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Shift in Europe policy likely as Germany’s CDU elects new leader



When Angela Merkel and Emmanuel Macron unveiled their groundbreaking plan for a €500bn pandemic recovery fund last May, one leading German politician expressed deep misgivings. This weekend, he might be elected leader of Ms Merkel’s party.

Friedrich Merz said the idea of the EU raising money on financial markets and distributing it as grants to member states was “bumping against the limits of the [EU] treaties”.

As an MP he had promised voters that the eurozone would not become a “transfer union” — a system where rich nations like Germany bail out their poorer neighbours. “I feel myself to be bound by this promise,” he said.

Mr Merz, a millionaire lawyer and former chairman of BlackRock Germany, is one of three candidates standing in a digital election on Saturday evening for leader of the Christian Democratic Union, Germany’s most popular party.

A victory for Mr Merz, whose views on the EU have more in common with the so-called “frugal” nations such as Austria and the Netherlands than with Ms Merkel, could have profound implications for Germany’s role in Europe. 

Vowing to make the CDU more conservative, Mr Merz is polling slightly ahead of his two rivals, Armin Laschet, prime minister of North Rhine-Westphalia, and Norbert Röttgen, chairman of the Bundestag foreign affairs committee. 

The winner will be in pole position to run as the CDU’s candidate for chancellor in September’s Bundestag election and then succeed Ms Merkel, who is quitting the political stage after 16 years as chancellor.

The change at the top will have huge ripple effects across the EU. Ms Merkel has earned the reputation of the bloc’s most experienced crisis-manager, a role she has reprised during the coronavirus pandemic. A rock of stability, she is widely respected for her ability to resolve conflicts, find compromises and mediate between opposing camps. A new chancellor will inevitably mean a new style of German leadership in Europe.

“The way Germany brings its weight to bear in the EU will change, and that will have far-reaching consequences,” said Herfried Münkler, a political scientist at the Humboldt University in Berlin. “This [Merkel] role of honest broker, of mediator — it’s coming to an end.”

The shift will be most marked if Mr Merz becomes chancellor. “It would be a different style, much rougher and bossier,” he said.

In their public utterances, the three candidates have shown remarkable unanimity on issues such as Europe. All are fervent supporters of the EU, committed to the Franco-German partnership. But Mr Laschet stands for continuity with Ms Merkel’s course in Europe, whereas Mr Merz occasionally strikes his more conservative tone.

In a book published last year — New Times, New Responsibility — he said Germany must “learn the language of power”.

“More than ever before, we have to defend our interests within the European Union,” he said.

In a debate between the three candidates earlier this month, Mr Merz, who served as a member of the European Parliament for five years, also expressed reservations about further steps towards EU integration. 

“I’m sceptical about transferring more powers to the European Union”, he said. “The EU will only have a future if the nation states remain [its] key pillars. I don’t want to see an EU in which our identity dissolves and we’re all just Europeans.”

In a debate last month he also took a potshot at the European Central Bank, bemoaning the effect of its low-interest rate policy on “private savings” in Germany and the “property market”.

“I am increasingly critical . . . of ECB policy,” he said.

“Merz plays to that section of the CDU who constantly fear Germany is being ripped off by other EU member states,” said Lucas Guttenber, deputy director of the Jacques Delors Institute, a think-tank. “There is a large constituency who think every deal the EU makes is detrimental to German interests.”

On some issues, however, Mr Merz advocates much closer co-ordination between EU states. In EU foreign policy, for example, he wants to see unanimity replaced by qualified majority voting, to allow the EU to project its power in the world more effectively. 

It is an idea that is also backed by Mr Röttgen, who has said the EU risks being “pulverised” between the US and China in their new great power rivalry. Both he and Mr Merz advocate the creation of an avant-garde of EU member states that could better assert a “European voice” in global affairs.

“Do we want to keep playing in the lower leagues, every man for himself, or . . . in the Champions League, to play a role in the world?” Mr Merz asked.

