European Union

Thanks to support from the Latvian Presidency of the Council of the European Union, several Latvian cultural institutions have entered into successful cooperation with the Google Cultural Institute platform. Materials from the National Library of Latvia (NLL), the Museum of the Occupation of Latvia and the Latvian National Museum of Art (LNMA) can be viewed on this platform as a continuation of the Latvian Presidency cultural programme.

Europe’s infrastructure gap stands high among the many problems challenging its economy, and particularly in the field of transport. The last few years of crisis and austerity have led national governments to slow their investments in this field, not least where maintenance work and the renewal of rolling stock are concerned.

These shortcomings should be placed against a background in which the European Union has over the last two or three decades devoted much attention to transport infrastructure, especially when cross-frontier links between neighbouring countries were concerned. It has been done so because for the single market to be truly effective, Europe must have a well-integrated infrastructure. This was clearly set out back in 1992 in the Maastricht treaty’s reference to trans-European networks (TEN) not only in transport, but in energy and telecommunications too.

“Europe’s main problem will be attracting private capital to finance infrastructure through public-private partnerships”

In the following year, a European Commission White Paper on growth, competitiveness and jobs underlined the pivotal role of TENs in the development of the internal market and for job creation. Then, in 1994, the European Councils of Corfu and Essen saw EU leaders approve 14 “priority projects” for transport and 10 for energy. That was followed in 1996 by guidelines for developing the promised European transport network.

In the context of the EU’s “Big Bang” enlargement, and to cope with various financial difficulties, the infrastructure plan was reviewed and expanded in 2004. Since then, the infrastructure gap between the EU’s older and newer member states has been reduced, but some considerable differences remain. In some of the older ones, the quality of their infrastructures has deteriorated because not enough has been spent on maintenance and the modernisation of ageing networks. In most of the newer EU countries, basic networks have still to be completed.

The financial picture is daunting. The cost of rehabilitating existing networks is now estimated at around €20bn a year, and on top of that there are huge new investment requirements. A study carried out in the context of the Commission’s 2011 White Paper on Transport, “Roadmap to a Single European Transport Area”, calculated that for Europe’s transport infrastructure to cope with the expected demand, investments of €1.5 trillion were needed between 2010 and 2030. The Commission estimated that just for the trans-European transport network from 2014 to 2020 the investment costs would be €500bn, half of which are needed to address the main bottlenecks, missing cross-border rail and inland waterway links and horizontal priorities like air and rail traffic management.

“The cost of rehabilitating existing networks is now estimated at around €20bn a year, and on top of that there are huge new investment requirements”

The end of 2013 saw a re-organisation of infrastructural priority projects accompanied by a new financial instrument within the EU’s 2014-2020 budget named the “Connecting Europe Facility”. Over €32bn, which includes €10bn from the EU’s cohesion fund, will cover energy and telecommunications infrastructure as well as transport, with the latter expected to benefit from €26.3bn of EU co-financing.

The EU’s new transport infrastructure guidelines pay special attention to high-speed and high-capacity rail, and aim at an EU-wide multimodal and interoperable “core network” by 2030. It is to consist of nine “Corridors” that are to increase efficiency and speed up both passenger and freight services. They will also promote links been rail, airports and sea ports.

So much for the EU’s ambitions. There remains, however, a huge divide between Europe’s infrastructural needs, which so far are mainly dependent on public funding, and ways of closing the gap. The resources of the Connecting Europe Facility (CEF) are quite modest when compared to Europe’s needs. The CEF’s call for proposals that closed this year at the end of February with available funding of €12bn was oversubscribed by more than three times. The European Fund for Strategic Investments, best known as the “Juncker Plan”, may be able to support those projects that the market is ready to undertake, like motorways, airports or the more efficient ports, but important projects like alpine tunnels, will still have to rely on public sector support.

It is still too soon to assess the Juncker Plan, but comparing it with other approaches can be interesting. In the U.S., one of the key pillars of the Obama Administration’s counter-cyclical strategy consisted of raising more than $100bn to provide federal support amounting on average to 35% to state and local infrastructure investment. In all, the U.S. government’s effort was equal in size to the Juncker Plan’s target of around €315bn. The latter, though, mainly provides leverage and guarantee instruments out of the EU budget to mobilise private capital rather than the fresh money that was the case in the United States. So far, European Institutions have not been allowed to raise money in the capital markets when earmarked for specific purposes like project financing.

Europe’s main problem will be attracting private capital to finance infrastructure through public-private partnerships (PPPs). Good examples of this sort of partial financing are important projects like France’s high-speed Tours-Bordeaux railway link and the Oresund link between Denmark and Sweden, and it is hoped these will be followed by many more. Some existing European financial instruments like project bonds, the loan guarantee instrument for trans-European transport projects, or the Marguerite Fund offer incentives for private capital to become involved, but so far their track-record is rather modest. But in these times when liquidity is abundant and so many institutional investors are looking for long-term opportunities, it should be possible in theory to attract the private sectors. The conditions for doing so need to be carefully analysed, and have much to do with the quality of projects, procurement procedures and the regulatory context in which financial institutions have to operate – Basel III for banks and Solvency II for insurance companies. Some of these pre-requisites play quite a different role in the case of private rather than public funding.

