Von der Leyen spars with rivals on EU budget, economy

This morning's top world news, in a nutshell - Wednesday, 22nd May 2024.

Rival candidates to take the helm of the European Commission sparred over the size of the bloc’s trillion-euro budget as the EU election campaign enters its final weeks. Ursula von der Leyen hinted at a new centrally-funded European air defence system and tariffs on Chinese goods as the German centre-right politican seeks a second term as Commission president.

But she and her rivals – including Sandro Gozi, a French MEP from Emmanuel Macron’s Renew Europe party, and Danish right-wing candidate Anders Vistisen – don’t see eye to eye on how to adjust the EU’s finances. “You don’t cut the budget, you increase it,” said Gozi, adding that new EU revenue sources such as a tax on food waste could help pay for new challenges like climate change and security, adding: “You cannot drive towards the future looking at the rear-view mirror.”

Brussels’ spending amounted to nearly €250 billion in 2022, and – with members each clamouring for their own priorities and pandemic-era debts still to be repaid – setting a new seven-year framework for the EU budget will be among the most politically-challenging tasks for the next Commission. Gozi’s approach was broadly supported by Socialist candidate Nicolas Schmit, currently Luxembourg’s European Commissioner, who argued the current budget is “not enormous”, and that that building up Europe’s defences in the wake of Russian aggression “will not be possible without some European indebtedness”.

Von der Leyen was less precise about her intentions, suggesting that she might be prepared to reduce expensive farming subsidies and aid to poorest regions, to prioritise new areas of spending.

“Agriculture and cohesion will play a role without any question, but we have to focus on what is most important at the moment,” von der Leyen said, promoting a potentially controversial new project for a bloc that has traditionally steered clear of military matters. I would advocate, for example, for an air defence shield as a common European project,” said von der Leyen, who was previously Germany’s defence minister, an initiative that if pursued could require significant central funding.

Vistisen, meanwhile, pledged to cut EU staffing levels by 10,000, and abolish half of the bloc’s agencies – though wasn’t drawn on the exact cost savings he expected to make from those changes.

Photo: Virginia Mayo/AP

Candidates also clashed on how to face up to aggressive trade practices from Beijing – with von der Leyen suggesting she would diverge from the US, which last week imposed sharp tariff increases on Chinese goods including chips, solar panels and electric vehicles. “We share some of the concerns of our US counterparts but we have a different approach, a much more tailored approach,” von der Leyen said, highlighting a months-long investigation the EU has undertaken into whether China’s trade practices comply with global norms. “Should it be confirmed what I suspect, that such Chinese subsidies exist, then I can guarantee that the level of the duties we would impose would match the level of damage,” she said.

Overall, analysts say the debate, hosted by Bruegel and the Financial Times, was less fiery than the previous 29th April bout in Maastricht, in which von der Leyen also faced off against Schmit and Vistisen on topics such as Ukraine and Gaza. Renew Europe appears to have benched its previous representative Marie-Agnes Strack-Zimmerman after the stilted performance she gave in April, and have now opted for the much more combative Gozi, who took fierce aim at his opponents’ track records.

The lack of progress on EU capital market reform is “the biggest EPP failure”, Gozi said, citing the centre-right political grouping to which von der Leyen belongs, saying that promises of further reform were “too little, too late”.

Europeans go to the polls from 6th to 9th June to elect the 720 lawmakers who will sit in the European Parliament for five years – and the result could also determine who takes over at the EU’s executive arm. Current polls suggest von der Leyen’s centre-right European People’s Party (EPP) will be the largest in the European Parliament, putting her in prime position to secure a second term. But the EPP will still likely need to find a coalition of other MEPs to secure a majority – and first she would have to be proposed as a candidate by national leaders in the European Council. The candidates, joined by extras from the far-left and green groups, will on Thursday go head-to-head at a televised ‘Eurovision debate’ – though that event has drawn controversy for apparently excluding Vistisen.

‘China considering car tariffs to retaliate against US and EU moves’

China is considering raising tariffs on some car imports, according to a prominent business group – a move that would counter EU and US trade actions against Chinese-made electric vehicles.

South China Morning Post quotes a statement on Tuesday evening, by the ‘China Chamber of Commerce to the EU’ saying it had been “informed by insiders that China may consider increasing temporary tariff rates on imported cars equipped with large-displacement engines”. The Brussels-based group was firming up a threat that had been reported by Global Times, a Chinese state-owned tabloid. “This potential action carries implications for European and US carmakers, particularly in light of recent developments such as Washington’s announcement of tariff hikes on Chinese electric vehicles and Brussels’ preparations for preliminary measures in a high-profile anti-subsidy investigation into Chinese EVs,” the chamber statement read.

