Charlotte Street Partners

DAILY BRIEFING

DAILY BRIEFING

The clash at the heart of Europe

Written by Ralitsa Bobcheva, associate 
Edited by Tom Gillingham, partner
5 July 2021

Good morning,

In his 2017 book The Capital, a satirical novel about the EU, Robert Menasse delves into the complex world of EU politics and nationalism in an attempt to answer the question: can the EU be more than the sum of its parts? 
 
While the author doesn’t offer a straightforward answer, the impetus behind the novel holds the key to one. By capturing the reality and – at times – sheer absurdity of the multinational Brussels bureaucracy that keeps the bloc running, the book aims to fill a fundamental gap in EU citizens’ understanding of the union’s inner workings and how these affect their everyday lives. The failure to address that gap, Menasse argues, is one of the chief reasons for the growing disparity between the EU and citizens across its member states.
 
I was reminded of this last week, when sixteen European extreme right-wing parties signed a document entitled “Declaration on the Future of Europe” in which they declare the bloc “a tool of radical voices” trying to build a European superstate.
 
Signed by several governing parties including Hungarian Prime Minister Viktor Orbán’s Fidesz and Poland’s governing Law and Justice party, the declaration calls for reforms in the EU to protect the cultural, religious and national heritage of individual member states and has since sparked controversy over a potential Eurosceptic alliance in the European Parliament. 
 
This sort of Euroscepticism has consistently been on the rise over the past two decades. Recent research shows that since 2000, the vote share for parties that are critical of or hostile towards the union has more than doubled, despite the fact that public opinion of the EU has generally improved over the same period. 
 
The right-wing backlash against European integration is one long time in the making and is almost inextricably linked with growing negative attitudes of some member states’ leaderships towards the adoption of values and norms promoted by the bloc. Yesterday, Slovenian Prime Minister Janez Janša warned that imposing “imaginary European values” on central Europe could lead to the bloc’s collapse and called for a better recognition of “a clear division between national and European competences”. 
 
Balancing national identity and post-nationalist EU sentiments is a difficult tightrope to walk, especially when its true role may not be fully understood by all. However, it is an issue that the bloc urgently needs to find more adequate ways to address if it is ever to become more than the sum of its parts.

News

Thousands of people have taken to the streets across Brazil over the weekend after the Brazilian Supreme Court justice authorised an investigation into President Jair Bolsonaro’s handling of the Covid-19 pandemic. The rallies started a day after Bolsonaro was accused by a whistleblower in the ministry of failing to take action when warned three months ago that senior officials had agreed to take bribes to purchase overpriced doses of Indian vaccine Covaxin. (£)
 
Several nations including the UK, Greece, Italy and Israel have responded to Cyprus’ appeal to help tackle a huge wildfire which officials have described as the worst in the country’s history. The fire stated on Saturday and has spread through the southern Limassol district and forced the evacuation of several villages. A coordinated response to tackle the wildfire is under way, the European Commission’s head of crisis management, Janez Lenarcic, has said.
 
In a Downing Street press conference today, Boris Johnson is expected to confirm that the lifting of most remaining lockdown restrictions in England will go ahead on 19 July amid a backlash from government scientific advisers who have warned against it. Some of the changes to be announced include allowing fully vaccinated people to travel to amber list countries without being asked to self-isolate upon their return and making the wearing of face masks voluntary.

Business and economy

In a joint letter, several business leaders have called on the prime minister “set the country clearly on the path to recovery” by encouraging people to return to the office. Among the signatories are Heathrow and Gatwick airport chief executives John Holland-Kaye and Stewart Wingate, Capita chief executive Jon Lewis and BT boss Philip Jansen.
 
More than one in four young people fear that poor mental health will affect their ability to find a job after the Covid-19 pandemic, according to a study by the Resolution Foundation. The report found that even after the reopening up of the economy, 18- to 24-year-olds were two and a half times more likely to be out of work or still on furlough than any other age group while more than one in five reported problems with mental health.
 
Around 30 rights groups including TUC, Friends of the Earth and Amnesty International have called on the UK government to introduce corporate accountability laws that would require companies to undertake human rights and environmental due diligence across their supply chains. Several European countries have already passed laws on supply chain due diligence and the EU is set to introduce obligations on all companies on the single market.

Columns of note

In the Financial Times, Andrew Hill and Emma Jacobs shed light on the key challenges and opportunities facing the 2020 graduate cohort. As employees gradually start returning to the office, which aspects of the virtual work experiment should employers retain, and which ones should they discard? (£)
 
In light of the EU’s new digital Covid certificate which launched last week, Nesrine Malik argues in the Guardian that the bloc has created a two-tier vaccination system that is likely to affect not only poorer countries’ economic recovery but also families separated across continents.

Cartoon source: The New Yorker

Markets

The week ahead

The latest developments on global recovery from the pandemic will be outlined by the OECD on Wednesday with an update on growth forecasts against the backdrop of a rapid vaccine roll-out. On the same day, Halifax is expected to update its monthly house price data which will signal any potential changes to the UK’s housing market after the end of the stamp duty holiday. 
 
We will learn how some major food retails have responded to the pandemic-induced changes in consumer behaviour as Ocado publishes half-year results and J Sainsbury posts a first-quarter trading update on Tuesday and then holds an annual meeting on Friday.
 
On Friday, market watchers will be paying close attention as China releases data on consumer price inflation and producer price inflation. All eyes will be on a meeting of G20 leaders and central bank governors on Friday where participants will focus on three key pillars of action: People, planet and prosperity.

What’s happening today?

Finals
Hipgnosis Song.
The Panoply Ho.

Interims
Porvair

AGMs
Keystone Law G.
Nostra Terra

UK economic announcements
(09:30) PMI Services

Int. economic announcements
(08:55) PMI Composite (GER)
(08:55) PMI Services (GER)
(15:00) ISM Prices Paid (US) 
(15:00) ISM Services (US)

Source: Financial Times

did you know

For her wedding in 1840, Queen Victoria was given a block of cheddar nine feet across by a group of Somerset farmers. It was put on display, but when attempts were made to return it to her, she refused to take it back. (Source: @qikipedia)

Parliamentary highlights

House of Commons

Oral questions
Defence (including Topical Questions)
 
Legislation
Police, Crime, Sentencing and Courts Bill: Remaining Stages
 
Adjournment
Sentencing regime for 17 year olds

House of Lords 

Oral questions
Various
 
Legislation
Environment Bill – committee stage (day 5)  

Scottish parliament 

In recess until 30 August.

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