A good many infrastructure projects can be seen as “public goods” that produce long-term economic benefits that rarely have a price in the market, and consequently rely mainly on public financing; in other words, are typical cases of “market failure” that call for public intervention. But when private financing is to be involved, that calls for a better identification of the positive overall economic benefits. Unlike with public funding, when private capital investment in a project produces such benefits as less pollution, less congestion and fewer accidents there must be an appropriate financial return for the investor. An interesting example of this problem is the EU’s Emissions Trading Scheme on greenhouse gasses, which applies to air transport but not to rail.

“Rather than seek private sector partners, EU’s national governments struggle with their public finances”

Other possible financial sources could be a better use of both the “user pays principle” and the “polluter pays principle”. Interesting examples are the tolling system for freight in Germany, and more generally the Swiss Alp transit scheme. Cross-financing, as in the case of the Brenner Base Tunnel for rail which is partly financed by the existing motorway, could also provide financial support for some projects, because they are in some sense an extension of the polluter pays principle.

A much more active role for private funds is not only desirable but very necessary, but many of the EU’s national governments still seem reluctant to encourage this. Rather than seek private sector partners, they struggle with their public finances. Whenever there are budget problems, infrastructure spending is at best rescheduled if it isn’t cancelled. When funds are made available, they are often quite modest, witness the €10bn two-year package in Germany to cover federal as well as local projects. EU governments continue to be very reluctant to take on more debt for infrastructural development, even though borrowing conditions are at present very favourable.

Another problem is the way PPPs are treated by the current Eurostat rules concerning the calculation of overall public debt in relation to the eurozone’s Growth and Stability Pact. Without re-opening the debate on the “golden rule”, a more favourable treatment of investment spending, especially when compared to current consumption, for projects being scrutinised at both national and European levels would seem to make a lot of sense.

A major debate is needed on all these issues. If we fail to address these problems and resolve them, Europe’s transport infrastructure will soon start to fall apart. If that happens, a severe blow will be delivered to our hopes of economic recovery in a Europe that is becoming the “old continent” in so many senses.

 

Photo credit: Flickr Tim Boric

 

 

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On 4 June, the 4th European Standardization Summit will take place at the National Library of Latvia in Riga as part of the official programme of the Latvian Presidency and the European Construction Week in Riga. The main topic of the Summit is how standardization can contribute to a cleaner and smarter economy in Europe focusing primarily on the construction sector and such issues as sustainable architecture and construction, energy efficiency of buildings, smart cities, and building design and management.

Budgets MEPs welcomed next year's "restricted" but well focused draft budget presented by Commission Vice-President Kristalina Georgieva on Wednesday immediately after it was approved by the Commission.
Committee on Budgets

Source : © European Union, 2015 - EP

Budgets MEPs welcomed next year's "restricted" but well focused draft budget presented by Commission Vice-President Kristalina Georgieva on Wednesday immediately after it was approved by the Commission.
Committee on Budgets

Source : © European Union, 2015 - EP

"The Central African Republic is doing much better. There is a clear improvement even if it is still very fragile," CAR's interim president, Catherine Samba-Panza, told foreign affairs MEPs on Tuesday. CAR still needs the EU's "multi-dimensional aid", she stressed, calling on member states to redouble their efforts to help the CAR meet its electoral, budgetary and security challenges.
Committee on Foreign Affairs

Source : © European Union, 2015 - EP

"The Central African Republic is doing much better. There is a clear improvement even if it is still very fragile," CAR's interim president, Catherine Samba-Panza, told foreign affairs MEPs on Tuesday. CAR still needs the EU's "multi-dimensional aid", she stressed, calling on member states to redouble their efforts to help the CAR meet its electoral, budgetary and security challenges.
Committee on Foreign Affairs

Source : © European Union, 2015 - EP

"The Central African Republic is doing much better. There is a clear improvement even if it is still very fragile," CAR's interim president, Catherine Samba-Panza, told foreign affairs MEPs on Tuesday. CAR still needs the EU's "multi-dimensional aid", she stressed, calling on member states to redouble their efforts to help the CAR meet its electoral, budgetary and security challenges.
Committee on Foreign Affairs

Source : © European Union, 2015 - EP

Plenary sessions : UN Secretary General Ban Ki-moon will deliver a formal address to Parliament at 15.15 today. He is expected to address the recent refugee tragedies in the Mediterranean and to support the EU Agenda on Migration.

Source : © European Union, 2015 - EP

Plenary sessions : UN Secretary General Ban Ki-moon will deliver a formal address to Parliament at 15.15 today. He is expected to address the recent refugee tragedies in the Mediterranean and to support the EU Agenda on Migration.

