Good morning and welcome to Europe Express!
EU institutions are readying for their last hurrah this week before breaking for summer holidays (as are we). The European Commission is set to unveil its long-awaited anti-money laundering package tomorrow, along with its latest rule of law report, which should provide some interesting fodder in the discussions with Poland and Hungary.
The European Central Bank will also have its regular governing council meeting on Thursday. On the governments’ side, a series of formal and informal EU ministerial meetings take place in Brussels and Slovenia.
With England’s ‘Freedom Day’ from Covid-19 restrictions today, our Chart du jour juxtaposes the UK with other European countries where the Delta variant has led to a rise in infections.
And while the Euro championship is now over (and seemingly caused a jump in infections in Italy, where fans across the country gathered to celebrate), we will look at why football is stoking tensions between Greece and Turkey.
Last, some holiday planning: This will be our last week of Europe Express, but we will return in early September for la rentrée (back to school) — as officials here in Brussels call the return to the office.
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The EU’s last big legislative onslaught before the summer break is due tomorrow — namely, the European Commission’s long-awaited anti-money laundering package, writes Sam Fleming in Brussels.
The FT has written about the biggest proposals, of which the centrepiece is the Anti-Money Laundering Authority. This will be a brand new body with powers to directly supervise companies and impose fines totalling millions of euros for breaches of money laundering rules.
The creation of the authority marks the EU’s boldest attempt to tackle illicit finance in the wake of numerous scandals. The idea is that the authority will be able to crack the whip when it comes to cross-border co-operation while also directly overseeing certain risky financial companies.
Much of the attention this week will be on how the proposed rules will work and how easily they will get through the legislative process. Behind the scenes, however, member states are already quietly discussing another priority: where the body will be located.
The AMLA, which is meant to set up shop in 2024, will initially only have 250 staff, so at first glance, it looks like a rather modest prize. But battles between member states to host EU agencies nevertheless tend to be hard-fought.
A new EU body brings with it not only skilled and well-paid staff and their families but also a boost to local enterprises such as hotels and restaurants. They also have a tendency to expand over time, given their natural inclination to look for ways of extending their powers.
The battle to host the relocated European Medicines Authority — with almost 20 European cities submitting bids — showed how keenly fought these contests can be (Amsterdam won). The European Banking Authority, which as with the EMA relocated from the UK because of Brexit, saw eight bids before Paris won out.
And past battles over agency headquarters went as far as causing diplomatic mini-scuffles, including when former Italian prime minister Silvio Berlusconi derided Finland’s cuisine when Helsinki was bidding for the European Food Safety Agency. (Italy’s Parma won)
The AMLA, which is expected to have an annual budget of more than €45m, will have a particular financial services focus within its broad powers, so we can expect an ecosystem of advisory firms and legal practices offering services to deep-pocketed clients to spring up around it.
Frankfurt and Paris are likely to be the contenders in an intense contest to host it, given the two rival financial centres are already homes to important EU bodies — most notably the European Central Bank in Frankfurt and the European Securities and Markets Authority in Paris.
But they will not be alone. Diplomats think Italy, which narrowly lost the battle for the EMA, is another possible location. The bidders for the EBA also included Austria and Luxembourg, while both Slovakia and Spain unsuccessfully pitched for the EMA and could fancy their chances this time around.
None of this will be settled soon, and predicting the outcome is impossible at such an early stage. But the decision over where to locate the AMLA is likely to generate far more heat than its modest size would suggest.
Chart du jour: England’s reopening gambit
A Delta variant driven jump in infections has prompted the reintroduction of some restrictions in the Netherlands and Spain, weeks after they were lifted. England is going ahead with ‘Freedom Day’ today despite leading in the number of daily cases and as authorities struggle with testing capacity, which is part of the government’s reopening strategy. (More here)
Hot summer in eastern Med
A spat ahead of a football match and accusations over irregular migration are derailing Greece and Turkey’s hopes for a “quiet summer” — a year after tensions over maritime borders pushed the Nato allies to the brink of confrontation, writes Ayla Jean Yackley in Istanbul.
