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News & Insights on Europe

News and Views on Europe – 17 Nov 2017

posted by eucentresg

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European Defence Cooperation Pact – a milestone for the EU?
23 EU member states have signed an EU Defence Cooperation Pact in Brussels on Monday (13 November), described by many as the “nucleus of a joint army”. The move is part of a broader push to advance European integration and was proposed by France and Germany last year as a response to Brexit, the uncertainties over the transatlantic security relations under president Donald Trump and the instability in the EU’s own backyard following Russia’s annexation of Crimea in 2014. The looming departure of the UK- the bloc’s biggest military power – has made it easier to go forward with the Permanent Structured Cooperation (PESCO), since Britain has traditionally been critical of any EU military cooperation, preferring to put the focus on strengthening NATO.

All member states, except Malta, Portugal, Denmark, Ireland and the US, have signed the declaration, prior to launching the legally binding PESCO at the EU summit on 11 December. Some experts expect Ireland and Portugal to join later. EU foreign policy chief Federica Mogherini hailed the pact as a “historic day for European defence”.

PESCO contains a list of commitments, which “include increasing the share of expenditure allocated to defence research and technology with a view to nearing the 2 percent of total defence spending” and to “regularly increasing defence budgets in real terms.” Also PESCO will make it possible for member states “to jointly develop defence capabilities, invest in shared projects, or enhance the operational readiness and contribution of their armed forces”. France and Italy had called for a more ambitious project, Germany, however, focused on getting as many member states on board as possible. Also countries that are not in the EU could take part in specific missions, but they will have no part in decision-making.

According to Jens Stoltenberg, Secretary General of NATO, who attended Monday’s EU meeting, PESCO was “good for Europe and good for NATO” because it would lead eventually to more spending on defence. Officials have stated that the framework will complement rather than antagonise NATO. Other projects such as the European Defence Fund worth €5.5 billion per year, which was launched earlier this year, also aimed at deepening integration in European Defence.

However, Nick Witney of the European Council on Foreign Relations in his commentary “EU defence efforts miss the open goal again” was skeptical of the latest efforts. He argued that the commitments laid-out in PESCO have “simply been watered down so as to become virtually meaningless.” He further noted that every project of PESCO will need approval by the Council, resulting in “lots more bureaucracy.”

 

Concerns over rule of law in Poland and Malta and over reform progress in Bulgaria and Romania
The European Commission released its Cooperation and Verification Mechanism (CVM) reports for Bulgaria and Romania on Wednesday (15 Nov), stating that the two EU member states have made progress in implementing judicial reforms and fighting corruption, but “there is still more work to be done.” Both countries had to sign up to the CVM which monitors and helps implement judicial reforms to combat corruption, when they joined the EU in 2007. This means that the two countries will remain blocked from joining the Schengen agreement. Moreover, Bulgaria and Romania are also keen to join the eurozone, with Bulgaria being close to entering the eurozone’s ante-chamber, the so-called Exchange Rate Mechanism (ERM-2).

Bulgaria will take up the six-months rotating Presidency of the Council of the EU from 1 January 2018 and Romania’s from 1 January 2019. That is why the CVM report was released now instead of January, in order “to avoid dealing with it during the Bulgarian presidency”. The Commission will assess progress again towards the end of 2018, for the last time before its mandate ends in 2019.

At the same time as the Commission released its CVM reports on Bulgaria and Romania, EU lawmakers are investigating concerns over the rule of law in two other member states, Malta and Poland. While concerns regarding Poland are more serious, Malta has also moved into the spotlight, following the murder of journalist Daphne Caruana Galizia. On Wednesday (15 Nov) the European Parliament came forward with a non-binding resolution, which was backed by two thirds of MEPs, raising “serious concerns” about the independence of the police and about money laundering in Malta. The latest revelations on Malta’s tax practices, including allegations on tax evasion and money laundering, has put the spotlight and pressure on Malta. If the Commission decides to act upon the request by the MEPs to look into rule of law violations, it could eventually lead to sanctions.

MEPs also prepared on Wednesday (15 November) the first step towards a sanctions procedure against Poland regarding “serious violations” of the rule of law. In a resolution adopted by 438 to 152 votes, with 71 abstentions, the MEPs condemned the government’s clampdown on the independence of the judiciary and breach of fundamental EU values. A similar resolution was adopted against Hungary earlier this year.

