European Union

OPINION on women, gender equality and climate justice
Committee on Foreign Affairs
Pier Antonio Panzeri

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Location : Brussels JAN 2Q2Further information
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Since the heads of the European Union and NATO signed the Joint Declaration in Warsaw in July 2016, their relationship seems to be in the spotlight again. More and more researchers and policy-makers show their interest in this special partnership. They closely follow closely the developments of the implementations of the proposals, which resulted from the Joint Declaration and the promises made at the NATO Summit in Warsaw. While one might think that the revival of their relationship came out of the blue, this is in fact not the case. Both organisations, and especially on the staff level, have been working on uplifting and revamping it for the last three years – to be more precise, since the onset of the Ukraine crisis. Questions about the actual trigger therefore arises. Are the renewed aggression and military confrontations on the eastern border the cause for strengthening their cooperation? It can be speculated that Russia has indeed played a very significant, and in fact a decisive, part in drawing the EU and NATO closer and revitalising their relationship.

At this month’s Talk around the Brandenburger Tor in Berlin – a collaborative and high-level conference organised by the German Atlantic Treaty Association (ATA DGA), the European Commission, NATO, and the Federal Academic for Security Policy (BAKS) – the EU-NATO cooperation among other hot topics received the main attention. According to Fyodor Lukyanov, editor-in-chief of Russia in Global Affairs and chairman of the presidium of the Council on Foreign and Defence Policy, ‘it is Russia that currently unites the US and the EU and the member states within NATO’. Moreover, he believes that Russia is indispensable for the unity in both organisations. Russia has always taken a key position when it comes to European and Euro-Atlantic security and defence cooperation. While its predecessor the Soviet Union was the main reason for the creation of NATO, it remained a decisive factor even after the end of the Cold War. In the late 1990s, NATO and Russia signed the Madrid Declaration to cooperate on security issues, and also the EU maintained relations with its neighbour in the East as well. Seen from Moscow, however, ideally, Russia would have become an affiliate of both the EU and NATO with some important privileges.

The most recent events, i.e. Russia’s annexation of Crimea in March 2014, the subsequent onset of the Ukraine crisis and the on-going conflict in the Donbas region, have created a new security environment for Europe and the Euro-Atlantic community. Russia’s latest actions, its new ways of aggression through the use of cyber and hybrid threats and also the Zapad exercise in September 2017 in collaboration with Belarus, have united the EU and NATO on the one hand, but, on the other hand, have also illustrated differences among the two organisations. The year of 2014 has been pointed out as the rapprochement of the two organisations – the melting of the ‘frozen conflict’ between EU and NATO – and the beginning of strengthening their cooperation. Yet, the EU seeks diplomatic solutions to the Ukraine crisis – most notably is the Minsk Agreement – while NATO has increased the number of troops on its Eastern flank in order to send a strong signal of deterrence towards Russia. Moreover, member states in both organisations have different views on and ideas for dealing with Russia and the renewed aggression. Especially the Eastern and Southern states have different threat perceptions and seek different solutions to the conflicts.

While it might be true that Russia is a decisive player for revamping the EU-NATO relationship, and therefore serves as a unifying factor for their cooperation efforts on security and defence issues, it also shows that internally the organisations cannot come up with a coherent strategy and a common position towards their big neighbour. In order to find a solution not only to the on-going conflicts in Ukraine and the Donbas region, but also to maintain relations with Russia, both organisations should approach the country equally and jointly. A common approach has not hurt any actor involved so far.

 

Nele Marianne Ewers-Peters is a PhD Candidate and Teaching Assistant at the University of Kent.

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If Europe’s economic and monetary union is to be completed and become true to its purpose in a democratic manner, many more steps are needed towards establishing proper democratic processes at the EU level. This will have to include true convergence and the elimination of disequilibria between Member States, an actual mechanism for fiscal transfers to Member States that are in financial difficulties, and, primarily, a forum where different paradigms for the direction of the Eurozone could be heard and materialize.

