Simplification will continue until morale improves

When EU leaders meet tomorrow to discuss the EU’s competitiveness agenda, they should stop chasing ghosts and confront the real problem Europe‘s economy is facing. Our latest for @politico.eu with @nilsredeker.bsky.social and @sandertordoir.bsky.social 👇

Worth reading. We want long lasting competitiveness and wealth creation. We can get both, being truth to our goals and principles.

OPINION: As the current consensus goes, Europe has smothered itself in unnecessary regulation, and growth will return once red tape is cut. This agenda is bound to disappoint.

Very good. I think the word for this is punchy. Also trenchant.

Bang on op-ed.

Tomorrow’s summit is a chance for EU leaders to stop chasing the wrong fixes — and finally sketch a response that matches the scale of Europe’s economic challenge. Here, lucasguttenberg.bsky.social, @sandertordoir.bsky.social and I lay out what that could look like. www.politico.eu/article/euro...

When EU leaders meet tomorrow to discuss the EU’s competitiveness agenda, they should stop chasing ghosts and confront the real problem Europe‘s economy is facing. Our latest for @politico.eu with @nilsredeker.bsky.social and @sandertordoir.bsky.social 👇

Brutal chart from @noahbarkin.bsky.social and Gregor Williams. German exports to China grew for nearly two decades - and are now in free fall.

Das spannende an diesem Interview gerade für Deutschland ist nicht die Position zu europäischen Schulden - das sagt Macron seit Jahren so. Viel wichtiger ist die große Klarheit, mit der Macron die Bedrohung der europäischen Wirtschaft und insbesondere der Industrie durch China anspricht.

EU ambassadors have reached a deal on the legal texts to provide Ukraine with a €90 billion loan funded by joint debt. €30 billion will be allocated for financial support, and €60 billion for military aid. Hungary, Slovakia and the Czech Republic will be exempt from the loan.

I don't fully understand why we are discussing the merger of Commission and EuCo president now. It was unbearable with Charles Michel, but that seems to have been an idiosyncratic issue. It works well with Costa. VDL is Europe's number to call. Costa keeps EuCo working. What problem are we solving?

Big weeks for EU trade – MERCOSUR signed but in a limbo, India concluded, deepening with Mexico waiting to be signed, more in the pipeline. It’s also a good moment to look at the bigger picture: More trade agreements are worth doing in a power-based world, but they’re no game changer for EU growth.🧵

“Coalitions of the willing” are back in vogue. Internationally, that makes sense. But in the EU context, I don’t buy the hype. In fact, it leads to the wrong conclusions and risks weakening the one institutional framework that actually gives Europe collective power in a world without rules. Thread:

Good news, but the tariffs were never the main problem. We still live in the world where the US is willing to threaten allies like it‘s a normal thing, just not the one where it followed through for now. This gives EU breathing space - should be used for serious de-risking, not for complacency.

Of and I should not forget of course: the threat of pulling out of the football world cup @lucasguttenberg.bsky.social!

This time, Europe’s leaders played the EU-US trade game well. From the Franco-German tough line to Meloni’s off-ramps, backed by a credible €93bn retaliation threat, they made escalation for Trump costly, and de-escalation easy. Markets and US politics did the rest — Rutte scoring on the assist.

European Parliament really seizing the moment. What a disaster. #Mercosur

That this isn't a trade conflict also means that the appropriate response isn't defined by trade impact. 10% extra tariffs would cost less than 0.1% of EU GDP (calculations by @julianhi.nz @kiel.institute). A dissuasive EU response would need to escalate beyond that bc the overall stakes are higher.

This is of course correct, but just to add: The Council will most likely not hand the Commission the keys to the ACI armory without exactly knowing in advance what guns it wants to take out and use and how. So the comitology most likely won’t matter a ton.

The Greenland conflict is *not* a trade conflict. It is about preserving the sovereignty of a European country. The goal should thus *not* be to avoid tariffs but to make the US drop its aggression. That is why tools beyond trade policy such as threatening to boycott the world cup could make sense.

What Mona says. We weaken ourselves if we continue this weird dichotomy of ACI=strong response and no ACI=weak response. That is bogus. The ACI is a process, not a measure in itself. What matters is what the EU is willing to do in terms of substance to threaten/hurt the US to make it back down.