Recep Tayyip Erdogan, Turkey’s president, said he shared Greek prime minister Kyriakos Mitsotakis’s desire for a thaw in relations after the leaders met on the sidelines of a Nato summit in June. The neighbours revived long-stalled talks on contested waters earlier this year.
But a football friendly led to a minor diplomatic row last week, when Turkey’s foreign ministry summoned the Greek ambassador to Ankara to register a “strong protest” over the treatment of Istanbul club Galatasaray, after Greek airport officials refused to accept the players’ negative coronavirus test results and sought supplementary testing.
Galatasaray pulled out of a pre-season exhibition match, set for tomorrow against Greek side Olympiakos, rather than take new Covid-19 tests, the club said.
Greece has expressed tentative support for the EU’s “positive agenda” with Turkey, the bloc’s effort to focus on areas of co-operation with Ankara, whose candidacy for EU membership is a distant prospect because of its poor relations with Greece and Cyprus and troubling human rights record.
Europe is particularly concerned about irregular migration from Turkey, and last month agreed to provide Turkey with an additional €3bn to encourage Ankara to prevent migrants from reaching Europe.
The Turkish coastguard last week said it had rescued almost 5,700 migrants in the Aegean and Mediterranean seas in the first half of the year, and said all but 1,000 of them had been pushed back into territorial waters by Greece.
Greece denies accusations that its coastguard forces migrant boats that enter its waters back into Turkish territory.
Temperatures may rise further this week when Erdogan heads to the Turkish-controlled enclave in North Cyprus to mark the 47th anniversary of Turkey’s invasion of the Mediterranean island.
Decades of UN-backed negotiations have failed to reunify Greek and Turkish Cypriots, and Ankara and the administration it backs in the north have hardened their stance this year, saying it was time the international community recognised the sovereignty of Turkish Cypriots.
Erdogan teased the visit by promising to deliver “good news” in an address of the Turkish Cypriot parliament. Analysts were left guessing what the Turkish president may announce, but the visit will probably reinforce Erdogan’s support for a two-state solution as Turkey flexes its strength in the east Mediterranean.
On Friday, the internationally recognised Cypriot government said a Turkish coastguard vessel had fired warning shots at a Cypriot police boat, which Turkish Cypriot authorities denied, calling the reports “fictional scenarios”.
What to watch today
EU agriculture ministers meet in Brussels
The European Commission is set to approve the Czech recovery plan
. . . and later this week
The European Commission publishes its annual rule of law report tomorrow
EU environment ministers meet tomorrow for an informal council in Slovenia
European Central Bank governing council meets on Thursday
Nordic view: In an interview with the Financial Times, Norway’s prime minister said oil production in the country was slowing down. But she refused to back calls from the International Energy Agency to stop all new petroleum projects to keep climate change in check, saying there was continued need for Norwegian oil and gas, including to make hydrogen.
Nuclear question: Emmanuel Macron has been a vocal supporter of nuclear power, which he views as critical to France’s green transition. But less than a year before presidential elections, he is leaving the multibillion euro question of adding new reactors undecided, even as some of his rivals position themselves firmly behind the project.
Spying on journalists: More than 180 people around the world, including FT editor Roula Khalaf, have potentially been spied on by governments via an Israeli spyware application installed on their phones, according to The Guardian. Khalaf’s phone was selected as a possible target by the United Arab Emirates when she was FT deputy editor, according to the report.
When not in Rome: A Vatican-owned luxury flat in central London has become the subject of complaints by local residents over alleged “hellish noise” coming from late-night events, some involving DJs. None of the complainants suggested that any Vatican employees were present at the gatherings.
