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EU-Mercosur free trade agreement signed

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European Commission President Ursula von der Leyen took a significant step last Friday by signing a landmark trade agreement with the South American bloc Mercosur.

“Today is truly a historic milestone,” von der Leyen stated after summit talks with the leaders of Mercosur in Montevideo, Uruguay.

The agreement focuses on reducing trade barriers. Tariffs on 91% of products traded between the EU and Mercosur will be gradually eliminated. According to European Commission calculations, this will result in annual savings of approximately €4 billion for European exporters.

South America has a competitive edge in agricultural raw materials and resources critical for climate transformation, while Europe specializes in supplying cars, machinery, and chemical products.

The EU is Mercosur’s second-largest trading partner after China, accounting for 15% of the bloc’s trade volume, compared to China’s 24% share.

Recently, trade volume for goods between the EU and Mercosur reached approximately €110 billion, representing about 2% of the EU’s total foreign trade.

The agreement, negotiated over 25 years, would establish a free trade zone encompassing more than 750 million people. However, it faces strong opposition from France, which fears cheap poultry and beef imports could harm its farmers.

Mercosur imposes some of the world’s highest external tariffs 35% on cars, 14-18% on car parts, 14-20% on machinery, and 18% on chemicals.

Under the agreement, 91% of these tariffs will be abolished, while the EU will eliminate 92% of its own import duties.

The EU also anticipates significant benefits from enhanced access to state infrastructure tenders and expanded market access in sectors like postal and logistics services, telecommunications, and finance.

In contrast to France, Germany has welcomed the deal. The Federation of German Industries (BDI) President Siegfried Russwurm hailed the agreement as a much-needed boost for German and European economies.

As of 2023, German exports to Mercosur totaled approximately $16 billion, leading EU countries. Germany’s exports are followed by those of Italy, Belgium, the Netherlands, and France. Customs reductions could save German companies €400-500 million annually. According to the German Chamber of Industry and Commerce (DIHK), 12,500 German companies export to Mercosur, with 72% being small and medium-sized enterprises. These exports support 244,000 jobs in Germany.

This agreement, which von der Leyen failed to secure during her first term, represents a major geopolitical victory as she embarks on her second term.

The deal aims to deepen ties between the EU and Mercosur members Brazil, Argentina, Uruguay, Paraguay, and new member Bolivia, amid rising global trade tensions.

At a joint press conference, von der Leyen emphasized: “We are sending a clear and strong message. We are showing that democracies can trust each other in an increasingly confrontational world. This agreement is not only an economic opportunity; it is also a political necessity.”

The visit of von der Leyen and EU trade chief Maroš Šefčovič to Uruguay to finalize the deal sparked unrest in France, where the government had fallen just hours earlier.

France is expected to intensify its opposition but will need to expand its coalition, which already includes Poland, Austria, and Ireland, to block the deal’s ratification.

French Trade Minister Sophie Primas stated: “France’s voice remains strong in Europe. We are not alone in opposing Mercosur in its current form. We can achieve a blocking minority.”

Paraguayan President Santiago Peña plans to visit France to convince President Emmanuel Macron to support the agreement. Meanwhile, Italy’s stance remains undecided, with Prime Minister Giorgia Meloni signaling conditional approval based on guarantees and compensation for the agricultural sector in the event of market imbalances.

As a major EU member, Italy’s decision could significantly impact the agreement’s fate.

The conclusion of political negotiations marks an important milestone for the EU-Mercosur agreement. However, the process is far from complete.

The finalized text will be published next week, allowing EU member states to express their views. It must undergo legal scrutiny and translation, which could take months.

To expedite the process, Brussels may separate the trade chapter from the political and cooperation pillar. This approach, if adopted, would require approval only from the EU Council and Parliament, bypassing the need for unanimity among member states.

Alternatively, full ratification of the agreement would require a qualified majority in the Council of Ministers (at least 15 countries representing 65% of the EU population). The political and cooperation pillar would require ratification by all national parliaments, potentially delaying implementation for years.

EUROPE

Meloni government pushes security law amid widespread protests in Italy

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Italy was rocked by protests over the weekend, prompting the government to call for the immediate approval of the controversial Security Bill, a key pledge of Prime Minister Giorgia Meloni’s government. The bill has divided the opposition, the Council of Europe, and the families of victims of mafia and terrorist attacks.

Protests in Rome and Bologna over the weekend, held in memory of Ramy Elgaml, an Egyptian teenager killed during a police chase in Milan, drew sharp reactions from government leaders. A recently surfaced video of the incident last month shows gendarmes chasing Elgaml and motorbike rider Fares Bouzidi, a Tunisian national. The officers are heard swearing after failing to overturn the motorbike and shouting “fine” when it falls.

Solidarity actions against police violence

The video shows the patrol car crashing into the motorcycle at the end of an eight-kilometre chase, which reportedly began when Elgaml decided to jump a checkpoint because he did not have a valid driving licence. It also shows police officers approaching a witness, possibly implying that he should erase evidence of the fatal accident.

