BERLIN — Germany on Tuesday extended its social distancing measures until June 29 as part of efforts to restrict the spread of the coronavirus, according to a deal between the federal government and regional authorities.

Under the extension, the governments of Germany’s 16 federal states can allow up to 10 people, or members of two households, to meet.

However, the government recommends that people still limit their number of social contacts and keep the size of their social group as constant as possible. It also suggests holding gatherings outdoors where the risk of infection is lower.

The current measures were set to end on June 5, pending discussions between Chancellor Angela Merkel and the leaders of the 16 regions, which ultimately have the power to impose restrictions.

Merkel initially announced restrictions on meetings of more than two people on March 22 in response to the deadly virus.

European Commission President Ursula von der Leyen on Wednesday unveils a revamped EU budget plan intended to power an economic recovery from the coronavirus crisis.

Von der Leyen presents her plan to the European Parliament in Brussels in the early afternoon before holding a press conference later in the day.

The plan will form the basis for negotiations between EU member countries, which have clashed over how much recovery funding the bloc should provide and whether it should be in the form of loans or grants.

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Christian Oliver is a senior policy editor at POLITICO and was based in Korea from 2008 to 2012.

Imagine a European Samsung, or a European Hyundai.

Wouldn’t it be great if Europe could take on China by emulating the industrial mojo of the South Koreans? If we focused our energies on building Korean-style corporate champions, surely EU economies would be awash with highly paid jobs making cars and ships, and we’d be able to kiss goodbye populist movements like France’s Yellow Jackets?

German Chancellor Angela Merkel and French President Emmanuel Macron are certainly thinking this way. Last week, Macron ramped up the Franco-German push to steamroller antitrust orthodoxy in Brussels to allow the creation of industrial heavyweights. Merkel specifically mentioned South Korea (along with China, Japan and the U.S.) as a country with the right answer. “We must not be afraid to have global champions,” she insisted.

The irony here is that Merkel is looking to Korea just as Koreans are fighting to be more like Germany. The Koreans have had a bellyful of their too-mighty national champions, the legendary chaebol conglomerates that rebuilt the nation from the rubble of its fratricidal 1950-1953 war, and are now pushing for a rapid reorientation to more innovative startups. In fact, Koreans often cite the small and medium-sized enterprises (SMEs) of the German Mittelstand as a far more desirable model to gain an edge over China.

Europe cannot, of course, afford to be naïve about China’s rise.

Koreans have a neat expression for such a paradoxical situation: “Even a passing dog would laugh.”

Rather than being a paradigm for Macron and Merkel, South Korea should serve as a cautionary tale about the limits of champions once an economy reaches a moderately prosperous plateau of development. Its family-run chaebols now stifle innovation, fatally erode SMEs (helping depress wages where 90 percent of jobs are located) and have undermined rule of law in the country’s polarized democracy.

These days, South Korea’s battle with its chaebols and their toxic political influence resembles a far-fetched soap opera. Since 2017, Koreans have grabbed the popcorn for a gripping series of trials centered on the corrupt nexus of chaebols and political favor. Former Presidents Park Geun-hye and Lee Myung-bak received jail sentences, along with Samsung boss Jay Y. Lee. Plot highlights include bribes paid in million-dollar horses, and President Park being exposed as in thrall to a Rasputinesque adviser, who just happened to be the daughter of a notorious shaman.

Past their prime

Let’s give the chaebols their due. After the Korean War, the country was in ruins. The gross domestic product per capita was less than Ghana’s, and the top exports included scrap, wigs and dried fruit. It was chaebols like Samsung, Hyundai, Daewoo and LG that pulled off the “miracle on the River Han” and forged a leading world economy. Between 1972 and 1979, exports increased nine-fold and income more than five-fold.

It is an epic, bittersweet story. Many older Koreans will regale you with anecdotes about Hyundai’s laconic founder Chung Ju-yung, whose journey from peasant to tycoon (via a humble car repair shop, and without buying new shoes) mirrors the nation’s rebirth. On the darker side, no one doubts the tragic human cost of the chaebol revolution. One haunting image was described to me by a Korean journalist, who grew up in the port of Ulsan where Hyundai built the world’s biggest shipyard. He said the soundtrack of his childhood was the wail of ambulance sirens racing to the docks. Safety came second to the national mission.

