Tag Archives: European Union

European Union, United States

Goodbye WTO, hello TTIP — United States and Europe hope to create world’s largest free trade zone

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Guest post by Michael J. Geary

The United States and the European Union expect to begin negotiations next month on the Transatlantic Trade and Investment Partnership (TTIP) in Washington, DC.  Their ambitious aim is to create the world’s largest trade and investment bloc that covers a combined consumer population of over 800 million people.  If the U.S.-E.U. talks prove successful, TTIP will become the biggest trade deal in history.USflagEuropean_Union

U.S. president Barack Obama announced, to mild surprise, in his February 2013 state of the union address before the U.S. Congress that the United States would begin TTIP talks with the European Union.  His announcement followed the publication of a report from the High Level Working Group, which had spent a year examining  various options for expanding transatlantic trade and investment.  The HLWG concluded that any deal between the United States and the European Union, in order to capture the most gains, would have to be comprehensive and include sensitive issues such as government procurement, a reduction in non-tariff barriers (NTBs), intellectual property rights, and employment and labour sectors.  In May, Obama nominated his close economic advisor and free trade proponent, Michael Froman, to become the next U.S. trade representative.  Froman’s selection was, therefore, an important sign that the Obama administration is serious about completing not only TTIP, but the Trans-Pacific Partnership (TPP) as quickly as possible.

The trade and investment pact features a number of ambitious goals.  At the most fundamental level, U.S. and European leaders hope to reduce the existing transatlantic tariffs and other barriers that amount to approximately 3.5%or less on a range of goods.  That will be by far the easiest element of TTIP to negotiate.  A recent report from the Bertelsmann Foundation showed that a 3.5% reduction in tariffs would increase German exports to the United States by 1.13% and increase German imports, respectively, by 1.65%.  Deeper trade liberalisation, including a reduction in NTBs would lead to even greater economic benefits in for U.S.-German trade.  That, in turn, will significantly affect traditional intra-European trade flows, such that trade between Germany and other member states will decline significantly upon the completion of a comprehensive TTIP accord. The Bertelsmann report showed that, in the long term, French exports to Germany would fall by 23%, Italian exports to Germany would decline by 30% and British exports to Germany would drop by fully 41%. Such a comprehensive transatlantic deal would therefore mark a major realignment of traditional European trading patterns, offset by access to a wider US market.  That pattern, moreover, is likewise is reflected in Bertelsmann’s assessment.  For example, exports from Ireland, Italy, Greece, Portugal, and Spain to the U.S. increase by an average of 86%, which presents a major boost to those European countries most adversely affected by the ongoing sovereign debt crisis. Aside from the potential boost to transatlantic trade, the European Commission argues that TTIP will generate close to 2 million additional jobs, half of which would be created in the United States.

Securing a comprehensive transatlantic trade agreement, however, will not be easy.   Continue reading Goodbye WTO, hello TTIP — United States and Europe hope to create world’s largest free trade zone →

Croatia, European Union

From Dublin to Dubrovnik: Reflections on 40 years of EU enlargement

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dubrovnik

Guest post by Michael J. Geary

Croatia on Monday becomes the 28th member of the European Union, marking a historical transformation for a country at the crossroads of central Europe, the Balkans and the Mediterranean.European_Unioncroatia

The second former Yugoslav country to join the European Union (following Slovenia, also a eurozone member), Croatia declared its independence in 1991, an event that led to the breakup of the union of Yugoslavia, an event that the United Nations and the European Union may have hastened in 1992 Croatia’s independence when they provided international recognition to a sovereign Croatia.  At the same time, the Croatian War of Independence broke out between Croat forces loyal to the newly independent Croatia and the Serb-controlled Yugoslav People’s Army and local Serb militia, the latter determined to prevent Croatia from breaking away. Between 1991 and 1995, when the conflict finally ended,more than 20,000 people had died and much of the country was destroyed.

