holding the eurozone together by soaking up Italian, Spanish, Portuguese, and Greek debt issuance, though with the German Constitutional Court breathing down its neck.
The Recovery Fund will kick in when the ECB’s pandemic QE runs out. That delicate handover will be the first big test of whether Europe has overcome the economic shock of Covid-19, or once again fallen short.
Had there been no deal after marathon talks and a promiscuous exchange of insults it would have a very rough day for the European Project. But what has emerged is not pretty either. There is a new line of emotional cleavage in EU affairs.
The Netherlands and the liberal, Atlanticist, free-market bloc used to hide behind Britain at EU summits, relying on the British Prime Minister of the day to fight their corner and suffer the opprobrium.
There was one consistent theme in the countless summits that I covered as Brussels correspondent. They always nudged forward the Monnet agenda by means of creepage, precedent, and the establishment of facts on the ground. The democratic consent for this erosion of sovereign national control was thinner than EU enthusiasts ever cared to admit.
The UK was invariably ambushed by the integrationist bloc. When the British put up reasonable objections they were accused of holding up progress by insiders whispering en coulisse, and vilified by the fanatical Brussels press corps. Over time this corrosive dynamic had consequences.
The EU ‘frugals’ now have to fight their own corner. They are learning what it is like to be cast as the villains - in this episode as penny-stinting moral reprobates, refusing to come to terms with the higher teleological destiny of Europe.
What is striking about this battle has been the sheer level of abuse hurled at Dutch premier Mark Rutte, the frugal-in-chief. His sin was to question why Dutch taxpayers should be bounced into funding pandemic give-aways that in reality have precious little to do with the virus. Some of the money is earmarked for countries that suffered less damage from Covid-19 than the Netherlands itself.
Mr Rutte has been traduced for asking why the Dutch people should pay for fiscal transfers to Club Med and the Kaczynski-Orban axis with no control by the Dutch parliament over how the money is spent or how recipients behave. The ‘big three’ beneficiaries in the Commission blueprint are Italy, Spain and Poland, and each of them is a red flag for The Hague.
Full post (£)
6) Britain Close To Abandoning Hope Of Brexit Trade Deal
The Daily Telegraph, 22 July 2020
The Telegraph has learnt that the Government’s working assumption is that Britain will trade with Europe on World Trade Organisation terms
Ministers now believe that Britain and the EU will fail to sign a post-Brexit trade deal, with just days to go until Boris Johnson’s July deadline for an outline agreement passes.
The Telegraph has learnt that the Government’s central working assumption is that Britain will trade with Europe on World Trade Organisation terms when the transition period ends on December 31.
UK and EU negotiators began the latest round of negotiations in London on Monday, but remain deadlocked on the stumbling blocks of fishing rights, so-called level playing field guarantees, governance of the deal, and the role of the European Court of Justice.
Senior sources said there was now an assumption that “there won’t be a deal”, though it remains possible that a “basic” agreement could be reached if the EU gives ground in the autumn.
Businesses have already been told to start preparing for a no trade deal exit from the transition period, a scenario which comes closer with each day of failed negotiations.
The current round of formal talks between David Frost, the UK’s chief negotiator, and the EU’s Michel Barnier is due to finish on Thursday, with no expectation on either side of a breakthrough.
No more face to face talks are scheduled this month, meaning Mr Johnson’s July deadline will have passed.
On Tuesday night Mr Frost hosted a dinner for Mr Barnier in Downing Street, but while Mr Johnson had made a point of joining the two men the last time Mr Barnier was in London, he made no such gesture this time around.
A senior source said: “The Government has been making it clear for a while now that it is prepared for no deal. Britain isn’t going to budge on fundamentals like fishing rights, so it’s all in the hands of the EU.”
Britain is seeking a zero tariff, zero quota trade deal, but trading on WTO terms would mean tariffs on goods and red tape that could lead to delays in the passage of goods entering and leaving the UK.
