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Europe’s ‘illiberal democracies” issue

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Andrzej Duda, president of Poland’s Law and Justice Party (PiS), made a very harsh statement on the long-debated issue of releasing funds for covid recovery. Duda said he would no longer respond to proposals from the European Commission, taking all the necessary steps for the relevant fund. The Polish leader went even further, claiming that a group of “left-wing liberal” politicians in Brussels wanted a government change in the country.

The recovery fund that Brussels had allocated to Poland was around 36 billion euros, but this money had not been in Warsaw’s hands for a long time on the grounds that it had not follow “supremacy of law”. Poland’s plan was finally approved; European Commission President Ursula von der Leyen again made the provision of money conditional on “reform”.

In November last year, the European Commission froze 100m euros in EU funding to Poland over Warsaw’s refusal to comply with a decision by the EU to end the activities of the Polish Disciplinary Service. On 15 July, the PİS government made amendments to the law on the Supreme Court and terminated the running of the disciplinary board. Established in 2017, the Disciplinary Chamber was presented by the government as a judicial reform. The chamber was viewed by the opposition and the EU as a way of intimidating independent judges that go against the government. The agency had no legal identity, which was approved by both the Polish Constitutional Court and the ECHR. The EU had even started fining Poland 1m euros per day for the chamber. Upon this, Duda decided to close the chamber and establish the “Professional Chamber of Responsibility”. According to the opponents, it was just a variation of the same thing.

Poland as leader of the ‘rebellion‘ against Brussels

Founded in the early 2000s, Poland’s ruling party, PİS, has become one of the most important representatives of the political position in Europe, now called “right-wing populist”, over the years. At first, it was thought that there would be a standard “Christian Democrat” party, and it was also on good terms with the Catholic Church. After the election victory in 2015, criticism rose both inside and outside: PİS was attacking Poland’s “democratic institutions”, acting against the rule of law, interfering with the Constitutional Court, restricting human rights and freedoms and increasing the country’s debt. In summary, the PİS administration was in contradiction with the “Round Table Talks” that emerged in the 1980s and that governments generally  attuned with after the dissolution of socialism.

What was that consensus? We can summarize it under four headings: first, democratization and decentralization; second, the “inefficiency” of the socialist economy and, as a remedy, the process of transition to a fast free-market capitalist economy in which private ownership would be central; third, -related to the second one- the acceptance of the “bitter prescription” and austerity policies under IMF and World Bank supervision; and fourth, good relations with the US in foreign policy, integration into EU mechanisms, and NATO membership were the constant principles.

Pre-PİS governments had complied unquestioningly with a harsh privatisation programme and IMF-World Bank-based neoliberal offensive policies. The reform process, initiated in 1997 following the Shock Therapy in the early 1990s, placed the neoliberal agenda and led to a serious decline in the living standards of millions of Poles.

It was under these circumstances that the march of PİS, which started with the coalition in 2005 and ended with power alone in 2015, began. PİS, who was tougher on anti-communism and Russian hostility than its predecessors, appeared before voters in the 2015 elections with the promise of deviation from neoliberal testament under the name of “economic patriotism”. In this context, in addition to reducing the power of banks and multinational companies, a “social transfer” campaign, which had not been seen since 1989, was also put forward: lowering the retirement age, financial support for families with more than one child, tax regulation and hourly minimum wage. This was accompanied by cultural policies such as objection to the law that frees gay marriages, criticism of the EU’s migration and multiculturalism policy, strengthening the nation-state system and protection of Christian values. Not to mention changing the street names that are related to communism from the period of the People’s Republic of Poland, they were such hostile as to change street names from Poland’s socialist traditions.

Indeed, Warsaw’s flag of rebellion against Brussels is marked by an ideological slur that identify with fascism, communism and the LGBT, and underlines the opposition to all of this. At this point, it should be stated that in the overthrow of the first PİS power (2005-2007), the urban-educated professional layers had a significant role, who believed that harsh neoliberalism was still beneficial to them and that they would prosper. The group consisted of people who took out a loan and bought a house, took out private health insurance to get rid of Poland’s poor health system, went to private schools or sent their children there. The eurozone crisis has crashed the hopes of these segments as well. Poland, whose economy has been growing steadily since the fall of communism, reached its peak in the 2000s, was entering the 2010s with an economic slowdown. Those who sent PİS with a tin can tied to its tail were printing two seals on its “national capitalism” in 2015.

This is the source of the tension between the EU and Poland. This is the Poland’s motivation  behind the demand of $1.26 trillion in compensation from Germany due to World War II. The Polish leadership is driven by the equation “Germany equals the EU”. This situation, combined with anti-Russianism, gives Warsaw an interesting field of action: the anti-Russian Anglo-American alliance, together with the Baltic countries, assigns a special role to Poland. Moreover, Britain, which has left the EU, wants to consolidate a non-EU Eastern European alliance system that includes Poland.[1] This being the case, Poland can raise its voice against both Russia and Germany.