Croatia, however, has marked major progress since the mid-1990s.  Successive Croatian governments have edged closer (albeit, sometimes with a gentle nudge from Brussels) to the European Union and the country formally applied for membership in February 2003.  A year later, the European Commission endorsed its application, and the European Council granted Croatia candidate status.  Enlargement negotiations proved difficult — not least because Slovenia, already an EU member state since 2004, had insisted that certain border disputes be resolved before Croatia could be accepted as a member.  The Slovenian veto stalled the negotiations for 10 months in the late 2000s before finally the two former Yugoslav nations agreed to settle border issues bilaterally.  Yet the extradition of Croatian citizens to the International Criminal Tribunal for the Former Yugoslavia proved to be a far thornier issue dominating the EU-Croatia enlargement talks.  The United Nations established the Tribunal in 1993 to deal with war crimes that took place during the Balkan conflicts of the 1990s. Croatia’s full cooperation with the Tribunal (reluctant at times) was a prerequisite for EU membership.

2013 is a year of contrasts for the EU enlargement process — arguably one its most successful policies, and one of the reasons that the European Union received the Nobel Prize for Peace last year.  Aside from Croatia’s pending membership, the European Union is set to open negotiations with Serbia and possibly sign a Stabilisation and Association Agreement with Kosovo after those two countries signed a landmark agreement in April normalizing relations between Belgrade and Pristina after almost two decades of hostilities. Continue reading From Dublin to Dubrovnik: Reflections on 40 years of EU enlargement →

Albania

Edi Rama set to return Socialists to power in Albania’s parliamentary election

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edirama

After nearly a decade in opposition, the newly united Albanian left is favored to defeat the incumbent center-right government of prime minister Sali Berisha with just days to go until the country’s June 23 parliamentary elections.albania

A country of about 3.5 million residents, tucked on the southeastern Adriatic coast and bounded by the floundering Greece to its southeast, troubled Kosovo to its northeast with Montenegro to its northwest, Albania is the only country outside of the former Yugoslavia federation to have missed the first wave of European Union expansion in southeastern Europe.  Unlike neighboring Serbia, Macedonia and Montenegro (or even, officially, Turkey), Albania is not yet even an official candidate for EU membership, following an embarrassing rejection in 2010 of its application for candidate status.

Regardless of who wins Albania’s elections, the world — and especially the European Union — will be watching keenly to gauge whether Albania’s government can conduct free and fair elections and orchestrate a seamless transfer of power if, as expected, it is voted out of office.  Though Albanian elections have become steadily fairer in the two decades since the country emerged from one-party rule, standards fall somewhat behind those within EU members, including most recently in 2011 local elections that resulted in charges of fraud and incompetence.  Moreover, Berisha has increasingly tried to use pan-Albanian nationalism to rally supporters, and he has even tried to extend suffrage to ethnic Albanians in Kosovo, none of which has endeared Albania’s current government to European policymakers.

After eight years in power, Berisha’s government has some modest accomplishments to boast for itself, despite its failure to get Brussels to take its EU aspirations seriously.  Berisha forged strong ties with the United States, hosting the first U.S. presidential visit to the country in 2007, and he helped shepherd Albania into the North Atlantic Treaty Organization in 2009.  Berisha has also presided over steady GDP growth rates of between 5% and 7% before the global financial crisis and between 3% and 5% from 2009 through 2011.

Berisha leads the Partia Demokratike e Shqipërisë (PD, Democratic Party of Albania), the country’s largest conservative party and the most dominant member of a wider coalition of parties (the so-called Alliance for Employment, Prosperity and Integration) contesting the parliamentary elections.  The PD-dominated coalition currently controls 69 seats in the 140-member, unicameral Albanian parliament (Kuvendi).

But because Albania depends on Italy to purchase nearly half of its exports, it’s not a surprise that growth dropped to just 1% in 2012, with forecasts to remain tepid in 2013.  After nearly two decades of growth after Albania emerged from its statist, Soviet-era economy, that has felt like recession for most Albanians, and that’s one of the reasons that both major parties in Albania are campaigning on the theme of change in 2013.  It’s also one of the reasons that the country’s main center-left party, the Partia Socialiste e Shqipërisë (PS, Socialist Party of Albania) and its alliance with a handful of smaller leftist parties (the Alliance for a European Albania) seems very likely to win the elections — the PS has held has held a consistent, if narrow, lead throughout the election campaign.  The PS and its allies currently hold 61 seats in Albania’s parliament. Continue reading Edi Rama set to return Socialists to power in Albania’s parliamentary election →

European Union, Iceland

Iceland ends its short-lived quest to join the European Union

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gunnar

It should have come as no surprise to observers of Iceland, but its new center-right government has firmly closed the door to membership in the European Union anytime soon, with an announcement from Icelandic foreign minister Gunnar Bragi Sveinsson (pictured above, left) last week.Iceland Flag IconEuropean_Union

It was virtually certain that Iceland would take a step back from EU membership, given that both governing parties — the Framsóknarflokkurinn (Progressive Party) and the Sjálfstæðisflokkurinn (Independence Party) — campaigned against EU membership in Iceland’s April parliamentary elections.