Mr Johnson has made clear it is a price he is prepared to pay if the EU refuses to back down over its insistence on retaining some say over British laws and fishing waters.
Angela Merkel warned the EU to prepare for no deal when Germany took over the rotating six-month presidency of the bloc on July 1. Mr Johnson had earlier told her the UK was willing to walk out of negotiations, if necessary.
Full story (£)
7) Meanwhile In The Real World... China’s Coronavirus Recovery Drives Massive Boom In Coal Plants
South China Morning Post, 21 July 2020
China is in the midst of a new coal boom, as approvals for coal energy projects have accelerated this year in response to the coronavirus outbreak
China has 249.6 gigawatts of coal-fired power capacity either under construction or in planning which is larger than the current coal fleets of the United States or India. Locations and sizes (megawatts, shown by the size of each circle) of new coal-fired power capacity in the pipeline in China. Source: Global Energy Monitor and NEA.
Far from treating the coronavirus pandemic as a once-in-a-lifetime opportunity to speed up decarbonisation and lock in climate goals, there are signs China is falling back on its old playbook of pumping cheap credit into fossil-fuel heavy energy projects to help the economy recover from a historic first quarter contraction.
Following a dramatic plunge in energy consumption and greenhouse gas emissions at the start of the year, China’s energy sector is roaring back to life. Daily consumption of coal, oil and gas in June was on par with the previous year, according to the government, and analysts say carbon emissions have bounced back to pre-coronavirus levels.
It may still be too early to say where energy use and emissions are heading in 2020, but the environmental detox that followed months of sweeping lockdowns appears to be over.
China has 249.6 gigawatts of coal-fired power capacity either under construction or in planning, according to Global Energy Monitor and the Centre for Research on Energy and Clean Air – which is larger than the current coal fleets of the United States or India.
In this year alone, China permitted 17.0GW of coal-fired power for construction, more than the previous two years combined, and the power sector has proposed some 40GW of new coal plants, the two groups said in a report in June.
The surge in new coal-fired power plant approvals is being driven in large part by a glut of local government infrastructure projects facilitated by easy access to bank loans and central government support for stimulus spending, analysts said.
Full story
8) And Finally: US Culture Wars Escalate As Wall Street Journal Staff Attack Their Own Opinion Pages
The Daily Telegraph, 22 July 2020
About 300 staff on Murdoch-owned newspaper accuse opinion section of publishing misinformation on topics including coronavirus and racism
Hundreds of journalists at the Rupert Murdoch-owned Wall Street Journal have mounted an attack on their own newspaper’s opinion pages, accusing editors and contributors of undermining readers’ trust with misinformation and basic errors on topics including coronavirus and racism.
In what will be viewed as the latest escalation of the so-called culture wars engulfing American institutions, about 300 reporters, editors, video journalists and newsroom technical staff have signed a letter to managers at the Journal's parent company Dow Jones to demand change.
In a copy of the letter seen by The Telegraph, they accuse the Journal’s opinion pages of a “lack of fact-checking and transparency” and a “disregard for evidence”.
The letter, due to be sent to Dow Jones chief executive Almar Latour on Tuesday, said: “Many readers already cannot tell the difference between reporting and opinion. And from those who know of the divide, reporters nonetheless face questions about the Journal’s accuracy and fairness because of errors published in opinion.” [...]
Journal staff have intensified criticism of their own opinion pages as the media grapples with structural changes driven by the internet that blur in readers’ eyes the traditionally clear divide between news and opinion in American newspapers. Against a politically polarised backdrop, leading US publications are increasingly faced with toxic internal debates that spill over onto social media.
Last week Bari Weiss, an editor on the opinion pages of the New York Times, publicly resigned claiming she had been “the subject of constant bullying by colleagues who disagree with my views”. Ms Weiss had been poached from the Journal in 2017 amid concerns in the senior ranks of the New York Times that it had failed to understand and reflect the spectrum of American opinion prior to the election of Donald Trump.
