But the thing is, it is not a flag of convenience situation there. Lufthansa owns flag carriers in 4 different countries (germany, switzerland, austria, belgium), who are, well, three of them, bstill considered legacy carriers with the corresponding T&Cs. However in the same countries they do own other carriers, who pay only a third of what the local flag carrier pays, flying the same kind of airplanes and routes, under exactly the same rules and regulations. A flag of convenience would take advantage of different rules and regulations in a different state. Which is clearly not the case here.

Of course those many different AOCs do serve a purpose, but then Lufty always had several AOCs running side by side, even before the LCCs invaded the market. Switching between AOCs is not a big issue anymore, neither for aircraft (takes about 4 hours) nor crews (takes two weeks). There are even some carriers that try out interoperability. In my outfit we could, for some time, switch every flight between planes and AOCs that were based in different countries. Simply remember that one has an OE registration when filling out the techlog and not the usual D registration. Aviation across the EU is under common rules and regulations.

Therefore a flag of convenience, in eastern europe for example, would be possible. However, that is simply not needed. Different companies with different T&Cs is simply a divide and conquer tool, and it works very well indeed in western european countries without the need to go east.

Yes, open sky agreements can be renegotiated. And they will at some point. How that ends is open for debate. Especially as the economical relevance of the US, while still high, is declining compared to other areas of the world, like china for example.