Former social democratic prime minister Jóhanna Sigurðardóttir launched membership talks with the European Union in July 2009, when Iceland was still reeling from the effects of a financial crisis that bankrupted its three major banks and left Iceland in economic meltdown.  In the immediate aftermath of the September 2008 crisis, some Icelanders even seriously considered joining the euro after the Icelandic krónur tanked in value.  As Iceland’s economy has recovered to some degree, despite difficult loan burdens and continued currency controls, and as the eurozone has come to appear more like a monetary straitjacket than an economic life raft, Icelandic voters have increasingly soured on the benefits of EU membership.

Though prime minister Sigmundur Davíð Gunnlaugsson’s Progressive Party was seen as originally more open to continuing the talks, Gunnlaugsson seems to have taken aboard the more hardline views of the Independence Party — no one quite expected the government to end negotiations with such resolute finality in only its first month in office.

So while Iceland will continue to be a part of Europe, it will do so, like Norway and Switzerland, outside of a formal membership of the European Union.

As I wrote in the immediate aftermath of the election, however, the line between membership and Iceland’s current status is not as bright as you might expect: Continue reading Iceland ends its short-lived quest to join the European Union →

European Union, United States

Spying on the Europeans — PRISM repercussions as Obama heads to Europe

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stasi 2.0

Michael J. Geary and I argue in The National Interest this morning that the repercussions of reports of the PRISM program within the U.S. National Security Agency mean that U.S. president Barack Obama will face tough questions when he goes to Europe for the G8 summit in Northern Ireland and additional meetings in Berlin. USflagEuropean_Union

At a time when Europeans are already concerned about the extent of their own governments’ intrusion into their private online lives, the revelations of the voluntary cooperation of service providers like Facebook and the like in allowing U.S. surveillance of foreign communications are already being met with skepticism from top U.S. allies at a crucial and ambitious time for the Obama administration’s European agenda:

The timing of the scandal could not have come at a worse time in EU-United States relations, with both sides set to embark on negotiations for what would be a landmark free-trade compact, the Transatlantic Trade and Investment Partnership (TTIP).

Above all, German chancellor Angela Merkel is expected to seek assurances from Obama in their one-on-one meetings in Berlin.  But with Germany having this week agreed to TTIP negotiations (leaving France as the remaining obstacle), and with the eurozone crisis still not fully over, certainly the Obama-Merkel meeting should have more important business than PRISM.

Ironically, the NSA gathered more pieces of intelligence within Germany during the month of March than any other EU country.  A spokesman for Merkel, the first chancellor from the former East Germany, where memories of Stasi surveillance are still fresh, said she would raise the issue with Obama. Her justice minister Sabine Leutheusser-Schnarrenberger stressed, “the suspicion of excessive surveillance of communication is so alarming that it cannot be ignored. For that reason, openness and clarification by the US administration itself is paramount at this point. All facts must be put on the table.”

Ultimately, the Obama administration and the NSA will be less vulnerable to the wrath of European regulators than the companies participating in PRISM themselves.

But Microsoft, Google and other service providers, including Facebook, YouTube, Apple and AOL, could face even more blowback than the U.S. government or the Obama administration. Their apparently voluntary participation in U.S. government’s PRISM program could open them to European lawsuits or otherwise subject them to additional regulatory scrutiny. Significant elements of their businesses are already subject to restrictions within Europe—Google faces strict restrictions on its StreetView program and Facebook’s facial-recognition capability is banned altogether. As PRISM continues to dominate world headlines, Facebook on Wednesday opened its first servers outside of the United States in northern Sweden—its presence there, which like much of Scandinavia is a bastion of government transparency and personal freedom, will come increasingly under the thumb of EU regulators.

I argued yesterday that Sweden is unlikely to come to the rescue anytime soon with respect to Facebook and PRISM.  More likely is that the European Parliament will work to pass the new data protection directive that it’s been considering for the past two years and that would place additional restrictions on the processing of personal data, though time is quickly running short with European elections set for May 2014.