The Journal’s opinion section meanwhile has traditionally reflected the views of the US conservative establishment. Tensions between its editors and the larger, more liberal news staff are a fixture of life at the newspaper and existed before its acquisition by Mr Murdoch in 2007, but have been raised since and especially in the current US political climate.
The latest letter of complaint comes weeks after staff complained about a column about race carried in the news pages and headlined “The often distorted reality of hate crime in America”. The writer Gerard Baker, the Journal’s former British editor-in-chief, was subsequently moved to the opinion pages, although the newspaper said the switch had been planned before the controversy.
Full story (£)
GWPF News, 21 July 2020
After four days of bitter wrangling, EU leaders have struck a deal on a coronavirus recovery package after they agreed to cut climate funding by more than half.
According to Reuters, the Just Transition Fund (which intends to wean member states of using fossil fuels) will only receive 17.5 billion euros from the EU recovery fund and budget – down from the 37.5 billion euros set aside the original proposal.
The EU’s heads of government agreed on a €750bn package aimed at funding post-pandemic efforts to revive Europe’s economies which are facing mass unemployment and a deep recession.
According to news reports, nearly half of all climate funding from the EU’s 2021-2027 budget will be handed out to farmers.
In recent days, the European Court of Auditors has criticised the European Commission’s accounting tricks of so-called climate funding. It revealed that the Commission substantially overestimated the amount it spent on preventing global warming — by handing out billions of euros in cash subsidies to farmers, simply counting these agricultural subsidies as ‘climate funding’.
EU Eyes Cuts To Green Transition Fund In Late Bid To Strike Recovery Deal
BRUSSELS (Reuters) – Cuts to climate funding were on the menu as European Union leaders sat down to negotiate over dinner, aiming to clinch a deal after four days of summit wrangling over a huge stimulus plan to help rebuild their coronavirus-hit economies.
EU Council President Charles Michel presented a new proposal to the 27 leaders on Monday evening before talks resumed, tabling cuts to climate change schemes as part of a bid to rework the overall package into something all countries could agree to.
The proposal earmarked 30% of both the EU budget and a new 750 billion euro coronavirus recovery fund for climate protection, and said all spending must comply with a principle to “do no harm” to EU green goals.
But it slashed the size of the EU’s Just Transition Fund, its flagship pot of money to help wean countries off fossil fuels.
The Just Transition Fund will now receive a combined 17.5 billion euros from the EU recovery fund and budget – down from the 37.5 billion euros set aside in a previous proposal.
Full story
2) EU Leaders Slash Climate Budgets By Tens Of Billions To Cover Coronavirus Recovery Package
The Independent, 21 July 2020
Nations compromise with arrival of proposals decimating climate and science funds
European Union leaders are set to slash tens of billions of euros from funds aimed at preventing catastrophic climate breakdown (sic), after agreeing on a coronavirus recovery package after almost five days of difficult talks.
The Brussels summit brought 27 leaders face to face after five months of remote diplomacy, in which time the pandemic brought existing cracks across the bloc into sharp focus.
With some diplomats fearing talks over a record €1.1trn budget and €750bn coronavirus stimulus could be “make or break” for the bloc, the distance between the aims of four so-called frugal nations – led by the Netherlands – and other member states, finally began to diminish on Monday, albeit at the cost of environmental schemes.
During a dinner meeting on Monday night, European Council president Charles Michel unveiled new proposals which tabled cuts to climate crisis schemes in a bid to rework the package into something all countries could agree upon, following days of Dutch-led dissent.
Full story
3) Peter Ridd Case: Federal Court Delivers Devastating Blow To Free Speech In Australia
Gideon Rozner, Institute of Public Affairs, 22 July
The Institute of Public Affairs has expressed its dismay at the judgement in the case of James Cook University (JCU) v Peter Ridd, in which the Federal Court of Australia overturned the earlier decision in the Federal Circuit Court, which held that Dr Peter Ridd was unlawfully dismissed by JCU.
