Friday 31 August 2012

PES Congress to be moved from Bucharest to Brussels

Due to the political battles between the Romanian governing coalition of socialists and liberals and the conservative president, the Party of European Socialists (which sits in the Socialists and Democrats group in the European Parliament) will move its September congress from Bucharest to Brussels.

The leader of the S&D group in the European Parliament, Hannes Swoboda, says that the move came at the request of the Romanian Prime Minister (and PES member) Victor Ponta, but the change of venue is being interpreted as a result of political pressure and a desire of political leaders not to be seen with a government that's had its commitment to the rule of law so seriously questioned over the past few months.

From EurActiv:

"[Socialist sources from the European Parliament], who asked not to be named, said “only a couple of leaders” of the PES-affiliated parties across Europe had confirmed attendance at the Bucharest congress, the rest apparently being reluctant to be hosted by Ponta, who has been under fire since he took office this spring."

The loss of the congress may also be a blow to Ponta's image and electoral strategy for the autumn election:
"When the decision to hold the congress in Bucharest was taken last year, Ponta was in opposition. As Romania’s parliamentary elections are due in the autumn, the congress was designed to boost his international image ahead of the poll."

So EurActiv is (indirectly) calling the news of Ponta's request  out for what it is: a face-saving exercise:

"PES sources said that while leaders of centre-left parties didn’t want to be criticised at home for being hosted by such a controversial leader as Ponta, there were also concerns that he should not be weakened before the election.

It would be a sharp blow for Ponta, who will turn 40 on 20 September, if the congress is moved away from Bucharest, a Romanian PSD source told EurActiv.

In any case, it appears that a decision to move the congress to Brussels should be coupled with a face-saving reason to be used internally in Romania, a difficult exercise for the PES secretariat."

This shows that the PES is much more uncomfortable with its Romanian member's actions than its weak response to the political crisis on the floor of the European Parliament would suggest. reaches the 1000 Euroblog mark!, a Euroblog aggregation site that I'm a voluntary editor for (one of many), now aggregates 1,005 Euroblogs.

It's not only a good sign for, but also shows healthy growth in the Euroblogosphere and online debate on the EU and European politics.

Monday 27 August 2012

Security chiefs worried about UK withdrawal from EU security cooperation

The Observer reported yesterday that former police and intelligence chiefs wrote a letter to David Cameron and Nick Clegg urging the UK to stay within the area of freedom, justice and security part of the EU:

"Written by William Hughes, director general of the Serious Organised Crime Agency from 2004 to 2010, it is signed by former Metropolitan police commissioners Lords Blair and Imbert, as well as Sir Stephen Lander, the ex-head of MI5, and other eminent figures.


The UK must decide by next summer if it wants to remain fully involved with existing EU justice and police measures or opt out. In their letter to Cameron and Clegg, the signatories say the latter course would have disastrous consequences for the fight against international paedophile gangs and investigations into terrorist networks.

"The growth in cross-border criminal activity within Europe is both an inevitable byproduct of the free movement of goods, services, capital and people under the single market, and a serious policing and security challenge," they say. "Responding to an increasingly international criminal environment requires modern international legal and policing tools, fast and effective cross-border co-operation and the ability to raise standards and share best practice with our closest security partners."

British officers, they say, are at the forefront of shaping effective co-operation. "British law enforcement bodies are now constantly communicating, co-operating and collaborating with EU agencies and other national policing partners in pursuing serious organised criminal and terrorist networks.""

I'm not the biggest fan of recent EU security policy - current policy on Passenger Name Record data and counter-terrorist financial tracking with the US and possibly within the EU is very flawed and without sufficient safeguards - but the value of being a part of this area, and whether or not the UK should opt out, should be much more widely debated. After all if the clamour is for repatriation of powers, surely possible withdrawal from a whole area (and former "pillar") of the EU should attract more comment?

Monday 20 August 2012

European Regional Development Funds

The BBC Radio 4 programme, File on 4, had an episode on the European Regional Development Funds recently. I'd recommend it - you can listen to it here. (Since it's BBC radio it's accessible outside of the UK, unlike TV programmes on iPlayer).

A few points from the programme:

- The programme focuses on the difficulty in local areas getting access to the ERDF due to UK government cut-backs. As 50% of the money needs to be raised to match any ERDF funding, the abolition of the Regional Development Agencies have left local councils to try to scrape the money together themselves, which is harder to do in poorer areas that need it the most. The UK government says that they have set up other funds that can be used to match and access ERDF funding, and that 98% of the EDRF funding for 2007-2013 period is in place with the relevant match funding.

- In crisis-hit countries it's even harder to access the fund, with 26% of Greece's EDRF funding unspent. The co-financing rate has been lowered to as much as 5% for countries in difficulty like Ireland, Romania, Greece and Portugal. One proposal for improving the use of EDRF in the economic crisis is to reform it so it can be used to support government programmes, such as health and education spending, instead of on fixed projects that take a long time to have an economic effect.

