The 🚦 agreement is actually pretty good news for a number of Eurozone files, including the fiscal rules and EDIS.

Here are the main bits: 1/ Most importantly, the text says that the fiscal rules can be "developed further" to reach three goals: Secure growth, safeguard debt sustainability and foster green investment. They should also become "simpler and more transparent, also to strengthen implementation".

Das @_FriedrichMerz-Interview im @handelsblatt ist beeindruckendes Anschauungsmaterial, wie sich ein Teil der Konservativen im europapolitischen Wald verirrt hat und jetzt nicht mehr herausfindet.

Warum das ein Problem ist: 1/ Es geht mit dem klassischen Motiv los, dass man höllisch aufpassen muss, den faulen Südeuropäern (hier stv 🇮🇹🇪🇸) nicht ihr Hallodritum zu finanzieren. Dass gerade diese Länder die ambitioniertesten Pläne zur Verwendung der EU-Gelder vorgelegt haben, bleibt natürlich unerwähnt.

Commissioner @PaoloGentiloni announces in @SZ that the Commission will only present its proposal for fiscal rules reform once there is a consensus among eurozone countries. Here's why this is a wise approach and why we are still far away from that point:
sueddeutsche.de/wirtschaft/eu-… 1/ A weird feeling has grown in recent months that an expenditure rule is the way to go to reform the SGP and that what we basically need now is a Commission proposal that the technocrats then can tweak so that everyone is happy. Everyone is now waiting for that proposal.

CDU and CSU are about to publish their election manifesto. On EU economic governance/fiscal policy, it is in perfect continuity with the Merkel line: No openings, no thick red lines.

Quick overview: 1/ CDU and CSU say they want a "stability and growth union". Who doesn't. They say they want to return swiftly to the fiscal rules but to "develop them further without watering them down." The also want sanctions to be applied and less room for judgment. No surprise here.

The German Constitutional Court today pulled back from the brink and put the case on the ECB's PSPP programme finally to rest. The saga ends with a lot of damage on all sides and a number of open questions.

A first take: 1/ The Court really wanted the plaintiffs to know that it's game over for now. They first declared their request for an intervention inadmissible on formal grounds. But just to get the message through, they also then went into why it was not only inadmissble but also unjustified.

Ahead of tomorrow's publication of Karlsruhe's decision on whether its judgment on the ECB's PSPP programme has been sufficiently respected, let's take a look back what happened so far in this season: 1/ On 5 May 2020, the @BVerfG delivered its surprise judgment. It is important to keep in mind what the Court actually said: The addressees of the judgment were the German federal government and the Bundestag. These two had violated the rights of the plaintiffs.

Das Dino-Papier zur "Schuldenpolitik" (ein Absatz zu 🇩🇪, der Rest zu 🇪🇺) ist ein wunderbares Beispiel für jene Mischung aus Falschbehauptungen und resignierter Inhaltsleere, die seit Jahren zu oft die deutsche Eurodebatte prägen.

Eine Übersicht:
sueddeutsche.de/wirtschaft/sch… 1/ Das Papier ist im Grunde ein langer Rant gegen die EZB. Die soll sich endlich mal auf Preisstabilität konzentrieren und mit ihrer expansiven Geldpolitik aufhören. Was dabei wie immer fehlt: Der empirische Befund, dass die EZB seit Jahren ihr Preisstabilitätsziel unterschießt.

The German Constitutional Court clears the way for the Recovery Instrument to go ahead. The decision is not an unconditional green light. But it is a pragmatic ruling that takes the economic consequences of a delay explicitly into account.

Here is what it says: 1/ The Court does not throw out the complaints outright as in admissible or obviously unfounded. In the logic of previous rulings of the Court, what the plaintiffs argue could indeed be admissible and could lead to the Court nixing the Own-Resources Decision (ORD).

After the dust has settled a bit, a quick summary on what we do and don't know when it comes to last Friday's decision by the German Constitutional Court on the 🇩🇪 ratification of the Own Resources Decision: 1/ The Court has blocked the president from signing the ratification bill into law. Unlike in previous comparable cases, it has not informally asked the president but ordered him to wait. It has not provided any reasons for that yet, so we can only speculate as to its motivation.

Das Bundesverfassungsgericht stoppt (erstmal) die Ratifizierung des Eigenmittelbeschlusses - und damit die Grundlage des EU-Wiederaufbauinstruments. Große Krise oder vor allem großes Theater?

Ein paar Einordnungen: 1/ Es geht hier um eine Auslegungsfrage des EU-Rechts. Konkret: Erlaubt der EU-Vertrag das, was die EU in ihrem Eigenmittelbeschluss vorhat, nämlich die Aufnahme von Schulden für gemeinsame Ausgaben. Damit ist das eine Frage, die Karlsruhe gar nicht selbst entscheiden kann.

The German Constitutional Court orders federal president Steinmeier not to sign the ratification law for the Own-Resources Decision until it takes a decision on an application for an emergency ruling. Not clear how long this will take.

bundesverfassungsgericht.de/SharedDocs/Ent… Seems not very likely to me that Karlsruhe will preventively stop the ORD. This is clearly a matter of interpretation of the EU treaties so it will have to send the matter to Luxembourg and this will take ages. But would not completely exclude it either.