Photo above is a popular graffiti slogan in Germany, showing former interior minister (and now finance minister) Wolfgang Schäuble — critics claimed Schäuble’s focus on counterterrorism measures approached levels of civil liberties intrusion similar to the East German secret police and intelligence force, the Stasi.

European Union, Sweden, United States

Can Sweden save the European Union from the NSA spooks?

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facebook goes arctic

Even as the media continues to debate leaks revealing the secret surveillance program of the U.S. National Security Agency, code-named ‘PRISM,’ one of the chief private-sector actors in the PRISM scandal opened its first non-U.S. site on Wednesday, giving one European nation a key jurisdictional hook to regulate future data privacy.USflagEuropean_UnionSweden

According to news reports from The Guardian, Facebook, has been cooperating voluntarily with the NSA’s PRISM program since summer 2009, thereby exposing the private data of both U.S. and non-U.S. citizens alike to the purview of the NSA under the authority of the U.S. PATRIOT Act passed in the aftermath of the 2001 al Qaeda terrorist attacks on New York and Washington.

But Facebook also opened a new facility to host its servers in far northern Sweden on Wednesday (in part to use the chilly Arctic weather to more efficiently cool its European servers).  Despite the awkward timing, it is Facebook’s first server hall outside of the United States, and its opening comes when European Union leaders are pushing for answers on the extent to which NSA has been permitted access to private, personal data by Facebook, Google, YouTube, Apple, AOL and other service providers and while the European Parliament is considering a new data protection directive that would enhance protection of the personal data of EU citizens.  Assuming that the European Union cannot stop U.S. government agencies, it means that European regulators could target U.S. technology companies in greater measure — after all, the EU already places restrictions on Google’s StreetView program and has already banned the European use of Facebook’s face recognition software.

So does that give Sweden a unique opportunity to ensure that the private data of EU citizens is not caught up in the NSA snare?

After all, Sweden is virtually synonymous with good government, right?

According to Transparency International, it’s among the least corrupt countries is the world.  In the middle of the 18th century, Sweden essentially invented the concept of freedom of information with the Freedom of the Press Act of 1766, and its leaders over the past two decades championed a EU-wide freedom of information regime.

But a reputation for transparency doesn’t necessarily connote a reputation for protecting privacy.  Wikileaks founder Julian Assange was so worried that Swedish authorities would extradite him to the United States that he chose to hunker down in Ecuador’s London embassy instead of allowing British authorities to transfer him to Sweden for a trial on a sexual harassment charge.  Swedes have also raised concerns with EU policymakers that the push for more robust data protection could actually harm government transparency by limiting the Swedish government’s ability to provide open access to documents.

Moreover, the current center-right coalition headed by prime minister Fredrik Reinfeldt of the Moderata samlingspartiet (Moderate Party) has introduced greater levels of Swedish surveillance.  In 2009, it narrowly passed legislation that would allow the government’s Försvarets radioanstalt (the National Defence Radio Establishment) to wiretap and access all international telephone and internet traffic, even if all  ultimate parties in the traffic are Swedish.  Though the legislation, know as the ‘FRA law’ passed only narrowly by Sweden’s parliament, the law had its genesis in the prior center-left government of the Sveriges socialdemokratiska arbetareparti (Swedish Social Democratic Workers Party).  It essentially codified into Swedish national law much of what PRISM has been purported to do within the United States.

The law caused some amount of concern, especially in neighboring Finland because all of its Internet and phone traffic at the time routed through Sweden.

Sweden’s foreign minister Karl Bildt earlier this week protested that Swedish activities under the FRA law are not similar to what’s been reported PRISM, in part on the basis that the FRA law was debated publicly and enacted by a duly elected parliament.  In that regard, Bildt’s right — it was clear just what was at stake when the Swedish parliament adopted the FRA law; in contrast, Facebook wasn’t even developed until three years after the U.S. PATRIOT Act.  In addition, Bildt expressed a healthy hint of suspicion about other ‘certain states,’ presumably including the United States:

 

Continue reading Can Sweden save the European Union from the NSA spooks? →

Turkey

Hand-wringing over Erdoğan is alarmist, but Turkey’s still trapped in a perilous standoff

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taksim

The images from Taksim Square over the past week, culminating in conflict between protesters and Turkish police authorities, have stunned a global community that’s used to thinking of Turkey — and, in particular, Istanbul — as a relatively tranquil secular meeting point of East and West.Turkey

Although I’ve not written much about Turkey through Suffragio, it’s a fascinating country that I was delighted to visit in 2010, at the height of the glory days of the government of its current (and now embattled) prime minister Recep Tayyip Erdoğan.