“This judgement is a devastating blow against mainstream Australians, against freedom of speech and against freedom of speech on climate change,” said Mr Rozner.
“Alarmingly, this decision shows that contractual provisions guaranteeing intellectual freedom do not protect academics against censorship by university administrators. The time has come for the Morrison Government to intervene.”
“This has been Australia’s David vs Goliath battle. Dr Peter Ridd on one side backed by thousands of ordinary Australians, and JCU on the other side who secured some of the most expensive legal representation in the country in Bret Walker SC to stifle the free speech of one of its own staff.”
Dr Peter Ridd, a professor of physics at JCU, was sacked by the university for misconduct for questioning in the IPA’s publication Climate Change: The Facts 2017 the climate change science around the Great Barrier Reef and for public statements made on the Jones & Co Sky News program.
“We understand that Dr Ridd is now considering his legal options in relation to a challenge in the High Court of Australia. If he does decide to take up that fight, the IPA – as well as thousands on mainstream Australians – will continue to support his fight for freedom of speech on climate change,” said Mr Rozner.
“James Cook University has engaged some of the most expensive legal representation in the country to stifle the free speech of one of its own staff, despite crying poor about university funding in the wake of coronavirus. It creates a massive chilling effect for any academic engaging in public debate in Australia,” said Mr Rozner
“James Cook University’s shameful actions prove without doubt there is a crisis of free speech at Australian Universities. Many academics are censured, but few are prepared to speak out and risk their career, particularly if faced with the prospect of legal battles and possible bankruptcy.
“The case has identified a culture of censorship when it comes to challenging claims surrounding climate change and the Great Barrier Reef. JCU to this date has never attempted to disprove claims made by Dr Ridd about the Great Barrier Reef,” said Mr Rozner.
Listen to The Heretic: Inside Peter Ridd’s fight for freedom of speech on climate change at www.ipa.org.au/TheHeretic
4) Matthew Lynn: Europe’s Coronavirus Rescue Fund Is Dead On Arrival
The Spectator, 21 July 2020
Arch-federalists will hail this as a ‘Hamilton Moment’. In truth, the Recovery Fund is likely to be dead on arrival.
Just imagine what would happen if real money was at stake. Over the last four days, the leaders of the European Union have been furiously haggling over their Coronavirus Rescue Fund. France’s President Macron has been banging the table angrily, the Dutch have taken on the role vacated by the British of the ‘bad Europeans’, and the Germans have been cautiously digging into their wallets to pay for the whole thing. In the end, however, they came up with a deal.
Arch-federalists will hail this as a ‘Hamilton Moment’ – a decisive step towards a more united Europe where the richer states help rescue the poorer, distributing money around the continent in a moment of ‘solidarity’. And while there is an element of truth in that – the EU will, for the first time, borrow money itself – no one should fall for the hype.
In truth, the Recovery Fund is likely to be dead on arrival. Here’s why:
First, it is too small. The EU likes to spin big numbers, but the headline €1.5 trillion (£1.35 trillion) includes its normal spending for the next seven years. And the loans hardly count. After all, Italy or Greece can borrow money themselves if they need to. The only significant number is the ‘grants’, which the so-called ‘frugal four’ scaled back from €500 billion to €390 billion (£450 billion to £350 billion). Out of a total EU GDP of €15 trillion (£13.5 trillion) that is not exactly chicken feed, but neither is it a game-changer. On top of that, the ‘rebates’ offered by the frugal four mean it will be even less in real terms, because they will claw some of that money back. In macro terms, it is not going to make much difference.
Next, it has hardly been an amicable agreement. The money has been squeezed out of the frugal four countries after a bitter argument, and so nothing more is likely to be forthcoming. Even worse, the Dutch secured an ‘emergency brake’ on spending, so they will be able to argue for years about how Italy or Greece use the money. Member states will also potentially be able to veto spending by other countries. That is a recipe for turning every bailout and infrastructure project into a pan-European row. If you are Dutch or German journalist with a taste for Eurosceptic clickbait, the next few years are going to be a lot of fun.