- The UK Parliament's Local Government Committee wants reform of the ERDF so that the UK still contributes to an EU pot for poorer EU countries, but with the percentage that the UK gets back from the ERDF retained rather than being cycled through Brussels (though some regions feel that they may lose out if the money is no longer earmarked specifically for regional development). The UK government says that that reform is not on the cards for the next EU budget.

One thing that's clear from the programme is how overlooked some regions are, both due to the UK government and the difficulties in the ERDF rules, and that local councils don't have the financial or political power to achieve some of the things necessary for local areas. Maybe it's time to look at (democratic) regional government in England again? It would be worthwhile to compare the regions within Scotland and Wales, which have devolved government, and the English regions.

Friday 17 August 2012

The Fiscal Stability Regulation

The second proposal of the two-pack, the Fiscal Stability Regulation (PDF), focuses on budgetary surveillance where Member States are “experiencing or threatened with serious difficulties with respect to their financial stability”. The Regulation would only apply to the Eurozone Member States. The Regulation would mean that Eurozone Member States will, just like Member States requesting precautionary assistance from the EFSF, ESM or IMF, be subject to a higher level of budgetary surveillance than would normally be the case under the Eurozone legislation so far.

The Regulation

- The Commission can decide whether a Member State should be put under enhanced surveillance, and whether to prolong that status every 6 months. The Commission must put Member States receiving financial assistance on a precautionary basis under enhanced surveillance if they actually draw on the precautionary aid;

- If a Member State is under enhanced surveillance, it must adopt measures aimed at addressing the sources or potential sources of difficulties and, on request from the Commission, the Member State shall: communicate information on the financial situation of financial institutions under the surveillance of national supervisors to the Commission, ECB, and European Banking Authority; carry out stress tests to test the resilience of the banking sector to financial and macroeconomic shocks; be subject to regular assessments  of its supervisory capacities over the banking sector; communicate information needed for the monitoring of marco-imbalances

- The Commission will conduct regular review missions in Member States under enhanced surveillance. If further measures are needed, the Council may recommend that the Member State seek financial assistance on a qualified majority vote;

- Where financial assistance is sought, the Commission will prepare an analysis of the sustainability of the Member State’s government debt;

- The Member State receiving financial assistance will prepare a draft adjustment programme in agreement with the Commission to be approved by the Council by QMV. If the Commission highlights significant deviations from the programme, the Council may make a finding of non-compliance by QMV;

- The monitoring under adjustment programmes will suspend the monitoring over other Eurozone legislation;

- There will be “post-programme surveillance” as long as a minimum of 75% of the financial assistance received by a Member State has not been repaid, and this period may be extended by the Council, voting by QMV. For this surveillance, the Commission will conduct regular review missions and the Council may recommend corrective measures to the Member State on a QMV vote;

- For qualified majority votes, only Eurozone members can vote in procedures under this Regulation, with the Member State concerned excluded from the vote.

European Parliament Report

The report in the Economic and Monetary Affairs Committee was drafted by Jean-Paul Gauzes (EPP). The report was adopted by Committee by 25 votes to 4, with 13 abstentions. It was passed in a plenary vote, but I haven’t been able to find out what the vote was.

The report contains 72 amendments, and the main changes are:

- Like the Excessive Deficit Regulation, more referenced to employment and social protection have been made in the recitals, and in the first article with regard to wage formation and collective agreements;

- Amendment 8 would include a recital referring to ECJ case law that Member States can restrict the free movement of capital on ground of public security, stating that this may be possible to fight tax evasion where a Member State faces serious difficulties in retaining financial stability. It would also insert a reference to the ability of the Council, on a Commission proposal, to authorise restrictions in the free movement of capital concerning third countries. Provisions addressing this are also to be included as articles;

- It would make it a requirement for Member States to report debt issuance plans to the Commission and Council;

- The report seeks to tie the decision that a Member State is at risk more closely to objective factors, including warnings from the European Systemic Risk Board;

- Requiring the Commission to examine the potential negative spill-over effects generated by Member States, including in the field of taxation, and the Council may make recommendations to the Member State regarding this on a proposal from the Commission;
- Requiring the Commission to report the findings of its reviews (including post-programme reviews) to the European Parliament;

- Requiring Member States intending to request financial assistance to inform the European Parliament;
- That the assessment of government debt sustainability also include an assessment of the impact of the adjustment programme on the Member State’s ability to repay, and the Commission will make public its methods of economic assessment;

- The Commission would be given the power to approve draft macroeconomic adjustment plans, with the Council being able to reject an approval by qualified majority voting. Likewise, the Commission can adopt recommendation for a new draft plan where it judges the old one to be insufficient; a recommendation which the Council can reject. (This would increase the power of the Commission in comparison to the original draft);

- The Commission can also make changes to the adjustment programme where there is a significant gap between forecasts and realised figures, which the Council can reject by QMV within 10 days of the decision;

