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EU identity crisis: Poland, Hungary and the fight over Brussels’ values

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When Boyko Borisov rubs shoulders — or at least bumps elbows — with fellow EU leaders at a summit in Brussels on Thursday, his will be one of the most familiar faces in the room.

A veteran of EU summits since 2009, the burly Bulgarian premier will sit down alongside fellow leaders including Angela Merkel, Germany’s chancellor, and French President Emmanuel Macron to discuss a topic that has bitterly divided the bloc — and even raised questions about its viability.

The majority of EU member states want to introduce new rules allowing the bloc to curb flows of funds to states that violate its main rule of law principles. But Hungary and Poland oppose the legislation and are vetoing €1.8tn of money desperately needed for Europe’s recovery from the coronavirus pandemic.

Mr Borisov has not joined that blockade. But Bulgaria, which has faced claims of government corruption, is one of a growing group of EU countries that embody problems the mooted rules were meant to address. In some, such as Poland, governance concerns centre on alleged breaches of EU standards in areas such as judicial independence. In others, such as Malta since the 2017 murder of the journalist Daphne Caruana Galizia, they concern questions of corruption and official accountability.

Andrzej Duda, Poland’s president, has said this year that “LGBT ideology” is more “destructive to man” than Soviet communism © Petr David Josek/AP

Hungary is at the vanguard of a clutch of EU countries that have gone out of their way to laud ideas that many in Brussels believe to be illiberal. In Poland, President Andrzej Duda has also warned this year that “LGBT ideology” is more “destructive to man” than Soviet communism.

All this is a direct challenge to the values and legal principles the EU claims to stand for, which have become a central tool of its foreign policy and soft power. The result is that the EU is increasingly open to charges of hypocrisy, which both damages its moral legitimacy and could sow doubt for businesses about whether they can trust EU legal systems.

“We tried to appease the autocrats and it’s not working,” says Katalin Cseh, a Hungarian centrist MEP. “A government can be destroying the EU from the inside and still getting billions to enrich their own circles. If we do not do something now, it will threaten the stability of the union.”

Illiberal regimes are hardly a novelty in postwar Europe. From the former dictatorships in the east and south to the government of former Italian prime minister Silvio Berlusconi, who was convicted of tax fraud in 2013, the rest of the world has often looked at Europe’s claims about its values more sceptically than the region does itself.

Chancellor Angela Merkel of Germany and Bulgarian Prime Minister Boyko Borisov talk at the EU summit in July © Stephanie Lecocq/Reuters

But the current breakdown of EU norms has exposed a powerlessness on the part of the EU institutions, as they seek to project, enforce and embody its founding values. It is occupying energy and attention at a time when the EU is also involved in last-minute negotiations with the UK over a Brexit deal. And it jars awkwardly with US president-elect Joe Biden’s push for the world’s democracies to unite to counter rising authoritarianism.

The problem is worsened because mainstream EU-wide parties, including Ms Merkel’s European People’s party (EPP), Mr Macron’s Renew Europe and the Social Democrat grouping that includes Spain’s prime minister Pedro Sánchez, encompass controversial political parties or leaders — giving them added heft at the negotiating table and in the European parliament. The EPP has suspended but not expelled Hungary’s ruling Fidesz party, even as the latter threatens to scupper the entire EU budget package.

“It has been a political choice not to halt what has been happening in Hungary and Poland,” says Rosa Balfour, director of the Carnegie Europe think-tank. “It’s hugely damaging — it’s not just about democracy, it’s about the functioning of the EU.”

European officials say they are making best efforts with the tools they have, such as bringing court cases against countries at the European Court of Justice — but some concede the threat to the EU’s integrity is serious.

A placard criticising Jaroslaw Kaczynski, the leader of Poland’s ruling party, is held aloft at a pro-choice protest in Warsaw last month © Wojtek Radwanski/AFP via Getty

“We are at quite a moment in the European project in terms of challenges to its founding principles,” says one official. “What we are seeing in some member states is a severe backtracking on some of the fundamentals of what we stand for.”

Even if the proposed EU law governing payments is introduced, diplomats and officials play down the idea that it will transform the picture. While supporters brandish it as a way of empowering Brussels to drag illiberal governments back into the democratic fold, in reality it is a narrow mechanism that aims to prevent the misuse of EU funding.

The EU official characterises it as an important but modest “first step” towards forcing member states to finally engage more with the severity of the bloc’s rule of law problem.