His other positions on Europe are in the CDU mainstream. He is in favour of completing EU banking and capital markets union and creating a single market in energy. He wants the EU to invest more in R&D, in its rail network and in digital infrastructure. He also says the bloc must reform its competition law to allow the creation of European champions. 

He is also generally supportive of the coronavirus pandemic recovery fund, saying in May that it was good that Germany and France had seized the initiative, and that Berlin had a “fundamental interest” in a functioning EU single market. But he has reservations. In his book he notes EU treaties forbid the bloc from taking on debt. He also raises questions about how the fund will be deployed.

“What’s actually happening with this money?” he writes. “Will it flow into European projects or, in a more-or-less uncontrolled fashion, into national budgets?”

But even if he wins, Mr Merz may struggle to fundamentally shift the CDU’s policies on Europe, which are largely the preserve of its powerful parliamentary caucus — a group that is generally hawkish on eurozone integration but can occasionally show flexibility: it supported Ms Merkel over the recovery fund, for example.

“A Merz victory will not change the CDU’s approach on Europe overnight — the party is much too heterogenous for that,” said Mr Guttenberg. “Fundamentally, the CDU does not know what it wants the EU to become, and in that respect, Merz seems to fit the part.”

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Marine Le Pen falls short in French regional vote




Marine Le Pen’s far-right Rassemblement National party fell short of expectations in the first round of France’s regional elections on Sunday, leaving the Les Républicains party and other centre-right politicians in a strong position for the second and final set of ballots next weekend. 

The relatively poor results for the anti-immigration RN — in a record low turnout of about 33 per cent — will also provide some comfort for Emmanuel Macron, who is expected to face Le Pen when he seeks re-election as president next year. 

Le Pen described the low turnout as a “civic disaster” that gave a false impression of the political situation. “If you want things to change, you must vote,” she said in a short speech as the results began to emerge.

Xavier Bertrand, the centre-right leader of the Hauts-de-France region in the north, was on course for re-election and received a boost to his own presidential ambitions, with early estimates from BFMTV after polls closed giving him 44 per cent of the vote, against 24.4 per cent for Le Pen’s RN. 

Recalling that the RN had been ahead in the region after the first round in 2015, Bertrand boasted in a speech of “breaking the jaws” of his far-right rivals in this year’s electoral battle. Le Pen had campaigned in the north and hoped to flip the region to her party in Sunday’s vote. 

Xavier Bertrand after casting his ballot © AFP via Getty Images

Early estimates suggested that Le Pen’s party might be within reach of a first-round lead in Provence-Alpes-Côte-d’Azur in the south. But even there the performance was less impressive than predicted by opinion polls, which had suggested the RN would take control of the region after the second round in the first such victory in its history. 

That now looks less easy to achieve for the RN, since other parties have in the past tended to unite in a so-called “republican front” in second-round votes to keep the extreme right from power.

Nationwide, centre-right lists were forecast to receive about 29 per cent of the votes cast in the first round, against 19 per cent for the RN, 16 per cent for the Socialist party, 13 per cent for the Greens and 11 per cent for Macron’s centrist La République en Marche party. 

Incumbent parties performed well, with LR politicians in the lead in the Grand Est region in the east, Auvergne-Rhône-Alpes in the south-east and Ile-de-France around Paris. The Socialists expected to hold Occitanie and Brittany in the west.

Gérald Darmanin, interior minister, said the record low turnout was “particularly worrying”, adding: “Our collective effort must be to mobilise the French for the second round.” 

The low turnout did not fulfil the fears of Macron’s ally François Bayrou by benefiting the extreme right or the extreme left, and may have been the result of voter weariness with politics and a desire to enjoy themselves after more than a year of the Covid-19 pandemic. 

“The French have their minds on other things completely,” Brice Teinturier of polling group Ipsos told a webinar last week. “We are coming out of the pandemic . . . and the outlook for the economy is getting much better.”