The Eurozone crisis has brought to the surface the structural weaknesses of the Economic and Monetary Union (EMU) and its ‘crowning jewel’: the Eurozone. The measures that have been marshaled to respond to the crisis can be separated across two main categories: those aimed at providing conditional financial assistance to Eurozone Member States through a variety of mechanisms (EFSM, EFSF SA, ESM) and through an initially ad-hoc and now permanent cooperation with the IMF, and those aimed at improving economic coordination between Member States through an overhaul of the EU modus operandi in financial governance (Two-Pack, Six-Pack, Fiscal Compact, etc.) What has been the impact of these measures on the democratic process of the Eurozone?

The analysis of democracy at the EU level has become known as the EU Democratic Deficit. In essence, the Deficit can be seen either “as an absence of public accountability or as a crisis of legitimacy”. Based on these two aspects, the Deficit scholarship is divided across three main approaches: Input, Throughput, and Output. The main subject of the analysis is whether the EU has the ability to influence key national policies with redistributive effects or not, and if so, whether there exists citizen input through appropriate processes with relevant safeguards in order to ensure proper democratic representation.

In the EMU, Member States had a lot to gain from joining, primarily in relation to a reduction of transaction costs and the promotion of stable financial relations. Concordantly, participation unavoidably resulted in the restriction of national fiscal and monetary sovereignty, and thus the legitimacy of the respective economic programs of each Eurozone members lost considerable ground. The political structure of the Eurozone should, ideally, compensate for the above through adequate provisions that ensure equal representation, emergency fiscal transfers in case of asymmetric shocks, and efficient convergence of economic policies. However, this has not been the case.

The deficit in the democratic process within the Euro area is not owed to mere participation in it, but to its structural weaknesses, which have allowed for considerable influence by and expression of interests of specific Member States vis-à-vis others, the latter also suffering from the resulting imbalances without any capability to address them. The crisis measures seem to have exacerbated, rather than addressed, this phenomenon. The intergovernmental nature of the ESM and the Fiscal Compact allowed for political weight to play a major role in their structure and underlying ideological foundation of ordoliberalism. Consider the introduction of even stricter budgetary policy, with specific limits for when a budget is to be considered balanced (maximum 0.5 percent GDP structural deficit) and for a 1/20 rate per year reduction of the debt if it is in excess of 60 percent GDP. Here, competition between rivaling ideas over budgetary restrictions within the Euro area was absent, harming legitimacy.

Another case is the lack of any meaningful representative input or oversight by the European Parliament in the arguably innovative Macroeconomic Imbalance Procedure, and in the breakthrough capacity of the Commission and the Council to scrutinize the budgets of Eurozone Member States before they become binding, and in the Troika (Commission, ECB, IMF). This constitutes a democratic deficiency, as there is no forum within which common economic matters could enjoy direct representative input and competing ideas could be presented and chosen by citizens, and it also harms accountability, as the participating actors are not scrutinized by representative institutions.

Yet, under these adverse conditions in relation to proper democratic process, Eurozone Member States once again relinquish even more authority over key national policies to actors at the supranational level, based on a reinforced ordoliberal paradigm. The authority of the Commission and the ECB has been considerably augmented vis-à-vis the national level in relation to key national policies of Member States, especially the periphery/Southern ones. For example, the wide-ranging introduction of Reverse Qualified Majority Voting across the Six-Pack (e.g. Regulations 1173/2011, 1174/2011, 1176/2011) not only makes it much harder to abolish Commission-proposed acts, but makes a blocking majority virtually impossible without any of the first five most populous countries (Germany, France, UK, Italy, Spain, Poland).

Even in the case of financial assistance, which could be considered a form of fiscal transfer to Member States with financial difficulties, the policies implemented, heavy on liberalization, privatisation, etc., were clearly ordo(neo)liberal (e.g. for Greece). In fact, the very narrative employed during the crisis was heavy on the ordoliberal notion that “economic problems only emerge from budgetary indiscipline and not from risky and unsustainable economic behaviour in the private market,” without any regard for the potential balancing effect fiscal transfers may have. The economic problems of periphery/Southern Member States were blamed on profligacy, reinforcing the belief that the financial assistance programs were about German or Austrian or French taxpayers are bailing out Greek or Irish citizens. However, economic booms to periphery Member States were financed by excessive and cheap capital inflows from the core/North Member States leading to a loss of competitiveness with little ability of restoration without access to monetary policy instruments. The implementation of predatory lending practices in the pre-crisis period because of the moral hazard resulting from the absence of a Eurozone-wide  banking union (leaving bailouts as the only option), was kept mostly silent. In the case of Greece for example, the largest portion of financial assistance went towards repaying the financial sector that irresponsibly lent to Greece the amounts it irresponsibly borrowed.