The incident sparked several days of unrest in Corvetto, the working-class neighbourhood where the teenager lived, leaving several policemen injured. Additional clashes occurred during a “solidarity” protest organised by anarchist groups in Turin on Thursday night.

Reactions from the right-wing government: ‘Red criminals’

Meloni described the events as “shameful,” while Defence Minister Giuseppe Crosetto called for legislation to better protect law enforcement officers. Deputy Prime Minister Matteo Salvini sharply criticised the protesters, labelling them as “red criminals” who attacked the police.

The bill, already passed by the lower house of parliament, returned to the Senate for debate on Monday. Provisions include harsher penalties for property damage during demonstrations, extended city banning orders for those accused or convicted of protest-related offences, and prison sentences ranging from six months to two years for organising sit-ins that disrupt railways, roads, or motorways.

Right-wing government aims to strengthen law enforcement

The draft law also introduces measures to support law enforcement, such as allowing certain weapons to be carried off-duty without a licence and covering legal costs of up to €10,000 for offences committed in the line of duty. It also criminalises causing bodily harm to an officer or agent on duty.

One of the most contentious aspects of the bill is the extension of powers for the secret services. Under the proposed law, agents could commit certain crimes, including joining or leading terrorist organisations, without accountability if done in the name of national security.

EU and Italian opposition express ‘concerns’

Council of Europe Commissioner for Human Rights Michael O’Flaherty criticised the bill in a letter to Senate President Ignazio La Russa on 20 December. O’Flaherty expressed concern that the bill is incompatible with European human rights standards, particularly regarding protesters, detainees, young environmental activists, and migrants.

The letter highlighted vaguely defined offences, such as non-violent protests blocking traffic or passive resistance in prisons and migrant centres, which are punishable by heavy prison sentences. “These provisions risk arbitrary and disproportionate application and have a chilling effect on freedom of expression and peaceful assembly,” O’Flaherty warned.

The opposition also condemned the violence, with Democratic Party leader Elly Schlein cautioning against politicising the events. Schlein emphasised the importance of statements made by Ramy’s family, who called for the tragedy not to be exploited.

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Scandinavian and Baltic nations push for lower Russian oil price cap

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Sweden, Denmark, Finland, Latvia, Lithuania, and Estonia have urged the European Commission to further lower the $60 per barrel price cap on Russian oil set by the G7, Reuters reported on 13 January.

The countries argue that a lower cap would further restrict Russia’s ability to finance its war against Ukraine and prevent significant disruptions to global oil markets. Under current conditions, Western companies can only insure and transport Russian oil if it is sold below the cap. In a letter to the European Commission, the six countries reportedly emphasized the need to “further increase the impact of our sanctions by lowering the G7 oil price cap.”

The G7 initially introduced the cap to reduce Moscow’s oil revenues while maintaining stability in global markets. With forecasts of a global oil surplus in 2025 and softening prices, the G7 may consider more stringent measures.

Sanctions and Ukrainian drone strikes have already disrupted Russia’s oil production, with refineries in Tuapse, Ilyich, and Novoshakhtinsk reducing or halting operations, Reuters reported. These pressures have further strained the capacity of Russia’s energy sector, forcing it to sell oil at a discount and operate under high interest rates.

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The BSW prepares for its first federal election: Harsh criticism of the AfD at the conference

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In Germany, political parties are accelerating their preparations for the early federal elections scheduled for 23 February. The Sahra Wagenknecht Alliance (BSW), a new leftist party set to participate in its first federal election, finalized its election program during a party conference in Bonn.

The conference began with a short film displayed on the screen behind the lectern. It featured black-and-white photographs from the 1981 peace demonstration in Bonn’s Hofgarten, where hundreds of thousands protested against NATO’s Dual-Track Decision. “History was written here. We are continuing it,” the film declared.

The Dual-Track Decision involved NATO’s plan to modernize its nuclear arsenal by deploying U.S. Cruise Missiles and Pershing II missiles in Europe while simultaneously pursuing arms control negotiations with the USSR. If successful, these negotiations would render the missile deployments unnecessary.

‘Hamburg opposition’ to Wagenknecht excluded from the conference

Katja Wolf, Thuringia’s co-chairwoman and occasional critic of BSW leader Sahra Wagenknecht, addressed the conference. She praised the party’s achievements as “absolutely impressive” and described the BSW as the “last democratic hope,” particularly in eastern Germany. Wolf expressed satisfaction with the “respectable” results in Thuringia, despite occasional tensions between the federal executive committee and the state organization.

However, the situation was different for the so-called “BSW rebels” from Hamburg. This group had recently protested the party’s strict admission policies, spoken to the media, and established their own regional association. As a result, the federal executive committee moved to expel members Dijan Lazic and Norbert Weber. Although their membership rights had already been revoked, Lazic and Weber traveled to Bonn for what Lazic termed “peace talks.” According to the Berliner Zeitung, security denied them entry, and they were surrounded by a crowd of journalists and cameramen.