Raising the voice might be a bit of an understatement: PİS leader Jarosław Kaczyński said last August that there was a German-Russian plan designed to rule Europe, and that Poland did not follow it. Kaczyński argued that the Polish opposition also acted in accordance with this plan and wanted to make the country “obedient to neighbouring powers”. Whereas last year, it was him last year who caused eyebrows to raise, saying that the EU had become the “Fourth German Reich”. Justice Minister Zbigniew Ziobro recently went further and argued that Germany wanted a “colonial government” in Poland.

 Hungary seeks reconciliation

Another “illiberal” country that an issue for Brussels is Hungary. Following his 54.13% election victory last April, Fidesz leader Viktor Orban referred to the EU headquarters, saying his victories were visible from the Moon, even from Brussels. Orban also explained who they had won the victory against: the Leftists, the bureaucrats in Brussels, George Soros, the international mainstream media, and even the President of Ukraine.

In 2014, Orban said his goal was “to build an illiberal democracy based on national institutions”. According to Orban, the 2008 global economic crisis showed that liberal democratic states were not globally competitive. The Hungarian leader said he wants to transform “welfare societies” into “employment/working societies” and previously stated that central control should increase in order to cope with energy companies and banks. Orban was struggling to get rid of “debt slavery” and not to make Hungary a “colony of the EU”. What he meant was abandoning the liberal way of looking at the world in order to put society in order.

However, it seems that Orban, who riveted his power, wants to make a fresh start with Germany. Fidesz leader Olaf Scholz, who left for Berlin in October, met with Germany’s new chancellor last year. Afterwards, although Orban described the meeting as “productive”, it was noteworthy that a joint press conference was not held.

Although it is understandable that the traffic light coalition in Germany does not want to side with Orban, it seems that both countries are now sending the message of “unity”. Hungary, like Poland, faces the threat of halting the European Commission’s pandemic recovery funds. The release of funds, which will be decided on November 19th, is of vital importance for Budapest, and it is above all to get Berlin’s approval on this matter.

Orban hoped he could find support for his own anti-sanction position in the German business world, as German industry suffered greatly due to anti-Russian sanctions. Germany is still the largest foreign investor in Hungary and the country’s main trading partner. But Orban doesn’t seem to have found what he hoped for: German industrialists didn’t like Orban, who attended a business forum in Berlin. The German industry as a whole supports anti-Russian sanctions, said Philip Hausmann, president of the German Eastern Trade Association. Hausmann also warned that the German-Hungarian partnership was in danger. According to him, the increasing “illiberal” practices of the Hungarian government were disrupting this partnership. “Whoever cooperates with us wins,” Orban said.

The latest situation in Germany, France, Italy

In the past week, it may not have been felt around here how the tension between Germany and France got to the newspapers. But the hysteria in the French press reached such a point that the country’s oldest financial newspaper, Les Echos, made the headline, “The war between France and Germany has become possible again.”

What happened? The German-French joint cabinet meeting was cancelled, with Scholz and Macron avoiding the cameras. Current contradictions are evident: rising energy prices and Germany’s unilateral subsidy decision, objection to increasing joint debt. All this is causing Paris to raise eyebrows. Moreover, Olaf Scholz’s visit to China was not welcomed by Emmanuel Macron, who reportedly offered to “give the impression that Europe is united” and the German Chancellor declined. France argues that the two countries must develop a special relationship in order to make the EU a geopolitical centre and to create a weight against the US and China. On top of that, France seems to be far behind its oldest rival economically in the last few decades.

It seems that Germany is not very much involved. Germany, which has bowed to the United States militarily and economically, also seems to have paused on joint defence projects with France. From the French point of view, the Germans think: If a European-based defense industry is to be developed, it must be a German industry under American control. Otherwise, there should be no such defense industry at all. It is clear that the two countries have different interpretations of “strategic autonomy”of the EU.

In Italy, another powerful country, the new right-wing power that has aroused “fear” in Brussels, is not thought to be that frightening. Giorgia Meloni, who met Brussels bureaucrats for the first time after his election, described the dialogue as “very sincere and very positive”. Meloni reiterated his pro-EU position on joint fight against rising energy prices and support for Ukraine against Russia. Meloni presents himself to the EU as a pragmatic, moderate and mainstream politician.

[1]. According to an Italian newspaper, the United Kingdom has for some time been eager to establish a “Commonwealth of Europe” consisting of the Baltic countries, Poland and Ukraine. Even more interestingly, according to the newspaper, Turkey will be added to it soon after the community is formed. See the news.