So, yes, the chaebols rebuilt a country, but they can’t conjure up another miracle to take it to the next level in the showdown with China. Korea now realizes that it needs to change tack to unleash the country’s bottled-up talent and pump more oxygen into SMEs in areas like gaming, fashion, music, biotech and medical services. The current left-wing administration of President Moon Jae-in founded a ministry for SMEs in 2017 and is trying to roll out a raft of incentives to rebalance the economy more to the little guy.

It’s going to be a long haul, though. Korean SMEs have a miserable time as the little fish, and their struggle to survive in the chaebols’ pond should show Merkel and Macron why tough competition policy on champions is so important. The conglomerates have such prodigious market clout in Korea that they can suffocate suppliers with bullying contracts and derisory payments. If you have a great idea or invention, the chaebol will buy you out, if only to kill you off as a rival. This is a very different situation from Japan, and Korean entrepreneurs look with envy to the city of Osaka, which prides itself on its SME culture.

Fears about Korea’s ability to innovate also loom large in Seoul’s attempts to steer away from chaebols. At heart, chaebols are fast-followers (or copycats, if you are less generous) with militaristically brilliant manufacturing. Apple invents the iPhone? No problem, Samsung can rustle up a Galaxy smartphone. But China can also play the fast-follower game. The sort of commercial DNA where Korea really does have a quirky, free-thinking edge over China is not really monetizable in old-school chaebols.

While Moon wants his agile front line against China to be composed of top-flight SMEs, that’s just not what Korea Inc. looks like. At least, not yet. The chaebols account for only 10 percent of jobs, but 80 percent of market capitalization and two-thirds of exports. Most crucially, wages in SMEs are 60 percent the level of those in the chaebols that squeeze them.

Political pressure cooker

Politically, this chaebol-SME divergence has fuelled a profound left-right schism. For such a sophisticated and well-educated society, the politics is bloody-mindedly binary. In short, there’s a belief that chaebol tycoons have been above the law and that is a red rag to the left.

In truth, chaebol untouchability was indeed shameless over the years before Moon. The chairmen of Samsung and SK (a telecommunications and energy conglomerate) received pardons for serious financial crimes from the two (now jailed) previous conservative presidents. Incredibly, the boss of the Hanwha explosives’ chaebol, involved in beating up some young barmen with a steel pipe, also received a presidential pardon.

This means many Koreans are angry over one rule for the chaebol royalty and another for everyone else. This is the gulf between haves and basement-dwelling have-nots that film fans will have seen in Bong Joon-ho’s Oscar-winning “Parasite.”

Koreans have a word — gapjil — that expresses the abusive power the haves exert over the have-nots. The word entered common currency after a dramatic air rage incident in New York in 2014, in which a Korean Air heiress exploded at cabin crew who did not serve her macadamia nuts in the way she wanted, and forced the plane to taxi back to the gate.

To Koreans, the case epitomized how chaebol types behave with lesser mortals. This intimidatory gapjil lies at the very heart of the conglomerate culture — say, in relations with contractors — and is now, literally, on page one of the latest Korean antitrust mission statement.

If Macron and Merkel want to snuff out malcontents like the Yellow Jackets by relaxing competition rules for champions, all in the hope of creating good jobs in Europe, they could be in for a rude awakening. The lessons from Korea show that chaebols widened social divisions by sapping the potential for a successful SME sector. What’s more, chaebols increasingly create employment outside Korea. Korean car giants, for example, happily produce in the southern U.S. where they don’t have to deal with fiery Korean unions.

Moon’s government is zeroing in on competition law and fair contracts with suppliers as one of the ways to retilt the economy. Antitrust enforcement in Korea stumbled into a depressingly typical scandal in 2018 when it emerged there were (surprise, surprise) revolving doors with the authority and the chaebols. Moon is seeking to rebuild credibility by appointing antitrust chiefs like Kim Sang-jo, dubbed the “chaebol sniper,” and his successor, Joh Sung-wook, who is also seen as tough on conglomerates.

French President Emmanuel Macron with German Chancellor Angela Merkel | Pool photo by Frederic Scheiber/AFP via Getty Images

Europe cannot, of course, afford to be naïve about China’s rise, but the EU can use an arsenal of trade defense measures to deal with Beijing: investment screening, anti-subsidy instruments and reciprocity in public procurement.