- Similarly, the Commission will be empowered to decide whether a Member State has significantly deviated from the adjustment plan, with the Council having 10 days to reject this decision;

- Adjustment plans must take into account the need to ensure sufficient means for fundamental policies such as education and healthcare;

- A Member State subject to an adjustment plan shall audit existing debt to assess the reasons for its accumulation;

- Social partners and civil society shall be given the opportunity to express their views on the Commission public recommendations and opinions provided for under this Regulation;

- A Member State can be placed under “legal protection” if it is going to default on a decision of the Commission (which can be rejected by the Council within 10 days). Under legal protection a Member State should be able to stabilise and honour its debt. Legal protection would: have the effect of “close-out netting” or “credit event” provisions becoming inoperative; maintain (freeze) loan interest rates and ensure that new loans (apart from financial assistance) are to be reimbursed as a priority; creditors of the Member State must make themselves known to the Commission within 2 months or have their debts extinguished; the Member State submits a recovery and debt settlement plan to the Commission for approval;

- For post-programme surveillance, the Commission can take these decisions, with the Council having the power of rejection.


The European Parliament has put forward some amendments to increase scrutiny and oversight over the budgetary monitoring, with more reporting to the European Parliament and opening up Commission recommendations and opinions to the comment of social partners and civil society. There are also references to the need for the social impact of the adjustment programmes to be assessed and for the necessary funding for health and education to be ensured.

However the drive to empower the Commission is striking. In all cases the Council can reject the Commission’s decision so the Commission still needs the Council’s consent in a way, but it matters that the consent can be implied through inaction and that it doesn’t have to be won in a vote. This would make it more likely for the provisions of the Regulation to be exercised since it is politically difficult for Member States to vote on issues for another Member State. The “legal protection” amendments are the most radical. I don’t know much about state bankruptcy, but the provisions seem to be far too concerned with ensuring that creditors can be paid off (and by implication that the failed adjustment programme be taken as far as possible to secure enough repayment as possible, despite this failure). That the Commission can declare this protection without an application by the Member State goes too far in empowering the Commission. There is no way this amendment will pass in the Council, and it should be noted that the Commission is considering ways bankruptcy could be dealt with in the Eurozone.

Thursday 16 August 2012

Excessive Deficit Regulation

The Excessive Deficit Regulation (PDF) builds on the six-pack legislation’s provisions on budgetary surveillance.

The Regulation

The Regulation would establish a common budgetary timeline (mid-term budgetary framework to be published by 15th April, draft budget laws published by 15th October, and budget laws should be adopted by 31st December), and require the creation of national independent fiscal councils for monitoring the implementation of national fiscal rules for achieving budget balance.

For budget monitoring, the relevant information is (simplified list taken from Article 5(3)):

(a)    The targeted budget balance as a percentage of GDP;
(b)   The projections at unchanged policies for expenditure and revenue as a percentage of GDP;
(c)    Targeted expenditure and revenue as a percentage of GDP;
(d)   A detailed description of measures to be included in the budget to bridge the gap between the targets in (b) and (c);
(e)   The main assumptions about expected economic developments and important economic variables, based on independent macroeconomic growth forecast;
(f)     Any additional indications on how recommendations to the Member State will be met.
The Commission will give its opinion on the draft budgetary laws by 30th November, and national parliaments can require a Commission presentation to them. There will also be an overall assessment for the Eurozone.

When a Member State is under the excessive deficit procedure it falls under closer budgetary scrutiny, with regular reports to the Commission on the execution of the budget on the general government and sub-sector levels. Under Article 7(6), the Commission can require a Member State to carry out and report on a comprehensive independent audit of its accounts and provide additional information on its progress on the excessive deficit. The Regulation would increase the Commission’s power in monitoring Member States’ budgets and involvement in budgets where there is an excessive deficit procedure in force.

European Parliament Report.

For the Economic and Monetary Affairs Committee, Elisa Ferreira (S&D) drafted the report for the Parliament’s response at first reading. The report was endorsed in Committee by 18 to 12, with 14 abstentions, and in plenary by 501 to 138, with 36 abstentions. The report was endorsed by an EPP-S&D-ALDE-Greens/EFA coalition.

The report submits 81 amendments that will be the Parliament’s starting negotiating point with the Member States in the Council. The main changes are:

- Greater reference to employment and social partners to be added to the recitals;

- It would add (non-binding) calls for a Financial Transaction Tax and a Common Consolidated Corporate Tax Base to the recitals;

- Specifies that the Regulation does not affect wage formation or collective agreements;

- Would define “particularly serious not compliance” as a deviation of 1% GDP in one year or an average of 0.5% GDP each year for two years from the budgetary objective if there are no exceptional circumstances;

- Gives some more flexibility with the deadlines;

- “Expected economic developments” will include an estimation of the assumed macroeconomic multiplier effects (so stimulus packages can be taken into account);

- Specifies that the Commission’s power to specify content of draft budgetary plans is through delegated acts, which brings it under closer control and scrutiny by the Parliament and Council;

- The European Parliament can also require that the Commission present its budgetary plans to it and the relevant EP Committee, as well as the Eurogroup, will discuss the Commission’s opinion on national budgetary plans and the budgetary situation in the Eurozone. The Commission may update its opinions in the light of these discussions;

- Overall assessments of the Eurozone shall also include stress tests that provide “an indication of the risks to public finance sustainability in the event of adverse financial or budgetary developments.”