Europe

EIB to unveil 15 billion euro tech initiative to scale European startups

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The European Investment Bank (EIB) will announce a €15 billion initiative today, in collaboration with EU capitals and private investors, aimed at supporting the growth of European technology companies.

For decades, startups on the continent have struggled to raise the large-scale funding rounds necessary to scale on this side of the Atlantic, frequently turning to US investors or relocating abroad as they expand.

“We are catching up. Now we need to accelerate,” EIB President Nadia Calviño said.

Under the existing European Tech Champions Initiative, the EIB had already pooled resources with six EU governments to establish funds that invest in high-growth companies across the EU.

Calviño described the initiative as “very successful,” noting that it has supported 12 European “unicorn” companies valued at over $1 billion, including the German artificial intelligence translation firm DeepL.

The bank is now expanding the program with a new phase nearly four times the size of the original.

Twenty-five EU governments, alongside private investors such as Santander and Danske Bank, are expected to participate in the program.

This initial €15 billion aims to mobilize up to €80 billion in total investment. Calviño stated that this estimate is based on the multiplier effects achieved under previous programs.

As part of these efforts, the EIB also aims to attract European pension funds, which manage immense pools of capital but have historically allocated fewer resources to technology investments compared to their US counterparts.

In addition to the new funding, Calviño noted that the EIB will create a platform providing a single point of access for existing European scale-up initiatives, including the European Commission’s Scaleup Europe Fund, France’s Tibi initiative, and Germany’s Win initiative.

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Germany to purchase US Tomahawk missiles to build own long-range strike capability

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Germany will purchase Tomahawk cruise missiles from the United States and deploy them on German territory, Chancellor Friedrich Merz announced on Thursday.

The move marks a shift away from planned US deployments and toward Germany establishing its own long-range strike capability.

Merz told lawmakers that he finalized the agreement with the US government during the NATO summit in Ankara, adding that the talks held on Tuesday and Wednesday had exceeded his expectations.

“While we close a critical strategic gap in our defense, we are also working to develop our own European systems and deploy them in Europe,” the Chancellor said.

According to German government sources, Washington committed in a letter of intent signed on Tuesday to approve Germany’s acquisition of Tomahawk missiles and their land-based Typhon launchers in August.

The number of missiles and launchers Germany plans to purchase was not disclosed because the information is classified.

The planned acquisition appears aligned with US President Donald Trump’s pressure on European allies to cover their own security costs, such as by purchasing US weapons.

The fate of the Tomahawk procurement had become uncertain after Trump announced in May that he would reduce the US military presence in Germany.

That development was seen as a cancellation of a plan made under the previous administration to deploy a US battalion equipped with long-range Tomahawk missiles to Germany.

That original plan was designed as a temporary solution to serve as a strong deterrent against Russia while Europeans developed their own versions of such weapons.

Germany produces its own cruise missile, the Taurus, but its range of approximately 311 miles is three to five times shorter than that of the Tomahawk missiles.

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Apple loses EU court appeal over Digital Markets Act gatekeeper designation

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The General Court of the European Union has rejected Apple’s challenges against its “gatekeeper” status designated under the Digital Markets Act (DMA).

With this ruling, the company’s designated status for the App Store and iOS remains valid, while its applications regarding iMessage were also rejected.

Apple had argued that the five separate App Stores it operates for the iPhone, iPad, Apple Watch, Mac, and Apple TV should be evaluated as distinct, individual services.

The court rejected this argument, ruling that these stores serve a common purpose of connecting developers and users, regardless of the specific device.

The court also dismissed Apple’s defense that the DMA’s interoperability obligations violate its fundamental rights.

However, it did not conduct a substantive assessment on the legality of this obligation, stating that a direct legal link could not be established between the regulation in question and the determination of “gatekeeper” status.

Following the ruling, Apple argued that the obligations under the DMA “exceed the boundaries of legality and proportionality.” The company asserted that the new rules jeopardize the work it has carried out for years to ensure user privacy and security.

Apple retains the right to appeal the decision, though a company spokesperson did not comment on whether there are plans to do so.

Apple previously declared that DMA rules prevented the launch of the updated version of Siri in Europe, resulting in European users being unable to benefit from the service.

In force in the European Union since 2024, the DMA covers a total of 22 services and products belonging to Alphabet, Amazon, Apple, ByteDance, Meta Platforms, and Microsoft.

The regulation obliges these companies to share certain data with competitors, provide access to user-generated data, and offer verification tools to advertising partners.

Additionally, it prohibits platforms from engaging in anti-competitive practices that favor their own products. Companies failing to comply with the rules face fines of up to 10% of their global turnover, which can rise to 20% in cases of repeated violations.

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