Brussels & Berlin | December 2020

As The New York Times puts it, “Donald Trump’s presidency was marked by exceptional contempt for European allies and the NATO alliance.” After a bumpy four years in transatlantic relations, the EU certainly has many tough problems ahead, from fine tuning its goals of strategic autonomy to the possibility of building a robust European military. For now, however, the EU has breathed a sigh of relief at the election of Joe Biden as the next president of the United States.

The EU Welcomes a Biden Presidency

President Trump drew consistent criticism from allies and opponents alike when he described Europe as a “foe,” considered withdrawing the U.S. from NATO, and threatened to impose steep tariffs on goods like German automobile imports—to name just a few of the policy plays that would have been unthinkable under other presidents. Biden is certain to reverse many of the more bombastic policy approaches to the EU, but this does not mean all the damage can be immediately undone. The fragility of the U.S. political system has made Europe realize that it can no longer depend solely on the U.S. as a close ally—militarily, diplomatically, or even economically. This puts European Commission President Ursula von der Leyen in a difficult position as she moves into the remaining four years of her mandate. With the UK set to leave the EU, Germany and France will need to work as closely as possible to fortify themselves for future potential uncertainty with the U.S. and to insulate themselves from an increasingly encroaching China. In a piece for War on the Rocks, Stephen Szabo and Jason Bruder urge President-elect Biden to “Think Bigger and Broader with Berlin,” namely when it comes to developing mutual strategies on security, trade, China, public health, and climate change.

In early December, the European Commission released “A new transatlantic agenda for global change,” which outlines areas for mutual cooperation, such as reigning in the pandemic, combating climate change, and working to develop mutual standards on technology and trade. Brussels described the last few years as having been marked by “bilateral tensions and unilateral tendencies” and heralded the election of Biden and Harris as a “once-in-a-generation opportunity to design a new transatlantic agenda for global cooperation.”

For a quick overview of what makes the EU and U.S. the world’s best friends anyway, check out our short animation on the history of the transatlantic relationship.

Budget Breakdown

Hungary and Poland have blocked the EU’s $2.1 trillion budget over the EU’s rule of law mechanism, which permits denial of funds as a sanction mechanism in cases of misuse of EU funds. Opponents of the rule of law mechanism decry a forced conformity within the EU over liberal values. Hungarian Prime Minister Orban even likened the potential rule of law enforcement to Soviet times, when Hungary was controlled by lawmakers in another capital. In the eyes of Brussels, the matter is rather uncomplicated: abide by principles of liberal democracy, or agree not to receive EU funding, including coronavirus bailout funds.

Speaking of Hungary, one of the chief architects of the country’s anti-LGBTQ legislation, Jozsef Szajer, was caught in late November in a police raid of a large orgy in Brussels that violated COVID restrictions. Szajer was serving as a Member of Parliament in Brussels representing Orban’s Fidesz party and had been a close ally of Orban. Szajer, one of Hungary’s staunchest proponents of traditional family values, has since resigned.

Brexit Talks

Negotiations on Brexit continue, in hopes of preventing a no deal Brexit scenario from going into effect at the end of the month, when the UK’s informal membership ends. Negotiators on both sides are working to bridge remaining gaps in negotiations and are set to continue talks to avert an end-of-year crisis. A recent simulation of a no deal scenario resulted in a five-mile backup at the French-British border—a worrying sign for a no deal scenario, especially since the UK and EU trade roughly $1 trillion worth of goods and services each year.

For his part, British Prime Minister Boris Johnson was quick to congratulate Joe Biden on his election as U.S. president, a signal that the British government is keen on working closely with the incoming administration, despite having cozied up to Trump. Furthermore, Johnson has released plans for a “green industrial revolution” that in many ways mirrors the Green New Deals being pursued by the EU and U.S., offering another potential area for collaboration. A major win for Boris Johnson would be to secure a comprehensive trade deal with the U.S., but Biden has indicated a UK trade deal is not among his top priorities.

Digital Divide

A growing area of uncertainty between the EU and United States regards digital taxation. Since 2019, a group of 137 countries has been negotiating digital taxation at the OECD, but progress has been slow and often turbulent. Last month, France decided to take matters into its own hands and plans to proceed with a digital tax. The Trump Administration responded by saying it would impose tariffs on various French goods, including makeup and handbags, beginning in early January. France responded that, should the U.S. proceed with these tariffs, France would seek retaliatory trade measures at the European Commission. Despite this quick escalation of trade tensions, Canada, Italy, and the UK have each laid out their own plans for digital taxation. While the Trump Administration has butted heads with large tech firms over the perceived and largely debunked theory that tech platforms censor conservatives, the administration has nonetheless defended American corporate giants facing prospects of an onslaught of international taxation schemes. Amid budget shortfalls at home and ongoing multilateral discussions about how to handle digital taxation abroad, the Biden team will have to decide how flexible, if at all, it wants to be on digital taxation.

Otherwise, a comprehensive retooling of the EU’s e-Commerce Directive, which went into effect in 2000, is set to be released in mid-December. The new Digital Services Act sets out to modernize existing rules and to create new ones. Key points of interest for big tech will be platform liability and antitrust issues. When the GDPR was implemented in 2018, it quickly set precedence worldwide for the first comprehensive privacy regime. It remains to be seen whether the contents of the Digital Services Act will have the same global ripple effects.

For more on transatlantic digital affairs, watch episode one of our transition project, in which Marietje Schaake, a former Member of the European Parliament and current international policy director at Stanford University’s Cyber Policy Center, offers her thoughts on transatlantic digital economy policy.

Struggles Ahead

Not unlike what awaits President-elect Biden when he assumes office in January, European Commission President Ursula von der Leyen has a potentially bumpy road ahead. In addition to managing distribution of the COVID vaccine, she also must work to maintain bloc unity, combat climate change, and restore faith in international institutions, namely the WTO.

In early December, the European Commission released its Democracy Action Plan to fortify democracy throughout the European Union against increasing threats of misinformation, online radicalization, and election interference. Among the chief tenants of the plan are: 1) promoting free and fair elections, 2) strengthening media freedom and pluralism, and 3) countering disinformation.

As the United States rebuilds its international strategy and diplomatic integrity following four years of the Trump Administration, they will likely face a European Union also undergoing a revitalization and transformation. Both seek to unify their citizens, combat climate change, and forge a cohesive digital path forward that enhances economies, while protecting citizens. As China’s influence continues to expand, the EU and U.S. must work together.

This is our quarterly publication on the European Parliament and German Bundestag. Our records indicate you may be interested in receiving updates about European politics and policy. If you've enjoyed it, please consider forwarding to a friend or colleague.

Print