EU Commission Vice-President Frans Timmermans outlined concerns over legislation that was adopted and proposed during the summer in Warsaw. In September Polish President Andrzej Duda (PiS) proposed amendments to the bills, but in the MEPs’ opinion, not enough dispel doubts about the division of powers and the independence of the judiciary. Therefore, Timmermans urged the Polish authorities to engage in a dialogue with the Commission. However, Poland’s Prime Minister Beata Szydlo called Wednesday’s parliamentary vote “outrageous”.

In theory the sanctions procedure could end up with the suspension of Poland’s voting rights in the Council of the EU (the so called “nuclear option”, also known as Article 7). However, in reality, this is unlikely thing since Hungary already indicated it would veto such a move. A report in the German daily Süddeutsche Zeitung outlined the possibility of tying disbursement of EU money to the rule of law as one possible way to deal with member states’ violations. Apart from Germany, France, the Netherlands, Finland, Sweden, Denmark and Belgium have indicated their support for such a move which could be part of the EU’s new cohesion-policy.

Another worrying development in Poland saw 60,000 people marching in Warsaw on the country’s Independence Day (11 Nov), most of them white nationalists calling for ethnic purity. Their xenophobic slogans and chants were not condemned by the Polish government heightening concerns in Brussels over the right-ward shift of Poland’s politics.

 

How the EU is planning to tackle “fake news”
On Monday (13 November) the European Commission announced plans on tackling fake news through launching a public consultation and setting up a High-Level Expert Group representing academics, online platforms, news media and civil society organisations. The plans are part of a broader effort to protect democracy. “Fake news is a direct threat to the very foundations of our democratic society,” said Mariya Gabriel, EU Commissioner for digital economy, speaking at a conference on fake news in Brussels on Monday. She also highlighted concerns over “the fact that this phenomenon makes it possible for external actors to influence opinion in our democracies to an extent that was never before possible.” Vice-President Frans Timmermans added that: “The freedom to receive and impart information and the pluralism of the media are enshrined in the EU’s Charter of Fundamental Rights. We live in an era where the flow of information and misinformation has become almost overwhelming. That is why we need to give our citizens the tools to identify fake news, improve trust online, and manage the information they receive.”

The Commission has put online a questionnaire to collect public responses and opinions on what actions could be taken at the EU level to give citizens effective tools to identify reliable information and how to adapt to the challenges of the digital ages. The responses to be collected until February will then feed into a strategy paper on how to clamp down on fake news.

Oxford University conducted a study on the topic of fake news, assessing 28 million feeds shared in political debates and elections in the US, UK, France, and Germany. Lisa-Maria Neudert, one of the researchers, says that for every piece of professional content, one piece of fake news / junk content was being shared in the US. “In France we have had a ratio of seven-to-one and in the UK and also in Germany we had a ratio of four-to-one, so roughly 20 percent of fake news content that was being shared,” she said.

However, regulators are facing a dilemma. Spreading fake news is often not illegal, and is considered freedom of expression. However, at the same time, there are real concerns that they do influence politics and elections. Those concerns were further highlighted in an article by the Guardian (14 Nov) which revealed that Russia used hundreds of fake accounts to tweet about Brexit, in order to sow discord between Britons over the referendum.

Germany has already started taking steps to tackle fake news. Recently a new law went into effect that will fine social media firms up to €50 million if they fail to remove illegal content like hate speech. Other EU leaders have indicated their support of such a law.

 

Chaotic Brexit: Stalemate and mutual discomfort
The EU and the UK embarked on the latest round of Brexit negotiations last Thursday (9 Nov) in Brussels, ending yet again with no significant progress. The EU was waiting for the UK to spell out what financial commitments it is willing to honour. (President of European Parliament Antonio Tajani put the figure at a minimum of €60 billion.) The UK, however, claimed that they have no mandate to commit anything beyond Theresa May’s Florence speech on 22 September. Interestingly, British Brexit secretary David Davis, in an interview with Sky News broadcasted on Sunday, insisted that the EU understands and accepts the UK’s position that no figure or formula will be fixed until the negotiations move on to the second stage that focuses on future relations between the EU and the UK. Due to this Brexit bill disagreement, Polish Prime Minister Beata Szydło judged that achieving “sufficient progress” – a term created by the EU to describe conditions to trigger phase 2 negotiations – at the European Council summit in December is difficult. EU’s chief negotiator Michel Barnier warned of the risk that the Brexit negotiation might collapse and said that “everyone needs to plan” for the breakdown in Brexit talks.

