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Greece sets tone for Europe’s summer travel

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Kalimera and welcome to Europe Express. Tourists from the UK, Germany and other countries started arriving on Greek islands over the weekend, after Athens lifted all restrictions for Covid-19 negative or vaccinated travellers (Russian vaccine included), no matter where they come from. We will look at how this early experiment is shaping up and what difference the EU’s “green certificate”, expected to be rolled out next month, will make.

We will also explore how Finland got back on track towards giving its formal assent to the EU’s recovery fund borrowing, after a four-day filibuster that included the recitation of fairy tales and Bible excerpts. 

But first, news from Brussels, which is working with African capitals and EU member states to boost vaccine manufacturing capacity in Africa. Ursula von der Leyen, European Commission president, is expected to lay out her plans to support the effort at a global health summit she is co-hosting in Rome on Friday, European officials said.

Before then, France’s president Emmanuel Macron will tomorrow host several African leaders at a summit in Paris to discuss the economic fallout from Covid-19, including the burden on public finances.

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Summer travel

While the EU is ironing out the details of a digital platform aimed at simplifying travel this summer, countries including Greece and Portugal already have national systems up and running, write Eleni Varvitsioti in Athens and Valentina Pop in Brussels.

Greece was among the first EU countries to formally welcome foreign visitors last week, as it seeks to double the revenues of its tourism industry, a vital sector that has been heavily hit since the pandemic brought travelling to a halt.

Tourists arriving in Greece no longer have to quarantine if they provide proof that they have been fully vaccinated (including with Russia’s vaccine), a negative Covid-19 test or documentation that shows they have recovered from the virus. 

Since the EU-wide digital green certificate (nothing to do with energy consumption on appliances) that will incorporate national systems is not ready yet, individual member states are putting their own systems in place. 

What is the EU’s digital green certificate?

  • Digital proof valid in all EU countries that a person has tested negative, was vaccinated or has recovered from Covid-19

  • Format is a QR code in the national language and in English

EU affairs ministers last week gave their green light to the scheme, but final details are still being ironed out, with some countries taking part in pilot trials aiming to have the final system set up by the end of June. 

Meanwhile, negotiators from the European parliament, commission and member states are seeking to thrash out a deal on the final details of the certificates. Last week, one of the sticking points was the parliament’s insistence that Covid-19 tests should be free to avoid adding hundreds of euros to the cost of family vacations. The price of a Covid-19 test ranges from zero in France to about €200 in Finland.

Visitors arriving in Greece have to declare their contact information and final destination in electronic form so they can be traced if needed. 

“Greece has an internal green pass operational already and will be there from day one, June 1, participating in this important European achievement,” tourism minister Harry Theoharis told Europe Express.

Over the past weekend, the number of arrivals at Greece’s 14 regional and national airports was 23,455, according to the Ministry of Tourism, showing signs that the country’s most profitable industry is gearing for a comeback. 

Last year, the number of visitors to Greece was down roughly 80 per cent to 7.4m, from a record 34m in 2019. Greece’s finance ministry is hoping to reach about half its pre-pandemic tourism revenues in order to keep the country’s budget on track. 

Given how important tourism is for a swath of European economies, other capitals will be watching early experiments in re-opening very intently.

Chart du jour: All flights lead to Greece

Chart showing that passenger demand for summer travel to Europe has yet to return

Greece has been the only summer destination in Europe attracting more flights than in previous years — at least of British tourists. Some southern European countries are rethinking their tourism strategies (Find out why).

FI, for filibuster

Finland’s parliamentarians last week made some headway dispelling rumours that theirs is not a talkative population, writes Valentina Pop.

For four days, members of the Eurosceptic Finns party not only voiced their opposition to taking on any common debt with other EU nations, but they also filled speaking time by reading out fairy tales, hymns and Bible passages.

It was a classic filibuster move, even if the procedural manoeuvre is not as common in Europe as it is in the US Senate. “This is a once in a decade kind of thing,” said Johanna Vuorelma, a political scientist at Tampere University. Previous filibusters occurred in the 1990s in the run-up to Finland’s EU membership and in the early 2010s around bailouts in the eurozone financial crisis. 

The Finnish parliament debated the EU recovery plan for four days © AP

In Finland, the “own resources” decision needed to fuel the EU’s €800bn recovery plan already has a higher hurdle to pass than in most countries. A previous attempt by the Finns party-led opposition to thwart the initiative was successful in imposing a two-thirds threshold for the actual vote. 