Ultimately, there are two questions at issue here: how to evaluate Erdoğan’s performance prior to the recent protests, on the one hand, and how to evaluate Erdoğan’s performance during and in response to the protests, on the other hand.

Although Western commentators have increasingly argued of Erdoğan’s move toward increasing Islamization and authoritarianism, I worry that those calls misunderstand the depth of Erdoğan’s support and the nature of what modern Turkey (it is, after all, a country that’s over 98% Muslim) has become today.  But it is impossible to watch Erdoğan’s repression of basic political freedoms, such as his government’s recent moves to disrupt a planned May Day protest, and the ongoing brutal police response to the Taksim Square and increasingly, nationwide, protests without admitting that whatever legitimacy Erdoğan once enjoyed is rapidly dissipating, and Erdoğan, his government, Turkey’s president, Turkey’s military, and Turkey’s awakened — and rightfully angry — protest movement, are all trapped in a suddenly perilous standoff.

It’s all the more fragile given the ongoing civil war in Syria.  Not only has the Erdoğan government been unsuccessful in persuading one-time ally Bashar al-Assad to pursue a more moderate course, the growing number of refugees from Syria within Turkey’s borders means that Turkey risks being drawn into a wider regional conflict (though, in one of the few humorous asides to the ongoing protests, Syria has now issued a travel warning for Turkey).

Erdoğan’s initial position was legitimate and democratic

When Steven Cook wrote in The Atlantic earlier this month, that ‘while Turkey is perhaps more democratic than it was 20 years ago, it is less open than it was eight years ago,’ I had two initial reactions.  First and foremost, shouldn’t we care more, from a pure governance standard, that Turkey’s government is representative and responsive to its electorate than it hews to some Westernized standard of ‘openness’? What does ‘less open’ even mean? Secondly, when Cook laments Turkey’s ‘less open’ nature, he doesn’t equally lament that the European Union virtually slammed the door in the face of Turkey’s application to join the European Union in 2005, when despite the opening of negotiations for Turkish accession, it became clear any road for Turkey’s EU membership would be long and arduous.  It may be difficult to remember today, but it’s a push that Erdoğan’s government made even more passionately than the governments that preceded it.

Turkey, let’s be clear, didn’t leave Europe.  Europe left Turkey, which has focused on becoming a more important regional player in the Middle East in recent years.

More importantly, from a day-to-day perspective for most Turks, Erdoğan ushered Turkey into a new era of economic reform and modernity, partly due to his enthusiasm to enter the European Union in his first term.  But despite the futility of Erdoğan’s initial rationale, Turkey’s economic gains are real, the country certainly remains under much better economic stewardship than Greece or much of Europe:

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But Cook, and similar analysts, I fear, are not placing enough weight on the fact that Erdoğan has delivered Turkey’s most responsive and democratically accountable government since the foundation of the modern Republic of Turkey in 1923.  And when I read critiques of Erdoğan that cast him as a modern-day ‘sultan,’ I have to cringe because it’s intellectually lazy for opponents to slap Orientalist labels on Erdoğan simply because they disagree with his policy choices.

The Economist on Sunday trumpeted a foreign diplomat who argues that ‘this is not about secularists versus Islamists—it’s about pluralism versus authoritarianism,’ though the question remains — pluralism compared to what? The governments that came before Erdoğan?  Some Western fantasy of what Turkey’s government should be?

Erdoğan is neither a sultan nor a dictator, but the duly elected leader of Turkey’s government for over a decade, enjoying the repeated success of consecutive democratic victories in election after election.

