Should the English be charged more?
The huge rise in University tuition fees in the UK caused a massive political storm, and the devolved regional governments signaled that they would step in to prevent such increases locally. In Northern Ireland the plan is to stop any non-inflation related rise in fees and in Scotland University education will remain free, but this has raised concerns over NI and Scottish universities being flooded with English students hoping to escape the burden of higher student loans.
To prevent local students from being crowded out, Scotland will introduce fees for non-resident UK nationals at the same £9,000 level, and the Northern Ireland Executive is thinking of following suit. However, these fees are being challenged as a breach of the European Convention of Human Rights* for being contrary to its provisions on education and non-discrimination. It seems unlikely that the case will be sucessful - after all, Scotland has maintained free education for residents whereas English, Welsh and NI students would have to pay a fee (albeit lower than elsewhere in the UK) - but it has highlighted the issue of discrimination being able to take place within an EU Member State between its own nationals, and yet be outlawed between EU nationals.
Because while students will pay different fees depending on where they live within the UK, EU citizens from outside the UK will be able to access university education on the same basis - the same fees - as locals. Of course, it's not quite as simple as that because UK nationals will be able to draw on benefits that EU students who aren't working won't be entitled to, but the difference on fees is still significant. The political implications are huge - within the UK it will spark many debates: why should the regions with develoved governments be able to have lower fees? should the regions be able to discriminate against the English metropole? is it just that EU nationals should be treated better than part of the UK population?
On the EU question, it's a matter of the weakness of EU citizenship. EU citizenship is limited to cross-border situations, and Member States are free to decide how they grant citizenship and how they treat their own nationals. For a while, it looked like the European Court of Justice** would break down this connection between a cross-border element and relying on citizenship rights in the Zambrano case, but it categorically ruled it out shortly afterwards.
That students from elsewhere in the EU will be charged less is being called a "loophole", but it's a part of the fundamental rule of EU law of non-discrimination on the basis of nationality. The difference arises because EU citizenship rules only regulate cross-border relations, while these fees are being regulated by national and regional rules. The tuition fees debate will rumble on in the UK for some time yet, and get caught up in the wider debate of the relationship between the UK's constituent nations, and, perhaps, the EU too.
* Part of the Council of Europe, and not the EU!
** The EU Court.
Friday, 26 August 2011
Thursday, 25 August 2011
Citizens will have to drag Europe closer to them
There's an interesting article in the New York Times (hat-tip Grahnlaw), "E.U. Elites keep the Power from the People", reporting on criticism from Habermas and others on the EU's democratic deficit:
I agree. However, the solution seems to be changing the Treaties, and this doesn't really address the problem. While Treaty change can help (for example, giving the Parliament the sole respobsibility for electing the Commission without Council input, and severing the national backgrounds of Commissioners from national nominations), the biggest and most urgent challenge has nothing to do with institutional tinkering.
The EU is already formally democratic. The Parliament is directly elected and has almost equal power with the Council, the weakness being mainly in the area of foreign affairs. This is real power, with US Vice President Joe Biden making the trip to implore the Parliament to pass the SWIFT Agreement between the EU and US last year. The Parliament elects the Commission (just like the government is in many national parliamentary systems), which is nominated by the Council. The Council consists of the elected national governments, and the European Council - the Member States' heads of government - direct general policy. So in all the main legislative institutions, offices are either directly or indirectly elected.
But despite this, the main focus on EU politics is the summitry that takes place every few months or to combat crises - an increasingly common event. Summits are the face of the remote decision-making that's going on. Member States gather together, not all with an equal say in practice, and hammer out compromises based on haggling over national interests, instead of working out what would be the best solution for the EU or Eurozone as a whole. If this sidelines the Commission, then it definitely sidelines the Parliament: after all, how can they reject emergency agreements made at a European Council summit? These summits could even be sidelining the ECB, which has been one of the most influential players in the crisis so far.
If the EU is formally democratic, then the problem is that it isn't functionally democratic. The addage that in democracies the electorate get the government they deserve doesn't quite apply as there hasn't been much political competition yet at the European level. That might change at the next election, with the PES considering running a primary to select a candidate for the Commission Presidency. Political competition is what's necessary to bring the EU closer to citizens. The EU can't be sold or airbrushed into people's lives: people need to be engaged on European issues, and we have to talk about these issues from the perspective of arguing for EU or Eurozone policies.