But if the vote goes ahead as planned tomorrow, pundits including Vuorelma expect it to pass — even though some members of the ruling coalition have indicated they may oppose it. Passage would be met with considerable relief in Brussels, which has anxiously watched the progress of national votes on its unprecedented recovery fund borrowing powers.

A more consequential delay was averted last week when the chamber’s vice-chair from the Finns party, Juho Eerola, was sidelined. He had admitted that he could have used procedural quirks to delay the own resources vote until autumn — which would have created a massive problem for the bloc.

“It showed that they are willing to go quite far, this is a strong ideological position for them,” Vuorelma said. With municipal elections in June and the Finns party having polled first in the weeks prior to this debate, the filibuster may have also had tactical intentions. “It certainly raised their profile, even if some party members resented the move,” she said. 

Two things to watch today

  1. European parliament resumes its plenary session

  2. European affairs ministers hold an informal council

. . . and later this week

  1. France hosts a number of African leaders for a summit on Tuesday, and on Friday, Italy and the European Commission host a Global Health Summit in Rome

  2. EU finance ministers meet in Lisbon on Friday and Saturday for informal talks

Notable, Quotable

  • The EU and US are expected to announce a temporary truce on Monday in their dispute over Trump-era steel and aluminium tariffs. The deal would mean the EU would shelve plans to boost tariffs on certain US products next month, giving the sides space to negotiate a settlement to the metals dispute. (Bloomberg)

  • Italy’s digital transition minister tells FT Rome correspondent Miles Johnson why he wants to roll out a nationwide digital platform for public services as part of the €248bn recovery plan designed to reignite the eurozone’s third-largest economy.

  • Marine Le Pen is allegedly at the core of a fraudulent scheme funnelling EU funds from the European parliament, according to a French police report seen by Journal du Dimanche.

  • The UK is not very keen on Joe Biden’s global minimum corporate tax proposal, arguing that a digital tax should come first. (Read more here)

  • The Polish government has put forward a plan, in part funded by the EU, to boost health spending and cut income tax.

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Today’s Europe Express team: sam.fleming@ft.com, eleni.varvitsioti@ft.com, valentina.pop@ft.com. Follow us on Twitter: @Sam1Fleming, @Elbarbie, @valentinapop





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Biden says he is open to exchange of cybercriminals with Putin

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US president Joe Biden said he was open to Russian president Vladimir Putin’s proposal to hand over cybercriminals to the US if Washington did the same for Moscow, just days before the two leaders meet for a summit in Geneva.

Biden and Putin will sit down in Switzerland on Wednesday for their first face-to-face meeting since the former was sworn in as US president. Both leaders said at the weekend that relations between their two countries were at a low point, but Biden’s latest comments suggested there could be room for co-operation.

Speaking at the conclusion of a meeting of G7 leaders in the UK on Sunday, Biden told reporters he was receptive to Putin’s suggestion of reciprocal extradition of cybercriminals responsible for disruptive ransomware attacks.

Earlier on Sunday, Russian state TV aired an interview with Putin in which the Russian president said that Moscow and Washington must “assume equal commitments”.

“Russia will naturally do that but only if the other side — in this case the United States — agrees to the same and will also extradite corresponding criminals to the Russian Federation.”

Asked about Putin’s comments, Biden said: “Yes, I am open to, if there are crimes committed against Russia, that in fact are people committing those crimes are being harboured in the United States, I am committed to holding them accountable.”

“I was told as I was flying here, that [Putin] said that,” Biden added. “I think that is potentially a good sign of progress.”

An increasing number of audacious ransomware attacks has paralysed companies in recent weeks. These have included the disruption of the Colonial Pipeline, which provides petroleum supplies for much of the US east coast, as well as operations at JBS, the Brazilian meat processing company. The White House has said it believes both attacks originated in Russia.

Jake Sullivan, US national security adviser, later clarified that Biden had not signed up to a “prisoner swap”.

“What he was saying was that if Vladimir Putin wants to come and say I am prepared to make sure that cyber criminals are held accountable, Joe Biden is perfectly willing to show up and say cyber criminals can be held accountable in America, because they already are. That is what we do,” Sullivan told reporters on Air Force One en route to the Nato summit in Brussels, the second leg of Biden’s first foreign tour as president.

“This is not about exchanges or swaps or anything like that.”

