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News & Insights on Europe

News and Views on Europe – 30 Nov 2018

posted by eucentresg

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EU leaders sign Brexit agreement; Theresa May faces opposition from hardline Remainers
On Sunday, 25 Nov, there was a collective sense of sadness as EU 27 leaders signed the agreement that will see UK leaving the European Union. While they were sad to see Britain leave, the EU 27 were united in affirming that the deal was the best Britain would get. Commission President Jean-Claude Juncker said that “this is the only deal possible” against staunch Remainers expressing hopes for otherwise. Theresa May agreed on this front and pledged to sell the deal to her country “with all [her] heart”. European leaders acknowledged that it was not a celebratory moment to see Britain leave but saw it as a historic achievement–Angela Merkel called it a “diplomatic masterpiece”–that the deal itself was reached.

The EU leaders also expressed that there is still much work to be done, especially for the UK Prime Minister. After the signing of “the divorce agreement”, May published a heartfelt letter to the people of Britain. In it, she asserted that the deal is in the nation’s best interest and also advocated for “a new era of political unity”. Contrary to such sentiment, there is strong opposition from hard-line Remainers in Parliament who are trying to push for other plans besides the one on the table. One such alternative is to propose a Norway-style, single market relationship with Brussels.

Former Labour cabinet minister, Andrew Adonis, who is also a supporter of a second referendum disagrees with the growing consensus among pundits in Westminster that, with only four months to go before the official exit, the current deal will be passed to avoid a no-deal scenario. Adonis insists that “There either has to be a no deal or no Brexit”. Adonis and other Remainers hope to stall the exit by asking for an extension under Article 50 of the Lisbon Treaty and getting a Parliamentary majority to hold a second vote before May 29. They are confident that the youth of Britain will turn out this time to vote to remain in the EU.

However, interpretation of Article 50 lies within the European Court of Justice’s (ECJ) jurisdiction. The issue is whether Britain can unilaterally reverse Brexit; author of the clause, British diplomat John Kerr, said that the UK is within its rights to withdraw the article until it has exited the EU. Other legal experts say UK cannot do so unilaterally as other EU member states have already incurred costs from Brexit.

On the other hand, the economic assessment on Brexit is also out and it has reported that the UK economy will be 1.9%-5.5% smaller per person by 2030. This means the UK will be €115 billion worse off a year. The reduction will mostly be caused by new trading costs and lower migration. However, without a deal the percentage decrease is projected between 3.5%-8.7% of GDP. Brexit will also reduce GDP of Ireland by 1.7% per capita and 0.7% for the EU 27 by 2030.

US President Trump has also said that Brexit is a good deal for EU but it may not allow UK to trade with other countries. May’s office corrected this notion and said that under the agreement, the UK will be able to sign trade deals with other countries including the USA. A spokeswoman for the Prime Minister said “we have already been laying the groundwork for an ambitious agreement with the U.S”.

 

The EU and its member states face a plethora of hurdles this week – from migration to “Yellow Jacket” protests
On the migration front, Slovakia has become the 8th EU country to withdraw from the Global Compact for Safe, Orderly and Regular Migration. Following in the footsteps of Hungary, Austria, Poland, Czech Republic, Croatia, Bulgaria and Slovenia, Slovak Prime Minister Peter Pelligrini announced on Sunday, 25th November, that Slovakia will also be opposing the migration pact. The pact was approved in July by all United Nations member states except the United States, and is due to be ratified officially in December.

Meanwhile, European Parliament lawyers have shown support for EU plans to set up “regional disembarkation platforms”, or migrant centres, in North Africa and European states. The legal approval is another step forward for the EU which is pushing ahead with these plans despite opposition from various parties involved. North African states have rejected the plan, no EU state has shown interest in hosting a controlled centre within its territory, and human rights activists have raised concerns over the poor treatment of refugees based in overcrowded camps in the Greek islands, stating that a similar phenomenon will take place with these migrant centres.

The EU is also facing budgetary woes. On Monday, 26th November, European Central Bank President Mario Draghi called for EU members to take immediate concrete steps to reform the monetary union in light of the upcoming European elections in May 2019. Draghi stressed the importance of “designing an ambitious reform plan and building trust among all priorities”. Draghi also alluded to Italy when he stated that countries with high debt should reduce it. He expressed concern that high debt will place the euro in a risky position, and people living in lower-income countries might begin questioning the benefits of being part of the EU or the Eurozone.

Draghi’s comments come at a time when the European Commission has called for disciplinary action to be taken against Italy over its 2019 budget plan. Last Wednesday, 21st November, the European Commission’s chief for economic affairs, Pierre Moscovici, announced that Italy’s decision to not revise its budget plans will inevitably lead to actions taken against the country. However, he also stated that the Commission remains open to dialogue with Italy.

