In this edition, we look at the root causes of farmers' fury in Germany and break down the recently agreed EU fiscal rules reform.
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00:00 [Music]
00:12 Hello there and welcome to Brussels, my love.
00:16 Euronews' weekly talk show that looks at all the news brewing here in Brussels and beyond.
00:21 I'm Maeve McMahon, thanks for joining us.
00:23 Coming up this week, chaos in Germany just as schools and life reopen after the Christmas break.
00:30 Farmers from all across the country took to the streets in fury.
00:34 From subsidy cuts and higher bills to lower wholesale prices for milk,
00:38 they say it's unfair that they're in the firing line.
00:42 We take a look at the biggest test so far for Olive Schultz's coalition
00:46 and the farmer revolt bubbling all across the continent.
00:49 And it's a new year, time many of us try to tighten our belts and cut back on our spending.
00:56 And this is also the aim of the EU fiscal rules reform approved by Member States.
01:01 But NGOs fear the so-called golden rules could worsen poverty in Europe.
01:05 But some economists say they're a compromise to end fiscal feuds between North and Southern Europe.
01:11 We break them down with our guests this week.
01:14 Lars Patrick Berg, German MEP from the European Conservatives and Reformists.
01:18 Welcome.
01:19 Maria João Rodrigues, former Portuguese MEP and government minister
01:23 and now the president of the Foundation for Progressive Studies.
01:26 Warm welcome.
01:27 And Fabian Zulek, chief economist and the head director of the European Policy Centre.
01:32 Lovely to see you all. Thank you so much for being with us.
01:35 But as usual, before we get your thoughts, let's just tell our viewers how German farmers spent their week.
01:44 From the North Sea to Bavarian hills, farmers in Germany are fuming.
01:48 Knee-deep in electricity bills and dwindling profits,
01:51 the final straw came when the government announced economic and agricultural plans
01:55 that would cull subsidies for the sector.
01:57 To make their point, farmers staged a week-long strike and begged for solidarity, which they got.
02:05 Even Dutch farmers took their tractors to the borders in a wave of support.
02:12 The big issue here, since the end of the Merkel era,
02:15 farmers feel unrepresented in the political corridors of Berlin.
02:18 The question now, will Germany's domestic woes constrain EU decision-making
02:25 or even derail the European Green Deal?
02:28 That is the big question. I mean, the images speak for themselves there.
02:35 But what is the view been here from Brussels on this story? Fabian?
02:40 I think it's not surprising that we are seeing farmers' protests.
02:44 We have seen them in a number of countries before.
02:47 There is a lot of pressure on the farming sector.
02:51 Certainly, when we're looking at what climate change action implies,
02:57 when we're looking at price levels, both in terms of input prices,
03:02 but also in terms of retail prices for farmers.
03:07 And when we're looking at fiscal balances in all countries,
03:12 where there is a great need to save money.
03:15 So all of that is coming together.
03:17 But we are also seeing that these protests are being utilised
03:21 by populist groups who are trying to profit from them.
03:24 We'll come to that later.
03:26 I mean, because policy makers, obviously here in this town, Maria,
03:29 they're trying to reach that ambitious goal of making sure this continent is net zero by 2050.
03:34 Which means writing up a lot of various legislation which will have major impacts
03:38 on all parts of society, including these farmers.
03:42 So I imagine there's a sense of nervousness now in this town
03:45 when they see this farmer movement, which seems to be just getting started.
03:48 And as Fabian said, it has been very much going on in many other countries for long.
03:52 Yes, in fact, this can become a larger issue in the European Union.
03:56 Because on one hand, we do need to move to a green economy.
04:02 There's no doubt about this.
04:04 But the only way to make it is with the means to support what we call a fair transition.
04:09 And this is what is failing in Germany, clearly.
04:13 Because if you want farmers, and all the sectors are involved,
04:18 but particularly now farmers, to move in this direction,
04:21 this should be something they can really make it.
04:24 And this means to have financial means which are not there in Germany.
04:29 And why are they not there?
04:31 First of all, because there is a debt break,
04:36 making a big limit for the possibility for the German budget to support this transition.
04:42 On the top of this, you had a recent decision by the German court,
04:47 pushed by the conservative family, asking for something which is, I think, a bad decision.
