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News & Insights on Europe

News and Views on Europe – 3 Nov 2017

posted by eucentresg


Spanish government gains upper hand in Catalonia?
Following the declaration of independence by the Catalan leader Carles Puigdemont after the Catalan parliament voted in favour of independence from Spain, the Central Government in Madrid, expectedly imposed direct rule over the Catalan region. Puigdemont and his entire cabinet, including 150 Catalan officials, were dismissed, and Prime Minister (PM) Mariano Rajoy also announced that regional elections will be held on 21 December. The intention behind calling elections much sooner than expected are clear – Madrid hopes Catalan voters will punish separatist forces. However, according to a recent poll (taken 16-29 October) pro-independence forces might have a similar ruling majority as the one they got in 2015. The survey also indicated an increase from 41.1% to 48.7% supporting secession in the past four months. The main pro-independence Catalan parties have already indicated that they will take part in the ballot.

The Spanish government is also bringing charges against Puigdemont and 19 other members of his fired government for rebellion, sedition and misuse of public funds. They have been summoned to testify in Madrid on Thursday and Friday (2&3 November) and were given three days to pay a combined deposit against potential penalties of €6.2 million. If convicted, the accused could face up to 30 years in jail. This led to another surprise twist: Puigdemont turned up in Brussels on Tuesday after vanishing from Spain. Puigdemont said during a press conference that he and six other members of his government had decided to leave Catalonia “out of caution.” He accepted the holding of the regional election in December, but at the same time insisted on still being the president of the “legitimate government” of Catalonia.

Rumours of Puigdemont’s intention to request asylum in Belgium were dismissed by him. He also told reporters that he was in Brussels as it is the capital of Europe, and “I am asking for Europe to react.” But his call for European solidarity was greeted with silence not only by the EU but also by its member states. Only the Belgian government came out with a statement, stating that “Mr Puigdemont is in Belgium, neither at the invitation or the initiative of the Belgian government.” The EU has also made it clear that the crisis is an internal Spanish affair and will not recognise last week’s independence declaration.

Not everybody is happy about Puigdemont’s trip to Belgium and his refusal to go back to Spain. He has been criticised also from within his own party, accusing him of “irresponsibility”, since his actions could lead to their imprisonment. There also have been calls by separatist politicians to “focus on negotiating a legal referendum with Spain.” Puigdemont, however, said that he will not go to Spain unless he gets “guarantees” that he will receive a “fair treatment” in Spain. If he and the other members of the former Catalan government fail to appear in court on Thursday, an international arrest warrant would almost certainly follow.

In an article in the Guardian, Richard Youngs, senior fellow at Carnegie Europe and former Visiting Fellow at the EU Centre in Singapore, was quoted saying that “The way the Catalan government is going is clearly not the way to succeed and there is no realistic chance of creating an independent state in this way.” However, Youngs also thinks the EU should have done more behind the scenes, mediating between both sides, which could have avoided the current crisis. A commentary in German daily Süddeutsche Zeitung focused on Puigdemont’s failure, since also his allies are turning away from him. His trip to Brussels was described as a “flight” and “political suicide”.


UK open to a Brexit deal favouring the EU
After a Tuesday (31 Oct) cabinet meeting on “Brexit preparations for all contingencies”, the UK’s Brexit Secretary David Davis told the House of Lords EU select committee that the “[UK] withdrawal agreement on balance will probably favour the [European] Union in terms of the things like money and so on,” although he insisted that “the future relationship will favour both sides”. He also talked down the prospect of the two sides failing to reach a deal whatsoever, asserting that “whatever happens, we will have some sort of basic deal” at least in areas like aviation.

The National Institute for Economic and Social Research (NIESR), a think tank, released a report on Wednesday (1 Nov) saying that British families are £600 (approx. 800 US dollars) a year worse off because of Brexit. The real household disposable income in the UK would have been more than 2 percent higher than it is today had Britain voted to stay in the EU, NIESR’s economic modeling team concludes. (The think tank also downgraded its forecast for UK economic growth this year and next, in what it described as a major divergence from the rest of the European economy which has seen growth pick up.)

Actually the British government had conducted as many as 58 in-house economic studies of the impact of Brexit covering sectors from aerospace to tourism, but London had refused to make the documents public because it fears that, in the words of Robin Walker, a senior Brexit official, “the more information is shared more widely, the less secure [British] negotiating position, and the harder it becomes to secure the right deal for the British people.” Labour had long rejected this argument and accused the government of trying to eschew public scrutiny. The UK’s Parliament agreed to a motion put forward by the Labour on Wednesday stating that the documents should be released to exiting the European Union parliamentary committee. The government did not oppose the motion but it was unclear if its passage would force them to act and when they would act.

Coming perhaps a little too late, but could potentially add to the complications of the Brexit negotiations, was the investigations into the “dark money” behind the Brexit. The UK Electoral Commission said Wednesday (1 Nov) it had opened an investigation into whether Aaron Banks, a leading Brexiteer of the private sector (and who was pictured with Donald Trump and Nigel Farage soon after Trump’s election victory), breached campaign finance rules during the 2016 Brexit referendum by giving almost £9 million in cash, loans and services to pro-Brexit activities. The investigation cannot overturn the referendum, though Banks claimed that it was the latest attempt by the “Remain establishment” to discredit the Brexit result.