We're in the middle of a massive crisis, but when it comes to the solutions, we are talking about national solutions to European problems. When Irish politicans talk about Eurobonds, they're thinking of the next five years and Ireland's interest rates, not how to make the Eurozone work - without even thinking about what fiscal union means, and how it should be run, how can it be properly debated or sold to an electorate? These conversations with ourselves mean that we're talking past each other on a European stage, rather than properly discussing what are our best collective options. Which is why working on giving substance to the Europarties is much more important than institutional tinkering. Citizens need to be engaged with the issues - using citizens' assemblies would be a good way of involving people and informing them on the options ahead.
Oddly, institutional tinkering is the sexy and glamorous side to ideas to tackle the democratic deficit. Hard graft within political parties and outside them in civil society to make them more responsive to European issues - and to make them fulfil their political function as a way of enabling citizens to influence policy - is a much more substantial task, even if it doesn't yet the attention of another constitutional treaty.
"“The process of European integration, which has always taken place over the heads of the population, has now reached a dead end,” Mr. Habermas said at a forum hosted by the European Council on Foreign Relations. “It cannot go any further without switching from its usual administrative mode to one of greater public involvement.”
The political elites “are burying their heads in the sand,” he said, adding, “They are doggedly persisting with their elitist project and the disenfranchisement of the European population.”
Those who agree with Mr. Habermas often cite the behavior of José Manuel Barroso, president of the European Commission, the Union’s executive, and Herman Van Rompuy, president of the European Council, which represents the 27 member states.
During these past months, both have failed to explain to a wider public what is happening to Europe and the euro. When they give interviews, they tend to address an elitist audience. Neither reaches out to citizens. “I doubt if they ever thought of doing town-hall meetings,” said Pawel Swieboda, director of DemosEuropa, an independent research organization in Warsaw.
“They don’t bother to do such meetings because they don’t have to stand for election,” added Reinhard Bütikofer, a German and leader of the Greens in the European Parliament."
I agree. However, the solution seems to be changing the Treaties, and this doesn't really address the problem. While Treaty change can help (for example, giving the Parliament the sole respobsibility for electing the Commission without Council input, and severing the national backgrounds of Commissioners from national nominations), the biggest and most urgent challenge has nothing to do with institutional tinkering.
The EU is already formally democratic. The Parliament is directly elected and has almost equal power with the Council, the weakness being mainly in the area of foreign affairs. This is real power, with US Vice President Joe Biden making the trip to implore the Parliament to pass the SWIFT Agreement between the EU and US last year. The Parliament elects the Commission (just like the government is in many national parliamentary systems), which is nominated by the Council. The Council consists of the elected national governments, and the European Council - the Member States' heads of government - direct general policy. So in all the main legislative institutions, offices are either directly or indirectly elected.
But despite this, the main focus on EU politics is the summitry that takes place every few months or to combat crises - an increasingly common event. Summits are the face of the remote decision-making that's going on. Member States gather together, not all with an equal say in practice, and hammer out compromises based on haggling over national interests, instead of working out what would be the best solution for the EU or Eurozone as a whole. If this sidelines the Commission, then it definitely sidelines the Parliament: after all, how can they reject emergency agreements made at a European Council summit? These summits could even be sidelining the ECB, which has been one of the most influential players in the crisis so far.
If the EU is formally democratic, then the problem is that it isn't functionally democratic. The addage that in democracies the electorate get the government they deserve doesn't quite apply as there hasn't been much political competition yet at the European level. That might change at the next election, with the PES considering running a primary to select a candidate for the Commission Presidency. Political competition is what's necessary to bring the EU closer to citizens. The EU can't be sold or airbrushed into people's lives: people need to be engaged on European issues, and we have to talk about these issues from the perspective of arguing for EU or Eurozone policies.
We're in the middle of a massive crisis, but when it comes to the solutions, we are talking about national solutions to European problems. When Irish politicans talk about Eurobonds, they're thinking of the next five years and Ireland's interest rates, not how to make the Eurozone work - without even thinking about what fiscal union means, and how it should be run, how can it be properly debated or sold to an electorate? These conversations with ourselves mean that we're talking past each other on a European stage, rather than properly discussing what are our best collective options. Which is why working on giving substance to the Europarties is much more important than institutional tinkering. Citizens need to be engaged with the issues - using citizens' assemblies would be a good way of involving people and informing them on the options ahead.