04:56 It's to say, we have created a special fund to deal with the pandemic, with the COVID,
05:02 and now we should use this fund to support the green transition.
05:06 But the German court was not accepting this decision.
05:11 And that's the German constitutional court in Harzruhr.
05:14 Now there is a straight jacket.
05:16 But I imagine you have a lot of farmers among your voters over in Germany.
05:19 How are they feeling about the EU climate law, the Green Deal,
05:24 the nature restoration law?
05:26 What are the main concerns you're hearing on the ground?
05:28 Well, the farmers' actions is actually an illustration of the desperation of working people in Germany.
05:36 And some political analysis tend to brand these actions as maybe the new yellow vest movement in Germany.
05:45 And it's not only about diesel, the pricing of diesel.
05:50 It's about overburdening farmers, shopkeepers, entrepreneurs with more and more regulations.
05:58 Not all of them, some of them come from Brussels, with more and more bureaucracy.
06:02 And this is culminating into the actions currently.
06:08 And I think the government has to take this very, very seriously.
06:11 Otherwise, it will get out of control.
06:13 Well, it looks like it's just getting started, as we were saying earlier.
06:16 But I wanted to get a perspective from another economist as well, who's based over in Frankfurt.
06:21 So we checked in with Sander Torda to hear what he thinks the root causes here are.
06:26 The German farmers are essentially paying the bill for what was the torpedoing of extra budgetary vehicles
06:34 by the German constitutional court.
06:36 And the German government, consisting of the three parties, had to find money somewhere.
06:40 One of the major sources for them to cut or increase revenues is to basically reduce fuel subsidies for farmers
06:48 and also to reduce tax benefits for ownership of vehicles.
06:51 For farmers, it's a real cost and a real price to pay.
06:54 They were the ones to sort of get put on the chopping board.
06:56 Sander Torda there.
06:58 I mean, do you think, Fabian, that policymakers understand that these farmers feel like they're on the chopping board?
07:05 I'm certain that policymakers understand.
07:08 And it's not the first time we've had farmers' protests as well.
07:12 Clearly, the changes which have been there have had a very significant effect.
07:19 But I think the big question has to be how do we achieve the green transition also in the agricultural sector.
07:27 And when we're looking at a situation where we still have very high subsidies which are harmful to the environment,
07:36 which clearly are creating disincentives for the green transition, then it's something which has to be addressed.
07:42 But it has to be addressed in a more planned way, in a way where we also have a package which makes it clear what other supports are available.
07:54 What we have in this case in Germany has been a very short-term action driven by the legal decision,
08:02 which has led to a situation which has just culminated into these protests.
08:08 But I think we shouldn't forget the underlying problem,
08:11 which is that we are not making enough progress in climate action also in the agricultural sector.
08:17 But I would like to add, if I may.
08:19 Sure, go ahead.
08:20 You are right, there is one point to have the green transition in mind, but it needs to be balanced.
08:25 And that's a fact.
08:27 We have more and more small and medium-sized agricultural farming being run bankrupt because of the current policy.
08:38 And it's a costly policy, especially from the Greens and from the coalition, from the traffic-like government in Berlin.
08:44 And it needs to be balanced.
08:46 If it's imbalanced, I can fully understand the resentment of the farmers and other people currently demonstrating.
08:54 But that's the point. So how can we have this balance?
08:56 Well, let's find that balance. I want somebody to tell me the solution here.
09:00 No problem. I have a point.
09:01 We need to have the capacity to invest in the green transition, supporting what should be supported.
09:07 And that's why I'm coming to my point.
09:09 There is a big straitjacket when there is a debt break. On the top of this, there is the impossibility to turn the fund we have created to address the pandemic, to turn it into supporting the green transition.
09:22 And on the top of this, we have a discussion on how should we Europeans build up this investment capacity to support green transition everywhere.
09:34 Because we have now the problem with the farmers. We can have similar problems in other sectors.
09:39 So this is the big issue.
09:41 What is our capacity as the European Union to support the green transition?
09:47 Because this is needed, but we don't have the necessary financial means yet.
09:52 And meanwhile, we have that anger, that resentment that Lars referred to there.
09:56 And we're seeing a massive clash as well, an urban-rural clash all across Europe.
10:00 And just to bring in the argument made by the head of the German Farmers Association, he feels that agricultural policy is being made from, quote, an unworldly urban bubble and against farming families and rural areas.
