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EU cuts planned tariffs on Tesla’s Chinese-made electric cars to 9 per cent

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The European Commission on Tuesday lowered its proposed tariff on imports of Tesla cars made in China, while largely maintaining other planned punitive tariffs on Chinese-made electric vehicles it set in July.

In the European Union’s highest-profile investigation into allegations of Chinese subsidies, the Commission published the draft final findings of its anti-subsidy investigation, prompting threats of retaliation from Beijing.

The Commission set a new reduced duty rate of 9 per cent for Tesla, lower than the 20.8 per cent it set in July.

According to the Commission, Tesla had requested a recalculation of the rate based on certain subsidies it received.

An EU official said on Tuesday that China believes its electric vehicle production benefits from extensive subsidies and proposed final duties of up to 36.3 per cent. This is slightly lower than the maximum provisional tax of 37.6 per cent set by the Commission in July for companies that do not cooperate with the EU’s anti-subsidy investigation.

Tesla was one of the companies that co-operated with the EU investigation.

The Commission said it was conducting an investigation, including sending a team to Tesla’s facilities in China to verify what subsidies the company had received.

A Commission official said that compared to the Chinese electric car makers Brussels investigated, it concluded that Tesla received fewer subsidies from China.

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Serbia to reinstate military conscription after 13 years

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Serbian President Alexandar Vucic has signed a decree to reintroduce mandatory military service, marking the return of conscription after its abolition in 2011. The new measure mandates 75 days of military service for men, while women will have the option to serve voluntarily.

“We will not attack anyone, but we want to deter those who pose a threat to us,” Vucic stated, without specifying any particular source of threat. He emphasized the importance of maintaining a strong military force for the nation’s defense.

For the decree to take effect, it must be ratified by the Serbian government and parliament, where Vucic’s ruling party holds a substantial majority.

The move comes as military tensions rise across Europe, with several nations reconsidering or reinstating conscription. Croatia, a neighboring country, announced in August that it would bring back compulsory military service, set to begin on January 1, 2025, after discontinuing it in 2008. Croatia’s Defence Minister, Ivan Anusic, stated that the decision aligns with modernization plans and commitments to NATO. The Croatian conscription will require two months of service.

Across Europe, other countries are following similar paths. Latvia reinstated conscription in 2023 in response to the ongoing conflict in Ukraine. Norway, where military service is already mandatory, revealed plans to recruit an additional 20,000 personnel. In the United Kingdom, then-Prime Minister Rishi Sunak pledged in May to bring back conscription due to the “growing threat from authoritarian regimes” such as Russia, Iran, China, and North Korea. Germany is also debating various options for reinstating military service, while Lithuania has introduced a nine-month conscription period for young men finishing school.

The return of conscription in Serbia reflects broader regional and global security concerns, particularly considering Russia’s military intervention in Ukraine and the subsequent military build-up in the Balkans.

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Draghi report divides German government, draws reaction from the Netherlands

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Mario Draghi’s call for the EU to continue issuing joint bonds to finance key investments has deepened the divisions within Germany’s already fragmented coalition government and received strong criticism from the Netherlands.

In his eagerly awaited report on the future of the EU’s competitiveness, former European Central Bank President Draghi stated on September 9, Monday, that the EU should continue to build on the model of its €806.9 billion pandemic recovery plan, provided that “political and institutional conditions” are met.

The NextGenerationEU (NextGenEU) program provides grants and loans to member countries for critical investments in exchange for targeted reforms, financed by jointly undertaken debts by EU member states.

Historically fiscally “conservative” EU countries, including the Netherlands and Germany, strongly oppose the renewal of NextGenEU beyond its August 2026 deadline.

FDP’s concerns: “Bureaucracy and planned economy”

Christian Lindner, leader of the liberal FDP and German Finance Minister, wrote on X on Monday that “the EU’s joint borrowing will not solve structural problems: companies are not lacking subsidies. They are tied up by bureaucracy and a planned economy. And they struggle to access private capital. We need to work on that.”

Lindner’s assessment stands in sharp contrast to that of Green Party’s Vice Chancellor and Minister of Economic Affairs Robert Habeck, who described Draghi’s report as “a call to action for the new European Commission and the EU as a whole.”

Greens support Draghi

Habeck said, “I am happy to pledge support for the [report’s proposals]. Innovation, better framework conditions, and mobilizing public and private sector investments are the order of the day.”

The differing views among ministers emerged amid ongoing budget disagreements within Chancellor Olaf Scholz’s federal coalition government in Germany.

Known as a “fiscal hawk,” Lindner has repeatedly called for deep cuts in public spending to comply with Germany’s constitutionally mandated debt brake. These calls have been resisted by the Greens and the SDP.

Netherlands: More money is not always the solution

Draghi’s report received a uniformly negative response from members of the Netherlands’ four-party coalition government, which includes far-right factions.

According to Dutch news agency ANP, Eelco Heinen, a well-known “fiscal hawk” and member of the conservative People’s Party for Freedom and Democracy, said, “More money is not always the solution.”

A similar assessment came from Dirk Beljaarts of Geert Wilders’ right-wing Freedom Party (PVV). Beljaarts stated, “Additional public investments are not an end in themselves. They are only necessary in cases of unfair competition or market failure.”

Objections from EU diplomats

Criticisms of Draghi’s call for a significant increase in EU-level investments have also been echoed by some EU diplomats.

