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Sunday, 2 December 2018

New ‘Hanseatic’ states stick together in EU big league (FT)

FT title: New ‘Hanseatic’ states stick together in EU big league

FT subtitle: Dutch-led group resists grand French ambition — with tacit approval from Berlin

"Wopke Hoekstra’s visit to Paris last week ended with the Netherlands’ finance minister getting such a dressing down from his French counterpart Bruno Le Maire that it was labelled a “diplomatic incident” by one Dutch newspaper.

The response captured an essential truth: the growing role that a Dutch-led alliance dubbed the “new Hanseatic League” is playing in European statecraft. 

Mr Le Maire, who waited until post-dinner coffee with Mr Hoekstra to deliver a 20-minute tirade against the Hanseatic “club”, railed at the alliance for threatening deeper eurozone integration and weakening the EU. Mr Hoekstra, whose visit to Paris was the last stop in a charm offensive that also included Berlin, denied that he was sowing divisions: the Hanseatic alliance, he said, was constructive, rather than uncompromising. 

“It is not one group against the other,” said Mr Hoekstra, who is leading the charge against French-led ideas for a eurozone budget in favour of more national responsibility in the single currency area. “The job for someone in a position like my own is to make the most of the hand you are given.” 

He added: “I’m a realist. My job is to do what is in the best interests of the Netherlands, and of course I keep an eye of what is in the interests of Europe as a whole.” 

Over the past year, the Dutch have spearheaded an alliance with Ireland, Finland, Denmark, Sweden and the Baltic states of Estonia, Latvia and Lithuania to make common cause in an intensifying debate on the future of the eurozone — one of the biggest questions facing the post-Brexit EU. 

The nickname echoes the original Hanseatic League, a Renaissance-era confederation of northern European free-trading city states, and is tongue in cheek: the Danes, part of the new alliance, sometimes complain that they spent years fighting the original Hanseatic League. 

But the name does signify a deliberate attempt to give a grouping of smaller, fiscally conservative economies a louder collective voice with Brexit looming. The UK’s departure from the bloc is depriving these nations of their biggest ally in calls for a more open single market and smaller common budget. 

The group is also a response to the re-emergence of a stronger Franco-German alliance under the leadership of French president Emmanuel Macron. Berlin, economically conservative but keen to improve its political relationship with Paris, has encouraged the Dutch and others to take on a more vocal role defending traditional hawkish positions and resisting grand leaps into fiscal union for the eurozone. 

Where France has lashed out, Germany has privately pushed the alliance forward. “I am from Hamburg — we are the traditional ancient Hanseatic league!” Olaf Scholz, German finance minister, told the Financial Times during Mr Hoekstra’s visit last week. 

Once mocked as “Wopke and the Seven Dwarfs”, Mr Hoekstra and his fellow Hanseatic finance ministers, who first got together at a Brussels steakhouse in 2017 after an EU finance ministers’ meeting, now see it as a sign of success that bigger capitals such as Paris are showing their irritation. Nadia Calviño, Spain’s finance minister and former European Commission official, raised hackles among the club’s diplomats this month when she refused to respond to a recent Hanseatic position paper because it was the work of “small countries with small weight”. 

The group, which holds private dinners every other month, has issued common position papers this year on three topics: resisting attempts to create more common eurozone spending tools, demanding stronger powers for the euro’s bailout fund and measures to promote deeper capital markets in the EU. 

The most recent initiative is a call for the European Stability Mechanism, the eurozone’s bailout fund, to carry out more scrutiny of national budgets— a hawkish cause, also joined by the Czech Republic and Slovakia, that reflects mistrust of the monitoring undertaken by the European Commission. 

Their efforts are having the desired effect. A December package of eurozone reforms is expected to bear plenty of Hanseatic hallmarks. Instead of signing off on grand ideas such as a common eurozone budget or joint bank deposit insurance, EU leaders now have more muted hopes and will instead back incremental steps to complete the bloc’s banking union. 

Mr Le Maire’s criticism reflects his government’s frustrated ambitions. France wanted to drive through grand architectural changes to the single currency and set up a common EU digital tax — plans that have run into small country opposition. 

For Mr Hoekstra and his allies, next month’s eurozone package will be the best answer for those who believe smaller countries cannot impose their weight in the EU. 

As one national diplomat from the group boasted: “We have the collective size of France with the competitiveness of Germany.” "

Source: https://www.ft.com/content/f0ee3348-f187-11e8-9623-d7f9881e729f

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