The EU thread

[crazy canuck]

Should we be worried about Germany and Italy being aligned?

Depends where you are. Americans will start worrying when Japan joins that alliance.

[Zanza]

Big free trade deal signed between the European Union and India.

[Sheilbh]

Seems to be irrelevant. EU countries constantly form factions and align on policy based on their current priorities, but those change with the issues at hand. Sometimes Germany and France are aligned, sometimes they are opposed. So what.

I think the article and the old common wisdom is kind of right that the engine of further integration is Franco-German alignment, perhaps not because of the countries themselves, though that matters, but that they represent strands and interests within the EU. And at this point Germany still matters a lot more because it's bigger, its economy is bigger and in large part more integrated within wider European networks. I don't think it's accidental that in the last 10-15 years integration has largely stalled and that coincides with far more difficult relations between Paris and Berlin even if they still do the formal/symbolic stuff of first trips etc.

Plus Macron will be gone in the next 18 months. He came into office with very ambitious plans for Europe, laid out in his first Sorbonne speech, and so I think there is a bit of stock taking. I've got mixed views and I'm not fully sure what I think on him (and a lot will depend on who wins and how in the Presidential election).

I tend to align in favour of the Mercosur deal, but am distinctly unimpressed by the Merz and Meloni instinct to suck up to Trump.

For the European project, I lean more towards Macron.

I'm more torn. I think actually doing deals like with India or (especially) Mercosur is kind of key to Europe being a strategic actor. I'd also add that with Merz there is €1 trillion of spending on defence and infrastructure (which is necessary and good) and I think far more significant in building strategic autonomy than one's pose towards Trump (especially when it's not aligned with private messages).

But as I say there have been so many instances of Macron doing this and people in French policy circles explaining that there is a deliberate strategy in Macron making very strong, sometimes provocative remarks precisely in order to generate a decision from others (especially the rest of Europe). I think the ambition and the goal is right but I can't think of many examples when it has actually worked, I think it is frustrating/tiring/draining for other leaders. I personally think it undermines France's goal of strategic autonomy for Europe as I think the rest of Europe sees that method as revealing what France actually means by strategic autonomy which is French leadership. The French President makes grand statements - a coup de main, perhaps - but the details have to be worked out by everyone else afterwards - as opposed to build the consensus before the dramatic announcement. I think Greenland was an interesting example of that because I don't think many other member states were endorsing retaliatory tariffs (Poland and the Baltics were vocally very opposed - I think the Lithuanian president described it as going straight to the bazooka).

But I think Macron's analysis and vision is right - and I'm not sure you can cautiously, consensually, incrementally build that up. It goes back to the Monnet point of Europe will be created in crisis because it will be the sum of the solutions adopted in response to those crises.

Big free trade deal signed between the European Union and India.

Seems very positive and sensible (though - hate to say it - I do slightly take Trump's point on India and Russian oil).

Total aside but I was wondering recently if India's a bit of a worry? I was just thinking about the impact of AI and my suspicion is it will be most strongly felt in service sectors - and just wondering how that will work out for India which is basing its development far more on services and outsourced/managed services rather than industrialising like China. I wonder if it's particularly vulnerable if enterprise AI takes off (maybe the Philippines too?).

[HVC]

To paraphrase "in this India you will find many a China", but with America what it is there's little choice I guess.

[Valmy]

Big free trade deal signed between the European Union and India.

Seems very positive and sensible (though - hate to say it - I do slightly take Trump's point on India and Russian oil).

Total aside but I was wondering recently if India's a bit of a worry? I was just thinking about the impact of AI and my suspicion is it will be most strongly felt in service sectors - and just wondering how that will work out for India which is basing its development far more on services and outsourced/managed services rather than industrialising like China. I wonder if it's particularly vulnerable if enterprise AI takes off (maybe the Philippines too?).

Well don't be patholigical. Just because Trump thinks something doesn't necessarily mean it is wrong. The fact that our President is not wrong 100% of the time is not some big credit to him.

Anyway I am curious how this AI thing is working itself out outside the US. Over here we are building huge data centers everywhere at great expense in infrastructure and they use a ridiculously large amount of energy. Are they building these things all over Europe? China? Is everybody going to be using our data centers for their AI? If so...does that worry anybody?

[Jacob]

China is definitely building data centres (and the energy capacity to power them). Looks like they are being built in Europe too, though I'm not sure about the scale.

[Sheilbh]

They're getting blocked by planning system here But that's fine because the grid and power infrastructure they'd require are also hitting planning problems.

But broadly a lot of Europe runs on American digital infrastructure anyway. I'm not sure there's a vast difference between using those data centres for AI tools v using them for your cloud infrastructure. It is one of the big dependency concerns with the US (the other is energy) - especially as I'm not massively convinced there is a meaningful difference between AWS Frankfurt v AWS California (even if there is from a purely formal, legalist perspective). It is owned by Google now but DeepMind started in the UK and Demis Hassabis wants to keep that in London (Google are building a huge "landscraper" in King's Cross for their campus and he's pushing for them to acquire even more of the are and have DeepMind as the sort of anchor of Google's presence here).