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Delta variant begins to spread, threatening EU’s Covid progress




The Delta coronavirus variant that swept the UK has become dominant in Portugal and appeared in clusters across Germany, France and Spain, prompting European health officials to warn further action is needed to slow its spread. 

While the new strain, which first emerged in India, still only accounts for a fraction of the total coronavirus cases in mainland Europe, it is gaining ground, according to a Financial Times analysis of global genomic data from the virus tracking database Gisaid. It accounts for 96 per cent of sequenced Covid-19 infections in Portugal, more than 20 per cent in Italy and about 16 per cent in Belgium, the FT’s calculations show.

The small but rising number of cases have raised concerns that the Delta variant could halt the progress the EU has made over past the two months in bringing new infections and deaths down to their lowest level since at least the autumn. 

“We are in the process of crushing the virus and crushing the pandemic, and we must in no way let the Delta variant get the upper hand,” France’s health minister, Olivier Véran, told reporters at a Paris vaccination centre on Tuesday. 

Véran said that 2 per cent to 4 per cent of virus samples being analysed in France were showing as the Delta variant: “You might say this is still low but it is similar to the situation in the UK a few weeks ago.” The FT’s analysis of Gisaid’s data suggests this figure could be higher.

Chart showing that the Delta variant now accounts for more than half of sequenced cases in parts of the US, and is growing in prevalence across the country

In Portugal, community transmission of the variant has been detected in the greater Lisbon area, where more than 60 per cent of the country’s new coronavirus cases in the past week have been identified. Non-essential travel to and from the city has been banned in an effort to prevent the spike in cases spreading to the rest of the country.

Scientists across the continent are now looking to the UK — where Covid-19 cases have tripled in the past month and the Delta variant accounts for about 98 per cent of all new infections — for clues about what may happen next and which measures may need to be taken.

After official data showed the Delta variant appeared to increase the risk of hospitalisation by 2.2 times compared with the Alpha variant, the UK government this week imposed a one month delay to the removal of its remaining coronavirus restrictions.

“The decisions the UK makes to reopen life and society will serve as a laboratory for us in Europe,” said Bruno Lina, a virologist in Lyon who advises the French government and helps co-ordinate variant sequencing in the country.

Whether the clusters of Delta infections peppering the EU turn into bigger outbreaks will depend in part on how many people have been fully vaccinated, scientists said, as well as people’s behaviour now that many restrictions on life and business are being lifted.

Chart showing that there are signs that many states are now seeing a shrinking outbreak of the Alpha variant, and a growing one of Delta

Recent UK government research has highlighted the need to complete vaccination programmes as quickly as possible. According to data gathered by Public Health England, the first dose of a Covid-19 vaccine is generally less effective against the Delta variant than with the previous strains. Two doses increases protection against symptomatic infection with Delta from 33 per cent to 81 per cent. 

While in the UK about 46 per cent of the population has been fully immunised, vaccination rates in most countries in mainland Europe are hovering at between 20 per cent and 30 per cent. About 26 per cent of the population in France has been fully vaccinated.

French authorities are currently trying to contain an outbreak in the Landes region, near the Spanish border, where 125 cases of the Delta variant have been confirmed by genetic sequencing and another 130 are suspected, representing about 30 per cent of recent infections in the area. Clusters of the Delta variant have also been identified in recent weeks in the southern suburbs of Paris and an art school in Strasbourg. 

In each case health officials have responded with the same formula: increased contact tracing and a renewed push to vaccinate people in the affected areas.

“If we keep vaccination going at a good pace, and some non-pharmaceutical interventions like masks indoors, we can still repress the circulation of the virus this summer,” said Lina, the French virologist. “This variant will displace the other ones — we must keep that in mind — but it doesn’t mean that it will lead to a new epidemic wave.”