The warning comes as trade ties between China and Western powers fray, with conditions expected to worsen in the weeks ahead. Last week, Washington announced significant tariff hikes on a wide range of Chinese goods – EVs, various batteries, semiconductors and cranes, graphite and other critical minerals among them. The European Union has embarked on a series of high-profile moves to tackle Chinese subsidies to various industries, which it says are distorting the European single market. In the most prominent case, Brussels is expected to finalise an investigation into subsidies in China’s EV sector by June 6, with provisional tariffs to be applied in early July.

Renew Europe will vote to expel Dutch VVD party on 10th June

The Netherlands’ VVD party’s membership in the European Parliament’s centrist group will be put to a vote following EU-wide elections after it entered into a coalition with a far-right party, the leader of Renew Europe told a French broadcaster on Tuesday. “I totally disapprove of this political decision at the national level. I think they’ve (VVD) set themselves apart from our values,” Valérie Hayer told BFM television. Secondly, as group president, I have a collective responsibility and the decision must be taken together on 10th June in accordance with the group’s statutes,” Hayer added.

Her comments come five days after VVD, the party of outgoing Prime Minister Mark Rutte, announced it had entered a four-way coalition agreement with Geert Wilders’ PVV, the centre-right New Social Contract (NSC), and the populist Farmer-Citizen Movement (BBB). PVV, led by anti-Islam firebrand and staunch eurosceptic Wilders, swept to victory in November’s general election, securing over a quarter of the vote and 37 of the House of Representatives’ 150 seats. The four-way deal struck last week pledges to set a limit to the number of asylum requests that can be accepted, tighten temporary residence permits, bring an end to automatic family reunification, extend the standard naturalisation period to 10 years and call on foreigners to renounce their original nationality when seeking Dutch citizenship. Hayer, who is French President Emmanuel Macron’s pick for the European election, had immediately condemned the deal, arguing the PVV “is the opposite of what we defend on values, the rule of law, the economy, the climate and, of course, Europe.”

Asked on Tuesday whether VVD could remain in the group, Hayer said: “For me, this is an unacceptable option because they are not respecting our values by making this alliance. We’ve always respected the cordon sanitaire (against the far right). It’s one of the group’s absolute values, and I’ll take my responsibilities after the election to ensure that these values continue to be respected,” she added. She rejected any notion of ever working with the RN, telling BFM: “It’s out of the question, never in my life. In any case, politically, I’ve never associated myself in any way with the extreme right.”

Meanwhile, the president of the Rassemblement National, Jordan Bardella, has “taken the decision not to sit” any longer with the Germans of the AfD in the European Parliament, according to his electoral campaign director, Alexandre Loubet, in comments to Agence France Press, confirming information from the newspaper Libération.

Kremlin change maritime borders with Finland, Lithuania

Moscow authorities have unilaterally decided to change Russia’s maritime borders with Lithuania and Finland in the Baltic Sea, according to a draft government decree published online by the Kremlin last night. The Russian Ministry of Defence has proposed to approve a list of geographical coordinates defining the width of the continental coast, the Russian territorial sea and the Baltic islands that will alter the border in the western exclave region of Kaliningrad.

“The approval of the project will establish a missing system of straight baselines on the southern part of the Russian islands in the eastern Gulf of Finland near Baltiysk and Zelenogradsk, and will allow their use as internal waters,” reads the document, adding, “This will change the maritime border of the Russian state, due to a change in the external borders of the territorial sea.”

The draft decree claims that the previous geographical coordinates, recorded on the basis of marine navigation maps that were based on 20th century research, “do not fully correspond to the current geographical situation” and “do not allow determining the external border of internal waters” of Russia.

Meanwhile,Russia on Tuesday announced the start of tactical nuclear weapons drills close to Ukraine, in what it said was a response to Western “threats”. Throughout its two-year offensive on Ukraine, Moscow has repeatedly talked-up its arsenal of nuclear weapons and its readiness to deploy them if it senses an existential threat. The West has accused President Putin of irresponsible nuclear sabre-rattling.