Continue reading Hand-wringing over Erdoğan is alarmist, but Turkey’s still trapped in a perilous standoff →

Germany

Entinhaltlichung: the best thing you’ve read so far on German politics this year

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Angela Merkel gibt Einblicke in Privatleben

Neal Ascherson turns his gaze toward German chancellor Angela Merkel, her opponent Peer Steinbrück, the former East German ghosts that haunt Germany, and the Hartz IV labor reforms that also haunt it, in a superb essay for the London Review of Books that’s probably the best thing you’ve read so far this year on Germany, its politics, the importance of regional governance in an increasingly federal Europe and the north-south (and west-east) European divide.Germany Flag Icon

On Berlin, Ascherson captures in one paragraph the idiosyncratic nature of Berlin, which is really unlike any other city in Europe, which he argues ‘will never be a real capital again’:

When people talk about ‘Berlin’, they usually don’t mean the government of the most powerful nation in Europe. They mean Klaus Wowereit, the gay mayor, or the film festival, or a new café on the Oranienburgerstrasse, or the botched plan for yet another unnecessary airport. There is no centre. Even Bonn, in the years when the federal government was there, seemed more in command than Berlin is now.

Ascherson uses reunification as an analogical point — it’s the moment the West German social welfare model fell apart, for better and for worse:

And when the West Germans won that war and annexed East Germany (the best word for it), the aftermath was uncannily like Reconstruction after the American Civil War. Here was repeated the economic collapse, the inrush of greedy carpetbaggers from the victorious West, the purging of an entire elite from management, teaching and social leadership, the abolition of institutions and, of course, the liberation of the slaves – this time, into mass unemployment.

And as for Merkel herself, Ascherson nails it:

As for Merkel, sometimes she looks placid, sometimes she looks cross and disappointed, sometimes she smiles politely at foreigners over coffee and cakes. So she reminds people of Mum, and those who want to keep holding her hand think they know what she wants. Others, in despair, confess they have no idea what she wants. These days, she seems to have no policy of her own. Instead, after a suitable delay, she takes on opposition policies in a diluted form. Intellectual critics complain that she has no ‘idea’, no ‘concept’. And to describe what she does, or rather doesn’t, they have coined a frightful new German word: Entinhaltlichung. ‘It means what it says,’ a Berlin friend tells me: ‘Decontentification.’

Spiegel journalist Dirk Kurbjuweit summarized Merkel’s Entinhaltlichung earlier this month by comparing it to the Biedermeier era — the sleepy, happy period between 1815’s Congress of Vienna and the return of revolutionary spirit in 1848:

At the federal level, though, Merkel’s Germany is by and large somnolent, in part because of the government’s failure to present new ideas and plans. The chancellor gets by without them, and even the business-friendly Free Democratic Party (FDP), the junior partner in the ruling coalition, can’t seem to muster up much of an alternative, happy to avoid any danger of becoming a target of hostility…

By and large, things are calm in Merkel’s republic — and that really is something new…. as chancellor, she quickly became “mommy,” a nickname that seemed silly at first but has since proved apt, in the sense that a “mommy” is someone who takes care of the home, makes life pleasant and keeps worries at bay.

Ascherson’s essay strikes many parallel notes, even its title: ‘Hanging on to Mutti,’ a reference to an informal term for the German word for mother, Mutter, and both Kurbjuweit and Ascherson wrangle with the fundamental question of why Merkel herself remains so apparently popular despite leading a government that’s neither incredibly remarkable or popular.

What’s been clear for some time, at least since late last year when it became clear than the rather wooden Steinbrück would be the chancellor candidate of the center-left Sozialdemokratische Partei Deutschlands (SPD, Social Democratic Party), is that the September federal election is going to be all about Angela. Continue reading Entinhaltlichung: the best thing you’ve read so far on German politics this year →

Bulgaria

Who is Plamen Oresharski?

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oresharski

The good news is that after months of uncertainty, Bulgaria has a new government.bulgaria flag

The bad news is that, in taking office, the new Bulgarian prime minister Plamen Oresharski warned his country that he wouldn’t make them rich and prosperous, but that he would work to ensure that over the course of his potentially four-year term in power, he would work to bring more hope and confidence that Bulgaria is ‘on the right track.’

Talk about lowering expectations.

After losing power in July 2009 just months after the global financial crisis, prime minister Sergei Stanishev and the center-left Bulgarian Socialist Party (BSP, Българска социалистическа партия) and its allies triumphed in the parliamentary elections earlier this month over his successor, Boyko Borissov and the center-right Citizens for European Development of Bulgaria (GERB, Граждани за европейско развитие на България).