10:13 Would you agree with his statement there?
10:17 That is quite populistic, I would say.
10:20 But in a sense, he's right. The policies coming out of Berlin are, to my view, they are too ideologically driven.
10:35 And I mentioned before, the policies have an impact on farming. And if the livelihood of farmers is threatened, then I fully understand their opposition and resentment to the policy.
10:50 Is that the big issue here, Fabian, that the farmers feel underrepresented in the coalition ever since Angela Merkel stepped aside in 2021?
10:58 I'm not sure that farmers have felt very well represented for quite a long time.
11:05 We also have to take into account that farming is a rather small part of most economies by now.
11:12 And as an economic sector, it has become much, much less significant in countries like Germany.
11:19 That's a message I'm sure a lot of farmers do not want to hear, but Fabian, sometimes…
11:25 I mean, this is simply a fact. I mean, this is something you can show very clearly.
11:30 But of course, in political terms, farming is still much more significant.
11:35 But what's the alternative then for families who spend their lives farming?
11:38 I think it's very important to say to farmers, even they are a small part of the population, they can play a very important role.
11:46 Because, in fact, we need to reinvent the role of farmers, because they are in charge of the so-called agricultural sector,
11:54 but they are in charge of the relationship between our societies and nature. And this is extremely important role.
12:02 So we need a radical rethink, perhaps, of the cap, the common agricultural cap, the whole way that farming has been done for decades on this continent.
12:10 Let's have a look at a bigger picture from a maybe geo-strategical perspective. No farmers, no farming, no food.
12:17 Now, in the wake of the war of aggression of Russia against Ukraine, I think it's very important that we have sustainable farmers in Europe
12:28 and that our food supply chain is secured.
12:33 Otherwise, we're in big trouble if we depend on imports of other countries too much from outside the European Union.
12:40 Well, let's just bring in our Berlin correspondent Liv Shry to get an update from the actual mood really this week over in the capital, over in Berlin.
12:49 We're here in the heart of Berlin, where tractors have been blocking roads leading up to the Brandenburg Gate, as you can see behind me.
12:57 Some politicians and even some farmers themselves are concerned that the far right may capitalize on these processes after Vice Chancellor Robert Habeck was trapped on a ferry last week by farmers protesting.
13:09 Politicians have condemned the blockade after police used pepper spray on some of the protesters.
13:15 Several ministers expressed concern that such actions could escalate and pointed to politicians who have been murdered by the far right in the past.
13:24 Farmers planned a huge action for Monday with thousands of tractors expected to flood the capital.
13:30 But it's not only the streets that have been blocked by the tractors, but the German train union is also striking for 48 hours this week.
13:38 Despite the freezing temperatures in Berlin, it is clear that the political climate here is very heated.
13:45 Liv Shry there on the political climate and another action she's reporting planned for this Monday.
13:51 And I feel it's only a matter of time before these farmers start descending upon Brussels.
13:55 I mean, we've seen it in the past and they're gathering momentum.
13:59 I mean, I think they'll have their message then heard.
14:02 Yeah. So the risk for these movements to be instrumentalized by the far right is there.
14:07 So we can see this clearly in Germany. But frankly, I think the solution is not to block the green transition.
14:14 The solution is to make the green transition something appealing for the farmers by providing them the necessary support.
14:21 This is the way to go. And that's why I think in the end, we need to have a good plan to implement the Green Deal in the agricultural sector, but support it with the necessary means.
14:34 So how should then how should the commission president handle this situation before it spirals out of control?
14:41 Well, I think we've already mentioned the common agricultural policy.
14:45 We are now very close to the discussion around how we design the long term budget of the European Union.
14:53 Agriculture still takes up a very large part of that budget.
14:58 And there will have to be changes in any case when we're looking at the prospect of enlargement with Ukraine having a very large agricultural sector and a very efficient agricultural sector.
15:10 Then we will have to make changes to the common agricultural policy.
15:14 I fear that we're not going to have that discussion because in the end, when it comes to budgets, both the domestic and the national and the European level,
15:26 then we tend to see that finance ministers predominate rather than looking at the policies.
15:32 But really what we should be talking about now is how we achieve these long term transitions.
15:38 And that means, in my view, complete reform of the common agricultural policy.