Putin told NBC News in an interview that aired on Friday that relations between the US and Russia were at their “lowest point in recent years”. Biden on Sunday said that he agreed with the characterisation, but also pointed out areas where he believed the two countries could work together.

The White House confirmed on Saturday that Biden would hold a solo press conference following the summit with Putin, rather than share a stage as his predecessor Donald Trump did with the Russian president in Helsinki in 2018.

Joe Biden disembarks from Air Force One in Belgium on Sunday for a Nato summit
Joe Biden disembarks from Air Force One in Belgium on Sunday for a Nato summit © Benoit Doppagne/POOL/EPA-EFE/Shutterstock

“This is not a contest about who can do better in front of a press conference or try to embarrass each other,” Biden said. “It is about making myself very clear what the conditions are to get a better relationship.”

He added: “Russia has engaged in activities which we believe are contrary to international norms. But they have also bitten off some real problems they are going to have trouble chewing on. For example, the rebuilding of Syria, of Libya.”

“I am hopeful that we can find an accommodation that can save the lives of people in, for example, Libya.”



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Construction sector warns rising costs will eat into EU recovery plan

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Construction industry executives across Europe have warned that “dangerous” price rises and shortages of many building materials risk undermining the EU’s flagship €800bn economic stimulus programme.

The EU construction sector generates almost 10 per cent of the bloc’s economic output and vast infrastructure projects make up a sizeable proportion of Brussels’ recovery fund, which will distribute grants and loans to rebuild member states’ economies after the Covid-19 pandemic.

But prices of construction materials from steel and wood to concrete and copper have begun to rise sharply in recent weeks as the economic rebound both in Europe and elsewhere — including the US and China — triggers a building boom.

According to the European Construction Industry Federation (FIEC), bitumen prices have risen 15 per cent in only three months, cement prices were up 10 per cent in a single month and wood prices were up over 20 per cent.

Public infrastructure projects usually impose penalties on builders for delays, while contractors often have to bear the cost of unexpected price increases.

Domenico Campogrande, director-general of FIEC, warned that the price rises and extra delays risked diluting the impact of the EU funds.

“The danger is that we have this big EU recovery plan but if 30 to 40 per cent of these funds are absorbed in extra financial instruments to cover the higher prices, it would be a real nonsense as it won’t go into the real economy,” he said. 

In a recent letter to the European Commission, the FIEC expressed “alarm” at the price rises and shortages of materials, including a more than doubling of the Italian price of steel bars used to make reinforced concrete in four months to March. 

“This phenomenon is jeopardising the construction sector’s contribution to economic recovery and is threatening the potential impact of European recovery programmes,” it said.

In Italy — the biggest beneficiary of the stimulus cash from Brussels — the government is planning to spend more than €100bn of its EU funding on building new infrastructure over the next five years. But the construction sector has warned officials that it will struggle to rise to the challenge without major reforms.

“We are facing shortages of many basic materials for construction and this is very dangerous as Italy is being hit harder than the rest of Europe,” said Flavio Monosilio, research director at ANCE, the association of Italian construction companies. “This crisis is at the heart of the new EU recovery plan.”

Line chart of Price indices rebased in US dollar terms showing Construction materials prices soar

Construction executives blame several factors for the bottlenecks, including the sharp rebound in demand which has outstripped the supply of materials in many countries, as well as pandemic-related disruption to supply chains and continued trade tensions.

Some materials have been hit by additional problems such as a bark beetle infestation that has hit wood production, and delays in the redistribution of unused steel.

Thomas Birtel, chief executive of Austrian construction group Strabag, said price rises had “increased tremendously in the last two weeks” and the company had to “report delays on individual construction sites because the material is simply no longer available”. 

Strabag, which built the Copenhagen Metro in Denmark and the Limerick Tunnel in Ireland, operates its own concrete and asphalt plants, but Birtel said: “Construction is a small-scale business and it is not even possible to control the supply chains for all building materials.”

In Germany, 44 per cent of construction companies surveyed by the Ifo Institute in May reported problems procuring materials on time, up from less than 6 per cent in March.

“We haven’t seen a bottleneck like this since 1991,” said Felix Leiss at Ifo. “This evidently caused construction activity to slow down in April, at least temporarily.”

Production in the German construction industry fell 4.3 per cent in April from the previous month, despite companies in the sector reporting a record order backlog of €62bn in March.