Oddly, institutional tinkering is the sexy and glamorous side to ideas to tackle the democratic deficit. Hard graft within political parties and outside them in civil society to make them more responsive to European issues - and to make them fulfil their political function as a way of enabling citizens to influence policy - is a much more substantial task, even if it doesn't yet the attention of another constitutional treaty.
Friday, 22 July 2011
Once again the day is saved...
...At least for now. It's hard to escape the feeling that each time an agreement is made at a European Council summit, it's only a matter of time (usually 3-6 months) before we're back in superhero mode again. Still, there seems to be something more to this deal than the simple bail-outs (or loans as they're normally called). The agreement's outline can be found here (PDF).
Greece.
First of all, Greece will get more loans - and more cheaply - to help fight its economic crisis: €109 billion. Structural funds and European Investment Bank funds will be directed towards helping Greece stimulate growth, and there will be some voluntary private sector involvement which will be for Greece only (a bizzare situation where creditors are seemly asked to take a partial default on the basis of what they can afford out of the goodness of their hearts).
And the rest...
All three countries will benefit from a interest rate reduction on the loans to 3.5% (for Ireland this is a 2% reduction), and the loans will have to be paid off in 15 years (at a minimum) rather than the previous 7.5 years. This should make it easier for the countries to implement their austerity programmes as it eases the economic and political pressure on the governments.
In Ireland the interest rate reduction is a great victory for the government. During the election campaign the (now) coalition parties had been campaigning for a negotiation of the EU/IMF deal for lower interest rates and for the burning of some bondholders. The restriction of voluntary private involvement in the scheme to Greece means that partial defaults on the private debts in Ireland are unlikely for now. I say for now because there's resentment in Ireland at having to pay back all the private debt and that the private sector is not taking any hit, and now it will be harder to argue morally, and politically, why there should be movement on this in Greece but not elsewhere. It gives the impression that being the golden pupil of the bail-out class doesn't win you any rewards. I wonder if the market will really see private investor involvement in the Greek deal as a one-off.
Also important is what Ireland might have conceded for this interest rate reduction, and hat it means for the Eurozone's economic policy. The Eurozone heads note:
Since Ireland's corporate tax rate has become iconic and synomous with Irish economic success, the scale of this concession will be heavily debated: is it just a commitment to negotiate? Does it commit us to common tax policies?
I actually think that this is a victory of sorts for Irish diplomacy (well, good use of circumstances at least). It seemed like a raise of Irish corporate tax might have been a condition for a drop in interest rates - in other words, Ireland would unilaterally raise its tax rates without European harmonisation. Since this would have been Ireland and not the EU deciding this, no referendum would need to be held. However, if it comes to a EU Directive, then the Irish government could hold a referendum on the subject, citing it as a constitutional requirement (although I doubt the extent to which it might be one). It's hard to know if that's exactly the case yet, but by having the discussion at a pan-European (or pan-Eurozone) level, Ireland's diplomatic position is improved, not least because it can try to build coalitions around its positions.
Biggest loser: ECB?
The Europeans Financial Stability Fund willbe given several new powers. It can:
If the EFSF is able to intervene in non-programme countries to be a lender of last resort to the banks,* then this would dilute the power of the European Central Bank. It's been widely noted that the ECB's loans of €120 billion to Irish banks gave it a lot of power, and that it was a big player in the events leading to the Irish EU/IMF deal. With another institution, created without treaty change, able to provide alternative credit in a crisis, it could be a way of Member States preventing the ECB gaining a strong hand in their economies during times of crisis. It will be interesting to see if this will change the institutional balance in the Eurozone.
*Technically it can't lend directly to the banks, but it lends to the Member State who then lends to the banks. This would also be done at a higher interest. It also means that there are aspects of EFSF loans to banks which make them less attractive than ECB loans, but it does show how wary the Member States are becoming of the ECB's power if they've created a way of circumventing its role as a lender of last resort, even in non-programme countries.
Greece.
First of all, Greece will get more loans - and more cheaply - to help fight its economic crisis: €109 billion. Structural funds and European Investment Bank funds will be directed towards helping Greece stimulate growth, and there will be some voluntary private sector involvement which will be for Greece only (a bizzare situation where creditors are seemly asked to take a partial default on the basis of what they can afford out of the goodness of their hearts).