Joining the club

Since its foundation the EU has believed it represents something far more than an economic community. Democracy, rule of law and fundamental rights are, in the words of European Commission vice-president Vera Jourova, the union’s bedrock. “This is largely what makes the EU unique,” she said in a speech in November.

It was this vision that drove the apparently relentless expansion of the EU and the spread of its ideology after the collapse of the Soviet Union in 1991. In the “jumbo enlargement” of 2004, 10 mainly former Communist bloc countries joined.

While the bar to admission to the EU was and remains high, the checks on behaviour once a country is in the club are limited. In particular, so-called Article 7 disciplinary procedures have proved inadequate to the task.

A protest outside the Central European University in Budapest against the Hungarian government’s decision to shut it down © Bernadett Szabo/Reuters

These allowed the commission, European parliament or member states to take action against countries under threat of punishments such as the suspension of EU voting rights. The commission triggered the process against Poland in 2017, while the parliament launched it against Hungary the following year.

Article 7 might be an effective panic button in the case of a clear-cut military coup, but it has proved of little use in navigating the grey zone of “illiberal democracy” created by Viktor Orban, Hungary’s prime minister, or in countries like Poland and Bulgaria, where those in power have sought to tighten control over the judiciary.

The requirement for unanimity means any two countries can stop action against each other — as Hungary and Poland have pledged to do, effectively stalling the processes targeting them. Officials speculate the proceedings against them may eventually get ditched, though proponents insist they exert important pressure — and point out that if the government changes in either country the procedure could yet have teeth.

The commission, which is now led by Ursula von der Leyen, has reverted to a strategy of bringing cases to the ECJ — an approach that officials stress has yielded wins.

But by the time judgments are handed down, the damage is often done. In October, the ECJ ruled against a 2017 Hungarian law that in effect forced the Central European University, founded by the billionaire backer of liberal causes George Soros, to shut down in Budapest. The victory came too late for the institution, which had already relocated to Vienna.

An LGBT Pride parade in Budapest in defiance of Hungary’s illiberal anti-gay government © Gergely Besenyei/AFP via Getty

In Poland, too, the impact has been limited. The commission’s decision to take Warsaw to the ECJ over its Supreme Court reforms resulted in the reversal of a purge of the court in 2018. But, overall, they have not been enough to prevent the ruling Law and Justice party from pushing through radical changes giving politicians sweeping powers over the judiciary. Critics say these critically undermine judicial independence. However, Polish officials say they are needed to overhaul an inefficient system, and that the proposed rule-of-law mechanism would be open to arbitrary politically motivated use.

Budapest has refused to implement a decision that found that its requirements for non-governmental organisations to declare foreign funding above a certain threshold was contrary to the free flow of money and ideas. It has instead doubled down and made complying with the rule a requirement to access Erasmus funds — an EU programme to support education and training — in Hungary.

Hungarian justice minister Judit Varga said in an October interview that Hungary was complying with the judgment in the CEU case. Regarding the NGO funding law, Ms Varga said the government was “trying to find ways to comply” with the judgment.

Concerns in Sofia

Bulgaria’s recent history embodies the dangers of inaction when it comes to the union’s founding principles. Concerns about its governance flared dramatically this summer when photos of a sleeping Mr Borisov with a pistol on his nightstand were published in local media.

A second photograph showed two gold bars and wads of €500 notes believed to total €1m. Mr Borisov said the first photo was genuine but the others were manipulated. Nevertheless, the imagery has stuck in the public imagination.

Bulgaria and its neighbour Romania have both faced strict rule of law monitoring since joining the bloc almost 14 years ago. It was created especially for them, after European capitals worried they were not ready for full membership.

Anti-government demonstrations erupted in the Bulgarian capital Sofia after the chief prosecutor, an ally of Prime Minister Boyko Borisov, raided the offices of staff working for Rumen Radev, the president, who has clashed with the premier © Nikolay Doychinov/AFP via Getty

Crises elsewhere diverted the EU’s focus away from Bulgaria and its unresolved rule of law problems. Many observers say EU cohesion funds contributed to enriching a group of politically well-connected Bulgarian businessmen. The government in Sofia maintains that it has the trust of Brussels and has overseen a period of stability and infrastructural development.

“Countering corruption is one of the priorities of the cabinet,” says a spokesperson for the Bulgarian government. “Our anti-corruption laws are based on the best legislative practices around the EU.”

Mr Borisov has largely avoided trouble with either Brussels or fellow EU member states. Unlike Warsaw and Budapest, he did not antagonise other EU leaders and has not indulged in ideological debates about migration and identity politics, even as he pandered to socially conservative forces at home.