So within two election cycles, Bulgarians have swung from the left to the right and, having indicated their dissatisfaction with both, are turning to a modified center-left government, with Oresharski, a former finance minister leading a semi-technocratic government supported by the Bulgarian Socialists and the third-largest party in Bulgaria’s parliament, the Movement for Rights and Freedoms (DPS, Движение за права и свободи), a liberal party that represents ethnic Turks and other Muslims.

Oresharski served as finance minister in Stanishev’s previous government from 2005 to 2009 in a career that’s spanned working in Bulgaria’s finance ministry since the early 1990s.  As finance minister, he worked to lower the Bulgarian corporate tax rate to 10% in 2007 and then followed up with a flat-tax rate of 10% on all personal income in 2008.

As prime minister, Oresharski has appointed Petar Chobanov as his own finance minister.  Chobanov himself is not technically a member of the Bulgarian Socialists, though he led the finance ministry’s forecasting agency under Oresharski in the previous government.  Chobanov, like Oresharski, leans toward a conservative fiscal policy in a country that, unlike much of Europe, has a strong budgetary outlook — its public debt load is just around 18% of GDP.  Nonetheless, Bulgaria hasn’t escaped the stagnant economic conditions that have plagued the rest of Europe, with GDP growth of less than 2%, an unemployment rate of 12.6% as of spring 2013, and an aging, declining population that’s shrunk by nearly 1.5 million since the 1980s.  Bulgaria and its neighbor Romania remain the two poorest countries in the European Union.  Continue reading Who is Plamen Oresharski? →

Scotland, United Kingdom

A tale of two referenda: How the EU debate could poison the Scotland debate

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In a static world, it’s easy to believe that UK prime minister David Cameron’s call in January 2013 for a referendum on the United Kingdom’s continued membership in the European Union will never come to pass — it depends upon the reelection of a Conservative-led in the 2015 general election, Cameron’s continued Tory leadership and a lengthy process of negotiation thereafter with EU leaders. United Kingdom Flag Iconscotland

So when Cameron agreed with Scottish first minister Alex Salmond two months later to hold a referendum on Scottish independence in September 2014, he had every reason to believe that he had bought enough time to keep the European issue relatively calm.  After all, poll after poll shows the pro-independence vote lagging far behind the anti-independence vote and, despite a relatively large number of undecided Scottish voters, many polls throughout 2012 and early 2013 showed the ‘no’ vote with over 50% support.  One Ipsos poll earlier this month showed that 59% support union and just 31% support independence.

But what’s increasingly clear is that the two referenda are becoming inseparable — Scotland’s future role in the United Kingdom depends on the United Kingdom’s future role in Europe.  With Westminster now increasingly turning to its toxic obsession with its union with Europe, a group of largely English parliamentarians may well be endangering the more longstanding three-century union with Scotland.

It’s easy to follow Cameron’s arithmetic here:  Allow the United Kingdom Independence Party (UKIP) and the more euroskeptic members of his own party their opportunity for an anti-Europe outlet in the May 2014 European Parliament elections.  Then sail through the September 2014 Scottish referendum with both the Labour Party and the Liberal Democratic Party united against Scottish independence, maybe even by promising ‘devomax,’ a form of further devolution of tax and spending powers to the Scottish parliament that came into existence in 1999.  Cameron could therefore put the specter of Scottish independence behind him before looking to the next general election and, if successfully reelected, the EU negotiations that would precede the long-promised EU referendum.

What Cameron didn’t count on was the growing chorus of euroskeptic rage from within his own party, which seems destined to repeat the Tory infighting of the 1990s that so destabilized former prime minister John Major’s government  Education minister Michael Gove’s insisted last week, for example, that he would support leaving the European Union if a vote were held immediately.  Over 100 Tory backbenchers are calling for a law to guarantee a referendum later this decade or even for a referendum before 2015, and one Tory MP is even arguing for a full joint Tory/UKIP electoral coalition in 2015.  Some Tories are even trying to look beyond Cameron to a more Euroskeptic leader, perhaps even Gove.  It comes at a time when UK voters insist in poll after poll that they would overwhelmingly vote to leave the European Union in a referendum.