“Many producers are unable to supply the materials before the end of the year and that’s a real problem,” said Stephan Rabe at the German construction industry association. “A lot of money is going into public and private sector construction projects in the US and China and that is sucking up a lot of materials. Wood is being produced in Germany and exported to the US, so it is in short supply here.”

Some German politicians have called on Berlin to seek temporary EU export restrictions on wood and other materials.

As the US government prepares to launch a $1.7tn infrastructure programme and the global economic rebound is expected to gain pace, the pressures are expected to remain high in the coming months.

“It will take time to go back to normal — at least the end of the year,” said Campogrande.

Some countries, such as France and Germany, have responded by easing the rules on some public sector construction contracts, waiving fees for delays and compensating contractors for unforeseen price rises.

Monosilio said Rome was yet to offer any relief to the sector, which has been battered by a decade-long fall in public infrastructure investment, a lack of funding from banks and long delays in project approvals and payments.

Italy’s prime minister Mario Draghi has said the “destiny of the country” depends on the success of a €248bn package of investments and reforms mostly funded by the EU’s Recovery and Resilience Plan. It includes investment in high-speed train lines, renewable energy facilities, smart electricity grids and energy efficient buildings. 

EU states have a poor record in distributing funds; in the six years to 2020, they on average only spent just over half the money they were allocated by Brussels. 

Without reforms to address the Italian construction sector’s problems, Monosilio said similar problems could bedevil the EU’s recovery spending efforts.

“The Draghi government absolutely wants to improve the situation,” he said. “[But] it is a sword of Damocles hanging over the whole European project.”



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Macron warns Johnson to keep his word on Northern Ireland

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Emmanuel Macron, French president, has warned Boris Johnson that efforts to reset relations between Paris and London depend on the UK prime minister keeping his word over the Brexit deal in Northern Ireland.

The EU has threatened to punish Britain — including imposing trade sanctions — if Johnson unilaterally breaks commitments on border checks made in the Northern Ireland protocol, part of his Brexit deal.

At a breakfast meeting on the margins of the G7 summit in Cornwall, Macron made it clear he expected Johnson to honour the Brexit deal sealed with the EU last December.

Macron is seen by Downing Street as the most hardline EU leader on the issue. Arguments between French presidents and British prime ministers at global summits are common — and often play well domestically.

But Macron’s warning underscored the seriousness with which the EU regards the mounting crisis in Northern Ireland.

Joe Biden, US president, has signalled his deep concern over the future of the peace process.

An Elysée source said Macron told Johnson at a breakfast meeting at Carbis Bay that he was ready to reset relations with London and that Britain and France had many common interests.

“The president, however, strongly underlined that this re-engagement requires the British to honour the promises made to Europeans and to respect the Brexit agreement,” the Elysée source said.

The protocol requires Britain to check certain goods moving between Great Britain and Northern Ireland to avoid them passing unchecked across the open border to Ireland, an EU member, and into the single market.

The introduction of an effective trade border within the UK’s territory has infuriated pro-UK unionists in Northern Ireland and added to tension in the region.

Johnson argues that the EU is being intransigent in the way it applies the protocol and Dominic Raab, UK foreign secretary, has accused Brussels of being “bloody minded”.

A clash is approaching later this month on exports of chilled meat products across the Irish Sea; the EU only permits trade in frozen meat. A “grace period” to allow continued sale of British sausages, minced beef and chicken nuggets in NI expires at the end of June.

Johnson has left open the option of unilaterally ignoring the ban in a move which the EU has warned could trigger retaliation under the terms of the EU/UK Brexit trade and co-operation agreement.

Maros Sefcovic, European Commission vice-president, confirmed last week that this could include trade sanctions, spawning fears of a trade war or — in tabloid headlines — a “sausage war”.

Johnson also held talks on Saturday morning with Angela Merkel, German chancellor, and European Council president Charles Michel and European Commission president Ursula von der Leyen.

Downing Street said after the meetings that Johnson was “confident” in his tough line on the protocol and that he had agreed with his European counterparts there was a need to find solutions “at speed”.

Johnson’s spokesman said “all options are on the table” if no solutions were found; Downing Street has not excluded suspending parts of the protocol. He added that none of the European leaders explicitly mentioned the threat of trade sanctions against the UK.

Von der Leyen said in a tweet that the Good Friday Agreement and peace on the island of Ireland were paramount.

“We negotiated a protocol that preserves this, signed and ratified by the UK and EU,” she said. “We want the best possible relations with the UK. Both sides must implement what we agreed on. There is complete EU unity on this.”



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