France is doing some good stuff at starting to build a sovereign cloud infrastructure (Dassault) with the aim to get the French government to be on that in the next year or two. They're also building alternatives to Teams and Zoom. The only serious EU AI company I can think of is Mistral, who are also French and have a lot of interest from the French state. Switzerland has build a public access LLM which I think is a very good idea.

There's a fair bit of "buy EU" about tech now - which is a recent development - but the reality is they're not really big companies with the same capability as the American companies. I think the French model of national champions is probably needed. I think the UK is far from alone in this but went all in on globalisation so we actually had some fairly big, effective tech companies (particularly in telcos). In France I think they would have won public procurement contracts but they were expensive and in a globalised world who cares about where a company is from - and we were ruled by spreadsheets. A lot of them went under - or more often were gobbled up by other tech companies, including in the US.

But it is worth saying it's not just the US - so the UK is still spending a lot of time and money ripping out Huawei from its telecoms infrastructure and lots of EU countries are now looking at something similar (there's also been stories recently that a Chinese telco provided telco infrastructure to Downing Street and may have been snooping).

[Jacob]

Apparently Europe is going to close the Baltic Sea to Russian shadow fleet: https://militarnyi.com/en/news/european-states-claim-control-over-russia-s-shadow-fleet-in-the-baltic-sea/

[Valmy]

They're getting blocked by planning system here

You guys probably need to do something about your planning system. I know that is a new and original thought.

[Sheilbh]

You guys probably need to do something about your planning system. I know that is a new and original thought.

Look, it's very important we protect *checks notes* a landfill next to a motorway from overdevelopment


(This is a real data centre project that is now not being built.)

[Crazy_Ivan80]

They're getting blocked by planning system here

You guys probably need to do something about your planning system. I know that is a new and original thought.

that or weaponise the planning system for deployment to warzones and enemy states..

[HVC]

They're getting blocked by planning system here

You guys probably need to do something about your planning system. I know that is a new and original thought.

Computer says no.

[HVC]

You guys probably need to do something about your planning system. I know that is a new and original thought.

Look, it's very important we protect *checks notes* a landfill next to a motorway from overdevelopment


(This is a real data centre project that is now not being built.)

Any bat roosts in the landfill?


But seriously, what props up your system? I can't imagine there's much in the way of pro landfill NIMBYism? Can I blame lawyers cashing in on the system? In my totally unbiased and logical view, it's usually lawyers fault 

[Zanza]

I can see benefits from using AI in business, but I wonder if the gigantic investments in the United States will actually generate returns. The current pricing models do not seem to be cost efficient and if you increase the costs significantly, the business cases for projects that I am aware of will not work anymore for AI consumer companies. Not sure.

Anyway, there is definitely a growing awareness for digital dependency on US payment service providers and on hyperscalers for infrastructure. The EU is driving sovereignty in both aspects, but so far not with sufficient capital or legal restrictions to be sufficient. Maybe we need to force foreign hyperscalers operators to have a EU joint venture partner or so. Which would make the US government super angry, but the tech companies would of course eventually agree if that's the price of continuing to do business here. Take the recent US Tiktok takeover as a blueprint.

[Sheilbh]

But seriously, what props up your system? I can't imagine there's much in the way of pro landfill NIMBYism? Can I blame lawyers cashing in on the system? In my totally unbiased and logical view, it's usually lawyers fault 

I'm willing to blame lawyers a bit And lots of "stakeholders" whose job is to look at a single thing, which they do very well (Natural England, the Environment Agency) etc and impose conditions which can make things very expensive or block them entirely (e.g. Natural England declaring a site of scientific special interest because of a rare spider that had moved into brownfield post industrial site that was supposed to be a new town of 15,000 built next to a brand new railway station). Plus lots of well-meaning laws with bad consequences that no-one really wants to challenge because the intentions are good This is where I sympathise with civil servants who the government blame for this. Because they didn't pass the laws saying you need to do a load of environmental impact assessment, or have biodiversity net gain, or nutrient neutrality etc - those laws were passed by Parliament and the quangos are just doing their (often quite narrow and specific) job.

Another example is the Aarhus Convention is about making it easier for people to legally challenge government on environmental grounds. Our courts have interpreted it by generally capping claimants' liability for costs to £20,000 - so if you can get a good GoFundMe going you don't even need to worry about losing.

Plus - regretfully - local democracy. Everyone runs against new buildings and the people who vote/make themselves heard at a local hate change and really hate any new buildings anywhere ever.

So in the case of the landfill the local council opposed it because of local opposition (more traffic, disruption etc).