Trump opts not to take witness stand

Former US President Donald Trump opted not to testify in his criminal ‘hush money trial’ on Tuesday, bringing his defence to a quick conclusion and clearing the way for jurors to begin deliberations next week. Justice Juan Merchan said jurors would return next Tuesday, following the three-day Memorial Day weekend, to hear closing arguments, with deliberations likely beginning the following day.

Trump had stoked speculation for weeks about whether he would take the stand to defend himself against charges of falsifying business records to cover up a hush-money payment to porn star Stormy Daniels before the 2016 presidential election. Criminal defendants typically do not testify in their own trials as it exposes them to probing questions from prosecutors – and he would have been at risk of perjury if he lied under oath.

Trump, 77, has pleaded not guilty to 34 charges of falsifying business records. He has denied wrongdoing and said he never had sex with Daniels, who testified in detail about a 2006 liaison she said she had with Trump. Outside the courtroom, Trump has criticised the judge overseeing the case as corrupt, and said prosecutors were trying to hurt his effort to win back the White House as a Republican from Democratic President Joe Biden in the November 5 election.

UN suspends Rafah food aid

The UN agency for Palestinian refugees, UNRWA, said Tuesday that it suspended food distribution in Rafah as supplies collapse and the security situation remains precarious. UN’s World Food Programme (WFP) warned that “humanitarian operations in Gaza are near collapse”, adding that it had also stopped distribution in Rafah after exhausting its stocks.

The UN has said no aid deliveries via a floating pier set up by the US have arrived over the past two days, the Associated Press reported. “If food and other supplies don’t resume entering Gaza in “in massive quantities, famine-like conditions will spread,” said WFP spokesperson Abeer Etefeh.

The Israeli government said in a update Tuesday that 403 aid trucks “were inspected and transferred to the Gaza Strip, yesterday” and added that 26 bakeries “are currently operation in Gaza, providing close to five million breads, rolls and pita breads daily.”

10 killed in Israeli bombing of Zawaida

The Palestinian news agency Wafa says that 10 people, including a newborn baby, were killed in an Israeli bombardment that hit the town of Zawaida in the centre of the Gaza Strip. Eight more people died yesterday afternoon in two Israeli raids on the Daraj and Tuffah neighbourhoods of Gaza city. The Palestinian National Authority sais the death toll from yesterday’s Israeli military raid in Jenin, in the West Bank, has risen to eight dead and several injured. According to the local Health Ministry run by the Islamist movement Hamas, the death toll in the Palestinian enclave since October 7 is at least 35,647 dead and 79,852 injured,  

Briton, 73, killed in Singapore Airlines flight turbulence

A retired British grandfather was killed and around 70 people were critically injured after a flight from Heathrow to Singapore was hit by severe turbulence. Geoffrey Ralph Kitchen, 73, and his wife Linda, were among 47 British passengers aboard the Singapore Airlines flight when it plunged around 6,000ft within minutes amid extreme weather. Passengers described “awful screaming” as the aircraft suffered a “dramatic drop”, with objects flying and people not wearing seat belts “launched immediately into the ceiling”, causing multiple head injuries. Mr Kitchen, who has two adult children and two grandchildren, suffered a suspected heart attack.

Along with the 47 Britons, there were 56 passengers from Australia, 41 from Singapore, 23 from New Zealand, 16 from Malaysia, five from the Philippines, four from Ireland, four from America, three from India, two from Canada, two from Indonesia, two from Spain,  two from Burma, one from Iceland, one from Germany, one from Israel and one from South Korea.

Graceland at risk of being sold at auction

Graceland, Elvis Presley’s legendary villa in Memphis, risks being sold in a judicial auction on Thursday despite protests from the singer’s granddaughter, actress Riley Keough, who inherited the assets after the death in January 2023 of mother Lisa Marie. The news of the auction on May 23rd was given by the local TV network Wreg-tv. An investment company, Naussany Investments, is trying to sell the villa, according to which Lisa Marie, at the time of her death, had a loan of $3.8 million still active for which she had used Graceland as collateral – a version that Keough contested in court: “Lisa Marie Presley never borrowed funds from Naussany Investments and never mortgaged the Graceland property,”. Keough also claims the documents presented by the investment company were “fake” starting from Lisa Marie’s signature. Elvis bought Graceland in 1957 for just over $100,000. After the singer’s death, in 1977 Lisa Marie became his heir and in 1982 she transformed the villa into a museum visited every year by hundreds of thousands of fans.

Main photo: Virginia Mayo/AP

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