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EUROPEAN UNION

Europe’s press mourns Brexit vote

Europe's press was awash with gloom and doom over Brexit on Saturday, warning that it was a boon for nationalists while urging EU leaders to meet the challenge of their "rendezvous with history".

Europe's press mourns Brexit vote
Photo: AFP

A cartoon in the Dutch paper AD Haagsche Courat styled after Edvard Munch's “The Scream” showed the German, Dutch and British leaders howling in horror, holding their hands to their faces.

“It's not an exaggeration to call it a disaster,” Spain's El Pais daily said in an editorial about Britons voting to leave the European Union in Thursday's referendum.

It urged EU nations to offer their citizens “ideas, plans, real leadership,” adding only then could the EU “be saved from the dangerous abyss it has reached”.

“A black day for Europe – OUTch!” was the banner headline of the German daily Bild, while Spain's El Mundo ran a cartoon showing the Beatles crossing Abbey Road towards an abyss.

“The Brexit shock will have profound geopolitical implications,” said an editorial in Italy's leading Corriere della Sera. “The European project will not be the same and the role of Europe in the world will inevitably be reshaped.”

Calling the UK referendum result a “blow to Europe”, Corriere said it marked the end of a period of optimism and cooperation in European history that began with the fall of the Berlin Wall.

“Europe is a common home that is on fire,” said Laurent Joffrin of France's left-leaning daily Liberation. “Its leaders have a rendezvous with history.”

He said Britons had voted with their pocketbooks and their disaffection was shared across the EU.

“The demographics of the vote leaves no doubt: the poorer and older you are in Great Britain, the more you reject the European project,” he said.

“Workers across the continent don't believe in it anymore. They are turning towards their national identities as the only credible rampart against the excesses of globalisation.”

Die Welt chastised German Chancellor Angela Merkel for her role in fanning anti-immigration sentiment, saying she “contributed to it significantly with the times she went it alone with her refugee policy.”

Populism could doom several EU leaders facing elections, said Italy's Il Fatto Quotidiano under the headline “Now everyone is scared”.

“The anti-establishment wave risks sweeping away” Prime Minister Mariano Rajoy in Spain's elections on Sunday, it said.

A “chain reaction” could follow that would doom Italy's Matteo Renzi in an October referendum as well as the French and German leaders, who face elections next year, the paper said.

But Austrian daily Die Presse warned against lambasting political elites in the aftermath of Brexit, which journalist Rainer Nowak said was seen as a “new victory of the underdogs over the decadent establishment”.

“Things cannot work without elites at a decision-making level,” he said. “(Rejecting) experts, universities, high culture, thinkers and debate… would be bad for everyone… not just Europe.”

Many editorialists saw the break with Britain as a watershed, with Jerome Fonglio of France's leading daily Le Monde saying it should prompt “deep thought about what (the EU) should be and the direction it should take”.

Italy's left-leaning La Repubblicca called on the youth of Europe to revitalise the European project.

“Europe belongs to you,” said a front-page headline. “Don't let the peddlers of fear win.”

Philippe Gelie of France's right-leaning daily Le Figaro slammed EU leaders for failing to plan for a possible Brexit.

“The crisis sparked by the British divorce requires sang-froid and intelligence,” he said, while warning that the bloc has become too unwieldy with 28 — and soon 27 — members.

In the end, wrote Herve Favre of France's La Voix du Nord: “Maybe one day we will thank our English friends for delivering the shock treatment that resuscitated the European patient.”

ENERGY

How European countries are spending billions on easing energy crisis

European governments are announcing emergency measures on a near-weekly basis to protect households and businesses from the energy crisis stemming from Russia's war in Ukraine.

How European countries are spending billions on easing energy crisis

Hundreds of billions of euros and counting have been shelled out since Russia invaded its pro-EU neighbour in late February.

Governments have gone all out: from capping gas and electricity prices to rescuing struggling energy companies and providing direct aid to households to fill up their cars.

The public spending has continued, even though European Union countries had accumulated mountains of new debt to save their economies during the Covid pandemic in 2020.

But some leaders have taken pride at their use of the public purse to battle this new crisis, which has sent inflation soaring, raised the cost of living and sparked fears of recession.

After announcing €14billion in new measures last week, Italian Prime Minister Mario Draghi boasted the latest spending put Italy, “among the countries that have spent the most in Europe”.

The Bruegel institute, a Brussels-based think tank that is tracking energy crisis spending by EU governments, ranks Italy as the second-biggest spender in Europe, after Germany.

READ ALSO How EU countries aim to cut energy bills and avoid blackouts this winter

Rome has allocated €59.2billion since September 2021 to shield households and businesses from the rising energy prices, accounting for 3.3 percent of its gross domestic product.

Germany tops the list with €100.2billion, or 2.8 percent of its GDP, as the country was hit hard by its reliance on Russian gas supplies, which have dwindled in suspected retaliation over Western sanctions against Moscow for the war.

On Wednesday, Germany announced the nationalisation of troubled gas giant Uniper.

France, which shielded consumers from gas and electricity price rises early, ranks third with €53.6billion euros allocated so far, representing 2.2 percent of its GDP.

Spending to continue rising
EU countries have now put up €314billion so far since September 2021, according to Bruegel.

“This number is set to increase as energy prices remain elevated,” Simone Tagliapietra, a senior fellow at Bruegel, told AFP.

The energy bills of a typical European family could reach €500 per month early next year, compared to €160 in 2021, according to US investment bank Goldman Sachs.

The measures to help consumers have ranged from a special tax on excess profits in Italy, to the energy price freeze in France, and subsidies public transport in Germany.

But the spending follows a pandemic response that increased public debt, which in the first quarter accounted for 189 percent of Greece’s GDP, 153 percent in Italy, 127 percent in Portugal, 118 percent in Spain and 114 percent in France.

“Initially designed as a temporary response to what was supposed to be a temporary problem, these measures have ballooned and become structural,” Tagliapietra said.

“This is clearly not sustainable from a public finance perspective. It is important that governments make an effort to focus this action on the most vulnerable households and businesses as much as possible.”

Budget reform
The higher spending comes as borrowing costs are rising. The European Central Bank hiked its rate for the first time in more than a decade in July to combat runaway inflation, which has been fuelled by soaring energy prices.

The yield on 10-year French sovereign bonds reached an eight-year high of 2.5 percent on Tuesday, while Germany now pays 1.8 percent interest after boasting a negative rate at the start of the year.

The rate charged to Italy has quadrupled from one percent earlier this year to four percent now, reviving the spectre of the debt crisis that threatened the eurozone a decade ago.

“It is critical to avoid debt crises that could have large destabilising effects and put the EU itself at risk,” the International Monetary Fund warned in a recent blog calling for reforms to budget rules.

The EU has suspended until 2023 rules that limit the public deficit of countries to three percent of GDP and debt to 60 percent.

The European Commission plans to present next month proposals to reform the 27-nation bloc’s budget rules, which have been shattered by the crises.

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