Thirdly, very little has yet been said about how the debt will be repaid. If you borrow money, you have to have some sort of mechanism to pay it back one day. The EU has plans for a plastics levy, but apart from that there is just some waffle about green and digital taxes. Those will be hard to agree, even harder to collect, and may well hurt the recovery as much as the extra spending helps it.
Even more worryingly, the shiny new EU bonds might end up rated as junk, or close to it. Why? Because every member state is ultimately on the hook for the money, so the ratings agencies may decide, quite rightly, that the EU bond has the same rating as Greek or Italian debt. Finally, the distribution of the money looks as if it will be completely political, with far more spent on grand French industrial projects in ‘green industries’ such as batteries for electric cars than rescuing small businesses in Italy and Spain.
Full post
5) Ambrose Evans-Pritchard: Europe's €750bn Recovery Fund Is An Economic Pop-Gun - But A Political Howitzer
The Daily Telegraph, 21 July 2020
The European Commission is now bordering on totalitarian in constitutional terms, mostly unchecked by any meaningful parliamentary oversight
The macroeconomic value of the EU’s €750bn Recovery Fund lies somewhere between modest and trivial. Part of it is reshuffling money that would have been spent anyway. The rest is spread thin over many years.
The significance is political. The fund is a profound change in the structure and character of the European Project. The Commission will have powers to raise large funds on the capital markets for the first time and to direct how the spending is allocated, turning this strange hybrid creature into an even more extraordinary institution.
Where else in the world does a single unelected body have the ‘right of initiative’ on legislation, and the executive powers of a proto-government, and the spending prerogatives of a parliament, all wrapped in one?
It is Caesaropapist, bordering on totalitarian in constitutional terms, mostly unchecked by meaningful parliamentary oversight. Montesquieu must be turning in his grave.
So yes, it matters. Emmanuel Macron was right to call the deal struck in the early hours of this morning an “historic” moment for Europe. But whether it is also an historic mistake - une fuite en avant, as the French say - remains to be seen.
The pure fiscal component has been whittled down from €500bn to €390bn, and even that figure is not quite what it seems. The money will be stretched out to the mid-2020s, amounting to less than 0.6pc of GDP annually.
A big chunk will go to Eastern Europe, lightly touched by the pandemic so far. Some money is going to regions in Germany or other states well able to finance their own needs.
If the aim is to prevent an asymmetric recovery that leaves Italy and Club Med marooned - and therefore renders monetary union unworkable - it is a blunt tool. There will be an ‘emergency brake’ if states are deemed to be dragging their feet on reforms (policed by the Commission, further increasing the power of Brussels), and a mechanism to cut funding to those breaching the ‘rule of law’. This will be a big source of coming friction. It is political nitroglycerine on a long fuse.
None of the grants will arrive until next year. The package is therefore useless as Covid disaster relief. In the meantime the European Central Bank is holding the eurozone together by soaking up Italian, Spanish, Portuguese, and Greek debt issuance, though with the German Constitutional Court breathing down its neck.
The Recovery Fund will kick in when the ECB’s pandemic QE runs out. That delicate handover will be the first big test of whether Europe has overcome the economic shock of Covid-19, or once again fallen short.
Had there been no deal after marathon talks and a promiscuous exchange of insults it would have a very rough day for the European Project. But what has emerged is not pretty either. There is a new line of emotional cleavage in EU affairs.
The Netherlands and the liberal, Atlanticist, free-market bloc used to hide behind Britain at EU summits, relying on the British Prime Minister of the day to fight their corner and suffer the opprobrium.
There was one consistent theme in the countless summits that I covered as Brussels correspondent. They always nudged forward the Monnet agenda by means of creepage, precedent, and the establishment of facts on the ground. The democratic consent for this erosion of sovereign national control was thinner than EU enthusiasts ever cared to admit.