Vaccination site in Jutland, Denmark
Denmark has only identified a small number of Delta infections, even though the variant arrived in the country at approximately the same time as in the UK. © Henning Bagger/EPA-EFE

Some scientists fear the Delta variant may have already spread further but gone undetected given that less of the genomic sequencing needed to identify variants has been completed in mainland Europe. While the UK has sequenced more than 500,000 Sars-Cov-2 genomes, Germany, France and Spain have sequenced about 130,000, 47,000 and 34,000 respectively.

“It’s costly, it’s time consuming and it was neglected,” said Antoine Flahault, director of the Institute of Global Health at the University of Geneva.

Denmark, however, has sequenced a high proportion of cases and still only identified a small number of Delta infections, even though the variant arrived in the country at approximately the same time as in the UK.

This could be explained partly, experts said, by differences in demographics and movement, including the number of cases imported into the country from regions with a high prevalence, such as India, and the living conditions in the communities into which it is seeded.

The difference in the pace of Delta’s spread across European countries remained “a little bit of a mystery”, said Jeff Barrett, director of the Covid-19 Genomics Initiative at the Wellcome Sanger Institute in Cambridge.

Still, many experts believe that wherever the Delta variant is introduced, it will eventually become dominant. The key, they say, will be to increase the proportion of fully vaccinated people, while slowing transmission of the virus as much as possible.

“We have to keep the messaging very clear,” said Lina in Lyon. “This is not over.”

Additional reporting by Daniel Dombey, Peter Wise, Guy Chazan and Clive Cookson

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EU fails in legal bid to speed up AstraZeneca vaccine supply




The EU has lost a legal bid to force AstraZeneca to speed up delivery of Covid-19 vaccines or risk billions of euros in fines, the latest round in a bitter battle between the bloc and the UK-Swedish pharmaceutical company.

In a ruling on Friday, a court in Brussels criticised AstraZeneca for a “serious breach” of its contract with the EU after repeated shortfalls but refused to impose a new schedule demanded by Brussels that would have required the company to deliver 120m doses by the end of June or pay fines of €10 per dose per day.

The dispute between the European Commission and AstraZeneca has severely damaged the company’s standing on the continent and in February spiralled into a diplomatic row when Brussels threatened to exercise an emergency provision of the Brexit deal to stop vaccines entering the UK via Northern Ireland.

The Brussels court ruled that AstraZeneca should provide 80m doses by the end of September. However, in practice this should have no impact on AstraZeneca, which has already delivered 70m doses and plans to provide the remaining 10m before the end of this month.

The commission insisted that the court judgment would nonetheless put pressure on AstraZeneca because it had “laid the tracks for the delivery of future doses on the basis of clear contractual principles”, including supply from British manufacturing sites.

“The company will have to follow these tracks and it can no longer argue that it cannot use the UK plants for the production of vaccines for the European Union,” the commission said.

The ruling found that the pharma company’s failure to send the EU vaccines manufactured in the UK was inconsistent with making the “best reasonable efforts” on supply required by its contract. But it did not order AstraZeneca to use UK production to fulfil the EU order.

A UK plant operated by Oxford BioMedica is nonetheless expected to start manufacturing for the EU, according to a person familiar with the matter. 

AstraZeneca was originally expected to supply up to 300m doses to the EU in the first six months of this year but that forecast was cut sharply after production problems.

With the pace of the EU’s vaccine rollout improving, using mainly Pfizer/BioNTech and Moderna jabs, and some countries imposing restrictions on the AstraZeneca vaccine after the discovery of rare blood clots, there is less practical need for the doses.

Jeffrey Pott, AstraZeneca’s general counsel, said: “AstraZeneca has fully complied with its agreement with the European Commission and we will continue to focus on the urgent task of supplying an effective vaccine, which we are delivering at no profit to help protect people in Europe and around the world from the deadliest pandemic in a generation.”

Ursula von der Leyen, president of the commission, said: “This decision confirms the position of the commission: AstraZeneca did not live up to the commitments it made in the contract. It is good to see that an independent judge confirms this.”

The court is due to hold hearings in September on a second case brought by the Commission seeking judgment on whether AstraZeneca failed in its duty to deliver on the supply contract. 

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