Among various Brexit scenarios, perhaps the no-deal one is the most damaging economically. The slow-moving Brexit negotiations, the deadlock over the UK’s divorce bill and the Tory in-fighting all increase the likelihood of ultimate failure of Brexit negotiations. This prospect prompted the Hong Kong-based South China Morning Post (SCMP) to publish an editorial on Wednesday (1 Nov) urging Theresa May to seal “core Brexit deals” or the “least disruptive transition” for Britain. Noting that pulling off a win-win Brexit outcome could be an “insurmountable” challenge for “a politically weak leader” like Ms May, SCMP candidly suggested she made bold changes to her “uninspiring cabinet” by “injecting new, younger blood”.

An op-ed in Yomiuri Shimbun written by the paper’s senior journalist Keiko Iizuka, too, attributed the UK’s Brexit predicament to its internal political struggle. Iizuka found it odd that the Conservative and the Labour, instead of clarifying positions relating to Britain’s exit from the European Union, are seemingly obsessed with a tug-of-war debate between capitalism vs. socialism. Iizuka suspected this is because although each party is united in its opposition to the other, both parties are also so deeply divided over their views on the EU that coherent party lines on Brexit are not possible.


Questions over Visegrad’s future
The Visegrad alliance, comprising Poland, Hungary, the Czech Republic and Slovakia, was established in 1991 to deepen regional cooperation after the collapse of communism. Initially the countries shared the common aim of joining the EU and NATO. But once members, the group lost its relevance. However, with the refugee crisis in 2015 the alliance was revitalised again sharing a common objective: the opposition towards German-led efforts to implement a burden-sharing policy which forced them to take in refugees.

However, in recent months, its relevance and unity is again being tested with rising tensions over the reform of the EU’s directive of posted workers. The reform which was agreed on 23 October, was strongly backed by France and also supported by Germany, Belgium, Luxembourg, the Netherlands and Austria. The reform allows people who work temporarily in another member state to earn as much as workers in the country where they are posted. Poland and Hungary opposed the move, while Slovakia and the Czech Republic endorsed the compromise. Macron has been criticised for deepening the East-West rift and driving a wedge through Visegrad, not only with EU labour reform but also when he met with the leaders of Slovakia and the Czech Republic in Austria in August, avoiding Visegrad’s more difficult half.

Another challenge to the V4′s unity has been the general election (20-21 October) in the Czech Republic, with populist oligarch Andrej Babiš likely being the country’s next Prime Minister (PM). Babiš has given little indication of the course of his foreign policy. It is widely believed that he “doesn’t really care about Visegrad” as a Czech official pointed out. But also the elections in Austria will change the dynamics of the group. Sebastian Kurz, likely new Chancellor of Austria, wants to delay further integration of central and eastern European countries.

Slovakia, Visegrad’s only euro member, has also made it clear that it sees itself close to the EU’s core and does not want to be relegated to a “second tier.” The Slovak PM Robert Fico has criticised Visegrad’s domination by the Hungarian and Polish right. Fico made it clear in an interview this summer that he is supportive of a united Europe, a tenor reflected in the Slovak society. Slovakia also has been called a “pro-Euroean island” in the region. Bratislava is also one of the candidates to host the European Medicines Agency (EMA).

The Visegrad alliance also seems to be losing influence in the EU Eastern Partnership. It tried to support EU ambitions and the democratic transformation of the countries on the eastern EU border due to their own experience of European integration. However, with the rise of populism and Euroscepticism, V4 is losing interest to support their eastern neighbours, but also its credibility. Or as Miriam Lexmann from the International Republican Institute put it: “Now we could rather share lessons from the failures of some of our own democratic processes.”

Visegrad’s disunion puts its ability to have an impact on “multi-speed Europe” initiatives championed by France and Germany at stake. According to Milan Nič, an analyst with the German Council on Foreign Relations “the attempt to turn this club into a counterweight failed. They’re too divided on fundamental issues to push a common agenda.” This development may sound like good news for Brussels, which on multiple occasions voiced concern over the illiberal and Eurosceptic platform. But further isolating those countries could backfire and fuel populism.


EU expresses concerns over rights in Cambodia
Following a series of alleged political crackdown in Cambodia that saw the arrest of opposition leader Kem Sokha and the dissolvement of his Cambodia National Rescue Party, a six-member European Parliament delegation flew to the kingdom on Tuesday (31 Oct) to hold consultation with the Cambodian government.

To the extent that the European Parliament is a co-legislator for budgetary and trade issues, the parliamentary delegation’s chairman, Werner Langen, after the two-day visit, warned that Cambodia could face EU action over aid and vital trade preferences if the human rights situation worsened further. According to Reuters, EU countries accounted for around 40 percent of Cambodia’s exports in 2016. Its exports, mostly of clothing, get fully duty free access under the EU’s “generalised system of preferences”. The EU and its member states also gave Cambodia nearly $170 million in development aid last year.

In response to the warning, Chheang Vun, Chairman of the Commission on Foreign Affairs of the National Assembly of Cambodia, firstly emphasised the positivity of the delegation’s visit, and then explained that Sokha’s arrest was justified because he had committed crimes following “foreigners’ policy . . . that caused social instability”. Vun dismissed concerns about the opposition parties potentially being dissolved in their entirety, adding that the Cambodia National Rescue Party is just one of many more opposition.

One of the reasons that the EU was particularly concerned with the political inclusiveness in Cambodia is that the EU has since 2014 committed about $470 million in preparation for the country’s next general election scheduled in July 2018 (in which the incumbent Prime Minister Hun Sen’s rule of more than 32 years will be at stake.) Therefore, Khmer Times understood that at the meeting with Werner Langen, Cambodian officials invited the EU to send observers to monitor next year’s national election. Werner said EU observers would monitor the election as requested.

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