- The requirement of Member states to report debt issuance to the Commission and the Eurogroup will be included;

- The Commission will be required to present a report on a roadmap towards Eurozone Stability bonds and present a proposal for a Eurozone sustainable growth instrument aiming at mobilising approx. 1% GDP per year over 10 years, including an increase in EIB capital and project bonds, to be invested in European infrastructure, science and technology;

- Eurozone Member States may agree an annual coordinated public debt issuance framework (this is for a future proposal, however);

- A European Redemption Fund shall be established based on joint liability and strict conditionality for 25 years (after which it will be wound up), covering debt over 60% GDP of non-assistance programme Eurozone Member States on a roll-over period of 5 years. There will also be a fiscal consolidation strategy and a structural reform agenda. The ERF’s day-to-day management will be under the Commission following a regulation by the EP and Council;

- Under the excessive deficit procedure, the relevant Member State will present its national plan, including areas of European Added Value, such as EIB credit lines;

- The Commission shall present a report, and possibly a proposal, on a European Debt Authority to the Parliament and Council that would be responsible for managing and coordinating all issues relating to the annual debt issuance plan of the Member States.


The report is clearly very ambitious, particularly inserting the creation of a European Redemption Fund, likely as a way of aiding Italy and Spain. The Parliament is keen to introduce a greater scope of variables to the process and to highlight the importance of social partners, respect for wages and collective agreements, and European solidarity through national plans indicating EIB and other economic help. It’s also clear that the Parliament is using this opportunity to push its ideas on to the agenda and to overcome being overshadowed by the European Council summitry that’s dominated the past 2-3 years of crisis. The Parliament has also tried to introduce more democratic and parliamentary controls over the Commission’s power, especially in ensuring the oversight of its delegated powers by the Parliament and Council. By reserving a right to demand Commission reports and the right of debate, the Parliament tried to ensure that all these plans are open to political debate and discussion.

Still, the need for the Parliament to cram requirements for further reports and debates on further aspects of Eurozone reform highlights how one-dimensional the current “fiscal union” is. The more radical elements are sure to be thrown out or heavily watered down – I don’t expect to see the redemption fund survive negotiations with the Council – but there are some grounded ideas for improving the content of reporting, planning, and of improving democratic oversight.

Fiscal Compact Plus: The 2-Pack of Legislation

The Fiscal Compact and the European Stability Treaty may still have obstacles to overcome before they fully enter into force across the signatory Member States, but the Fiscal Compact has its origins in the six-packof legislation adopted last year by the European Parliament and Council. That the Parliament had a full and equal say over the substance of the Fiscal Compact as EU legislation shows that it’s come a long way from the stereotype of the cross-border talking shop and it now decides on big ticket European issues.

The six-pack hasn’t marked the end of Eurozone legislation however, with a two-pack being introduced at the end of 2011. The two-pack consists of a proposed regulation for the Eurozone on the monitoring and assessing of draft budgetary plans under the excessive deficit procedure (PDF), and a proposed regulation on the strengthening of economic and budgetary surveillance of Member States experiencing serious difficulties in financial stability (PDF). I’ll just call these the “Excessive Deficit Regulation” and “Financial Stability Regulation” respectively for short. Both proposals would increase the Commission’s role in Member States’ fiscal affairs.

The European Parliament has voted on reports on these proposals in Committee stage, but the Socialists and Democrats Group abstained from the report votes after they failed to delay the vote (they wanted to revisit the provisions after the French elections). The votes were close enough that the Committee referred the reports to plenary to gauge political support in the EP as a whole.

In the following blog posts I’ll look at each proposal in turn and the Parliamentary reports:

Wednesday 15 August 2012

A European SWIFT?: the Commission outlines available options

Just after the Lisbon Treaty came into force, the European Parliament used its new power to block the SWIFT Treaty with the US, which would give the US Department of Homeland Security access to financial transaction data for anti-terrorism purposes. The problem was there was no way of targeting suspected individuals and no judicial oversight: financial transaction information would be handed over in bulk (based on search categories) to the US government to search through.

After some changes (Europol gained the role of verifying the compliance of US requests under the treaty for data) and heavy lobbying that included a vice-presidential visit to the European Parliament, the EP voted through a re-negotiated treaty. Since then it turns out that the negotiated safeguards are wholly inadequate, with general data covering a global area for an essentially unlimited time being provided to the US DHS.