But rolling protests erupted in Bulgaria this summer after the chief prosecutor, a Borisov ally, raided the offices of two staff members of Rumen Radev, the president, who has clashed with the premier.

Unmoved by the demonstrations, Mr Borisov’s Gerb party has supported controversial amendments that would increase the power of the general prosecutor and shrink that of both the president and the justice minister.

Nelly Kutzkova, a former chair of the Bulgarian Judges Union, describes a culture of intimidation and pressure on judges who issue verdicts unpopular with political power brokers. “The most influential people in Gerb are not familiar with basic principles of rule of law,” she says.

Liberties under threat

The dangers posed by over-mighty national governments are by no means confined to a few countries in the east, according to Philippe Lamberts, co-president of the European parliament’s Greens grouping. Terror attacks, the political crisis over migration and now the pandemic have all given leaders extra pretexts to rein in civil liberties, he says.

He points in particular to France, where a security law approved by its lower house of parliament last month would make it a crime to publish the face of a police officer or gendarme with the aim of causing them “physical or psychological harm”. The government has promised an independent commission to rewrite parts of the law.

“It gives more alibis to the executive branches to capture ever more power,” Mr Lamberts says. “We should have much stronger ways of forcing member states to respect the obligations they have freely subscribed to,” while also being tougher in using existing powers, he adds.

Violations of basic EU precepts do not only damage the bloc’s image — they also undermine the ties of trust that help bind it together. “It is a potentially fatal problem in the long run: this is a community of law first of all,” says Robert Cooper, a former senior EU foreign policy official.

Earlier this year, the Dutch judicial system, for example, stopped extraditing people to Poland on the grounds that they could not be assured of a fair trial in the country. In October, Poland’s national public prosecutor Bogdan Swieczkowski responded by ordering subordinates to conduct a “thorough analysis” of whether there were “obligatory grounds” for refusing to comply with European arrest warrants issued by the Netherlands, according to Polish media reports. 

Viktor Vadasz, a criminal judge at the Metropolitan Court of Budapest and spokesperson of Hungary’s National Judicial Council, an independent, self-governing body, warns of the dangers posed by this erosion in judicial co-operation.

“If we are looking at an extradition hearing, and judges say ‘I won’t let my citizen be exposed to an unfair trial,’ that’s the end of the single market,” he says, noting the impact political verdicts could have on commercial affairs. “Without independent judges, the EU doesn’t function. Judges with mutual recognition and respect make it work.”

Line chart of % of respondents in each country saying the EU conjures positive feelings showing Despite dips in support, eastern Europeans still back the union

New mechanisms

The bloc has attempted in recent years to expand its arsenal to combat rule of law breaches. In September it launched its first ever peer-review report on the performance of every EU country, in part to counter allegations that some nations were being singled out. The bloc has created a new European public prosecutor’s office to pursue cases involving the fraudulent use of Brussels money, in the face of some member states’ historical reluctance to do so.

The EU’s July summit struck a landmark agreement to introduce the new mechanism allowing funding to be cut when countries breach key principles. And yet it is far from clear that the European Council EU summit on December 10-11 will herald a solution to the rule of law impasse that is blocking the EU’s entire seven-year budget, as well as an additional €750bn Covid-19 recovery fund.

Some diplomats and officials think the pandemic emergency money might have to be forced through via a route that excludes Poland and Hungary altogether.

Poland’s deputy prime minister, Jaroslaw Gowin, insisted on Thursday that there was scope for compromise. But even if Budapest and Warsaw do drop their objections, the bloc faces profound questions over how it can defend the primacy of its founding values. Many observers stress that the impetus must come ultimately from within countries themselves. While the EU can be both guide and guardian on the rule of law, it is neither feasible nor desirable for it to lead those efforts.

Above all, the rule of law battles expose a costly failure of EU foresight about how “fundamental things are actually much more fragile than we thought they were”, says Julia De Clerck-Sachsse, a former EU adviser who is now a senior non-resident fellow at the German Marshall Fund of the United States.

“There was so much euphoria that democracy was winning that there was a sense we didn’t need to protect it,” she says. “But it was much more vulnerable than we would ever think.”

Additional reporting by James Shotter in Warsaw

 



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Mario Draghi makes his mark with vaccine embargo

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It did not take Mario Draghi long to make a mark in Europe as Italian prime minister.