And the rest...
All three countries will benefit from a interest rate reduction on the loans to 3.5% (for Ireland this is a 2% reduction), and the loans will have to be paid off in 15 years (at a minimum) rather than the previous 7.5 years. This should make it easier for the countries to implement their austerity programmes as it eases the economic and political pressure on the governments.
In Ireland the interest rate reduction is a great victory for the government. During the election campaign the (now) coalition parties had been campaigning for a negotiation of the EU/IMF deal for lower interest rates and for the burning of some bondholders. The restriction of voluntary private involvement in the scheme to Greece means that partial defaults on the private debts in Ireland are unlikely for now. I say for now because there's resentment in Ireland at having to pay back all the private debt and that the private sector is not taking any hit, and now it will be harder to argue morally, and politically, why there should be movement on this in Greece but not elsewhere. It gives the impression that being the golden pupil of the bail-out class doesn't win you any rewards. I wonder if the market will really see private investor involvement in the Greek deal as a one-off.
Also important is what Ireland might have conceded for this interest rate reduction, and hat it means for the Eurozone's economic policy. The Eurozone heads note:
"[W]e note Ireland's willingness to participate constructively in the discussions on the Common Consolidated Corporate Tax Base draft directive (CCCTB) and in the structured discussions on tax policy issues in the framework of the Euro+ Pact framework."
Since Ireland's corporate tax rate has become iconic and synomous with Irish economic success, the scale of this concession will be heavily debated: is it just a commitment to negotiate? Does it commit us to common tax policies?
I actually think that this is a victory of sorts for Irish diplomacy (well, good use of circumstances at least). It seemed like a raise of Irish corporate tax might have been a condition for a drop in interest rates - in other words, Ireland would unilaterally raise its tax rates without European harmonisation. Since this would have been Ireland and not the EU deciding this, no referendum would need to be held. However, if it comes to a EU Directive, then the Irish government could hold a referendum on the subject, citing it as a constitutional requirement (although I doubt the extent to which it might be one). It's hard to know if that's exactly the case yet, but by having the discussion at a pan-European (or pan-Eurozone) level, Ireland's diplomatic position is improved, not least because it can try to build coalitions around its positions.
Biggest loser: ECB?
The Europeans Financial Stability Fund willbe given several new powers. It can:
"- act on the basis of a precautionary programme;
- finance recapitalisation of financial institutions through loans to governments including in non programme countries;
- intervene in the secondary markets on the basis of an ECB analysis recognizing the
existence of exceptional financial market circumstances and risks to financial stability and on the basis of a decision by mutual agreement of the EFSF/ESM Member States, to avoid contagion."
If the EFSF is able to intervene in non-programme countries to be a lender of last resort to the banks,* then this would dilute the power of the European Central Bank. It's been widely noted that the ECB's loans of €120 billion to Irish banks gave it a lot of power, and that it was a big player in the events leading to the Irish EU/IMF deal. With another institution, created without treaty change, able to provide alternative credit in a crisis, it could be a way of Member States preventing the ECB gaining a strong hand in their economies during times of crisis. It will be interesting to see if this will change the institutional balance in the Eurozone.
*Technically it can't lend directly to the banks, but it lends to the Member State who then lends to the banks. This would also be done at a higher interest. It also means that there are aspects of EFSF loans to banks which make them less attractive than ECB loans, but it does show how wary the Member States are becoming of the ECB's power if they've created a way of circumventing its role as a lender of last resort, even in non-programme countries.
Wednesday, 6 July 2011
What kind of Free Trade do the Tories believe in?
The news that a government contract for the Thameslink project worth £1.4 billion has been awarded to Siemens rather than Bombardier. It's become a big news story because Bombardier has announced plans to cut over 1,400 of its UK-based jobs. The EU has been singled out for some of the blame:
The deal with Siemens will reportedly create 2,000 jobs, though:
The article shows that manufacturing jobs are seen as the goal for the UK economy. With services far outpacing manufacturing in the UK economy, job cuts in this area are seen as a further sign of failure. Interestingly, the BBC just produced a good 3-part documentary called "Made in Britain", the premise of which was that manufacturing jobs will leave the UK anyway and that the UK should (and is) moving into higher value economic activities. It's very strange that there is little debate on how Germany actually retains its manufacturing sector and whether the social and economic policies they use would work in the UK or if they are desirable.