The new Franco-German recipe of loosening competition rules to allow for more corporate titans clearly demands closer examination when Korea, a hardened competitor with China, wants to reduce reliance on champions and to toughen antitrust controls on them to give space to SMEs.

Merkel last week called the drive toward champions a “necessary response.” There’s a new generation of Koreans who are trying to speed off in the opposite direction.

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If a week is a long time in politics, a year is a lifetime — particularly in the midst of a pandemic.

This time last year, voters across the EU were casting their final ballots in the European Parliament election. But what would happen if that election were (or even could be) held today?

POLITICO’s Poll of Polls has reactivated its European Parliament seat tracker, which uses an amalgamation of national opinion polling to estimate what the composition of the Strasbourg legislature would be after such a hypothetical election. In short: The result is a boost for the center-right European People’s Party, with voters flocking to incumbent ruling parties at a time of international crisis.

Before analyzing the details, first some methodology and caveats.

Poll of Polls combines all available high-quality public opinion polls in each country that ask about the voting intention. We aggregate the polls to smooth outlier results and gain a more robust estimate of the strength of each political party. The European Parliament seat tracker model translates that support into MEPs using the allocation system applied in each country.

The results are useful for interpreting the direction of Europe’s political winds, but we should be cautious about overinterpreting the figures. At this point in the European political cycle, polling firms are asking about national political sentiment, not specifically about European Parliament voting intention. Although the seat projection will therefore miss some quirks specific to European elections, voting behavior at the national and the European level are nonetheless strongly correlated. The fact that the U.K. is no longer included in the model is likely to improve its accuracy as the country was home to some of the largest polling upsets and very distinct voting behavior at the European level.

Also, for some countries such as Bulgaria, there are no recent polls available and we must revert to polls from several weeks back. In others, like Luxembourg, there have been no polls since the election so we have used the seat allocation from May last year. Naturally, we are comparing the hypothetical election result with the post-Brexit allocation of seats — so minus the MEPs elected form the United Kingdom that left the chamber at the end of January.

According to our analysis, if the European Parliament election was held today, the EPP would gain significantly, picking up 11 extra seats. The surge in support for Germany’s Christian Democrats, the party of Chancellor Angela Merkel, is the main driver of this trend. The CDU/CSU party union is currently at close to 40 percent in national polls, meaning it would pick up 10 seats in the European Parliament under our estimate. That would make it the largest party delegation by far with 39 seats, eclipsing Italy’s League party, led by Matteo Salvini, on 24. Currently, both party delegations hold 29 seats.

The League is still the strongest party in Italy’s national polls, but with significantly diminished support compared to the beginning of the year. Nonetheless, the Identity and Democracy group to which the League belongs would emerge from a hypothetical European election virtually unscathed with just one fewer seat, as they would pick up seats in Belgium and Slovakia to compensate for Italian losses.

POLLING TREND

Changes in the Poll of Polls’ European Parliament seat projection over time.

The projection is for the composition of the post-Brexit Parliament — that is, without U.K. MEPs elected in May 2019 — and is based on publicly available high-quality national polling. For more polling data from across Europe, visit POLITICO Poll of Polls.

Our projection suggests that the center-left S&D grouping would continue its long-term decline if an election were held tomorrow. It would drop from 146 seats to 143 with small losses across the EU, from Spain and Germany to Bulgaria and Greece. Liberals were among the big winners from last year’s election with 98 seats in the post-Brexit Parliament. But driven by poor polling trends for their national members in Spain and Germany, the Renew Europe group would lose 8 seats, according to our projection.

With the climate issue overshadowed by the coronavirus pandemic, green parties in several EU countries have suffered slight polling dips since the crisis hit. This is most clearly visible in Germany, where the party fell from 23 percent to 16 percent in national polls within a few weeks.

Meanwhile, the European Conservatives and Reformists (ECR) would overtake the Greens in the chamber. It has regrouped after it lost its founding party, the British Conservatives, due to Brexit, but with a strong showing for the Italian right-wing Brothers of Italy, the group would be projected to gain five more seats. The left-wing group European United Left–Nordic Green Left (GUE/NGL) would also make gains off the back of boosted support for Ireland’s Sinn Féin, among others.