At his first EU summit as premier at the end of last month, the former head of the European Central Bank made a forceful intervention about the slow pace of Europe’s vaccination drive and the need to get tough with pharmaceutical companies over their failure to deliver promised vaccine supplies.

Seven days later, the Italian government confirmed that, with Brussels’ approval, it had blocked a consignment of doses of the Oxford/AstraZeneca vaccine destined for Australia under an EU-wide export authorisation scheme that has been criticised by other countries. The company has fallen far short of its promised deliveries to the EU in the first three months of 2021.

Draghi, a man who earned impeccable internationalist credentials as ECB president, became the first leader to trigger an EU mechanism that critics see as vaccine nationalism that risks undermining the global fight against the pandemic.

“Imagine what would have happened if [former PM Giuseppe] Conte or [Matteo] Salvini had taken such a stance,” said an official with the Democratic party, part of the governing coalition.

Salvini, leader of the nationalist League which is also in the coalition, said on Twitter that he was “proud Italy was the first European country to block exports outside the EU”.

Draghi was installed as prime minister last month to break Italy’s political paralysis and revamp plans to spend up to €200bn in EU funds to support an economic recovery and faster long-term growth. But an alarming resurgence of infections in recent weeks means fighting the pandemic is his overriding priority.

Vials of the AstraZeneca Covid vaccine © Remo Casilli/Reuters

His robust stance on export controls was an expression of “strong restlessness” about the EU’s handling of the vaccination campaign, said Giovanni Orsina, director of the LUISS school of government in Rome. 

“The current situation shows a strong fragility in Brussels’ negotiating position towards the big pharmaceutical companies,” Orsina added. “Draghi is using his political clout to redress the balance in this regard, clearly also in Italy’s favour. Absurdly, having a person of extraordinary international prestige allows for a much stronger approach to national protection than a pure sovereigntist as prime minister.”

At the EU summit Draghi asked why the bloc had not imposed stricter vaccine export controls for companies that failed to meet their contractual commitments. Speaking to Ursula von der Leyen, European Commission president, by phone this week, he stressed “the priority goal of a more rapid European health response to Covid-19, especially on vaccines”, according to his office.

Meanwhile he has set out to reboot Italy’s vaccination programme which is run, with varying degrees of success, by regional governments. As of March 5, Italy had administered only 5.2m doses, or 8.6 per 100 people, below the EU average. More ambitious vaccination targets are expected within days.

Draghi has also replaced the coronavirus commissioner with an army logistics general who has experience in Afghanistan and Kosovo and who will work alongside a new head of the civil protection agency. The aim is to speed up vaccination across the country. The government is also weighing up whether to extend the interval between doses in order to increase coverage, as in the UK. 

Drive-through testing centres and other sites are being converted into vaccination facilities, and a €500m investment in a new manufacturing plant is planned.

“The Italian pharmaceutical industry is a sector to be proud of, and it is capable of ensuring the production of vaccines at all stages,” Giancarlo Giorgetti, economic development minister and League politician, said earlier this week.

The Democratic party official said replacing the Covid commissioner with a general was “concerning”, but Draghi’s efforts have otherwise drawn broad support.

Raffaele Trano, a former Five Star MP now in opposition, said “the muscular approach and the logistical revolution seem to be paying off, even against the big pharmaceutical companies who are not being reliable at all and whose priority is clearly to put profit before the health of citizens”.

“There is a need to act promptly, and Draghi is doing what he was called to do: speeding up the process as much as possible,” said Paola Boldrini, a centre-left member of the senate who sits on its health committee.

“Europe has acted as best it could, but Italy is in an emergency situation, which is the reason why the current government was formed,” Boldrini added. “Unfortunately, despite the great co-ordination in disbursing recovery funds, with vaccines the EU was not as efficient, the contracts that were signed [with pharmaceutical companies] underestimated the real production capacity of vaccines and Brussels found itself unprepared.”

Italian officials stress that the decision to block the vaccine consignment from Catalent, a Lazio-based fill-and-finish contractor, was taken jointly with the commission in accordance with the export transparency mechanism introduced in January.

“I would not interpret Draghi’s move, co-ordinated with the commission, through the lens of vaccine nationalism but rather of the EU’s willingness and ability to stand up to big pharma to protect its citizens,” said Nathalie Tocci, director of the Institute for International Affairs in Rome. The doses were intended for Australia, a country with few new infections and where the vaccination programme is still in its early stages.

“I don’t think that Italy would have taken this initiative if the country in question was either a developing country or one living through an emergency to the same extent EU member states are.”