[It seems that the loss due to the failure to win the contract is 200 jobs (as Bombardier wrote to the government stating that it would lay off 1,200 workers anyway). Talking about jobs in terms of "net gains" is not to dismiss the tough time these 1,400 workers are facing at the moment, but it does seem that making the deal with Siemens has the effect of creating more jobs than would have been saved had Bombardier won the contract (2,000 versus 200).]
Anyway, the fact that EU law on procurement (you can read the PDF of the legislation here if you have a spare week) prevented the government for picking Bombardier has been flagged as one of the (if not the) main reason for the loss. Under these rules, Siemens won the contract because they represented the best value for money under the criteria set out for procurement. Where the company was based was not allowed to be a factor in determining which company got the contract.
This raises some questions about how the internal market is really viewed, because the anger seems to be directed at the rules in different ways. The impression from the news is that either (a) it's Labour's fault for drawing up the contract criteria; (b) the rules are good in principle but other Member States don't apply them as well as Britain does; or (c) it's the evil EU, goddamnit!
(a) & (b) are linked - how contract competitions are run (what the criteria are) would depend on the sector/work. There have been suggestion from within the government that the rules should be changed. Via Conservative Home:
So some Tories would like commitment to the "domestic supply chain" to be a factor. It's hard to see how this can be interpretated in any other way than that government should be able to value national over European companies purely on the basis of nationality or the level of establishment within the Member State. After all, the contract is awarded to those who can provide goods or services to the government's criteria and requirements. It's not like the companies create their own system and then, if they aren't rehired in a new contract, the system breaks down and needs to be rebuilt by another company to its different standards.
There are 2 options:
1. Weaker rules that permit more protectionism.
2. Keeping the rules and ensuring better implementation in other Member States IF that is a problem.
So what kind of internal market do some of these Tories want? What is their vision of free trade? Are they really going to pick a political fight over this?
Am I the only one bemused that Tories are complaining that the "socialist and bureaucratic EU" has prevented government from watering down market competition to engage in soft protectionism?
"The government has said that the Siemens bid represents the best value for money, and that it was following EU procurement rules, which do not allow where companies are based to be taken into account."
The deal with Siemens will reportedly create 2,000 jobs, though:
"...Siemens will build the trains in Germany and only 300 of the UK jobs it creates will be directly employed manufacturing posts, at a factory in Hebburn, South Tyneside."
The article shows that manufacturing jobs are seen as the goal for the UK economy. With services far outpacing manufacturing in the UK economy, job cuts in this area are seen as a further sign of failure. Interestingly, the BBC just produced a good 3-part documentary called "Made in Britain", the premise of which was that manufacturing jobs will leave the UK anyway and that the UK should (and is) moving into higher value economic activities. It's very strange that there is little debate on how Germany actually retains its manufacturing sector and whether the social and economic policies they use would work in the UK or if they are desirable.
[It seems that the loss due to the failure to win the contract is 200 jobs (as Bombardier wrote to the government stating that it would lay off 1,200 workers anyway). Talking about jobs in terms of "net gains" is not to dismiss the tough time these 1,400 workers are facing at the moment, but it does seem that making the deal with Siemens has the effect of creating more jobs than would have been saved had Bombardier won the contract (2,000 versus 200).]
Anyway, the fact that EU law on procurement (you can read the PDF of the legislation here if you have a spare week) prevented the government for picking Bombardier has been flagged as one of the (if not the) main reason for the loss. Under these rules, Siemens won the contract because they represented the best value for money under the criteria set out for procurement. Where the company was based was not allowed to be a factor in determining which company got the contract.
This raises some questions about how the internal market is really viewed, because the anger seems to be directed at the rules in different ways. The impression from the news is that either (a) it's Labour's fault for drawing up the contract criteria; (b) the rules are good in principle but other Member States don't apply them as well as Britain does; or (c) it's the evil EU, goddamnit!
(a) & (b) are linked - how contract competitions are run (what the criteria are) would depend on the sector/work. There have been suggestion from within the government that the rules should be changed. Via Conservative Home:
"[Transport Secretary Philip Hammond] did tell the BBC's Evan Davis that he wanted to look at whether similar contract processes could be rewritten in future so that successful bidders were, in some way, committed to the "domestic supply chain". Noting that French building contracts tend to be awarded to French manufacturers and German contracts to German manufacturers he promised to explore how British industry could be supported in future tender processes without compromising EU procurement laws."