Throughout the crisis measures, EU-level actors have acquired even more authority to influence key national policies, but being restricted to implementing the same ordoliberal paradigm without any challenge or alternative offered, or even without any platform where such an alternative could be offered. While it may seem that certain advances towards completing the Euro area’s true character as an Economic, along with Monetary, Union have been introduced, in reality there is a reinforcement of the application of the ordoliberal model that has constituted a primary reason for its structural weaknesses. Consider the fact that the ECB President mandated specific reforms, including retirement provisions, wage reforms, privatizations, etc., to be assumed in Italy through a letter sent to the Italian Prime Minister. Even more importantly, consider the inability of successive Greek governments from 2010 onwards to implement their electoral platform if and where it clashed with commitments included in the EU-IMF financial assistance programs, reaching a true crescendo during 2015, with the then government being elected on an anti-austerity platform and then, eventually, entering yet another program.

All the above create an absence of citizen input in the direction that economic and fiscal policies take. They also result in an absence of competition of different perspectives. If Europe’s economic and monetary union is to be completed and become true to its purpose in a democratic manner, many more steps are needed towards establishing proper democratic processes at the EU level. This will have to include true convergence and the elimination of disequilibria between Member States, an actual mechanism for fiscal transfers to Member States that are in financial difficulties, and, primarily, a forum where different paradigms for the direction of the Eurozone could be heard and materialize.

Based on the research article published in EuropeNow, Issue 12 (November 2, 2017).

 

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The 5th Eastern Partnership (EaP) summit takes place in Brussels (Europa building) on 24 November 2017. Heads of state or government from the EU member states and the six Eastern partner countries look forward to future cooperation. They also take stock of what has been achieved since the last summit in Riga in 2015, focusing on the tangible benefits delivered to the citizens of the six Eastern Partnership countries. 

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So, has Corbyn seen the light at last on Brexit? Yes, according to columnist Polly Toynbee writing in The Guardian.

After his brilliant performance at Prime Minister’s Question Time this week, Ms Toynbee was moved to write: ‘The Labour leader finally grasps what leaving the EU really means: the greatest harm inflicted on the very people his party cares about the most.’

She wrote. ‘Brexit is the great national crisis of our times and yet the leaders of the opposition have sometimes seemed so muted it has driven remainers to tear their hair out in frustration.’

But all that changed this week, according to Ms Toynbee.

‘Jeremy Corbyn for the first time turned all guns on the prime minister over her incoherent, incomprehensible and impossible Brexit stance. He used all his questions, every one, to wallop her exactly where she and her party are most vulnerable – and not before time.’

Firing on all cylinders, Corbyn hit the Prime Minister with a ‘blistering salvo’:

“Seventeen months after the referendum they say there can be no hard border but haven’t worked out how. They say they’ll protect workers rights, then vote against it. They say they’ll protect environmental rights, then vote against it. They promise action on tax avoidance but vote against it time and time again.”

The Prime Minster, observed Ms Toynbee, offered only a lame response. “Let me tell him, I am optimistic about our future. I’m optimistic about the success we can make of Brexit … blah, blah, blah … building a Britain fit for the future …”

Corbyn gave punch after punch against Brexit. He said,

“The EU’s chief negotiator said this week that the UK financial sector will lose its current rights to trade with Europe. It seems as though neither EU negotiators nor the Government have any idea where this is going.”

More blah, blah, blah by the Prime Minister, then Corbyn jumped up with his left hook:

“In April, the Brexit Secretary was confident that the European Banking Authority would be staying in London; now he cannot even guarantee that banks will have a right to trade with Europe. Last week, the Government voted down Labour amendments to protect workers’ rights.

“The Foreign Secretary has described employment regulation as ‘backbreaking’, and has repeatedly promised to ‘scrap the social chapter’. Why will not the Prime Minister guarantee workers’ rights—or does she agree with the Foreign Secretary on these matters?”

Yet more blah, blah, blah by the Prime Minister.