“Recently the intra-EU controversy has been between institutions and big pharma, where the accusation is that the EU has not been able to stand up to companies, thus gambling on the lives of citizens,” Tocci added. “Seen through this lens, Draghi’s move, far from being an act of nationalism, could be read as the necessary step to prevent reigniting dangerous Euroscepticism.”

Additional reporting by Silvia Sciorilli Borrelli in Milan



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‘After a year we’re back to square one’: Milan locked in Covid’s grasp

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This time last year, chef Andrea Berton thought customers “might be overreacting” when they began cancelling tables at his Michelin-starred Milan restaurant amid a rise in cases of the concerning new coronavirus.

“It was a strange atmosphere,” he recalled this week. “The restaurant was suddenly empty at lunchtime and international customers kept calling to cancel bookings and events around the Salone del Mobile,” he added, referring to Milan’s annual furniture fair.

Neither he nor anyone else could have foreseen what would happen next. Days later, on March 8, Italy’s government ordered the immediate lockdown of the wealthy Lombardy region that includes Milan in an effort to stem the spread of Covid-19. The unheard-of restrictions were extended across the whole country the following day, confining 60m people to their homes.

It was the moment that Europe finally woke up to the threat from a virus that had emerged in China around the turn of the year. Within weeks, the entire continent — and soon the whole world — had been brought to heel by the pandemic.

“We were confronted with a virus we knew nothing about,” said Francesco Passerini, mayor of the small town of Codogno, an hour from Milan, where one of Italy’s earliest confirmed Covid-19 cases had been discovered in late February. “We didn’t know how to protect our community and we had people who were very ill. It felt like an impossible fight.”

Doctor Annalisa Malara with a patient in the coronavirus intensive care unit at a hospital in Lodi, near Milan, last month
Inside a coronavirus intensive care unit at a hospital in the city of Lodi, near Milan © Emanuele Cremaschi/Getty Images

A year on, an end to Europe’s coronavirus crisis still seems some way off despite the hope offered by vaccines. Most of the continent’s 750m citizens continue to endure curbs on their daily lives and the economic and social toll has been enormous.

In Italy — as in some other EU countries such as nearby Greece and the Czech Republic — the number of new infections is rising as concerns intensify over the threat from new variants. Lombardy, still Italy’s worst-affected region, is grappling with thousands of new cases daily and hundreds of deaths each week.

On Friday, a new two-week partial lockdown came into force across the region, with offices closed and employees told to work from home. Schools and playgrounds are shut and hospitality and travel are banned, although shops remain open — for now.

Yet as cases tick higher, experts fear it is only a matter of time before the curbs are extended.

“It won’t be long before the whole country goes back into the ‘red zone’,” said Guido Bertolaso, Lombardy’s vaccine adviser, this week, referring to the most stringent level in Italy’s coloured tier system.

Chart showing that cases and ICU admissions are rising again in Lombardy, with the number of ICU patients climbing 30 per cent in the last week

“Unfortunately it’s not over,” said Passerini, the Codogno mayor. “But it’s not comparable with last year because we’ve learned to live with the virus and now we have a vaccine. So we have something to look forward to.”

Looking back evokes painful memories. The most vivid was the day he and other volunteers had to empty a church to make room for dozens of coffins. “I remember watching the dead bodies being brought in and the church, a place of hope, suddenly turn into a morgue. I couldn’t believe it was happening,” he said.

In the weeks and months that followed, Carla Sozzani, founder of 10 Corso Como, a cultural, shopping and dining destination in Milan’s nightlife district, could not get used to the silence in a city known as a teeming hub for industry, banking and fashion.

“The only noises you could hear, day and night, were the ambulances and the drones they used to check nobody was leaving their homes,” she said. “It was unsettling.”

Mired in a series of lockdowns, Milan has welcomed only a fraction of the 10m tourists who came in 2019, a shortfall that has put immense strain on its economy.

There is hope that the new government of Mario Draghi, an experienced crisis manager who formerly ran the European Central Bank, can bring improvements by speeding up the vaccine rollout and leading an economic recovery.

Sozzani, a self-confessed optimist by nature, was certain that Milan would regain its vigour in time for the rescheduled Salone del Mobile in September, once more people had been inoculated. “The fair is a symbol of Milan and it will represent its rebirth,” she said.

Chef Andrea Berton has been forced to close his Michelin-starred Milan restaurant once again

In a sign of his frustration at the slow rollout, Draghi has moved to block the export of 250,000 Oxford/AstraZeneca doses destined for Australia so they could be used in Italy. As of this week, however, under 6 per cent of Italians had received a first vaccine dose.