15:43 That will be opening a Pandora's box, won't it? That will be a fascinating discussion.
15:47 What we're also contemplating here is the impact of a very fragmented Germany and politically stable Germany, the impact that as well could have on the European Union itself, Laris.
15:57 But just to go back to the farmers, I mean, will you see them move perhaps in these European elections towards the far right joining them, perhaps, as opposed to the traditional conservatives that they used to feel very close to?
16:09 I don't think so. And let me make a comment on what we just saw.
16:12 I think I'd fully condemn any use of force in during protests.
16:18 This is a no go. But like branding the protests that they are being undermined by extremists from the right.
16:27 I think this is not the right thing to do. There are some incidents. Yes, that's right.
16:32 And what happened in North Germany when the deputy chancellor wanted to embark the ferry wasn't fully right.
16:42 But I think there's a legitimate cause of the farmers to to to protest and everything else is exaggerated in regards to everything else.
16:51 Right. Support, etc.
16:53 Well, German politics are getting very interesting. We also saw a new German political party being launched this week with Sarah Wagenknecht and the SAG Sarah Wagenknecht Alliance.
17:03 She's the new face on the block who wants to overcome, quote, incompetence, she says, and arrogance of the Berlin coalition government.
17:09 She feels voters are feeling left behind. Who exactly is she and what does she represent?
17:17 Well, I would say that she's very much in line with the populists we have seen before, only that she is on the left in the populist spectrum rather than on the right.
17:30 But what she's trying to appeal to is really the discontent which is there.
17:34 And that's where I would also make the link to the farmers protests.
17:39 I think, yes, there are very specific issues which have to do with farming and with the recent actions which have been there.
17:48 But what we're also seeing is a more general discontent which is often used by the populist to argue that this is all the fault of the establishment.
18:06 I think these very simplistic solutions are not real solutions.
18:11 They are not going to address the challenges which we are facing, but they are having traction electorally.
18:18 And we're seeing that in Germany, but we're also seeing it in other countries.
18:22 What's your take on that, Maria? I mean, is Brussels sometimes a little bit guilty of not listening to people?
18:27 I must say that I'm a bit worried with her position regarding the way to deal with the invasion of Ukraine by Russia.
18:35 Because this is not helping us to have a united position on the way to support Ukraine and to deal with this pressure coming from Russia,
18:46 which is in the end the pressure on the entire European Union.
18:49 Look, I'm coming myself from the other part of the continent, Portugal, but I completely understand that we need to have a united position supporting Ukraine.
18:58 So when I see these kind of opinions emerging in Germany, I'm worried, I must say.
19:04 And just on another point, are you worried about Germany standing in the European Union with all this going on now in Germany?
19:10 Well, I think we've been through other crises. I think we'll find solutions.
19:16 But I'm coming back to Sarah Wagenknecht. I think she's a senior. She's an eloquent politician.
19:21 And there's a lot of hope, obviously, in the coalition government that she will take a share of or grab some share of AFD's voters.
19:29 But she has to prove, first of all, she has to prove that the party will stand for the European elections.
19:35 We will keep an eye on her. Thank you so much for that. But I'm afraid we have to take a very short break.
19:40 But stay with us, because after the break, we'll be bringing you up to speed on how EU governments may have to tighten their purse strings
19:46 as lenient rules put in place after Covid will cease to exist. See you soon.
19:51 Welcome back to Brussels, my love, with me Maeve McMahon, where we're talking through just some of the stories in the news these days.
20:07 And one that didn't get much airtime but could potentially have an impact on us is the EU fiscal rules reform that was agreed upon before Christmas after months of negotiations.
20:17 The rules will govern the wallets of EU member states, make sure no government gets so indebted that they might have to default.
20:24 The so-called golden rules aspire, of course, to safeguard the EU's ceilings of 3% of GDP for government deficit and 60% of GDP for public debt.
20:33 So, Fabian, I'm going to look at you because you've been around town, of course, during the Greek debt crisis.
20:39 And we remember you've been following the these rules for many, many years.
20:43 Can you tell us what has been agreed on? What will it mean for us? What impact will it have on the real economy?
20:48 Well, there is a certain complexity to it, also because when it comes to fiscal rules, the governments do like a bit of complexity because it makes it easier to also hide things within that.
