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Europe is also having a crazy start to the year

January 15, 2021, 11:24 AM UTC

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Good morning. David Meyer here in Berlin, filling in for Alan today.

The United States has had an attention-grabbingly tumultuous start to 2021, so I’d like to also highlight the (mercifully non-violent) turmoil in European politics right now.

Brexit is so last year. Here’s what’s happened in the EU just in the last three days—and remember, in Europe “liberal” generally means pro-business and socially liberal, much like the dominant center-right (to European eyes) wing of the Democrats in the U.S.:

Italy‘s government was thrown into crisis when former Prime Minister Matteo Renzi yanked his tiny, liberal Italia Viva party of out of the governing coalition, amidst an argument over how much COVID-19 relief funding should go to infrastructural investment as opposed to handouts. Prime Minister Giuseppe Conte now has a left-leaning minority government, but his other coalition partners are siding with him and he’s unlikely to step down.

Estonia‘s government collapsed over a property-development corruption scandal involving now-former Prime Minister Jüri Ratas’s left-leaning Centre Party. Opposition leader Kaja Kallas’s liberal Reform Party will now try to form a new coalition with the Centre Party.

—The Dutch government, a centrist coalition between conservative, liberal and social-democrat parties, is close to collapse. The cause this time is a scandal over child benefits payments, in which the Dutch tax office mistakenly pursued thousands of families for the repayment of “fraudulent” claims, causing financial ruin for many. Far-right opposition leader Geert Wilders is, as always, waiting in the wings, and he’s recently been making hay by criticizing the government over its tardy vaccine rollout.

But perhaps the biggest change that’s about to occur will be in Germany, which has a federal election coming up in September. Party grandees in Angela Merkel’s center-right Christian Democratic Union will choose their new leader tomorrow. As the CDU is Germany’s dominant party, and Germany is along with France one of the biggest beasts in the post-Brexit EU, the choice will have major ramifications outside German borders.

I wrote about the candidates last February—the pandemic has delayed this election for nearly a year—but, long-story-short, the three options this weekend are Friedrich Merz (much more conservative and fiscally frugal than the centrist Merkel), Armin Laschet (the Merkel continuity candidate) and Norbert Röttgen (Merkel-esque but more of a foreign-policy hawk).

The winner could become the center-right candidate to succeed Merkel as Chancellor, or not. Health Minister Jens Spahn and Markus Söder, the head of the CDU’s Bavarian sister party the CSU, have both seen their profiles rise in the pandemic—either could soon be angling for the top of the ticket, if the CDU party congress chooses a leader who polls badly with the general German public and would make it harder for the party to find coalition partners.

So it’s not just American politics that’s dizzying right now! It was always inevitable that the pandemic would have political consequences, and we’ve only just begun to see them materialize, on both sides of the Atlantic. More news below, and have a good weekend.

David Meyer
@superglaze

david.meyer@fortune.com

TOP NEWS

Biden package

President-elect Biden hopes to begin his term with a $1.9 trillion coronavirus relief package that would see Americans get a $2,000 handout rather than the $600 provided by the most recent bill. It also includes 100 million vaccines to be administered in the new administration's first 100 days, a temporary boost in unemployment benefits and moratorium on evictions and foreclosures—and long-standing Democratic moves such as a $15/hr minimum wage and more paid leave for workers. Fortune

Pandemic measures

As faster-moving COVID strains take hold, Europe's leaders are reacting. Chancellor Angela Merkel is pushing for tougher coronavirus restrictions in Germany, such as border checks and a requirement to wear an FFP2 mask (like N95 masks in the U.S.) on public transport. France is introducing a curfew, to be in place for the next 15 days, from 6 p.m. to 6 a.m. And the Italians are talking about having to vaccinate as much as 95% of the populace, if the new British strain becomes dominant there. Fortune

Xiaomi drop

Smartphone giant Xiaomi has been added to the Trump administration's blacklist of allegedly-military-connected Chinese companies. Xiaomi's share price dropped 10.6% at the open of Friday trading in Hong Kong, because its addition to that blacklist means U.S. investors won’t be able to buy its shares. Alibaba, Tencent and Baidu have been spared for now. CNBC

Huawei exclusion

A Swedish court today threw out Huawei's appeal against its exclusion from the country's 5G network rollout. The Swedish telecoms regulator will resume 5G spectrum auctions next week, having been forced to pause by Huawei's legal action. Reuters

AROUND THE WATER COOLER

Australia vs Google

Google started blocking some Australian news sites as an experiment, to determine the value of its search services to said sites. The extraordinary move, which has outraged the Australian government, comes in the context of a long-running dispute over whether Google should pay to show clips of Australian news articles. BBC

Future travel

The pandemic has changed travel forever, according to Airbnb CEO Brian Chesky. He predicts fewer trips for business meetings, and more situations where people work remotely and occasionally travel back to their headquarters. Chesky also sees more people travelling to smaller cities, and more "meaningful" travel to see friends and family rather than landmarks. Fortune

Wirecard loss

You may look at Deutsche Bank's loss of €18 million ($22 million) in the collapse of payments firm Wirecard as a bad thing, but you'd be wrong, according to DB CEO Christian Sewing. That's because the bank had exposure of €80 million to Wirecard, so the relatively small loss was down to a successful risk-management strategy. "While [such a] loss does hurt, it shows that our fundamental strategy is partly right," Sewing told a parliamentary inquiry. Financial Times

Tammy Duckworth

Senator Tammy Duckworth, a military vet, spoke to Fortune about last week's Capitol invasion. She described how her military training kicked in and how that affected her choices—as did her reliance on a wheelchair for mobility. Fortune

This edition of CEO Daily was edited by David Meyer.