So some Tories would like commitment to the "domestic supply chain" to be a factor. It's hard to see how this can be interpretated in any other way than that government should be able to value national over European companies purely on the basis of nationality or the level of establishment within the Member State. After all, the contract is awarded to those who can provide goods or services to the government's criteria and requirements. It's not like the companies create their own system and then, if they aren't rehired in a new contract, the system breaks down and needs to be rebuilt by another company to its different standards.
There are 2 options:
1. Weaker rules that permit more protectionism.
2. Keeping the rules and ensuring better implementation in other Member States IF that is a problem.
So what kind of internal market do some of these Tories want? What is their vision of free trade? Are they really going to pick a political fight over this?
Am I the only one bemused that Tories are complaining that the "socialist and bureaucratic EU" has prevented government from watering down market competition to engage in soft protectionism?
Monday, 4 July 2011
Lovers' Tiff?
On the Council of the European Union's website a document called "Relations with the European Parliament (July 2011)" only has an image of a shredded piece of paper next to it.
Hopefully given the positive vision of the Polish Presidency, Warsaw can relight the spark of passion and return Brussels to its natural state of a lovers' paradise. ;)
Hopefully given the positive vision of the Polish Presidency, Warsaw can relight the spark of passion and return Brussels to its natural state of a lovers' paradise. ;)
Saturday, 25 June 2011
"But we signed up to a free trade area!"
More and more I see the argument that the EU should be turned into a free trade area, and I thought I should try to create a short reply.
"But we signed up to a free trade area!"
This is also argued with "common market", with it clear that a free trade area (like NAFTA, for example) is meant. But there's a big difference between a free trade area and a common market (a.k.a "single/internal market").
A free trade area simply reduces tariffs and import quotas between countries - this was the aim of the European Free Trade Area,* which the UK helped found in opposition to the EEC, and then left to join the EEC. FTAs don't cover the free movement of goods, people and services that a common market consists of.
The issue with free trade areas that they only reduce tariffs between members, so members can have different tariffs with third countries. This means that some goods might try to get into the free trade area via FTA country A (which has lower external tariffs) before moving on to country B (which has high external tariffs). This lack of control means that some countries prefer a customs union, which is like a FTA but with common external tariffs.
A common market is much more than a FTA because it not only deals with tariffs and import quotas, but also deals with the free movement of goods, services, establishment (freedom to set up businesses throughout the common market), capital and people. This requires some restrictions on the law-making of member states (they can't legislate for import quotas, discriminate against goods from outside the country with different tax rates, etc.), and requires common law making so goods, etc., can move freely without being blocked by different technical standards. This common law making and standards means that there would need to be a common court and law-making institutions in any case. That's why the EU needs to have institutions, but NAFTA doesn't.
Leaving a common market means that a country and its citizens would loose free movement rights. While it's true that there will still be trade between the EU and ex-members (the EU has FTA agreements with Chile, Mexico, South Africa, etc., so I don't see why an ex-member wouldn't get one as well), without common laws, the ex-member would move away from the common standards of the common market, and more and more non-tariff barriers would block trade. Citizens of the ex-member country would also loose their free movement rights.
Having a common market also means that there needs to be a common trade policy with third countries, and the free movement of persons creates pressure for there to beco-operation and common rules on cross-border crime, but foreign affairs and justice and home affairs are other debates.
Since the EEC was aimed at creating an common market, joining countries never signed up for a free trade area.
*Confusingly, the EFTA is now a single market because its member countries are linked up to the EU's single market via the European Economic Area (or via 120 bilateral agreements in the case of Switzerland).
"But we signed up to a free trade area!"
This is also argued with "common market", with it clear that a free trade area (like NAFTA, for example) is meant. But there's a big difference between a free trade area and a common market (a.k.a "single/internal market").
A free trade area simply reduces tariffs and import quotas between countries - this was the aim of the European Free Trade Area,* which the UK helped found in opposition to the EEC, and then left to join the EEC. FTAs don't cover the free movement of goods, people and services that a common market consists of.