21:05 But the reality is this is a debate we've had for a very long time, and it's really about two major issues.
21:12 One issue is how do we deal with a situation where national fiscal pressures have led to a situation where debt levels have been rising pretty much in every country,
21:26 and where in a number of countries debt levels have reached points which are very worrying and which have also prompted market reactions.
21:35 And clearly, the eurozone crisis is in everyone's mind that we'll have to find ways of not getting there again.
21:45 But the other issue, which is also there, is that we have very different fiscal means in different countries and that we have to have a way of encouraging countries to also spend on the areas where we have common European goals.
22:05 There was a massive spending spree, of course, there after Covid to help governments support their people, support their companies.
22:13 Lars, what is your take on this reform and that of your political party here?
22:17 Well, we have to, of course, reduce borrowing. Nevertheless, the debt reduction policy at home is spiking up discontent within the population.
22:30 So I think it's about making the right policy choices instead of randomly maybe slashing budgets.
22:36 Okay, and yourself, Maria, what's your take?
22:38 Look, I think what is at stake here is to strike the balance between preventing a new debt crisis coming on one hand, but on the other hand, to create room for investment and growth.
22:49 And basically, I think this reform is halfway because it is possible to have, let's say, more fiscal space to invest.
23:01 We have a new approach based on medium term plans with a more flexible approach on how to reduce debt.
23:09 So these are positive items of this reform. But on the other hand, we missed the most important thing from my viewpoint, which is we need a European investment capacity long term.
23:25 Because we know because of the green transition that we need to have a long term, large scale investment capacity.
23:33 And so far, we don't have the answer for this, as we just saw about the German situation, by the way.
23:39 Well, I know, as you say, they're each country as well. I think they'll have four years to prepare their plans hand in hand with the Commission.
23:45 And I saw the Greens are not happy at all with this reform. I mean, it also has to get the nod of approval from the European Parliament.
23:52 Philippe Lambert, the head of the Greens this week, said that he was sleepwalking, quote, into a major policy blunder with these reforms.
23:59 And you talked about the halfway house. That's also the take of an economist, Shander Tordaert, that we spoke to.
24:05 Let's bring in again his take. I think that fundamental paradigm change has withstood the negotiation with the member states.
24:13 But I think the reform has also a few original sins, one of which is that there are a number of so-called safeguards that overrides this more smart system.
24:22 So in a sense, the ghost of the old system has been reintroduced to a degree to play catch Germany and some of the more frugal, austerity oriented countries.
24:31 And so you have a halfway house, a system that is different and that is more intelligent, but that also has real sort of problems.
24:38 So what should our viewers be taking away then from all this?
24:41 I think the most important thing to take away from this is, yes, we have an agreement, but the issues which are underlying this discussion and which are more fundamental have not been addressed.
24:58 And that is how do we invest in the transitions which we are going through while at the same time maintaining a fiscal system which is sustainable over time?
25:11 And how do we divide that between the national and the European level?
25:16 And my view is European level borrowing is coming permanently because the pressures which are there at the national level will lead to that situation.
25:27 So we should really have a discussion now how we best design that and how we make sure that it is spent on the right policies rather than doing it last minute when it becomes necessary and then having a policy which isn't thought through.
25:42 Would that be a priority for you as well in your group?
25:44 Oh yes, I think we have currently, we have a dysfunctional European and even German economic and fiscal policy.
25:52 And at a time when our citizens are really struggling with the burdens on their shoulders.
25:57 So for a policy maker, for a politician, it is very important to address these issues.
26:02 Yes, I think we need to learn a lesson from the past.
26:05 It is that if we want to have responsible national fiscal policy, we need to have a complement at European level to make sure that we as Europeans, we have the necessary means to invest in the future.
26:20 And so that's why I think this reform is halfway because nothing is said on how can we ensure a long-term investment capacity.
26:29 We have created one in face of the tragedy of the pandemics, exceptional instrument which is enabling Europeans to invest, to support people by issuing common debt.
26:44 From my point, we should extend this instrument for the future to support notably the green transition.
26:51 But there is still no agreement about this.
26:53 And I believe this will be necessary.
26:55 Otherwise, national budgets alone will not be able to fund everything we need to fund.
27:03 That's the issue.
27:04 That is the reality, the hard cold reality.
