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European Union Geopolitical Watch – From July 9 to July 15, 2022

European Union Geopolitical Watch Team: Amandine Paillette, Yanis Kourrad, Léo Caget, Antoine Bézier, Etienne Mathieu

07/11/2022: Record investments at ” Choose France ” summit in Versailles -Léo Caget-

The 5th edition of the “Choose France” summits took place in Versailles on Monday, July 11th. These events aim to attract large international companies in order to highlight the attractiveness of France and attract foreign investment to the country.

Monday’s summit was the one with the highest total amount of investment in recent years, with a sum announced at 6.7 billion euros, for more than 4,000 jobs created, according to the Elysée. A total of 14 projects should be implemented in the coming years. Among them, a record investment of 5.7 billion euros is being advanced by the American company GlobalFoundries, and the Franco-Italian company STMicroelectronics, with the aim of building a semiconductor factory near Grenoble. This project is part of the European “Chips Act” plan, which should enable the EU to become once again one of the world leaders in semiconductor production while strengthening its independence from foreign imports of these components.

Among the projects announced were those of companies in the new technologies sector (Amadeus, Qualcomm, Ericsson), but also in aeronautics (Collins Aerospace, AkzoNobel), logistics (Fedex), employment (Randstad), health (GSK), and consulting (Accenture). Many leaders of large companies were also present (JP Morgan, Coca-Cola, Siemens, …), as well as representatives of sovereign wealth funds from the Gulf States, Canada, or South Korea.

07/12/2022 : Croatia signs its entry into the euro zone as of January 1, 2023. -Amandine Paillette-

On July 12, the Council of the European Union adopted the last legal acts validating the entry of Croatia in the euro zone for January 2023. A signing ceremony was organized in Brussels, in front of the international press. Christine Lagarde, President of the European Central Bank, Valdis Dombrovskis, Vice-President of the Commission and Paolo Gentiloni, Commissioner for the Economy were present for the occasion. Boris Vujčić, Governor of the Croatian National Bank said at a press conference held in Zagreb at the same time “This is a historic day for Croatia. Five years of hard work have paid off“.

At the beginning of May, the European Central Bank and the Commission agreed that Croatia met the necessary conditions to adopt the single currency, unlike its counterpart, Bulgaria. Croatia is the 21st state to change its money to the euro. Until then, the country’s national currency was the kuna, the exchange will be made at the rate of 7.5345 kuna for 1 euro. This change comes after the Croatian currency weakened considerably, reaching parity with the dollar.

07/12/2022 : Council of the European Union releases an additional fund  of one billion euros in financial assistance for Ukraine. -Yanis Kourrad-

Following lengthy negotiations, the Council of the European Union approved on Tuesday July 12 the payment of an additional €1 billion in aid to Ukraine, due to the war in which it has been mired since February. This financial assistance is in addition to the first one provided at the beginning of the year, amounting to 1.2 billion euros, bringing the amount of macro-financial support granted by the EU to 2.2 billion euros.

 This form of financial assistance, which is in the form of a long-term loan in order to avoid a negative impact on the Ukrainian budget, will allow Ukraine to meet the necessary financing and reconstruction needs before the assistance is fully repaid. The Czech Finance Minister, Zbyněk Stanjura, welcomed this support, stressing that “the continuation of material and financial assistance is not an option, but our duty”. The European Union recalls, however, that the payment of this sum is subject to the requirement of transparency regarding the use of these funds.

This new aid is part of the continuity of the EU’s financial support mechanisms for Ukraine over the period 2014-2021, during which Brussels paid out almost 5 billion euros in the form of loans.

07/13/2022 : EU and UK order 75 million doses of future Sanofi-GSK vaccine. -Yanis Kourrad-

As the seventh wave of Covid-19 hits Europe, French pharmaceutical company Sanofi and British firm GSK may soon be able to deliver several million doses of the vaccine to Europeans. Last April, the two laboratories joined forces to develop a new vaccine to combat the new form of coronavirus. Last month, the French flagship Sanofi reported promising results for its booster dose against the Beta and Omicron variants. Today, both the European Union and the United Kingdom announced an order for 75 million vaccines. A spokesperson for Sanofi said that “if it turns out that Sanofi-GSK is the most effective vaccine against the new variants, the EU may order more doses”. If the results of the clinical trials scheduled for the beginning of September prove conclusive, and if they are validated by the European Medicines Agency (EMA), Sanofi and GSK could see their marketing campaign begin next autumn.

07/14/2022: The resignation of Italian Prime Minister Mario Draghi is rejected by President Sergio Mattarella. -Antoine Bézier-

On Thursday 14th July, Italian Prime Minister Mario Draghi announced his resignation, but it was rejected by Italian President Sergio Mattarella. The former European Central Bank president’s decision followed a boycott of a confidence vote in the Senate by the Five Star Movement (M5S), a member of the ruling coalition. The vote of confidence concerned a decree-law which dealt with aid to families and businesses in the context of high inflation, totalling almost 23 billion euros. The text also gave extraordinary powers to the Mayor of Rome Roberto Gualtieri to build a waste incinerator in the city, which is plagued by rubbish problems. This transfer of powers was unacceptable to the M5S, which also opposes a project it considers costly and polluting.

Mario Draghi, who had never before sought elected office, came to power at the beginning of 2021 to form a national unity coalition, which was apolitical and intended to enable the country to deal with the pandemic emergency and the ensuing economic crisis, while a “Greek scenario” was foreseen for the Italian economy. This coalition brings together all the political forces represented in the Italian Parliament, with the exception of the far-right party Fratelli d’Italia. Even though the President of the Italian Council has a majority to govern without the Five Star Movement, he believes that he has not been mandated to lead a government that would become “political” without the support of the M5S, and has therefore tendered his resignation.

Beyond the political disagreement, some analysts attribute electoral ulterior motives to the M5S, which would seek to recover visibility after having lost nearly 20% of voting intentions since its victory in the last legislative elections in 2018. The party, weakened by personal rivalries and internal disagreements, notably over the Russian-Ukrainian war and the issue of arms deliveries, is divided between the supporters of Giuseppe Conte, former head of government and guardian of the original party line embodied by its founder Beppe Grillo and those of Luigi Di Maio, Italy’s Minister of Foreign Affairs and International Cooperation, who has fully embraced Mario Draghi and split with about 50 MPs to create his own Together for the Future (IPF) party.

Instead of accepting the resignation of the head of government, Italian President Sergio Mattarella invited the former ECB boss to appear before Parliament for a vote of confidence on 20th July. While the left-wing forces have assured that they will vote confidence in him, Matteo Salvini’s League may prefer early elections and the position of the Fiv Star Movement remains unpredictable.

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Eastern Europe Geopolitical Watch – From July 9 to July 15, 2022