The departure of Torsten Teichert, a former SPD and Left Party member from Hamburg and one of the BSW’s founders, also unsettled the party. In a letter addressed to “dear Sahra,” Teichert accused Wagenknecht of “deceiving herself and others” and secretly sympathizing with AfD ideas. He claimed that Wagenknecht was “causing a new split on the left” and argued that leftists who rejected smugness would have to become “modern conservatives.”

The AfD: A target for speakers

Despite internal tensions, the conference proceeded harmoniously, as the party leadership had hoped. The election program was approved by a large majority of the 600 members present. Key demands included the resumption of Russian gas supplies via the Nord Stream pipeline, the reintroduction of a wealth tax, a minimum pension, and a ban on mobile phones in primary schools. Additionally, the party executive board passed an urgent motion to recognize the newly established Peace, Reason, and Justice Foundation as a party-affiliated organization.

According to the Berliner Zeitung, the BSW aims to focus on swing voters during the election campaign, particularly those considering the AfD but not yet part of its core electorate. This strategy likely explains the aggressive criticism of the AfD by many speakers at the conference.

The debate between AfD chancellor candidate Alice Weidel and American billionaire Elon Musk appeared to galvanize the BSW. Secretary General Christian Leye labeled the AfD as “useful idiots of the system,” arguing that their policies serve corporations and the wealthy due to Musk’s support. Co-chair Amira Mohamed Ali remarked, “They especially hate us,” referring to the far-right competition.

Oliver Ruhnert, Berlin’s top candidate and former manager of football club Union Berlin, drew parallels between the AfD and the neo-Nazi NPD.

Mountaineer: U.S. troops and nuclear weapons out!

BSW Bundestag member Sevim Dağdelen called for the withdrawal of all U.S. troops and nuclear weapons from Germany. “We can no longer afford 37,000 U.S. soldiers in Germany. That’s why we say: Let the Yanks go home,” she declared. Dağdelen also opposed the deployment of U.S. medium-range missiles in Germany, stating, “We don’t want a war against Russia from German soil; we want peace with Russia.” Her speech earned applause from the delegates.

“The vassalage of German governments to the U.S. must finally come to an end,” Dağdelen argued, emphasizing that Germany “deserves sovereignty.”

Wagenknecht slams AfD: ‘Weidel is Musk’s fangirl’

In her speech, Wagenknecht reflected positively on her party’s first year, describing it as a source of pride. She highlighted the BSW’s emphasis on peace in coalition agreements in Brandenburg and Thuringia. Addressing critics, she said, “Your anger honors us; your anger encourages us.”

Wagenknecht acknowledged the challenges of the election campaign for a young party, noting that many voters would cast tactical ballots. However, she expressed confidence that the BSW would secure seats in the Bundestag in its first election.

She criticized AfD leader Alice Weidel’s proposal to allocate 5% of GDP to armaments, calling it “arming for Donald [Trump].” Wagenknecht also mocked Weidel’s relationship with Musk, labeling her a “submissive fan” of the billionaire.

‘Sanctions serve American interests, not Ukraine’

Wagenknecht argued that Germany needs affordable energy, not empty campaign promises. She accused the Greens of being “nauseatingly war-drunk” and criticized the German government’s alliance with the United States. According to her, the economic sanctions imposed on Russia after its invasion of Ukraine were not motivated by morality or human rights but by U.S. economic interests.

“The sanctions are an economic stimulus program for the U.S. economy and a murder program for German and European companies,” she claimed. Wagenknecht urged Germany to prioritize the lowest energy prices over ideology or double standards.

BSW aims to revive the ‘German model’

The party’s election program focuses on restoring economic prosperity through the “German model”—a social market economy with a strong SME sector, successful industrial companies, and social cohesion. Wagenknecht told RedaktionsNetzwerk Deutschland (RND), “Thirty years ago, many things worked better in Germany than they do today.”

The program pledges to preserve Germany’s industrial value creation, automotive production, export-oriented engineering, and medium-sized world market leaders. It also proposes transforming state-supported companies into “innovation-friendly association companies” and creating an industry fund to support start-ups with patient capital.

The BSW advocates for consumer relief measures, including the abolition of VAT on basic foodstuffs and a nationwide repair bonus. It also calls for higher taxes on large fortunes and incomes well above the average, while offering tax relief for gross incomes up to €90,000 annually. Additional proposals include abolishing statutory health insurance contributions and increasing pensions by €120 per month to offset inflation.

Closing speech by Lafontaine

Oskar Lafontaine, the 81-year-old former SPD and Left Party politician, delivered the conference’s closing speech, which ended half an hour early. He emphasized the importance of Russian energy for German industry and criticized the US for its role in the Nord Stream pipeline explosion. “Russia is a war criminal, but we shouldn’t buy gas from the U.S. either,” he argued.

Lafontaine highlighted the BSW’s unique stance on peace, disarmament, and social justice. He dismissed Weidel’s armaments proposal, accusing her of poor calculations, and condemned the Gaza tragedy as “Western nihilism.”

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