The 'bazooka' thing really hurts the debate. By all means, use the ACI against coercion - but talking it up in this way also means that there's no plan for when the magic weapon doesn't work, and people think less about other strong options. Or even which measures should take place under the ACI.

What's in the leaked Commission draft for the Industrial Accelerator Act? Lucas has got you covered 👇

How should the EU react to Trump’s tariff threats over Greenland? Get out of self-deterrence, launch the Anti-Coercion Instrument (ACI) and focus on concrete levers instead of the next abstract tools debate. This is an explainer how this could work: 1/ 🧵

Don't forget that Latin America may feel the same way. Quiz: which 2 countries since 1950 have been in the World Cup semi-final that are not European or Latin American?

Europe should hold a competing football competition in Denmark at exactly the same time - and call it the Viking Freedom Supercup.

Great idea

It might sound silly, but I mean it: The easiest and most potent way for Europe to hurt Trump this year is to once again use its cultural soft power and to threaten a boycott of the World Cup. It would become a completely meaningless event and would hurt him where he is most vulnerable - his vanity.

This is a good point. As is the whole thread.

One additional point on politics: Without the very strong push especially from Berlin for the use of the Russian assets, Orbán would most likely not have agreed to this lesser-evil solution from his (and Putin‘s) perspective. The threat was real, and he caved.

Good thread. Orban, Fico and Babis didn't veto the loan. But the loan is backed using enhanced cooperation (A20 TEU) which means they don't underwrite it/pay for it either.

Very helpful overview of what happened last night and where it leaves us by @lucasguttenberg.bsky.social!

So what the hell just happened? Two things: Ukraine will get 90 billion euros. And Orbán did not veto that even though he could have. How so? Short thread:

The choice EU leaders face today is not the reparations loan vs. "Eurobonds". The choice is agreeing on a workable solution that rapidly gives a lot of money to Ukraine vs. going back to the drawing board with no clear idea where to go next while Ukraine's money is running out. Should be obvious.

EU leaders are discussing today the so-called reparations loan to finance Ukraine in the coming years. But how does it work and why does it matter? @fraghi.bsky.social had me on her podcast and asked all the good questions and so we tried to unpack this potentially pretty big Christmas gift 👇

Lots to criticise in yesterday’s cars package - but one point deserves credit. The COM plans to limit support for corporate cars to EVs and tie it to European preferences. Exactly what @lucasguttenberg.bsky.social, @sandertordoir.bsky.social, and I called for and a genuinely meaningful step forward

This is right, I think. Do the idiot test: would the Danish EU Presidency, the Commission and many member-states pursue the reparations loan if easier options to fund Ukraine were available?

Very informative thread on how to mobilize the necessary money for supporting Ukraine without relying on unanimity and without creating more debt for Ukraine or other European states by @lucasguttenberg.bsky.social 👇

The entire thread is worth your time:

Do read the whole thread. 👇🏻

Very useful.

Helpful, clarifying thread.

Is Germany again dragging its feet and undermining a "simple" solution to the Ukraine financing problem, instead pushing the ubercomplex reparations loan? It's a tempting eurocrisis reflex that if only there were a will in Berlin, there would be a better way. But there isn't. Here is why:

I would add to this that the Ukraine negotiations are also taking place in #Berlin at the moment.

Spot on. Moment of truth for Paris and Rome. Is France serious about strategic autonomy or is it just a vacuous talking point once Europe hits real trade-offs? And is Italy with Europe and Ukraine or Moscow and Washington?

Often, Berlin is the main veto player when it comes to decisive EU action. But this week, for once, Berlin is a key driver of getting both the reparations loan and Mercosur over the finish line. This time, the EU's ability to act act fully hinges on Rome's and Paris's will to jump.

When I started at the ECB in 2013, the Greek finance minister becoming Eurogroup president would have been an absurd, comical idea. We have come a long long way. (Also the Eurogroup is finished as a real institution but that is another issue. The symbol still matters.)

Regardless of what happens to the reparations loan, which is still under intense negotiations, the Russian assets will be protected from undue interference. It's a bold decision and an act of defiance. The Europeans are finally playing their cards.

Good work by Denmark, the Commission, Germany, France, others "The Danish Presidency can inform that COREPER has agreed on a revised version of the Art. 122-proposal and approved the launch of a written procedure for formal Council decision by tomorrow around 5 pm," the Danish presidency announced