EsadeGeo Daily Digest, 19/05/2020

Financial Times – Sam Fleming, Victor Mallet and Guy Chazan / Germany and France unite in call for €500bn Europe recovery fund

  • Germany and France have joined forces to push for a €500bn EU recovery fund, boosting the effort to create a co-ordinated European fiscal response to the coronavirus pandemic. The funds would be raised by the European Commission borrowing on capital markets and would be used to support EU spending rather than loans to national governments. 
  • The Franco-German plan marks a potentially significant breakthrough, given that Paris and Berlin were at loggerheads over the issue of common debt issuance to pay for recovery efforts. Ms Merkel said the EU was facing the “gravest crisis in its history, and such a crisis demands appropriate answers”. Mr Macron described the proposals as “a major step”, adding: “This is the transfer of real budget money to the worst-affected regions and the worst-hit sectors.”
  • However, the Franco-German plan ran into immediate resistance. Austrian chancellor Sebastian Kurz said he and his Dutch, Danish and Swedish counterparts were only prepared to accept a rescue fund that gave out loans. It will fall to European Council president Charles Michel to broker the final accord among the member states at a summit.
  • Under the Franco-German proposal, all the money from the recovery fund would be distributed in the form of grants. This has triggered scepticism among so-called frugal northern European member states, which prefer all or most of the money to be given out as loans that would have to be repaid by member state recipients.
  • Politico – Matthew Karnitschnig and Rym Momtaz / Berlin buckles on bonds in €500B Franco-German recovery plan

Bloomberg – Jordan Fabian and Nick Wadhams / Trump threatens WHO with permanent cutoff of U.S. funds

  • President Donald Trump escalated his threats against the World Health Organization over its handling of the coronavirus pandemic, saying he would permanently cut U.S. funding if it does not make sweeping reforms. Trump called on the group to “demonstrate independence from China,” renewing a complaint that led him in April to temporarily suspend U.S. funding.
  • “If the World Health Organization does not commit to major substantive improvements within the next 30 days, I will make my temporary freeze of United States funding to the World Health Organization permanent and reconsider our membership in the organization,” Trump wrote to Director General Tedros Adhanom Ghebreyesus.
  • Trump made the letter public hours after Chinese President Xi Jinping addressed the Geneva-based group’s governing body, the World Health Assembly, by video link and promised to devote $2 billion toward fighting the pandemic over the next two years while urging greater international cooperation to defeat the virus.
  • It’s not clear how much reform the WHO can actually carry out on its own. As with almost every organization under the United Nations umbrella, such changes would require approval from the countries that belong to the agency, which include China and many developing countries that rely on the agency for crucial medical assistance.
  • The New York Times – Andrew Jacobs, Michael D. Shear and Edward Wong / U.S.-China feud over coronavirus erupts at world health assembly

Foreign Policy – Josh Nadeau / Putin is using the pandemic to consolidate power

  • On Sunday, Russia became the country with the second-highest number of official coronavirus infections in the world, after the United States. This grim news comes amid a number of increasing, and increasingly restrictive, measures to combat the virus, including a digital pass system requiring residents to register for a code in order to move around their city by vehicle or public transit. 
  • Human rights defenders are concerned that the Kremlin may be using these and other extraordinary measures to justify or even speed up the implementation of authoritarian practices dreamed up long before the onset of COVID-19. An increasing number of authoritarian monitoring systems have already been put in place within the last two months.
  • These controls could limit the movement of citizens deemed a threat to public safety, and the subsequent collection of location data could allow government officials to know who has come into contact with whom. Court and penitentiary systems may use the extraordinary circumstances as an excuse to consolidate power over the civilians under their authority.
  • In another failed bid to keep his approval rating high, Putin has delegated unpopular decision-making processes to local governors in an attempt to keep his own hands clean. This has, however, instead led to inconsistent measures taken across the country and a corresponding spike in infections.
  • Euractiv – Vlagyiszlav Makszimov / The Brief – Orbán’s (im)permanence

Forbes – Mike Hughes / Climate change: a pandemic isolation can’t solve

  • One of the few upsides to this pandemic is the immediate, positive impact it has had on our environment and reduction in emissions. As we start to plan for a post-COVID world, we need to take this opportunity to reset the environmental scales by using the current situation to establish emissions and energy baselines and introduce changes that will ensure economic growth and a healthier planet.
  • Accelerate speed of renewable energy growth: The latest IEA report highlights the continued growth in renewable energy production and consumption at a time when energy consumption across the board has dropped dramatically. As we look to restart the economy, we must now look to keep the green energy gains and avoid a return to our previous normal energy patterns.
  • Maintain reductions in energy consumption where possible: Aligning profitability and sustainability will be key to keeping a clean energy future. There is a clear opportunity for all businesses to review their operating infrastructure and ingrained work practices. Now the systems are in place, flexible working can continue to help companies and commuters reduce their carbon footprint.
  • Eliminate energy waste: Buildings are the world’s largest consumers of energy and hold the greatest untapped potential for savings. the economic relaunch is an opportunity to positively transform our society and promote decisions and investments leading to decarbonisation, decentralisation, and digitisation.
  • Euractiv – Matt Mace / Business giants call for science-based green economic recovery
  • Bloomberg / A return to normal in China means air pollution is back in force

Today’s future perspectives:

The selected pieces do not necessarily reflect the views of Javier Solana and EsadeGeo. The summaries above may include word-for-word excerpts from their respective pieces.

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