Source : © European Union, 2015 - EP

Citizens from over 70 nations will be able to vote in the UK referendum on Britain’s membership of the European Union. But most European Union nationalities will be excluded.

A spokesman for the British Prime Minster said:

“This is a big decision for our country, one that is about the future of the United Kingdom. That’s why we think it’s important that it is British, Irish and Commonwealth citizens that are the ones who get to decide.”

But the voting franchise on who can vote in the UK has more to do with Britain’s distant past than its future.  Its roots go back to Britain’s Empire, when countries across the world were ruled by Great Britain.  At one time or another, Britain invaded almost 90% of the world’s nations.  At the Empire’s peak, atlases showed half the world coloured pink, signifying British rule.

Over time, as the British reign softened, many of these countries became self-governing whilst retaining Britain’s monarch as Head of State.  The Commonwealth of British Nations was formed in 1949 with membership on a voluntary basis.  The last two countries to join The Commonwealth – Rwanda and Mozambique – have no ties with Britain’s Empire.

Including Britain, 55 countries across the world are members of The Commonwealth, and all citizens from those countries resident with ‘leave-to-remain’ in the UK will be able to vote in the Referendum. 

They include citizens living in the UK from Australia, Canada, Ghana, Malaysia, India, Pakistan, Singapore, South Africa, Uganda and Zimbabwe.  Just two EU countries are members of the Commonwealth, Malta and Cyprus, and citizens from those countries resident in the UK will also get a vote.

The right-to-vote in the UK elections doesn’t end when Commonwealth membership ends.  The UK’s Electoral Commission told me yesterday, “Commonwealth citizens retain their voting rights even if the country of which they are a national has been suspended from the Commonwealth.”

In addition, citizens living in the UK from 15 ‘British Overseas Territories’ will also have a say on Britain’s future in Europe, including those from Anguilla, Bermuda, Cayman Islands and Montserrat.  The British government has announced that residents of its Overseas Territory, Gibraltar, whether living there or here, will also be able to vote in the Referendum.

Citizens of the British Crown Dependents of the Isle of Man and the Channel Island also have the vote.  And as a result of a special treaty signed between Britain and Ireland, Irish citizens living in the UK will also have a vote in the referendum.

But citizens from 24 EU countries who have made Britain their home, who reside here, work here, pay taxes here and many of whom have started families here, will have no vote on whether Britain will stay a member of the EU, even though the decision directly affects them.   Many of these EU citizens have been living in Britain for over 30 years.  They hadn’t taken out British citizenship because, under EU rules, they all have European Citizenship, meaning that, like all EU nationalities, they can move to any other EU country and enjoy the same rights as native citizens of that country.

Except that residents here from other EU countries do not enjoy the same voting rights as British citizens – or those of over 70 nationalities across the world, who because of Britain’s imperial past, still retain the historical right to vote here in our General Elections and the forthcoming referendum.

EU citizens living in the UK denied a referendum vote include French, German, Italian, Spanish, Polish, Danish, Romanian and Swedish residents  – all denied a vote, whilst those living here from nations including Grenada, Kenya, Mozambique, Nigeria, the Seychelles and Sri Lanka will have a say on Britain’s future in the EU.

Also excluded from the referendum vote will be British citizens who have lived abroad for over 15 years – an arcane rule that the Conservatives promised in their manifesto would be scrapped. But it seems that the rule will not be changed in time for the referendum.

Uniquely for the referendum, members of the House of Lords will be given a vote, but unlike in last year’s Scottish referendum on independence, 16 and 17 year-olds will not. (In the Scottish referendum, EU migrants were also permitted to vote). However, the fact that the UK government can amend the rules on who can vote in the referendum, means that it is politically and practically possible to change the voting franchise for what will be a once-in-a-generation (or-two) event.

Yesterday I contacted No 10 Downing Street, the home of British Prime Minister, David Cameron.  A spokesman told me that the voting rights and rules for the referendum will be broadly the same as those of a British General Election.  But, he added, it would be subject to the consent of Parliament.

Maybe our Members of Parliament will see sense and realise that there is a serious democratic deficit in allowing so many different nationalities to vote in the forthcoming EU referendum, but to specifically exclude most nationalities living here from the rest of Europe, as well as denying a vote to many British people living abroad.  

#EUReferendum: who can and can’t vote and is it fair? Read @Jon_Danzig on our Facebook page http://t.co/nha8RDX0Xa pic.twitter.com/b7U5NoP72U

— New Europeans (@NewEuropeans) May 27, 2015

Other articles by Jon Danzig:

• Can’t vote or don’t vote?
• Britain’s human rights law: endorsed by Churchill, written by British lawyers, adopted by 47 European countries
• Censored by The Daily Telegraph

The post The Referendum – who can and can’t vote? appeared first on Ideas on Europe.