27:07 And I'm afraid that is all we have time for. But we'll come back to that topic very soon.
27:12 And that, of course, of the overall European economy and the outlook for 2024.
27:15 But for now, thank you so much to our guests for being with us.
27:18 And thank you so much for watching.
27:20 Stay with us here on Euronews.
27:22 And for any more news in depth, check out our website, Euronews.com.
27:34 Welcome back to Brussels, my love.
27:37 I'm Maeve McMahon and I'm taking a look at the major news of the week.
27:41 And one story that caused a big stir here in Brussels was the decision of the EU Council President, Jean-Michel, to run for the European Parliament's elections.
27:50 Which would mean if he got elected as an MEP, he would have to take his seat in July and leave his throne in the EU Council that he was meant to keep warm, of course, until November.
27:59 Now, I'm not sure if there's any rules in the EU treaty for this, but the word on the street is that the Hungarian head of state, Viktor Orban, would have to take over
28:08 because Hungary, of course, will be taking over the EU rotating council as of July 1st.
28:13 I mean, this was a massive story in the Brussels bubble here this week.
28:17 It caused a massive stir. Is it a big deal, though, beyond?
28:21 Maybe it's a Brussels bubble story exclusively.
28:25 Nevertheless, it seems to me that Jean-Michel lacks a sense of responsibility.
28:32 To me, he seems to be like a captain leaving the bridge in a very rough and heavy sea.
28:40 And that is bad. It's dangerous, really. Of course, it's legitimate to pursue a second career.
28:45 But he's head of the European Council and he should have more feeling of responsibility.
28:52 If there's only one who thinks that the captain has left the ship, that's also what Sophie Inbal, the Dutch MEP, put on Twitter the other day.
28:58 She said, if that is how committed you are to the fate of the European Union, then how credible are you as a candidate?
29:04 Aren't politicians always thinking about their future?
29:06 And is this not just a taste of what's to come in the next few months as all these big top jobs are up for grabs?
29:12 I mean, certainly we're going to see positioning.
29:15 We'll see people moving, also thinking about how sustainable the jobs in which they are are going to be for the future.
29:24 I think his decision was very unfortunate because it does give a signal about where he sees his priorities lying.
29:35 But I don't think it's going to be as dramatic as sometimes the discussion has been in the bubble.
29:40 There will be a solution found. It just means that we have to accelerate some of the discussion by a few months.
29:47 But ultimately, it's not going to make a big difference to the final outcome.
29:52 There is a difficulty, of course, in deciding where all the top jobs go, what role the parliament is going to play, the Spitzenkandidaten system.
30:01 There is a big question about whether von der Leyen will continue and what that means also in relation to other jobs.
30:09 The NATO secretary general. So there is a big discussion to come and it is important.
30:15 But I think what we should also focus on, which I think is much more important than the personalities,
30:20 is the big problem we've had across the rue de la Loire between the Commission and the Council.
30:26 Indeed. I'm not sure if our viewers are aware of the tension that exists really between the EU Council President and the EU Commission President.
30:33 So far, Kate. But look, let's recall, first of all, that the President of the European Council plays a very important role because the European Council is about setting the agenda.
30:44 When it comes to the possibility for Charles Michel to be replaced by the Hungarian Prime Minister, frankly, I think this will not happen.
30:55 I'm not worried with this. The internal regulation of the European Council foresees that this replacement could take place.
31:02 Nevertheless, Charles Michel will be elected in June when the negotiation for the top posts will happen.
31:11 And so the big issue is another one. The other one is the decision about the top posts and what we can foresee for the time being, according to the European polls.
31:22 If EPP wins the first position, then Mrs. von der Leyen has a chance to consider.
31:30 But it's likely that the social democratic family will be the second, which means that this family might have a chance to propose someone for the post of President of the European Council.
31:44 This is the kind of issues which are relevant for us to discuss.
31:47 And we will keep our viewers posted on them as this fascinating year goes on. But for now, I'm afraid we've run out of time already.
31:54 But thank you so much to our guests for being with us as always. And if you want to reach out to us, you can drop us a line.
32:01 Our email address is Brusselsmylove@euronews.com. And tune in next weekend for a special edition, bringing you all the news from the World Economic Forum over in Davos.
32:11 But for now, thank you so much for watching. See you soon on Euronews.
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