Here is a short explainer of the 🇫🇷-🇩🇪 proposal.

The expenditure ceiling in the EU budget would be increased to around 2% of GNI (currently around 1% of GNI) for the next 3 years.

The additional around 165bn, which the EU could spend per year, would add up to 500bn.

1/11 By contrast to 'normal' EU spending (i.e. the normal 1% of GNI), the 1% on top would not be covered by Member State annual contributions, but by debt.

This debt would be pure EU debt, i.e. only implicitly backed by future Member State contributions, but not explicitly.

2/11

The German Constitutional Court ruling (#BVerfG). Summary thread.

1) The main implication is not at the surface. ECB can continue quantitative easing and Bundesbank will in all likelihood continue to participate. What has changed today is the independence of the ECB.

1/8 2) The BVerfG raises the question of the limits of ECB independence. This is big. They insist that the ECB independence ends when the ECB starts to get into "economic policy" as opposed to "monetary policy".

2/8

Vorschlag: Die Bundesregierung sollte Banken jetzt verpflichten, ihre Dispo-Zinsen auf 0% zu setzen. Diese Maßnahme wäre wirtschaftspolitisch effektiv und gerecht. Auf vielen Konten geht aktuell kein Geld ein. Banken sollten davon nicht profitieren.

Thread. 1/6 Oft liegen Dispo-Zinsen auf Girokonten immer noch zwischen 5% und 10% (manchmal sogar darüber). Dabei können sich Banken mit Negativzinsen bei der EZB refinanzieren. Eine solche Gewinnspanne für Banken ist absurd. Selbst bei 0% Dispo-Zins würden Banken keine Verluste machen.

2/6

SPD/🇩🇪: Thread.

Paradoxical result. During Merkel years, SPD lost its natural centre-left position to Merkel in a social-progressive GroKo (min wage, pensions, gay marriage, end nuclear+coal, refugees). Now, as Merkel is on her way out and CDU shifts right, SPD shifts left. 1/9 SPD vote echoes Corbyn-Sanders trend of many centre-left parties. New SPD leadership won thanks to an alliance between the leftist young socialists and the traditional, often higher-age working-class SPD. Both groups share the focus on classical redistributive policies. 2/9

About the political implications of the vote against Goulard. Thread.

Rejection was not only a vendetta against Macron. It also hurt VDL+Merkel. For VDL’s strategy, Goulard was crucial. EPP MEPs knew this. They held the key to G’s confirmation but disobeyed their new boss. 1/6 Goulard’s defeat is also a defeat for Merkel. History shows why: Helmut Kohl had built the broadened EPP to gain control in the EU. He exercised power via EPP. Until recently Merkel did the same. That's over. EPP defeated her on the Osaka/Timmermans package. Now on Goulard. 2/6

Some thoughts about campaign against von der Leyen. Thread.

- EP vote is for real. If she loses, she‘s out. EUCO would need a new candidate.

- Those who reject her should explain why plan B would work + be preferable. Is there a reasonable alternative? I don‘t think so.

1/5 - Reopening full package looks impossible: Michel (ALDE) + Sassoli (S&D) have been appointed by EUCO/EP. Lagarde needs EP hearing but is uncontested. So it’s only about Commission.

- Logically, to ensure balance + legitimacy of package, Commission President must be EPP.

2/5

The least important criterion in choice of next ECB President is nationality. Here is what really matters. Thread.

Criterion 1: Guts & independence. Someone capable of telling European Council, BILD or Piketty they are dead wrong. Someone who reads Proust when markets panic. 1/ Criterion 2: Macroeconomic nerdiness. We need someone who gets excited by Baumol’s cost disease, MMT and single-limb collective action clauses. If you are able to spot mistakes in the Bayesian estimates of Smets-Wouters, then the ECB Presidency could be for you. /2

A few thoughts on how EU27 should now look at Brexit:

EU would be stronger if UK remained, not weaker. It would be a historic mistake to listen to those who put more weight on the short-term difficulties to re-integrate UK than on the long-term benefits of a united Europe. 1/5 A second referendum should be the EU27’s preferred solution by now. This is the main instrument to create legitimacy for bringing the UK back or deciding on a deal (and even a no-deal). A two-level question could work. 2/5

Short thread about cooling 🇫🇷-🇩🇪 relationship. Macron’s decision not to participate in @MunichSecConf may be driven by many considerations. But cancelling a joint Merkel-Macron appearance is always a symbolic signal that will be carefully monitored in the rest of the EU. 1/8 Paris and Berlin currently disagree on NordStream, deepening of EMU, trade policy, EU security/defence, Saudi-Arabia, to name just a few. On these issues both sides play tactical games, instead of defining joint strategic goals. True friendship requires much more than that. 2/8

Short Brexit thread.

There are 4 main scenarios at this stage. 1/ Amended May deal, most likely shifting towards Norway. 2/ Second referendum offering a 3-way choice via 2 questions. 3/ No deal. 4/ General election. NB: Prolonging Art50 is not a scenario, it’s a tool. 1/8 There is currently no majority for any of the 4 scenarios above. This gets many to believe the no-deal scenario is increasingly likely as the default option. That’s logically right, but politically unconvincing. The no-deal group in Westminster is by far the smallest. 2/8

1/ Thread: Here are my 12 thoughts on #Brexit. We are at half-time in Art50 process. Departure UK from EU now exactly 12m away. Right moment to take stock and list a few backward- and forward-looking thoughts. (You can also read the full blog-post here: delorsinstitut.de/en/all-publica…) #1: When the UK voted leave, many said the EU would be weakened. Today it is clear that the contrary is true: it’s the UK not the EU that has been weakened by Brexit.