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News & Insights on Europe

News and Views on Europe – 27 Oct 2017

posted by eucentresg

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Crisis in Spain at risk to escalate over suspended Catalan autonomy
The rifts between the Spanish central government in Madrid and the Catalonian government in Barcelona deepen. Prime Minister Mariano Rajoy announced on Saturday (21 October) that his government will trigger Article 155 of the Spanish constitution. This means that the whole Catalan Cabinet will be dismissed, with Madrid assuming all the powers of the regional executive. Furthermore, regional elections will be called within the next six months. The Spanish Senate is scheduled to vote on the move on Friday (27 October), which would mean that the measures will come into effect one day later. In response to Rajoy’s threat, nearly half a million of Catalan separatists took to the streets of Barcelona on Saturday. Neutral figures, such as Barcelona Mayor Ada Colau, whose party hasn’t taken a stance on independence, said the measures proposed by the central government were an attack “on the rights and the liberties of everyone.”

The further evolution of the crisis will depend on the reaction of the separatists, with calls for passive resistance and civil disobedience mounting. Carles Puigdemont, the Catalan leader, gave an address during Thursday’s (26 October) plenary session, and left the decision to whether declare independence to the regional Parliament. He accused the central government of derailing a last-minute compromise. It was also expected that Puigdemont might dissolve the regional Parliament in order to de-escalate tensions with Madrid. Earlier reports by the Spanish press assumed that he had given up on plans to declare independence. A report in the EUObserver, however, highlighted that Puigdemont is also under pressure from his allies and own party, who insist on declaring independence and threatened him to quit if he called for new elections.

A deal between Barcelona and Madrid is not entirely off the table, negotiations through intermediaries are trying to broker a deal, which would allow for new elections without putting Catalonia under direct Madrid rule. This means that the uncertainty over Catalonia’s future continue or as Politico put it: “That means the unpredictable drama could continue on Friday, when Rajoy is expected to address the Senate before it approves the use of Article 155 [...]. Puigdemont could still back down or go ahead with fellow secessionist lawmakers and respond by approving a real, unambiguous declaration of independence.”

Calls for more self-determination are not only limited to Spain. Italy saw two of its regions voting for more autonomy on Sunday (22 October). The two North Italian regions of Lombardy and Veneto, have been compared to Catalonia. And although all three regions have one thing in common, namely being the wealthiest in their country, the nature of the referendums were different. Unlike Catalonia the Italian regions did not demand independence, but a greater autonomy, mainly greater “fiscal federalism”. Contrary to the situation in Spain the referendums in Italy were legitimate, but are only of consultative nature and non-binding. Lombardy and Veneto demand also more say on other issues such as immigration, security, infrastructure and education. Just over 40% of voters went to vote in Lombardy, with 95% supporting greater autonomy, while some 58% turned up in Veneto and almost unanimously voted in favour of increased autonomy (98%). The combined wealth of the two regions accounts for 34% of Italy’s GDP and therefore they demand to retain a higher share of their fiscal revenue. The referendums were organised by the regional governors, both belonging to the far-right Northern League (Lega Nord) party. The party is expected to get a boost from the referendums just ahead of general elections next year. However, some critics claim that the votes were a waste of time and money, given that the Italian constitution allows regions to enter into negotiations at any time with the central government in Rome. Others also highlight Italy’s North-South divide might further deepen. Giovanni Orsina, history professor at Rome’s Luiss-Guido Carli University, said “Once you open up the issue of what the northern regions pay, then I expect a backlash in southern Italy.”

 

German coalition talks, parties agree on pro-EU policies
German Chancellor Angela Merkel, whose conservative party, the CDU, lost many seats in last month’s general election, is trying to form a coalition with the liberal Free Democrats (FDP) and the Greens. The parties are currently holding so called “exploratory” discussions, during which their disagreements on taxes, migration and foreign policy have become obvious. But also the recent “battle” over the finance ministry shows that it might take a while before any final decisions on the “terms and conditions” of a so-called Jamaica coalition crystallised.

The FDP claims that the influential finance ministry, which has been the past eight years under the CDU, has operated as an “extended arm” of Merkel’s chancellery. It is quite evident that the CDU would like to hold on to the ministry, arguing that their finance minister Wolfgang Schäuble brought Germany back to a balanced budget. However, FDP and the Greens are also keen to take over the ministry. It is widely believed that the Social Democrats (SPD), Merkel’s former junior coalition partner, “were pushed to the sidelines in many key debates because they held no sway in the finance ministry.” Green leader Simone Peter said in a newspaper interview that ministry posts won’t be divided up between the parties “until the very end” of coalition negotiations. However, a joint paper on Europe by all parties involved in the talks was released on Thursday (26 October), after agreeing on a blueprint for fiscal policy on Tuesday (24 October). While the paper has been criticised for being too vague on many pressing issues, and mainly outlining topics which have to be discussed further, such as eurozone budget and the European Stability Mechanism (ESM), it also highlights the importance of the Franco-German relationship and the agreement to push for reforms of the EU. Furthermore, the paper states the importance of maintaining the four freedoms of the EU’s single market (free movement of goods, capital, services and labour), probably as an indication of support of a hard Brexit.

 

EU gives Vietnam “yellow card” over illegal fishing
The European Commission issued a “yellow card” on Monday (23 Oct) warning Vietnam for its failure in addressing illegal, unreported and unregulated (IUU) fishing. Part of the reason is that the EU thinks Vietnam, as one of the top ten producers of seafood products in the world, lacked “an effective system” to punish IUU fishing and did too little to stop Vietnamese vessels in the waters of neighbouring small island countries. Their activities risked negatively impacting marine ecosystem.

With this “yellow card”, Vietnamese vessels will be subjected to more intense scrutiny, which could see all shipments inspected; a process that can take three to four weeks and £500 (US$633) per container. Vietnam now has six months to improve the situation or else it will be given a red card and banned from exporting aquaculture products to EU. (When the Philippines was given a “yellow card”, for example, up to 70% of its containers were rejected.) The warning came months before the implementation of a new EU system to fight against illegal fishing.

Vietnam was quick to respond to the “yellow card”. The Vietnam Association of Seafood Exporters and Producers (Vasep) signed a memorandum with Vietnam Coast Guard on Tuesday (24 Oct) to exchange information and raise public awareness about IUU fishing activities. VASEP is also collaborating with the Ministry of Agriculture and Rural Development and related agencies on the issue, proposing solutions to change the management methods over the fishing ports and build a database for management and trace ability.

Despite the incident, an international workshop held on Wednesday (25 Oct) stressed the importance of EU-Vietnamese economic ties. The EU is the second biggest trade partner of Vietnam with bilateral trade estimated at over US$45 billion in 2016. And the EU-Vietnam Free Trade Agreement (EUVFTA) was highlighted to be particularly valuable to Vietnam in terms of improving the workforce quality while creating a more favourable business climate in Vietnam. Negotiations for EUVFTA were concluded on 1 February 2015. The deal is expected to take effect in 2018 (provisionally).

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