Part of SWIFT II was that the US would help the EU establish its own system (Article 11), and the Commission has published a communication on the options on setting up a European Terrorist Financial Tracking System (PDF). A more targeted approach to data collection is one of the aims of a European system, so that these systems are less intrusive into the privacy of citizens.

The Communication doesn't pick a particular option, and there will be an Impact Assessment based on a study the Commission contracted out in 2010. The Communication also promises that the Impact Assessment will pay particular attention to the necessity and proportionality of a European system and its impact on fundamental rights - given the poor use of statistics in the PNR proposals, I can't say I've much confidence in the quality of impact assessments in the area of justice and home affairs.


Two main goals have been identified:

"• the system must provide an effective contribution to the fight against terrorism and its financing within the European Union;

• the system must contribute to limiting the amount of personal data transferred to third countries. The system should provide for the processing of the data required to run it on EU territory, subject to EU data protection principles and legislation."

A European TFTS could provide a useful extra tool in the fight against terrorism, and given the European basis of SWIFT (it's based in Belgium), designing a system that respects civil liberties and fundamental rights would have a positive knock-on effect in the EU's security relations with the US and other countries when it comes to finance tracking by ensuring that any transfers of data also comply with fundamental rights.

More specifically the system will cover:

"• preparing and issuing (legally valid) requests to the designated provider(s) of financial messaging services for the raw data to be provided to an authorised recipient or recipients. This involves determining the message categories to be requested, how often such messages should be sent, and maintaining contacts with the providers on these issues;

• monitoring and authorising requests to the designated provider(s) for such raw data. This involves verifying whether the request for the raw data have been prepared in accordance with the applicable limitations;

• receiving and storing (processing) the raw data from the designated provider(s), including the implementation of an adequate system of physical and electronic data security;

• running the actual searches on the data provided, in line with the applicable legal framework; on the basis of requests for such searches from authorities of the Member States, the U.S. or other third States on the basis of clearly defined conditions and safeguards, or on the own initiative of the authority (or authorities) entrusted with processing the data;

• monitoring and authorising the running of searches on the data provided;

• analysing the results of the searches, through combining these results with other available information or intelligence;

• distributing the results of the searches (without further analysis) or the results of the analyses to authorised recipients;

• implementing an appropriate data protection regime, including applicable retention times, logging obligations, handling requests for access, correction and deletion, etc."

Options (from page 9 onwards):

The Communication makes it clear that a hybrid solution is preferable to an exclusively national or exclusively centralised approach, so all of the options are designed along hybrid lines with differing degrees of (de)centralisation.

Option 1: A central EU TFTS unit as a coordination and analytical unit cooperating with national law enforcement authorities. Under this system most of the data work would be done at the European level with national requests to the central unit. Europol or Eurojust are possibilities for performing the central unit's role.

Option 2: EU TFTS extraction service option. This would be the same as option 1, but the central unit would not carry out analysis based on the extracted data for national requests (only for EU or third country requests), and requests would be verified at the national level.

Option 3: A Financial Intelligence Unit: there would be a European FIU platform which would request data from SWIFT and/or other data providers on the basis of national FIU needs. National FIUs would carry out the analysis, etc., for their Member State. The FIU Platform could deal with third country requests and for EU institutions.

The FIU model bears a striking resemblance to the Passenger Information Units envisaged by the current proposed Passenger Name Record Directive (PDF), so I'm guessing that something close to option three will be what we see in the draft law. going with this model will bring up a lot of issues regarding safeguards and oversight, and how data analysis is used, as well as what scope the FIU Platform will have for transfering data on to third countries. Some of these issues will also remain for the other options, but at first glance it looks like option 2 provides a system with clearer lines of responsibility that also ensures that the information is delivered to national experts who can then get on with the job.

Two key aspects for a European TFTS.

A European TFTS has to be a system of individualised searches. The processing of bulk data is essentially casting a wide net, with government rummaging through everything that's been dredged up, whether or not the data belongs to non-suspects. Developing a system capable of delivering individualised searches is necessary if the system is to be equipped with sufficient safeguards to protect civil liberties.

The second key aspect for a European TFTS is that searches need to be subject to judicial oversight in the Member States - law authorities should not be able to issue searches whenever they want, but they should have to get judicial permission (or an equivalent process in national law) for a search based on specific legal grounds. This would help prevent data mining (or similar practices such as what goes on under the current treaty) and ensure that there are strong safeguards. These aren't the only safeguards necessary - retention periods and how far analysis shifts into profiling are other issues that need to be considered when the studies and the legislative proposal come out - but they are necessary. If these basic elements are missing from any TFTS, then it should be rejected. (The Communication mentions that Europol as a possibility for a role in verifying requests for data under the system, despite not being a judicial authority by any stretch of the imagination).

The contracted study should be finished by the end of the year and I assume the impact assessment and proposal will be published in 2013.