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End of an era as Lionel Messi and FC Barcelona part company
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Barcelona football club said on Thursday that Lionel Messi, widely regarded as one of the greatest of all players, is leaving because of “financial and structural obstacles” that it blamed on financial regulations imposed by La Liga, which runs the top two divisions in Spain, requiring the team to rein in its spending.
Messi, the frontman of FC Barcelona’s success for more than a decade, will be leaving a club where he has spent the entirety of his career, winning every leading trophy and personal accolade.
Messi and Barcelona had intended to sign a new contract on Thursday but ultimately the player and club were forced to separate, said Barcelona in a statement, adding that both sides “deeply regret” their split. La Liga declined to comment.
“Despite FC Barcelona and Lionel Messi having reached an agreement and the clear intention of both parties to sign a new contract today, this cannot happen because of financial and structural obstacles (Spanish Liga regulations),” Barcelona said. “As a result of this situation, Messi shall not be staying on at FC Barcelona. Both parties deeply regret that the wishes of the player and the club will ultimately not be fulfilled.”
Messi’s exit comes as Barcelona and rivals Real Madrid are at loggerheads with La Liga over the Spanish league’s plan to partner with private equity firm CVC Capital Partners, which plans to invest €2.7bn in the league, subject to clubs’ approval.
The exit of the superstar Argentina international, who earned a total of more than €555m between 2017 and 2021, according to Spanish newspaper El Mundo, underlines the financial pressures at Barcelona.
The Catalan club sunk to a net loss of almost €100m in the 2019-20 season, the first to be disrupted by the pandemic, as revenues of €855m fell short of the €1bn set in its budget. Its debt has soared north of €1bn. In June, the club approved a €525m debt refinancing.
On the pitch, Barca finished third in La Liga, its worst showing since 2008. It has not won the Uefa Champions League, Europe’s most prestigious club tournament, since 2015.
The decision comes just days after Barca president Joan Laporta said the club “have to make sure” Messi stays and that the process was “on the right track”. The president had also called for “greater flexibility” from La Liga.
Despite the long affiliation between Messi and Barcelona, the player last year told the club he wanted to leave but ultimately decided to stay on to avoid a legal dispute.
Messi’s departure comes a day after La Liga agreed a €2.7bn deal with US private equity group CVC Capital Partners to buy a minority stake in a new entity that would manage broadcast, sponsorship and digital rights for the league.
Barcelona and arch-rivals Real Madrid, which have been embroiled in a dispute with La Liga over plans for a breakaway European Super League, would stand to receive about €260m each from the deal with CVC.
The transaction was partly seen as a way to win over the support of Barcelona, which has been financially constrained by La Liga’s rules from making any high-profile acquisitions or renewal of contracts.
Real Madrid also lashed out at the CVC deal with CVC on Thursday, questioning its legality and accusing the Spanish league of negotiating the agreement without the club’s knowledge.
Barcelona followed up later on Thursday by joining Real in condemning La Liga’s planned partnership with the buyout firm. The club said: “FC Barcelona feels it is inappropriate to sign a half-century agreement given the uncertainties that always surround the football world. The terms of the contract that La Liga is describing condemn FC Barcelona’s future with regard to broadcasting rights.
“FC Barcelona wishes to express its surprise at an agreement driven by La Liga in which the teams’ opinions, including those of FC Barcelona, have not been taken into account.”
Spanish football clubs have yet to vote on the CVC agreement. Italy’s top football league, Serie A, turned down a similar agreement a few months ago.
Europe targets adolescents for Covid jabs to curb Delta spread
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French President Emmanuel Macron, whose habitual garb in public is a dark suit and tie, switched this week to a black T-shirt to encourage the young to get vaccinated over the holidays.
“Many of you have questions or are scared,” Macron said in one of several videos he posted on TikTok and Instagram from what seemed to be the presidential holiday residence in southern France. “So I’ve decided to answer your questions directly. Go ahead.”