The UK was invariably ambushed by the integrationist bloc. When the British put up reasonable objections they were accused of holding up progress by insiders whispering en coulisse, and vilified by the fanatical Brussels press corps. Over time this corrosive dynamic had consequences.
The EU ‘frugals’ now have to fight their own corner. They are learning what it is like to be cast as the villains - in this episode as penny-stinting moral reprobates, refusing to come to terms with the higher teleological destiny of Europe.
What is striking about this battle has been the sheer level of abuse hurled at Dutch premier Mark Rutte, the frugal-in-chief. His sin was to question why Dutch taxpayers should be bounced into funding pandemic give-aways that in reality have precious little to do with the virus. Some of the money is earmarked for countries that suffered less damage from Covid-19 than the Netherlands itself.
Mr Rutte has been traduced for asking why the Dutch people should pay for fiscal transfers to Club Med and the Kaczynski-Orban axis with no control by the Dutch parliament over how the money is spent or how recipients behave. The ‘big three’ beneficiaries in the Commission blueprint are Italy, Spain and Poland, and each of them is a red flag for The Hague.
Full post (£)
6) Britain Close To Abandoning Hope Of Brexit Trade Deal
The Daily Telegraph, 22 July 2020
The Telegraph has learnt that the Government’s working assumption is that Britain will trade with Europe on World Trade Organisation terms
Ministers now believe that Britain and the EU will fail to sign a post-Brexit trade deal, with just days to go until Boris Johnson’s July deadline for an outline agreement passes.
The Telegraph has learnt that the Government’s central working assumption is that Britain will trade with Europe on World Trade Organisation terms when the transition period ends on December 31.
UK and EU negotiators began the latest round of negotiations in London on Monday, but remain deadlocked on the stumbling blocks of fishing rights, so-called level playing field guarantees, governance of the deal, and the role of the European Court of Justice.
Senior sources said there was now an assumption that “there won’t be a deal”, though it remains possible that a “basic” agreement could be reached if the EU gives ground in the autumn.
Businesses have already been told to start preparing for a no trade deal exit from the transition period, a scenario which comes closer with each day of failed negotiations.
The current round of formal talks between David Frost, the UK’s chief negotiator, and the EU’s Michel Barnier is due to finish on Thursday, with no expectation on either side of a breakthrough.
No more face to face talks are scheduled this month, meaning Mr Johnson’s July deadline will have passed.
On Tuesday night Mr Frost hosted a dinner for Mr Barnier in Downing Street, but while Mr Johnson had made a point of joining the two men the last time Mr Barnier was in London, he made no such gesture this time around.
A senior source said: “The Government has been making it clear for a while now that it is prepared for no deal. Britain isn’t going to budge on fundamentals like fishing rights, so it’s all in the hands of the EU.”
Britain is seeking a zero tariff, zero quota trade deal, but trading on WTO terms would mean tariffs on goods and red tape that could lead to delays in the passage of goods entering and leaving the UK.
Mr Johnson has made clear it is a price he is prepared to pay if the EU refuses to back down over its insistence on retaining some say over British laws and fishing waters.
Angela Merkel warned the EU to prepare for no deal when Germany took over the rotating six-month presidency of the bloc on July 1. Mr Johnson had earlier told her the UK was willing to walk out of negotiations, if necessary.
Full story (£)
7) Meanwhile In The Real World... China’s Coronavirus Recovery Drives Massive Boom In Coal Plants
South China Morning Post, 21 July 2020
China is in the midst of a new coal boom, as approvals for coal energy projects have accelerated this year in response to the coronavirus outbreak
China has 249.6 gigawatts of coal-fired power capacity either under construction or in planning which is larger than the current coal fleets of the United States or India. Locations and sizes (megawatts, shown by the size of each circle) of new coal-fired power capacity in the pipeline in China. Source: Global Energy Monitor and NEA.