Tuesday 14 August 2012

Making the pro-European argument

Listening to The EU Debate on the BBC last week, I was struck again by how often the pro-European argument re-treads old arguments, and I have to admit I roll my eyes every time the peace argument is brought up.

This is not to say that there's anything wrong in the peace argument itself (or to take away from the debate on the BBC, which had a very limited time to establish the argument). The EU does contribute to peace in Europe because it promotes continuous cooperation between the Member States. NATO has contributed massively to peace in Europe, but it's not as deep as the EU or as good at generating connections and cooperation between its Member States - despite Greece and Turkey being members since 1952, the fifty years since joining have not been the most cordial (indeed the deterioration of relations between the two countries after joining was a case study in how multilateral military alliances can destabilise relations between countries at my university). Likewise the Council of Europe and its Court of Human Rights have not prevent war between its members, with the Russia-Georgia war being a recent example.

However the European Union is much, much more than just a peace project and requires a more complex argument to justify it. By launching the pro-European argument with the "peace in Europe" rationale, by the time NATO has been addressed there is less time to set out a deeper context or basis to the EU to build on when the debate moves on to the economy or justice and home affairs. Not only does the opening argument on peace sound distant from today's concerns (it's inevitably admitted that war wouldn't suddenly occur if the Euro collapsed tomorrow, etc), but it also means that there is little underlying rationale or idea that holds together the cooperation covered by the EU. Not a good way to start off the pro-European argument.

Explaining takes practise.

A common thread to discussions in pro-European circles seems to be that the pro-European case would find more supporters if it was explained. This irritates me for two reasons: it's a boring discussion that doesn't solve or further anything, and pro-Europeans are terrible at explaining things. Probably because they constantly talk about explaining things rather than actually explaining them.

Or, more seriously, there is usually less need to defend and think about defending the status quo than if you want to change something. It reminds me of the position of unionists in Northern Ireland or the unionist argument in Scotland, where the status quo came or is coming under pressure (in greatly differing circumstances), and those who supported the union lagged behind in creating an articulate narrative in its favour. While supporters of the British union have adapted, pro-Europeans still lag behind - with the pro-European position more precarious if it also wants to argue for the future changes that are a key part of the pro-European position in the Eurocrisis.

The structure of the EU and the reliance of the pro-European movement on European leaders and European summit meetings meant that it struggles to create a convincing narrative and has lost time. It also means that there's been a shrinking support base - a generation of believers in the European ideal as a way of maintaining peace have passed, and the European statesmen and women who pushed the project along in the past are less likely to be generated in the future by a generation for whom the need for peace is less visceral and the narrative for the European Union less clear.

Participation needs to be at the core of pro-Europeanism.

Protesilaos Stavrou has pointed out that there are two types of pro-European: the intergovernmental and the federalist. If the focus on European statesmen and stateswomen and all the related summitry has left us with a withered pro-European base and an out-of-date narrative, then I don't see much future for that strand of pro-Europeanism - how can it bring the EU closer to citizens and build a convincing narrative? The summitry that has dominated the Eurocrisis has not only failed to deliver a solution, damaging the credibility of the intergovernmental model, but is also corrosive to the political confidence and support necessary for the outcomes of summits to be delivered on. The intergovernmentalist pro-European seems to assume that necessity will overcome objections in the end and that the EU will find a way to muddle through. But integration has progressed further than in the past with an outdated narrative in the present: there isn't the same reserve of goodwill to run on, and it is hardly desirable to run a game of chicken between economy necessity (or any other necessity) and European voters and hope that we'll muddle through each time.

The second element of the pro-European argument is generally that cooperation between Member States means that we can achieve more together than we could apart. This needs to be developed further with the idea of participation and a more democratic EU: that if cooperating means that Member States can do more and achieve more than on their own, then a democratic EU would empower citizens to a degree that they wouldn't be without the EU.

This also means that the pro-European side needs to drop the idea that everyone benefits equally and nobody looses out from this process: that the internal market, justice and home affairs cooperation, etc, make sense, but they have downsides that need to be debated and avoided or mitigated. This is why there is social elements to the internal market - ensuring that there are certain common standards on employment (such as maternity) mean that the social protection that is part of our common values is not undermined. However we need to build a substantive European public sphere so that we can debate these issues better and so we can use the European Parliament better.

It is a complicated argument to make and needs to take on the failings of the EU as it stands as much as it builds a robust narrative to defend the idea of European Union versus ad hoc argeements or free riding on the rest of the EU while withdrawing. (And of course it would need to be more flesh out than I've written here). But there must be a coherent narrative to support the cooperation that pro-Europeans are advocating, and one that underlines the alternative argument of Euroscepticism in the public mind. If the EU is to survive, it needs to be responsive to citizens, so participation needs to be at the heart of the pro-European argument.

Friday 10 August 2012

The EU Debate on the BBC

Another recommendation today, with a debate on BBC Radio Four called The EU Debate.