He has also posted short videos to correct misconceptions about the vaccines and France’s supposedly “freedom-killing” insistence on health passports to access bars and other public places. “Vaccination saves lives, the virus kills — it’s as simple as that,” he said in one.
Macron may be one of the EU’s more visible leaders to urge the young to be jabbed, but he is not alone.
On Wednesday, the UK belatedly extended its Covid-19 vaccination programme to 16- and 17-year-olds. But across continental Europe, governments from Scandinavia to the Mediterranean have already been targeting as yet unvaccinated teenagers to fight rising infections and hospitalisations driven by the highly infectious Delta variant of the virus.
This vaccination drive, which anticipates the new school term starting in September, is partly why Europe has already overtaken the US in terms of vaccination rates per 100 people and, on current projections, will soon overtake the UK too.
In France, health ministry data show that more than 40 per cent of those aged between 12 and 17 have already received one jab, and nearly 20 per cent are fully vaccinated. (In the vulnerable age group between 70 and 80, full vaccination coverage is close to 90 per cent.)
Most Nordic countries have also started to vaccinate teenagers and, by the end of July, almost one-third of 12-15 year-olds in Denmark had received at least one jab. “We need the immunity of the population, especially before a winter season,” Soren Brostrom, head of the Danish health authority, said in June when announcing the decision.
Much the same is true in Germany, where more than 900,000 adolescents or 21 per cent of those aged between 12 and 17, have received at least one jab, and more than 10 per cent are fully vaccinated.
Individual German parents and children already have had the legal right to get vaccinated since June, and several states had begun limited offerings of the jabs to 12-17-year-olds.
But health minister Jens Spahn announced on Monday plans to offer more jabs to youngsters before school begins. “This is absolutely not about applying pressure,” he said on RBB radio. “It is about giving those who want to be vaccinated, including children and adolescents, the opportunity.”
The next step in Europe will be to vaccinate young children, especially as Delta strain infections seem to be rising fastest among the unvaccinated young. In a recent UK study, almost a third of the positive Delta variant tests came from people aged 5 to 17.
“It’s clear that children under 12 will become the main reservoir of infections once a large share of the over-12 population is vaccinated,” said Antoine Flahault, director of the Institute of Global Health at the University of Geneva.
“It seems reasonable today to suppose that we’ll only be able to finish with this pandemic by vaccinating a very large share of the population, perhaps 90-95 per cent, by including children,” he said, noting that the jabs would have to be supplemented by other measures such as continued border controls as well.
In Spain, which has already overtaken the UK and the US in vaccinating its population, the government says its inoculation drive must now focus on younger people.
Prime Minister Pedro Sánchez has declared that the country, where 59 per cent are fully vaccinated, deserves “the gold medal for vaccinations”. This week he said the country was on course to fully vaccinate 70 per cent of its population before the end of August.
But officials increasingly recognise that will not be enough to provide “herd immunity”. Infection rates in Spain — now in its fifth coronavirus wave — remain extremely high, with cases particularly prevalent among people in the 12-19 and 20-29 age groups; in the former, the full vaccination rate is less than 4 per cent.
High infection rates among these groups — with a 14-day rate of above 1,300 per 100,000 people — have spilled over to older groups. The 14-day rate among the over-eighties has been close to 300, even though according to official figures that age group is 100 per cent vaccinated.
“What is happening in Spain shows quite simply that the vaccinations do not have the same efficiency that was indicated in the trials . . . It is going to be more difficult to reach herd immunity,” said Rafael Bengoa, a former Basque region minister for health and director at the World Health Organization.
He said the Delta variant — now accounting for more than 75 per cent of Spanish cases — was a key factor blunting vaccines’ impact and argued that the necessary level of protection would now probably require full vaccination for closer to 90 per cent of the overall population.
“We are only going to achieve this when we have revaccinated older people who are losing protection relatively quickly and when we have vaccinated young people and children,” he said. “The end is further away than we predicted.”
Additional reporting by Richard Milne in Oslo
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