Far from treating the coronavirus pandemic as a once-in-a-lifetime opportunity to speed up decarbonisation and lock in climate goals, there are signs China is falling back on its old playbook of pumping cheap credit into fossil-fuel heavy energy projects to help the economy recover from a historic first quarter contraction.
Following a dramatic plunge in energy consumption and greenhouse gas emissions at the start of the year, China’s energy sector is roaring back to life. Daily consumption of coal, oil and gas in June was on par with the previous year, according to the government, and analysts say carbon emissions have bounced back to pre-coronavirus levels.
It may still be too early to say where energy use and emissions are heading in 2020, but the environmental detox that followed months of sweeping lockdowns appears to be over.
China has 249.6 gigawatts of coal-fired power capacity either under construction or in planning, according to Global Energy Monitor and the Centre for Research on Energy and Clean Air – which is larger than the current coal fleets of the United States or India.
In this year alone, China permitted 17.0GW of coal-fired power for construction, more than the previous two years combined, and the power sector has proposed some 40GW of new coal plants, the two groups said in a report in June.
The surge in new coal-fired power plant approvals is being driven in large part by a glut of local government infrastructure projects facilitated by easy access to bank loans and central government support for stimulus spending, analysts said.
Full story
8) And Finally: US Culture Wars Escalate As Wall Street Journal Staff Attack Their Own Opinion Pages
The Daily Telegraph, 22 July 2020
About 300 staff on Murdoch-owned newspaper accuse opinion section of publishing misinformation on topics including coronavirus and racism
Hundreds of journalists at the Rupert Murdoch-owned Wall Street Journal have mounted an attack on their own newspaper’s opinion pages, accusing editors and contributors of undermining readers’ trust with misinformation and basic errors on topics including coronavirus and racism.
In what will be viewed as the latest escalation of the so-called culture wars engulfing American institutions, about 300 reporters, editors, video journalists and newsroom technical staff have signed a letter to managers at the Journal's parent company Dow Jones to demand change.
In a copy of the letter seen by The Telegraph, they accuse the Journal’s opinion pages of a “lack of fact-checking and transparency” and a “disregard for evidence”.
The letter, due to be sent to Dow Jones chief executive Almar Latour on Tuesday, said: “Many readers already cannot tell the difference between reporting and opinion. And from those who know of the divide, reporters nonetheless face questions about the Journal’s accuracy and fairness because of errors published in opinion.” [...]
Journal staff have intensified criticism of their own opinion pages as the media grapples with structural changes driven by the internet that blur in readers’ eyes the traditionally clear divide between news and opinion in American newspapers. Against a politically polarised backdrop, leading US publications are increasingly faced with toxic internal debates that spill over onto social media.
Last week Bari Weiss, an editor on the opinion pages of the New York Times, publicly resigned claiming she had been “the subject of constant bullying by colleagues who disagree with my views”. Ms Weiss had been poached from the Journal in 2017 amid concerns in the senior ranks of the New York Times that it had failed to understand and reflect the spectrum of American opinion prior to the election of Donald Trump.
The Journal’s opinion section meanwhile has traditionally reflected the views of the US conservative establishment. Tensions between its editors and the larger, more liberal news staff are a fixture of life at the newspaper and existed before its acquisition by Mr Murdoch in 2007, but have been raised since and especially in the current US political climate.
The latest letter of complaint comes weeks after staff complained about a column about race carried in the news pages and headlined “The often distorted reality of hate crime in America”. The writer Gerard Baker, the Journal’s former British editor-in-chief, was subsequently moved to the opinion pages, although the newspaper said the switch had been planned before the controversy.
Full story (£)
The London-based Global Warming Policy Forum is a world leading think tank on global warming policy issues. The GWPF newsletter is prepared by Director Dr Benny Peiser - for more information, please visit the website at www.thegwpf.com.
No comments:
Post a Comment