The debate covers the in/out debate for the UK in the EU from the politics and economic perspective. It would have been nice to have a programme/debate on each aspect of the relationship (politcs, ecomoics, justice and security, and foreign affairs) to get a bit more into the subject, but it's a good programme.

Since it's BBC Radio, it can be listened to outside of the UK, unlike TV programmes on BBC iPlayer.

Amartya Sen: Democracy, Austerity and Social Justice in Europe

I came across this interesting article by Amartya Sen via the CELS: "What happened to Europe?" It's a very broad article, but covers the connection between politics (and democracy) and austerity, social justice and European integration. An extract:

"That austerity is a counterproductive economic policy in a situation of economic recession can be seen, rightly, as a “Keynesian critique.” Keynes did argue—and persuasively—that to cut public expenditure when an economy has unused productive capacity as well as unemployment owing to a deficiency of effective demand would tend to have the effect of slowing down the economy further and increasing—rather than decreasing—unemployment. Keynes certainly deserves much credit for making that rather basic point clear even to policymakers, irrespective of their politics, and he also provided what I would call a sketch of a theory of explaining how all this can be nicely captured within a general understanding of economic interdependences between different activities (emphasizing in particular the fact that someone’s expenditure is another person’s income). I am certainly supportive of this Keynesian argument, and also of Paul Krugman’s efforts in cogently developing and propagating this important perspective, and in questioning the policy of massive austerity in Europe. 

But I would also argue that the unsuitability of the policy of austerity is only partly due to Keynesian reasons. Where we have to go well beyond Keynes is in asking what public expenditure is for—other than for just strengthening effective demand, no matter what its content. As it happens, European resistance to savage cuts in public services and to indiscriminate austerity is not based only, or primarily, on Keynesian reasoning. The resistance is based also on a constructive point about the importance of public services—a perspective that is of great economic as well as political interest in Europe.

THERE IS A CENTRAL ISSUE of social justice involved here—that of reducing rather than enhancing injustice. The public services are valued for what they actually provide to people, especially to vulnerable people, and this is something for which Europe had fought. Savage cuts in these services undermine what had emerged as a social commitment in Europe at the end of World War II, which led to the birth of the welfare state and the national health services in a period of rapid social change in the continent, setting a great example of public responsibility from which the rest of the world—from East Asia to Latin America—would learn.

In order to understand the inadequacy of Keynes as a guide to solving the European economic crisis, we have to ask: what kind of an economist was Keynes in terms of his vision of a good society? Keynes did say—famously, and accurately enough—that paying laborers to dig holes and then to fill them up can be a very good thing, because of its impact on increasing effective demand to combat a recession or a depression. This is fine as far as it goes, but Keynes had extremely little to say on what social commitments a state should have—what public expenditure should be for, other than for just strengthening market demand through state intervention."


If we add to this economic argument the long-term concern in Europe about some form of social justice and the more immediate political worry about the undermining of the European sense of solidarity, we can see what a disaster the recent European financial policies have been. The case for resisting the savage cuts in public services can hardly be ignored. This is not because the commitment to social justice must always be paramount, but surely it must be a serious concern that cannot simply be discarded by bankers and financial leaders. There is, of course, always a need for rational scrutiny and examination of what a country can afford and what it cannot—taking into account all the relevant factors, including the changing age distribution of the population. But this is not the same question as checking what a country can afford with inefficient economic and financial management, with fuzzy thinking on exchange rates and market demands and economic competitiveness."

The first two pages are a bit of European integration history, and the substantive argument really gets going from page 3 onwards.

Thursday 9 August 2012

Bloggers and the Council Presidency: #Cy2012eublogs

I attended the European blogging event held by the Cypriot Council presidency two weeks ago (you can find the event on Twitter with the hashtag #cy2012eublogs). It was a well-run event, with four panel discussions between bloggers on Europe in the World, the EU and citizens, the economy, and a more sustainable Europe, before a general panel discussion on the results from group. There were also some Cypriot bloggers present to talk about the Cypriot blogosphere.

It was definitely a good experience, and a great opportunity to talk with other bloggers from across Europe on different issues. I largely agree with Protesilaos that the event was a success, and hopefully this will be the start of an engaged dialogue between the presidency and the Euroblogosphere that will leave a legacy.

1. Panel #2: A Europe of Growth.

I took part in the second panel on the economy and growth. The panel was chaired by Bernardo de Miguel, and we had the opportunity to talk to a Commission civil servant working on the Multiannual Financial Framework and to Cypriot presidency representatives. Some of the debate can be seen here:

(Part of the debate was broadcast via Google Hangouts, though there were some technical difficulties and the feed was off for part of it. We didn't have any interaction from those watching, but some of the other panels did. You can watch all the videos on this YouTube Channel).

The debate started off focusing on the Multiannual Financial Framework and what the EU could do, and there was some discussion about structural funds, which were agreed to be a positive aspect. The austerity debate was naturally a central issue, including how the EU budget would either live up to the austerity being pursued across Europe, or how the EU could offset the effects of austerity. Much of the debate also focused on perception of the budget and how citizens/bloggers could/should be involved - that the budget has to pay for commitments already made by the European Parliament and Member States, and whether we would be comfortable with the implications of more EU control and oversight that might come with any specific funding of national welfare states.