Jeremy Corby hit back:

“The record is clear: this Government voted down our amendment to protect workers’ rights. The Environment Secretary said he wanted a ‘green Brexit’, but yet again Conservative MPs voted down Labour amendments to guarantee environmental protection.”

The Prime Minster, “I will take no lessons from the Labour Party, blah blah blah..”

Corbyn swung back:

“The right hon. Lady’s predecessor blocked EU-wide proposals for a public register of trusts; again, Conservative MPs voted down Labour amendments to deal with tax avoidance

“When it comes to Brexit, this Government are a shambles.”

And his knock-out punch:

“Is it not the truth that this Government have no energy, no agreed plan and no strategy to deliver a good Brexit for Britain?”

‘Where has Corbyn been?’ asked Ms Toynbee. On a long journey, apparently.

The Guardian columnist explained, ‘A lifetime of instinctive “capitalist club” Euroscepticism has been shed. Passionate distress over Brexit from his young supporters and his trade union allies has brought him round.

‘Besides, the facts have changed. His vague, abstract distaste for the EU has given way to facing the hard reality of what Brexit means: inflicting most harm on those he cares about most. If only those on the opposite benches were on the same reality-check journey.’

Mr Corbyn’s rhetoric has changed lately. On a visit to Shipley in West Yorkshire, he was asked how he would vote if there was another referendum now. It was a question that the Prime Minister and her Chancellor, Philip Hammond, refused to answer. But Mr Corbyn didn’t hesitate: he’d vote for Remain.

Said Mr Corbyn, “I voted remain because I thought the best option was to remain. I haven’t changed my mind.”

And he added, “We must make sure we obtain tariff-free access to the European markets and protection of all the rights and membership of agencies we have achieved through the European Union.”

Mr Corbyn warned, “The danger is, we will get to March 2019 with no deal, we fall out of the EU, we go on to World Trade Organisation rules, and there will be threats to a lot of jobs all across Britain. I think it is quite shocking.”

Is Ms Toynbee right when she asserted in her column, ‘He was, say some, hesitant on unfamiliar policy turf. But now he has found his feet, and his voice and confidence’?

The EU’s chief Brexit negotiator, Michel Barnier, has challenged the Tory government to answer: what kind of country does Britain want to be, a European model country, or something else altogether?

According to Ms Toynbee, Theresa May doesn’t have a clue, but Jeremy Corbyn does.

She wrote, ‘The European model beckons as the enlightened, internationalist, progressive vision – the Europhobic model is a land of impoverished deregulation.’

This is now something that Labour understands. She explained, ‘There were obvious reasons for Labour’s reluctance to go full-tilt against Brexit.

‘Too many Labour MPs in leave seats had taken fright. But since the election, another picture has emerged: Labour lost votes in some leave seats but gained votes in other leave areas as electors lost faith in the government’s chaotic negotiations.’

Shadow Brexit Secretary, Keir Starmer, has led the way, ‘opposing every government misstep, aligning maximum opposition amendment by amendment.’

Concluded Ms Toynbee, ‘His leaders cannot but see that this is not just right, but politically essential. There is no other place for an opposition to be in this national trauma.

‘My hunch is that the harder Corbyn hits out over Brexit, the stronger Labour’s support will grow. And the word is, that’s what we shall hear from now on.’

If her analysis is correct, it means that Labour offers Britain the best chance to reverse Brexit. So long as they can get into power before Britain leaves the EU.

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The European Defence Agency was established under a Joint Action of the Council of Ministers on 12 July, 2004, to support the Member States and the Council in their effort to improve European defence capabilities in the field of crisis management.

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One for the money, two for the full retention of citizens’ rights

In my house, “rock’n'roll” has a very specific meaning. When uttered in the context of getting people out of the house it denotes that we have arrived at the actual moment of departure and no more delays will be tolerated: everyone is moving to the door.*

Put differently, I have established a credible set of language to present my intentions.

Obviously, I’d like to say that this all stems from the professional work I do on negotiation, but it doesn’t: it actually stems from endless hours of farting about, waiting for children to divine what their true path in like should be (despite it very obviously being get-out-of-the-door-right-now). Trial and error abound.