One Milan-based anaesthesiologist, who did not wish to be named, also warned that intensive care units in hospitals across the region were rapidly filling up again.

“It reminds me of last spring,” she said. “The vaccine makes us hope for the best but we need to plan for the worst, because the rollout is too slow and people are dying.”

Berton was this week forced to close his restaurant again, a “stop-go approach” that he said would be the death of his and other businesses in the city.

“I would never have imagined it would last this long,” he added. “After a year we’re back to square one.”

 



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EU and US agree to suspend tariffs in Airbus-Boeing dispute

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The EU and US have agreed to suspend punitive tariffs related to their longstanding feud over aircraft subsidies, in the first breakthrough in trade relations since President Joe Biden took office. 

The two sides reached a deal after intensive talks, according to people familiar with the discussions, in a sign that the 16-year-old transatlantic trade battle over state aid to Airbus and Boeing could be coming to an end. 

The accord, announced by Ursula von der Leyen, European Commission president, means both sides will suspend tariffs linked to the dispute for four months. The duties have hit products ranging far beyond aircraft, encompassing an eclectic array of goods such as US self-propelled shovel loaders, French wine and even US ornamental fish.

In a statement issued after a call with Biden, von der Leyen said: “President Biden and I agreed to suspend all our tariffs imposed in the context of the Airbus-Boeing disputes, both on aircraft and non-aircraft products, for an initial period of four months.

“We both committed to focus on resolving our aircraft disputes, based on the work of our respective trade representatives,” she said.

The goodwill gesture is intended to prepare the ground for negotiations on a permanent solution to the dispute by setting joint rules on permissible aircraft subsidies.

The US trade representative’s office said that a settlement was needed to address challenges posed by new entrants to the aircraft sector from China. Beijing has made it a priority to break the global duopoly that has dominated for decades.

It added that limits on future subsidies and monitoring and enforcement mechanisms would be part of a deal between the EU and US.

A European official said the announcement came “earlier than expected”, given that Biden’s nominated trade representative Katherine Tai has yet to be confirmed. Countering China and setting transatlantic standards for the aircraft industry were keys goal, the official said.

One European diplomat said that four months would be “enough time to focus minds while still being very do-able”.

The deal came a day after the UK and US came to their own arrangement whereby Washington also agreed to suspend punitive tariffs linked to the dispute for four months.

The UK had already unilaterally stopped imposing its own tariffs at the start of this year. EU officials and other trade experts have questioned whether the UK would have had the right to continue to impose them anyway, given its exit from the bloc’s customs union.

Brussels imposed extra tariffs on $4bn of US goods in November, covering a wide range of products including sugarcane molasses, casino tables and fitness machines. 

By then the US had already imposed extra duties on $7.5bn of European exports — the result of Washington’s own World Trade Organization victory against aid to Airbus. 

Brussels sees today’s step as a breakthrough that can pave the way for broader co-operation on trade after the tensions of the Trump era — tensions that at times threatened to boil over into a full-scale trade war.

The US-EU aircraft subsidies dispute is one of the longest-running cases in WTO history. Both sides have been found over the years to have failed to properly implement WTO panel rulings on illegal subsides. 

The battle dates back to 2004, the year after Airbus overtook its US rival in terms of deliveries for the first time. Having earlier brokered an agreement with the EU on state aid in 1992, the US launched a case against subsidies for the European group that dated back to the 1970s. Initially the US claimed that $22bn in illegal funding had been given to Airbus.

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The EU followed up a few months later with a challenge of its own, originally claiming $23bn in illegal aid was offered to Boeing.

The two sides have long remained far apart on the terms of any agreement on how to fund new aircraft development. But with both Airbus and Boeing focused on recovering after the coronavirus pandemic and a hiatus in new commercial aircraft development, industry experts said the timing was right.

The deal will come as a relief to aircraft manufacturers and other businesses on both sides of the Atlantic. French wine producers and Italian cheesemakers have been among those in the vanguard of calls for an end to the dispute. The spirits industry has also been among the US sectors strongly urging a solution. 

Airbus welcomed the decision to suspend tariffs. The company said it supports “all necessary actions to create a level-playing field and continues to support a negotiated settlement of this longstanding dispute to avoid lose-lose tariffs”.

Boeing said it hopes the deal would allow for talks to “bring a level playing field to this industry”.

 



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