Overall it was a good debate. It's hard to get to grips with the details of the MFF, so the discussion remained quite general, but hopefully there will be follow-up in the Blogosphere.

2. The Cypriot and European Blogospheres.

Cypriot bloggers Petros Mavros and Mike Simopoulos where in a panel discussion on the Cypriot blogosphere, which seems to be seen in a similar way to the nationa media (that there is a specific party political agenda).

Will there be more connections built between Cypriot and EU bloggers? With Cyprus in the Council driving seat for the next few months, EU blogger interest in Cyprus will be much higher than before, and the Cypriot blogosphere could be a big help in getting to know the domestic politics better. Personal connections matter too, so meeting with Cypriot bloggers was a great idea and will encourage me to look out for Cypriot blogs.

If there are more blogging events (not necessarily physical) with the Cyprus presidency on specific issues that include both EU and Cypriot bloggers, this would promote connections and a more vibrant exchange of views.

3. #Cy2012eublogs: Success and Sustainability.

The aim of the event was to connect EU bloggers with the Cyprus presidency, and I think it made a great start. As a blogger when I look to institutions and their websites, my main stop is the European Parliament because it is easy for me to follow the policy areas I'm interested in and, if I have time, the debates in the Committees. The Council has nothing approaching this level of openness (though is trying to shed some more light on the Council), so I don't use the Council website that much - in fact, I use it the least of all the main EU institutions.

This event has drawn more attention to the Cypriot presidency, and I'm already much more interested in this presidency than in previous ones. For bloggers the event has raised interesting discussions that desrve follow-up in our blogs - and a closer look as the presidency develops.

Further events on specific areas or issues would be a good way for both bloggers and the Cypriot presidency to capitalise on the goodwill and interest generated by the event. There are plenty of interesting topics coming up or already under discussion: the Multiannual Financial Framework, the new general Data Protection Regulation, in the area of justice and home affairs (measures such as EU PNR or and EU Terrorist Financial Tracking System ["EU SWIFT"]), and the collective management of music copyright. Upcoming work on these kinds of issues could be flagged by the presidency in advance as a way of highlighting both their work and areas where civil society can debate before matters have been decided. Using these initiatives as the focus of future meetings or blogging events could generate interest and useful debate on these points and on the work of the Cypriot presidency as a whole.

Wednesday 8 August 2012

A much needed referendum debate

Sigmund Gabriel of the German opposition SPD (PES) has called for Eurobonds as a necessary part of the solution to the Eurozone crisis, and for the referendum required to permit German participation. Although Gabriel is just one of the Troika that heads the SPD (Steinbrueck and Steinmeier are the other two), the - increasingly frequent - judgments from the German Constitutional Court in Karlsruhe have made it clear that further integration may require a referendum. So there has been a bit of a debate lately on when and how a referendum should be held over Europe - notably coming from the Finance Minister.

The German Constitution can be changed by the German Parliament (which is why it could be argued that the independence of the Bundesbank from political interference and pressure is slightly mythical), but Karlsruhe has essentially stated in its Lisbon Treaty Judgment that at some point a referendum would be needed. So despite the outcry from the governing parties that the SPD are being irresponsible in backing Eurobonds:

"Merkel spokesman Georg Streiter said the a German referendum "lies a very long way in the future"..."

Any fiscal union will need explicit consent from the people of the Eurozone, and there has to be an open political debate about the alternatives with competing proposals. The step-by-step approach that has been taken so far (in Europe generally, but in Germany and by Merkel especially) has a corrosive effect on the confidence in national and European political leadership and ability, and in the idea that there is a solution. What we have now is a strategy that breeds cynicism, to the extent that it's hard to know if there is a strategy at all and we have to engage with a new type of Kremlinology centred entirely on the contents of Merkel's head! Without even a debate on the future of fiscal union, it's hard to see any political deal produced at the end of this process being accepted after all the suspicion and bickering that will likely continue for another 2 years, if not longer.

So the debate is necessary for any plan to have a hope of working. Speaking in favour of Eurobonds is not the same as making an open commitment to Eurobonds to be introduced as soon as possible (the SPD are still quite close to the government on conditionality, but with more solidarity); it needs to be part of a deal that covers conditions and democratic oversight. It cannot be a technical fix introduced at breaking point, but the product of an open political process. Utopian to hope for given all the summitry, but necessary if we're to have any hope of creating a workable compromise.

Note: Juergen Habermas' (et al) article in the Frankfurter Allgemeine Zeitung (here in German) has been linked to the SPD's move, and Habermas will be involved in the SPD's manifesto for the next German elections. Other interesting articles on the SPD's website on Eurobonds and meeting their Spanish counterparts here and here.