An EU diplomat speaking to Euractiv referred to the bloc’s Multiannual Financial Framework (MFF) or “regular” budget, stating, “The discussion on more EU investment will be part of the next MFF debate.”

The bloc’s current seven-year €1.2 trillion MFF will end in 2027.

Southern countries support the report: Support from Spain and France

On the other hand, Draghi’s proposals have received support from some key member states.

Bernard Guetta, a member of French President Emmanuel Macron’s Renaissance party, praised the report’s call for “common defense, industrial policy, and abandoning the taboos of joint debt.”

Speaking to Euractiv, Guetta said, “It is absolutely necessary to urge member states, the European Parliament, and the future Commission to fully embrace the idea of industrial policies and joint investments.”

Guetta also called on member states like Germany and the Netherlands to “open their eyes and end their ideologies” regarding joint borrowing.

The deputy acknowledged that France, which was officially “reprimanded” by the European Commission earlier this year for high public spending, might not be the most reliable country to advocate for EU joint financing due to its own public finances being in the red.

Guetta’s support for Draghi’s key proposals was echoed by Spain’s Finance Minister Carlos Cuerpo, who, like Draghi, believes that some of the necessary financing must come at the EU level. Cuerpo shared the need for urgent work on a permanent EU joint debt program.

Opposition in Italy: Lega and Five Star Movement against Draghi’s proposals

In Italy, while opposition from the Democratic Party and right-wing coalition members Forza Italia and Brothers of Italy generally agree that Draghi’s proposals are a “step in the right direction,” the coalition’s small partner Lega and the opposition populist Five Star Movement disagree.

Lega Senator Claudio Borghi stated on X that every line of the report poses a “deadly threat” to Italy, accusing Draghi of wanting to turn Italy into “the next Greece for revenge.”

Pasquale Tridico, head of the Five Star Movement delegation in the European Parliament, directly targeted Draghi. Tridico argued that Draghi’s report represents a form of self-criticism for “condemning the neoliberal policies that underpin the current European structure” and questioned Draghi’s role in key EU decisions, particularly regarding the Stability Pact reforms which Draghi now supports but which Tridico argues are inconsistent with the large-scale investments in innovation and green transition.

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Macron appoints former EU Brexit negotiator Barnier as prime minister

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French President Emmanuel Macron has appointed former EU Brexit negotiator Michel Barnier as France’s next prime minister.

The Élysée Palace said in a statement on Thursday that Barnier ‘will be charged with forming a unifying government that will serve the country and the French’.

Barnier, 73, is a former member of France’s conservative Les Républicains (LR) party.

The approaching deadline for the start of budget talks for 2025 in parliament next month has increased the urgency to break the deadlock in France, where no new government has been formed for a long time, especially given the poor state of France’s public finances.

Barnier, a former LR statesman, refused to comment on the growing speculation about his candidacy or on his direct talks with the Élysée Palace.

Macron has chosen the prime minister Le Pen wants

But Barnier has emerged as a more suitable candidate than LR regional president Xavier Bertrand, who was close to taking up the post on Wednesday, people familiar with the talks told the Financial Times.

Bernier, who ran for the LR presidency in the 2022 election but lost to rival Valérie Pécresse, had taken a hard line on immigration in that campaign, proposing a three-to-five-year moratorium on non-EU arrivals in France and claiming immigration was ‘out of control’.

According to the FT, Bernier’s stance surprised those who knew him in Brussels, but it could make him more palatable to Marine Le Pen’s National Rally (RN).

National Rally recognises Bernier’s legitimacy

Le Pen issued a statement from X following Bernier’s appointment, saying they recognised the prime minister.

As we announced to the President of the Republic, we will demand that the new head of government respect the 11 million French people who voted for the National Assembly and respect them and their opinions. We will pay close attention to the project he will put forward and we will make sure that the wishes of our voters, who represent a third of the French population, are heard and respected,’ she said.

Jordan Bardella, president of the RN, also said his party was considering the nomination of Michel Barnier as prime minister, adding: “We will evaluate his general policy speech, his budgetary decisions and his actions on the basis of the evidence”.

Mélenchon: ‘This government is the government of Macron and Le Pen’

The parties that make up the New Popular Front (NFP), which came first in the elections, reacted harshly to Macron’s decision.

Jean-Luc Mélenchon, leader of Unbowed France (LFI), reacted to Emmanuel Macron’s decision to appoint Michel Barnier as prime minister by claiming that the election had been ‘stolen’ from the French people.

The LFI leader said: “The prime minister was appointed with the approval and perhaps at the suggestion of the National Rally. This is practically the government of Mr Macron and Mrs Le Pen,” he said.

Olivier Faure of the Socialist Party (PS) also expressed concern about today’s decision.

“In all democracies in the world, the coalition that has to form a government is the first party. It is never the party that lost the election. Setting this precedent would be dramatic and dangerous for the institutions themselves,” Faure wrote.

Greens: Macron finds RN more acceptable than LFI

PS MP Arthur Delaporte said that Emmanuel Macron had ‘made a big mistake’ and that the French leader, elected ‘by the Republican Front’, had ‘succumbed to the blackmail of the RN and the extreme right’.

Marine Tondelier of the French Greens also criticised Macron’s decision.

Barnier’s appointment is possible because Macron finds the RN more acceptable than the LFI,’ said Sandrine Rousseau, another Green MEP.

LFI MEP Rodrigo Arenas went even further, saying that Michel Barnier’s arrival at the Matignon castle was a sign that ‘Marine Le Pen has seized power’.

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