But the example is still apposite, because it illustrates another basic idea of negotiation theory, namely that your mouth should only write cheques the rest of you can cash.

As any parent will know – or is in the process of learning – both threats and promises should be proportionate, credible and deliverable. And that’s also the case for more formal negotiations.

All of which brings us around – as so often – to Article 50 and the recurring narrative of “no deal”.

Quite aside from the many other issues surrounding the British government’s approach to negotiating the UK’s withdrawal from the EU, there is the element that there are very few people – especially outside the UK – who consider “no deal” to be an option.

Let’s take the three elements I just mentioned – proportionate, credible and deliverable – and look at each of them.

Proportionality is possibly the biggest issue here. Certainly, any deal with the EU on a future relationship is going to require some compromise and concession on the part of the UK, and that will come with associated costs. We can argue for a very long time about how one calculates such things, but in the broadest of terms, the EU holds the stronger position and the status quo ante framework, so costs are very likely to be on the UK’s sides. Those costs could be reduced by keeping divergence from the EU model to a minimum, but that in turn incurs opportunity costs to the UK, which might want to follow different options.

But a “no deal” outcome comes with much greater costs. Whilst the UK might not incur the opportunity costs just noted, it would instead both fully fall out of the EU framework and also create widespread and systemic uncertainty across a vast array of policy areas.

If you want to think of it in a different way, usually in a negotiation there is a coming-together of parties, but with the option of not concluding an agreement because the benefits aren’t sufficient: you can fall back on the status quo ante. But in this negotiation, you start with an agreement, from which one party wants to withdraw, so it becomes primarily a matter of cutting the costs of being in.

In brief, “no deal” seems to consist of avoiding costs by means of incurring much bigger costs, which is not a logically sensible approach.

And this takes us to credibility.

The very phrase “no deal is better than a bad deal” has the ring of thing-you-say: a quick check on Nexis throws up many earlier instances than the present situation, back to an October 1986 piece on the News International strike that is certainly not the first use.

However, just because it’s a thing-you-say, it doesn’t make it credible: indeed, precisely because it sounds like a line from a movie, it loses some of its force. Next time you’re out dating, try “here’s lookin’ at you, kid” and see how you do.

Moreover, the force of the option is deeply undermined by the lack of detail behind the headline claim. Regardless of the state of the impact assessments that the British government has (and is in the (slow) process of making public), none of the speeches from UK principals on Article 50 has actually explored and explained why a “no deal” path might be viable: I will spare us all the “falling back on the WTO rules” trope, if only because the only consensus seems to be that there’s no consensus (although I do recommend this).

But despite these issues, “no deal” does have one big ace up its sleeve: it’s very deliverable. As a direct function of the triggering of Article 50, it is the default option for the negotiations – something has to happen for it not to ensue, as I’ve discussed before. And as we all know, it’s easier for something to not happen than for it to happen.

In that sense, and in that sense only, it is also credible, because all the UK has to do is drag things out and it gets “no deal”. And this is really the nub of the matter.

You can see “no deal” in one of two ways. Either you believe it is a desirable outcome, in which case you just have to keep others from agreeing an alternative, or you think it’s bad not only for the UK but also for the EU, so you toy with it to encourage the EU to make concessions on the deal you actually want.

Neither option looks very sensible – the former for the costs, the latter for the clear and present danger that the game of chicken ends with you getting something you didn’t want. But both views are ultimately driven by an incomplete and particular view of the costs and benefits. To be clear, I make that last point because no one has a full and balanced view: the scope and scale of the process far exceeds anything seen in modern history: even in cases where states have had to pick up the pieces following the collapse of a system, at that previous system had collapsed, rather than remaining and requiring the simultaneous construction of a new relationship.

However, words matter and the comfort-blanket of “no deal” is one that several British ministers seem deeply reluctant to give up. But for their sakes, and for the sake of the UK, they need to recognise that it hinders much more than it helps, whatever future they are working for. Otherwise, there won’t be a lot of shakin’ going on.

thank you very much

 

* Of course, at some point other members of my household will come to read this and snigger at the portrayal of what is actually a more haphazard affair than that depicted. But being loyal, they will confirm the general thrust of the point, possibly in a nice comment below the line.

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Cussens and Others
Taxation
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