Young, innovative firms often struggle to grow in Europe, and access to finance is a key issue. Now the EU is setting up a €5bn public-private fund: The Scaleup Europe Fund.
In my new policy brief, I discuss whether this is a good idea and how the fund should be designed.
Main takeaways 👇
Kommunalwahlen, Endergebnisse: Frankreich ist mehrheitlich mitte-rechts in der Fläche, links in den Großstädten, und es gab Trostpreise für die Ränder und Renaissance.
Die wichtigsten Ergebnisse und ihre Folgen: 🧵
www.lemonde.fr/les-decodeur...
Of course, yet if you look at the market shifts these specific words have caused so far...
Not saying this is not dangerous, but rather to stay calm for the moment and react firmly to concrete plans or measures rather than to every snippet/TruthSocial
🚨🚨 Unusual with such moral integrity for a European political leader: Spanish PM Pedro Sanches insists that #Spain won't temper criticism of #Trump's attacks on #Iran over fear of reprisals and commercial pressure. 👇
www.politico.eu/article/pedr...
End/
For now the threats are half-baked. But the EU should still take note. The right response is simple: close ranks early to prevent pressure points and hit back hard if coercion materialises
8/ So while Trump’s rhetoric sounds dramatic, replicating a Lithuania-style pressure campaign against a single EU member would be difficult for Washington.
Tariffs/blockades targeting a single EU country would also be hard to enforce and could lead to mysterious trade flow changes
7/ Important caveat for today: the US does not have the same toolkit China used.
Beijing spent years building a sophisticated and restrictive economic coercion apparatus, using informal pressure via customs authorities, regulators, and supply chains: tools that are harder to deploy for Washington
6/ The pressure Vilnius felt most strongly came from inside the single market, when European firms exposed to China became the main transmission belt for Beijing’s coercion.
Surely, there is a lesson there.
5/ In the end, the impact was real but limited.
Lithuania’s CHN exports collapsed and companies faced disruption but Vilnius did not reverse its policy and eventually bilateral relations stabilised.
But the episode highlights both how creative economic coercion can be and why EU solidarity matters
4/ More creatively, Beijing targeted wider supply chains, warning EU companies that using Lithuanian components could jeopardise their CHN market access. Entire shipments could be blocked if it contained just one Lithuanian component.
A particularly receptive conduit: German car industry 'sigh'
3/ China used a mix of direct and indirect pressure:
• Lithuanian exports blocked or delayed
• Lithuania temporarily removed from Chinese customs systems
• Food export approvals halted
• Freight routes disrupted
At its peak, trade flows essentially collapsed.
2/ But that doesn’t mean economic punishment of a single EU country is impossible.
An insightful precedent: China’s pressure campaign against Lithuania in 2021 after Vilnius allowed a Taiwanese Representative Office.
And Beijing got surprisingly far.
1/ An interesting question, however, is whether individual EU member states can, in fact, be hit by bilateral trade sanctions.
The EU runs a common commercial policy, so trade measures generally apply to the entire bloc, not individual states.
So “cutting trade with Spain” isn’t simple.
🧵
Trump wanting to cut all trade ties with Spain over use of US military bases is getting attention and some say Merz should've piped up more strongly.
For now, it's mostly rhetorical pressure ('waffle'), so the damage is limited. If it becomes any more concrete, the EU must decisively rebuke.
After months of wrangling and an epic list of delays, the Commission has finally released its Industrial Accelerator Act.
This could turn into one of the EU’s most consequential industrial policy files in years - and the proposal is honestly not a bad place to start.
Some quick thoughts:
This is the way.
And I hope more EU leaders follow suit. It would be particuarly good for Merz to have a call with Sanchez today and affirm full German solidarity with Spain.
Mandatory condition:
- employment must be at least 50% Union workers
3/5 of:
- max 49% foreign ownership
- joint venture with EU entity
- tech transfer via licencing, IP rights
- 1% gross annual global revenue for R&D spent in EU
- at least 30% input products made in EU
IAA (finally) out
FDI conditions are lex China pure, covering investments >100m from countries with >40% global production share in
i) batteries
ii) EVs
iii) solar
iv) critical raw materials
Excluded French reactions as that really is no surprise hahah
Poland could be interesting to see how strong they go against tbf though!!
Decision @ec.europa.eu to go ahead with provisional application #EU #Mercosur is the right one. Many in @europarl.europa.eu agree.
We are in an exceptional situation where EP can only vote after ECJ. At the same time, international trade rules are constantly being violated by others. 1/2
So the Telegraph is taking this well
Is that true? The way I understand it, the Council already empowered COM to provisionally apply in January, so no second vote needed?
EU provisionally applies Mercosur, as set out in the Council decision last month: ec.europa.eu/commission/p...
EP reactions will be interesting.
What's Plan B? Options the Trump Administration Could Pursue if the Supreme Court Strikes Down Tariffs If the Supreme Court rules President Trump cannot levy tariffs under the International Emergency Economic Powers Act (IEEPA), his administration may look to alternatives to levy new tariffs and/or continue collecting revenue from imports that could include: Law/Framework Details Limitations Sec. 232 tariffs Limited to imports deemed a threat to national security. Requires investigations, which may take months. Sec. 301 tariffs Allows for tariffs against countries USTR determines are engaged in unfair trade practices. Each tariff is limited to a particular country. Requires investigations and consultations with foreign governments, which may take months. Sec. 122 tariffs Allows for tariffs to address "balance-of-payment" deficits, which can include trade deficits. Can only last for up to 150 days, and are limited to a 15% ad valorem rate. Sec. 338 tariffs Allows for tariffs when the president finds a foreign country is disadvantaging or discriminating against U.S. commerce. Generally limited to 50% of the value of the goods. There is a 30-day delay after a presidential proclamation before tariffs are triggered. Sec. 201 tariffs Allows for tariffs to address harm to U.S. domestic industries. May only last for up to 8 years (initial 4 years plus optional 4-year renewal), and are limited to a 50% ad valorem rate. After 1 year, tariffs must phase down "at regular intervals." Requires investigation from ITC. Reclassify as "licensing fees" President Trump suggested that if SCOTUS strikes down lEEPA tariffs, he may reframe them as licensing fees. If the same or substantially similar to lEEP tariffs, any lEEPA licensing fees" may be subject to further legal challenges. Congress codifies tariffs Congress could codify some or all of President Trump's tariffs in statute. Unclear if there are majority votes in either chamber to codify tariffs. Bilateral trade agreements Presid…
Incredibly helpful table from @andrewlautz.bsky.social
To me unclear what possible litigation processes will look like in practice - could be an expensive bill
www.ft.com/content/d00d...
No rest for the wicked, muted market reactions to ruling
Don't get your hopes up too high for big tariff policy changes, Trump's lawyers will have prepared for this outcome but could mean increased uncertainty for businesses over the next weeks/months
The Industrial Accelerator Act, aimed to boost energy-intensive industries and clean tech, faces another delay. Meanwhile, energy-intensive industry continues to struggle.
I looked into the data. First, overall poor performance espc. for the chemical industry - although a small recent uptick (1/3)
No I don’t think so either. My comment was more related to the fact that the EPP is only scutinizing non-EPP/non-ECR countries.
Their targeting of Spain has different roots I think and is also not new, see e.g. the derailing of Riberas hearing for Commissioner by EPP MEPs
Trump being the reason though? idk about that