This is precisely what European Commission President Jean-Claude Junker and Italian Prime Minister Giuseppe Conte did last Saturday, meeting to discuss the Italian budget. Although the meeting was indecisive, the two sides have agreed to resume talks with other European leaders involved as well. There have been growing concerns among top Italian officials that the tensions between the European Commission and the Italian government have negatively impacted the Italian market and banking sector. Conte hopes that these dialogue sessions will help to calm financial markets and avoid further disciplinary actions from the Commission.

In the meantime, the European Parliament has been working on the EU’s social policy, seeking to create a “European social watchdog” and coordinate social security systems. In September 2017, European Commission President Juncker had announced the need for a common labour authority to ensure fairness in the single EU market. Following up from his announcement, Commissioner for Employment Marianne Thyssen submitted her proposal for a European Labour Authority (ELA) in March this year. The ELA seeks to coordinate labour policies among national authorities and help them comply with European rules. It will also facilitate access to information about labour rights and perform a mediatory role in disputes between states.

This week, French President Emmanuel Macron was confronted by protests against gas price hikes that went viral on social media. The protests mobilised up to 280,000 people and garnered broad public support. The protestors who wore high-visibility yellow vests, now termed as “Yellow Jacket” activists, burnt barricades and trashed café terraces at Champs-Elysées. The demonstrations forced Macron to take the humble approach, promising that he would listen to the people more and involve grassroots activists in a consultative approach to mitigate the shift to a low-carbon economy for poorer households. Macron’s approval ratings dipped to a record low, threatening his party’s prospects in the European elections next year.

In one of his first concessions to the Yellow Jacket activists, Macron has already pledged to tweak the system for taxing fossil fuels. He announced the creation of a new “agenda for solutions and protection” which will be developed over the next three months. This agenda will help tax increases take into account oil prices in the international market so as to mitigate impacts of rising oil prices on the people.

 

EU grapples with how technology affects the functioning of democracy
A Eurobarometer survey on democracy and elections has shown that 61% of Europeans worry about cyberattacks to manipulate elections, while 59% are concerned about influence from foreign actors and criminal groups. European Commission also reflected this concern of the citizens on electronic voting in light of the upcoming European elections. Commission First Vice-President Frans Timmermans has called on governments to work together in an EU-wide approach on cybersecurity to prevent hacking attacks. The Council and Parliament are working on setting minimum security standards for products ranging nuclear power to light bulbs.

Concern for the ability of technology to interfere with democratic elections is also present in an international hearing that took place in British Parliament over Facebook’s role in spreading misinformation about elections. In a session absented by CEO, Mark Zuckerberg, policy makers from Ireland, UK, Singapore, Argentina, Brazil, Latvia, France, and Belgium tried to get answers about the Cambridge Analytica scandal from Facebook’s Vice President, Richard Allan. They see the need for Facebook to take responsibility for allowing the formation of “echo chambers”, that have destabilized democracies. Although the officials have no legislative power, some countries are already working to stop “fake news” but they see a need to work together internationally in order to stamp out the influence of companies like Facebook.

One such EU wide measure for cyber security is the framework for protecting privacy called General Data Protection Regulations (GDPR). The importance of privacy has shot up for many Europeans after the Cambridge Analytica incident exposed the mishandling of data by tech giants. The region’s watchdogs have received complaints regarding high-profile technology and financial services. In this context, experts say GDPR has raised awareness for using these services but also seeks to improve protection in data breaches and police targeting techniques used by companies. However, an undesirable consequence of the GDPR is the impact it has had on small tech startups, which are unable to compete with the very giants whose services were responsible for the uproar in the first place.

 

Conflict in Azov sea put Europe on the path to de-escalate tensions
On Sunday (25 Nov), Russian forces attacked and detained soldiers on Ukranian naval ships in the Kerch Straits near Crimea. Despite the unresolved nature of how the conflict started, Ukrainian government has introduced martial law for 30 days following the cited threat of war. The EU considered sanctions on Russia but for now have opted to stress the importance of dialogue in “de-escalation on both sides”. German Chancellor Angela Merkel has reportedly since spoken to both Russian President and Ukraine’s President. Some see this move from the Europe as a failure to assert a strong stance against continuing aggression from Russia in the Azov sea since the annexation of Crimea.

Another report states that EU should be on high alert and be ready to revise its strategy against Russia. It has imposed sanctions since 2014, which are renewed every six months. However, this Azov sea conflict has shown that they are not enough to deter Russia. An alternative approach would be based on violation of international and and human rights, which would allow Brussels to assert itself against Moscow more prominently.

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