Die Pandemie und insb. das Wiederaufbauinstrument werden die 🇪🇺-Finanzarchitektur von Grund auf verändern. Damit stellen sich ganz neue Fragen - gerade für die nächste Bundesregierung.
In @Zeitschrift_WD erklären @hemker_h, @SanderTordoir und ich, welche:
wirtschaftsdienst.eu/inhalt/jahr/20… 1/ EU-Schulden für gemeinsame Ausgaben sind in Zukunft eine Politikoption - doch unter welchen Bedingungen? Gleichzeitig wird die EU massiv Bonds ausgeben, die als neue sichere Anleihen den Markt verändern werden. Will man diese dann einfach wieder verschwinden lassen?

The pandemic and the Recovery Instrument will change 🇪🇺 economic governance for good and will force governments to make stark choices in the coming years.

@hemker_h, @SanderTordoir and I took a look into the crystal ball and found five reasons for that:
delorscentre.eu/en/publication… First: EU debt is now a policy option; question is under which circumstances can it be used? EU debt will also become a triple-digit-billion reality; does the EU really want to withdraw these safe assets from the markets again?

So what does yesterday's internal @CDU spat on a possible reform of the debt brake tell us for the coming months? @COdendahl has the optimistic take that a taboo was broken and that is what matters. I am not so sure.

Thread: 1/ What did @HBraun propose? A change in the constitution to allow for a longer-term temporary suspension of the debt brake instead of suspending every year anew. He also suggested it was just unrealistic to reapply the brake for 2022.

On Saturday, the @CDU will choose its new party leader. What will we learn from the choice for the CDU's - and probably by extension 🇩🇪's - future approach to 🇪🇺?
Not that much: Whoever wins will inherit a party that is fundamentally unsure what to make of Europe.

Thread: 1/ For the last 15 years, the CDU has been the most important veto player in European policymaking. When the CDU moves, Europe moves. When the CDU does not, neither does Europe. And barring a surprise in the September elections and a centre-left govt, this will remain the case.

Die Suche nach Policy-Fehlern und eher plumpes Brüssel-Bashing gehen in der Impfdiskussion gerade Hand in Hand. Ersteres ist notwendig, letzteres aus vielen Gründen gefährlich.

Der Versuch einer Einordung: 1/ Die Mitgliedstaaten haben die EU im Sommer beauftragt, in ihrem Namen mit Impfstoffherstellern zu verhandeln. Dafür gibt es Verträge zwischen EU und Mitgliedstaaten inklusive detaillierter Governance (siehe Link).
ec.europa.eu/info/sites/inf…

Es scheint einen Deal zu geben: 🇭🇺🇵🇱 ziehen, so scheint es, ihre Vetos im Tausch für einige symbolische Schritte zurück. Orbán und Morawiecki haben sich verzockt, der Druck des Rests der EU hat Wirkung gezeigt.

Ein Überblick über den Kompromiss auf dem Tisch: 1/ Wichtigstes Ergebnis: Der Text der Verordnung zum Rechtsstaatsmechanismus bleibt, wie er ist. Damit bekommt die EU nun erstmals die Möglichkeit, Gelder aufgrund von Rechtsstaatsverletzungen zu sperren, wenn sie mit EU-Geldern in Verbindung gebracht werden können.

Looks like the contours of a deal are becoming clearer:
- Text of RoL mechanism stays as is
- some interpretative language by EuCo on scope (migration, family, link to the budget)
- application only after ECJ has ruled
- emergency break, but no unanimity

Quick overview:

https://twitter.com/TomaszBielecki/status/1336599011214635009

1/ Text stays as is. That would be the most important message by far. It's the text that the ECJ will rule on and what Commission and Council have to apply. On the interpretative language, we'd need to see the details, but again, legally it is the regulation that counts.

It's incremental progress day again in Eurozoneland: The #Eurogroup agrees to ESM reform, unfortunately unchanged. Yet, there will finally be a backstop for the Single Resolution Fund - and it will be introduced already in 2022.

Short assessment:
consilium.europa.eu/en/press/press… 1/ First things first: The EG did not go back to the drawing board to heed the lessons of the pandemic and to use ESM reform as an opportunity to make the crisis management framework viable in the long run. Huge missed chance, will bite us in the butt one day.

The one thing the EU institutions can and should do now is to hold the line. 🇭🇺 and 🇵🇱 are blackmailing everyone and should be treated as such. This means in particular that there cannot be any agreements on spending programmes.

Thread: 1/ The @Europarl_EN has long pushed for a de-coupling of spending programmes from the MFF in case there was no deal on the Council side and to re-authorize spending under the old ceilings in this case. This kind of made sense earlier this year. But it would be madness now.

🇭🇺 und 🇵🇱 blockieren die Verabschiedung des EU-Finanzpakets auf Botschafterebene. Das sind schlechte, aber auch erwartbare Nachrichten - und noch lange kein Ende des Prozesses.

Wie es dazu kam und wie es jetzt weitergeht: 1/ Der Rechtsstaatsmechanismus war eine offene Flanke der großen Gipfeleinigung im Juli. Das war allen Beteiligten bewusst. Es war im damaligen Kompromiss bereits angelegt, dass sich nochmal ein Gipfel mit dem Thema würde beschäftigen müssen. Keine Überraschung hier also.