The issue with free trade areas that they only reduce tariffs between members, so members can have different tariffs with third countries. This means that some goods might try to get into the free trade area via FTA country A (which has lower external tariffs) before moving on to country B (which has high external tariffs). This lack of control means that some countries prefer a customs union, which is like a FTA but with common external tariffs.
A common market is much more than a FTA because it not only deals with tariffs and import quotas, but also deals with the free movement of goods, services, establishment (freedom to set up businesses throughout the common market), capital and people. This requires some restrictions on the law-making of member states (they can't legislate for import quotas, discriminate against goods from outside the country with different tax rates, etc.), and requires common law making so goods, etc., can move freely without being blocked by different technical standards. This common law making and standards means that there would need to be a common court and law-making institutions in any case. That's why the EU needs to have institutions, but NAFTA doesn't.
Leaving a common market means that a country and its citizens would loose free movement rights. While it's true that there will still be trade between the EU and ex-members (the EU has FTA agreements with Chile, Mexico, South Africa, etc., so I don't see why an ex-member wouldn't get one as well), without common laws, the ex-member would move away from the common standards of the common market, and more and more non-tariff barriers would block trade. Citizens of the ex-member country would also loose their free movement rights.
Having a common market also means that there needs to be a common trade policy with third countries, and the free movement of persons creates pressure for there to beco-operation and common rules on cross-border crime, but foreign affairs and justice and home affairs are other debates.
Since the EEC was aimed at creating an common market, joining countries never signed up for a free trade area.
*Confusingly, the EFTA is now a single market because its member countries are linked up to the EU's single market via the European Economic Area (or via 120 bilateral agreements in the case of Switzerland).
Friday, 24 June 2011
Where exactly are the Europarties?
The Europarties are supposed to be forums for political debate and participation in the EU - that's very much the theory, anyway. So during the Euro crisis (and particularly during today's summit), what have the Europarties been up to?
The Socialists and Democrats.
The S&D have been somewhat active. There was a conference recently in Barcelona that resulted in the "Barcelona Declaration" (designed to make Social Democrats electable to take power in the EU by 2014):
The Declaration itself (which you can read here [PDF] in French) pretty much says the same thing, but it pads it out to fill the page. Sadly it's all too vague to really mean anything - and this during a major economic crisis! Even though it's aimed at 2014, how can the second biggest political force have no ideas or strategy at this stage? That the PES's campaigns on the Financial Transaction Tax and on Eurobonds haven't even got a mention simply demonstrates that the PES's leadership can launch internet campaigns separate from the actual power structure in the party without any impact.
The S&D group has endorsed the European Trade Union's day of action in Luxembourg, and points to anternet campaign Change for Europe (I assume it's cross-party with the Greens). While there are a few noises about transaction taxes and shifting the taxation burden, it's not clear that this is leading anywhere other than a party-political endorsement of the Parliament's aim of some own resources (read: taxes) for the EU.
The S&D is, on the surface, in a difficult position as its member parties are engaged in different levels of austerity while its European leadership calls for less austerity and more investment. However, it's not a massive gap, as its member parties also want this too, at least in general. With the S&D* opposition pretty much across Europe, they should really be doing more to throw their political weight around - after all, they don't have enough voices in Council or the Commission, so surely they should want to create a more vocal public response if possible?
Of course, it's not quite that simple as there are divisions between the member parties and within them. But a greater effort to have a common platform is necessary, particularly if they want to be electable in the face of a European culture of austerity.
The PES has announced that it has collected the signatures of 1,000 elected MPs of their member parties for a transaction tax - why not try to make use of this to establish an effective pan-European position?
*The PES ("Party of European Socialists") is the actual party, but in the EP they're known at the S&D. Poor branding, but what can you do?
European People's Party.
The EPP is "in government" in the EU, with a big majority in the Commission and Council, and as the biggest party in the EP. It's been enjoying a period of huge electoral success and it hasn't needed a common programme, and it shows. The party seems to be obsessed with finishing their articles with a "note to the editor" about the EPP's dominance in whatever institution features.
I'm happy to be corrected, but it doesn't look like the EPP has done much in the way of stating policy decisions that haven't been an initative of the (EPP-run) Member States. The EPP acts as a pro-government party for whatever the Council or Commission puts in front of it, unless it was proposed by the S&D side or there's an EP interest against it.
Update: Reuniting Europe has a blogpost on the EPP summit before the European Council summit.