As the Brexit negotiations gradually fall into disarray, negative consequences of the UK ending its four decade EU membership are unfolding and hurting both sides in different ways. Financially, Brexit will increase net contributions of Germany, the biggest EU country in terms of both population and GDP, to the EU budget by 16% or €3.8 billion. France is facing an increased net contribution of approximately €1.2 billion per year and Italy €1 billion. In terms of defense, with Britain gone, there are concerns over the further weakening of the Western defence alliance. However, this was dismissed by British Prime Minister Theresa May during her speech at the London Lord Mayor’s banquet.

It is probably inevitable that the EU’s defence relations with the UK will change with Brexit. Internal divisions within Europe have started to emerge in this regard – some EU countries in Central Europe and on the Baltic favour giving Britain special status post-Brexit to enable it to continue taking part in the decision-making process regarding military missions, but other, more powerful countries are inclined to make any such future arrangement dependent on the nature and outcome of the current first phase of Brexit talks.

Brexit is taking a toll on the departing UK as well. Debate since Brexit referendum has failed to tackle immigration — the key motivator behind the Leave campaign. The number of non-British EU citizens working in the UK has reached a record high (approx. 2.38 million with a particular increase among people from Bulgaria and Romania) since the June 2016 referendum, according to government figures released Wednesday (18 Nov). Prime Minister May is also struggling in the face of Conservative backbench rebellion and attack from the opposition Labour party. Up to 40 Conservative MPs were reportedly prepared to sign a letter of no confidence in Theresa May while Labour claims that her government lacks “authority” to deliver Brexit transition deal. The weakened leadership of Ms May has led to the cancellation of a scheduled meeting with the Conference of Presidents — the president of the Parliament and the leaders of the political groups – on 24 November as senior MEPs do not want to stay in Brussels on a Friday to meet with her.

 

EU lifts ban on Japanese food, pushes for free trade with Japan
The EU announced on 11 November that it will lift the import ban on some Japanese food including rice, bamboo shoots and fishery products on 1 December. The ban was imposed after the meltdowns at the Fukushima Daiichi nuclear complex, following the East Japan earthquake 2011, that resulted in land and sea contamination. Farmers in other prefectures will no longer need to prove that their products contain no inputs from Fukushima next month onwards.

The ban was lifted just days before Japan’s Foreign Minister Taro Kono and Trade Minister Hiroshige Seko spoke on the phone on Wednesday (15 Nov.) with Cecilia Malmstrom, the EU’s trade commissioner, reaffirming the shared intention to finalise and conclude the negotiations for the Japan-EU Economic Partnership Agreement (JEEPA) within the year. Both sides are also aiming to have JEEPA come into force in early 2019.

The two sides struck a political agreement in July before G20 Summit, and have been working to fix the final text of the deal since thereafter. While most of then-outstanding issues have been resolved successfully, provisions in relation to investment dispute settlement prove difficult to tackle. Tokyo wanted to establish an in-built investor-state dispute settlement mechanism, but Brussels insisted that a permanent, stand-alone investment court system should be founded. Unable to find common ground, the two sides will set the issue aside so they can wrap up and sign the rest of the pact, Nikkei Asian Review understands.

For the EU, JEEPA is a huge achievement from a trade policy point of view. It is expected to be implemented alongside the EU-Canada Comprehensive Economic and Trade Agreement (CETA) , connecting the EU to both America and Asia through freer trade. For Japan, the finalisation of JEEPA would follow the preliminary, minister-level agreement reached earlier this month on the 11-member Trans-Pacific Partnership (officially known as Comprehensive and Progressive Agreement for Trans-Pacific Partnership, CPTPP), the big regional trade deal that was nearly scuttled by the US withdrawal.

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