Merkel eyes overhaul of EU finances for post-Brexit bloc

German Chancellor Angela Merkel delivers her speech aboutEuropean policy ahead of a EU summit at the parliament Bundestag in Berlin. (AP)
Updated 22 February 2018
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Merkel eyes overhaul of EU finances for post-Brexit bloc

BERLIN: Brexit offers the EU an opportunity for a broad rethink of its financial set-up, German Chancellor Angela Merkel said on Thursday before an EU summit that will tackle the bloc's future budget.
Addressing the Bundestag (lower house of parliament), Merkel made clear that the future of the EU would be a priority in her fourth term, provided a coalition deal between her conservatives and the pro-EU Social Democrats is approved by SPD members.
"We need a new start for Europe," said Merkel, adding the looming debate on a new budget for the 27-member bloc after Britain's withdrawal in 2019 could lead to some major changes.
"The debate about the future financial framework is also a chance to look at the finances of the EU as a whole," she said.
Leaders at Friday's summit will discuss whether to boost the next seven-year budget to pay for common policies on security, defence and migration between 2021 to 2027.
Germany, Europe's biggest economy, is the biggest net contributor and has said it is ready to pay more although some others, including the Netherlands, argue that a smaller bloc - without Britain - implies a smaller budget.
Merkel sought to reassure those in her conservative bloc who are more sceptical about deeper EU integration and paying out for poorer, debt-ridden member states.
"Solidarity cannot be a one-way street," she said.
"The stability and growth pact will remain the compass for Europe," she added, reiterating that liabilities and supervision must go hand in hand as part of any euro zone reform.
Taking aim at some eastern European members, Merkel also said the bloc's structural funds should in future be linked to taking in foreign migrants. Eastern members with right-wing nationalist governments have rejected an EU burden-sharing plan for migrants coming from the Middle East, Africa and Asia.
"With the distribution of structural funds, we must ensure that the allocation criteria in future reflect the engagement of many regions and municipalities in absorbing and integrating migrants," she said.
That idea is "political blackmail," said the far-right, eurosceptic Alternative for Germany (AfD), which will be the main opposition party if a "grand coalition" goes ahead. The AfD made clear it rejects bigger payments to the EU.
"Germany is going from teacher to taskmaster to paymaster," Alexander Gauland, head of the AfD's parliamentary group, said to applause from his lawmakers in a riposte to Merkel's address.
The chancellor, at risk of being supplanted as Europe's most influential leader by French President Emmanuel Macron, said the EU should be more ambitious in developing a response to growing global political and economic pressures.
"More than ever we need European answers to the pressing, big questions of our time," she told the Bundestag, urging the EU to adjust to digital advances in technology to be able to compete economically in the future.
Macron has offered an ambitious vision for Europe, but has had to wait for a response from Germany, due in part to Merkel's protracted attempts to cement a governing coalition.
She emphasised that European policy would be front and centre in a new grand coalition with the Social Democrats, which would be a repeat of her last coalition that prevailed up to the Sept. 24 election.
"Germany can only do well in the long run if Europe does well," she said. "It is no coincidence that the first chapter of the coalition agreement is on Europe".
The coalition parties have agreed on a deal but SPD rank-and-file are voting to approve it. The result is due on March 4.


US unveils new veto threat against WTO rulings

Updated 23 June 2018
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US unveils new veto threat against WTO rulings

  • US tells WTO appeals rulings in trade disputes could be vetoed if they took longer than the allowed 90 days
  • Trump, who has railed against the WTO judges in the past, threatens to levy a 20 percent import tax on European Union cars

GENEVA: The United States ramped up its challenge to the global trading system on Friday, telling the World Trade Organization that appeals rulings in trade disputes could be vetoed if they took longer than the allowed 90 days.
The statement by US Ambassador Dennis Shea threatened to erode a key element of trade enforcement at the 23-year-old WTO: binding dispute settlement, which is widely seen as a major bulwark against protectionism.
It came as US President Donald Trump, who has railed against the WTO judges in the past, threatened to levy a 20 percent import tax on European Union cars, the latest in an unprecedented campaign of threats and tariffs to punish US trading partners.
Shea told the WTO’s dispute settlement body that rulings by the WTO’s Appellate Body, effectively the supreme court of world trade, were invalid if they took too long. Rulings would no longer be governed by “reverse consensus,” whereby they are blocked only if all WTO members oppose them.
“The consequence of the Appellate Body choosing to breach (WTO dispute) rules and issue a report after the 90-day deadline would be that this report no longer qualifies as an Appellate Body report for purposes of the exceptional negative consensus adoption procedure,” Shea said, according to a copy of his remarks provided to Reuters.
An official who attended the meeting said other WTO members agreed that the Appellate Body should stick to the rules, but none supported Shea’s view that late rulings could be vetoed, and many expressed concern about his remarks.
Rulings are routinely late because, the WTO says, disputes are abundant and complex. Things have slowed further because Trump is blocking new judicial appointments, increasing the remaining judges’ already bulging workload.
At Friday’s meeting the United States maintained its opposition to the appointment of judges, effectively signalling a veto of one judge hoping for reappointment to the seven-seat bench in September.
Without him, the Appellate Body will only have three judges, the minimum required for every dispute, putting the system at severe risk of breakdown if any of the three judges cannot work on a case for legal or other reasons.
“Left unaddressed, these challenges can cripple, paralyze, or even extinguish the system,” chief judge Ujal Singh Bhatia said.
Sixty-six WTO member states are backing a petition that asks the United States to allow appointments to go ahead. On Friday, US ally Japan endorsed the petition for the first time, meaning that all the major users of the dispute system were united in opposition to Trump.