European Liberal Democrats. (Which are part of the ALDE Group).
I'm pretty sure this says it all:
While the S&D may be more active, as the opposition, the onus is on them to be more active and creative than the incumbant party(ies) - and, in an ideal world, actually effective as an opposition. Reforming Europarty structures to make them more coherent could go a lot further than changing the EP electoral system. What's the point of having "more European" elections if the parties refuse to campaign publically on pan-European issues?
[I just quickly dashed off this post - feel free to bombard me with info on what the parties want to do or what the issues are with their internal structures].
The Socialists and Democrats.
The S&D have been somewhat active. There was a conference recently in Barcelona that resulted in the "Barcelona Declaration" (designed to make Social Democrats electable to take power in the EU by 2014):
"In the "Barcelona Declaration", Socialists and Democrats say they will:
•WORK for fair and progressive financial recovery focused on job creation and the protection of the welfare state;
•PROMOTE inclusion and integration in the face of populism and xenophobia;
•BRING more representation into the democratic system through new ways of participation; and
•STRENGTHEN the EU based on solidarity and combating growing nationalisms and euroscepticism."
The Declaration itself (which you can read here [PDF] in French) pretty much says the same thing, but it pads it out to fill the page. Sadly it's all too vague to really mean anything - and this during a major economic crisis! Even though it's aimed at 2014, how can the second biggest political force have no ideas or strategy at this stage? That the PES's campaigns on the Financial Transaction Tax and on Eurobonds haven't even got a mention simply demonstrates that the PES's leadership can launch internet campaigns separate from the actual power structure in the party without any impact.
The S&D group has endorsed the European Trade Union's day of action in Luxembourg, and points to anternet campaign Change for Europe (I assume it's cross-party with the Greens). While there are a few noises about transaction taxes and shifting the taxation burden, it's not clear that this is leading anywhere other than a party-political endorsement of the Parliament's aim of some own resources (read: taxes) for the EU.
The S&D is, on the surface, in a difficult position as its member parties are engaged in different levels of austerity while its European leadership calls for less austerity and more investment. However, it's not a massive gap, as its member parties also want this too, at least in general. With the S&D* opposition pretty much across Europe, they should really be doing more to throw their political weight around - after all, they don't have enough voices in Council or the Commission, so surely they should want to create a more vocal public response if possible?
Of course, it's not quite that simple as there are divisions between the member parties and within them. But a greater effort to have a common platform is necessary, particularly if they want to be electable in the face of a European culture of austerity.
The PES has announced that it has collected the signatures of 1,000 elected MPs of their member parties for a transaction tax - why not try to make use of this to establish an effective pan-European position?
*The PES ("Party of European Socialists") is the actual party, but in the EP they're known at the S&D. Poor branding, but what can you do?
European People's Party.
The EPP is "in government" in the EU, with a big majority in the Commission and Council, and as the biggest party in the EP. It's been enjoying a period of huge electoral success and it hasn't needed a common programme, and it shows. The party seems to be obsessed with finishing their articles with a "note to the editor" about the EPP's dominance in whatever institution features.
I'm happy to be corrected, but it doesn't look like the EPP has done much in the way of stating policy decisions that haven't been an initative of the (EPP-run) Member States. The EPP acts as a pro-government party for whatever the Council or Commission puts in front of it, unless it was proposed by the S&D side or there's an EP interest against it.
Update: Reuniting Europe has a blogpost on the EPP summit before the European Council summit.
European Liberal Democrats. (Which are part of the ALDE Group).
I'm pretty sure this says it all:
"Annemie Neyts-Uyttebroeck MEP, President of the European Liberal Democrats re-iterated her views on the need for the European People's Party (EPP) to take a more pro-active approach towards developments in Greece, "the EPP needs to shoulder responsibility and help bring about relief to the Greek situation given that some of the main political actors in this scenario belong to its European political family"."
While the S&D may be more active, as the opposition, the onus is on them to be more active and creative than the incumbant party(ies) - and, in an ideal world, actually effective as an opposition. Reforming Europarty structures to make them more coherent could go a lot further than changing the EP electoral system. What's the point of having "more European" elections if the parties refuse to campaign publically on pan-European issues?
[I just quickly dashed off this post - feel free to bombard me with info on what the parties want to do or what the issues are with their internal structures].
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