UKIP’s rise hasn’t helped, and Nigel Farage’s insistence at contesting a Scottish by-election led to the somewhat humorous result of his being chased out of a pub in Edinburgh last week (pictured above).  Though it’s a safe bet that Farage and UKIP won’t make many inroads in Scotland, it’s hard to see how his active presence in Scotland could do anything but make things worse for unionist supporters.  His party is currently polling as much as 20% in national polls, outpacing the Liberal Democrats and, in some cases, pulling to within single digits of the Conservatives (giving Labour a sizable lead).  Even if Labour wins in 2015, if UKIP wins the support of one out of every five UK voters, it will pull not only the Tories, but probably even Labour, further toward euroskepticism and eventual rupture with Europe.  Continue reading A tale of two referenda: How the EU debate could poison the Scotland debate →

France

As Hollande marks one year in office, would Dominique Strauss-Kahn have been better for France?

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Today is the one-year anniversary of François Hollande’s inauguration as the new president of France, having swept to the Elysée Palace with a mandate for a more subdued presidential administration and a leftward turn after the ‘bling bling’ administration of center-right president Nicolas Sarkozy.France Flag Icon

Hollande won’t face voters again for four more years, and by 2017, Hollande’s reputation may well have recovered, but at the one-year mark, he’s had a horrific presidency so far:

  • France slipped back, as a formal matter, into recession today, with a GDP growth rate of -0.2% for the first quarter of 2013 with an unemployment rate of over 10% and eclipsing the previous high in 1997. 
  • Barely a month into his administration, Monsieur Normal appeared to be unable to stop a fight between his current partner, Valerie Trierweiler, and his former partner, Segolène Royal, when Trierweiler tweeted her support for Royal’s opponent, thereby ending Royal’s chances to become the president of France’s parliament, the Assemblée nationale, and making Hollande look as if he couldn’t even control matters within his own relationship.
  • The traditional Franco-German axis that’s powered European integration for decades remains at a frigid impasse, despite the widespread belief that German chancellor Angela Merkel has outfoxed Hollande and is winning the policy war on how to address the ongoing eurozone economic crisis.
  • He worked to implement a 75% income tax rate on income above €1 million per year, though France’s constitutional court has ruled it unconstitutional on technical grounds, all the while keeping in place strict targets to reduce France’s budget deficit and retaining a rise in the retirement age from 60 to 62 implemented by the Sarkozy administration.
  • Budget minister Jérôme Cahuzac stepped down in April 2013 after it was revealed he had a Swiss bank account and had potentially committed tax fraud.
  • Altogether, Hollande’s approval ratings are the lowest of any president after one year in office, and fully 73% of French voters are dissatisfied with Hollande and 68% are dissatisfied with his prime minister, Jean-Marc Ayrault.

It’s been, from a political perspective — and even from a policy perspective — a bit of a disaster.  Hollande’s chief accomplishment, enactment of same-sex marriage in France, has been accompanied by vigorous opposition from Sarkozy’s party and from the far right, inspiring massive anti-marriage rallies and even an uptick anti-gay violence.

It’s enough to make you wonder — what would have happened if Dominique Strauss-Kahn had never been alleged to have sexually assaulted a maid in a New York hotel, had stepped down with his head held high as managing director of the International Monetary Fund to run for an almost certain nomination as the presidential candidate of France’s Parti socialiste (PS, Socialist Party) and proceeded to challenge Sarkozy?  Strauss-Kahn today, as a matter of coincidence, re-emerged to open a bank in South Sudan, one of his rare appearances since the debacle that led to his arrest in May 2011.  Although U.S. prosecutors dropped charges of attempted rape and other sexual abuse charges in August 2011, Strauss-Kahn’s political career was finished.

Though it’s subject to a ‘grass is always greener’ caveat, there’s good reason to believe that a Strauss-Kahn presidency would have been a smoother affair than the embattled Hollande administration.

Despite whether it would have been better or worse, a Strauss-Kahn presidency would have been an incredibly different beast from the outset.

It seems unlikely that Strauss-Kahn would have ever campaigned on a pledge to raise the top rate of tax to 75%, let alone attempted to enact it, when it’s such an outlier among peer tax regimes.  It seems more likely that Strauss-Kahn, as a relative moderate within the Socialist Party, would have been more receptive to implementing labor market reforms designed to make France more competitive — perhaps a gentler variant of the Hartz IV / Agenda 2010 reforms that Germany enacted under social democratic chancellor Gerhard Schröder in the early 2000s.

But as a former IMF chief and a former finance minister under the government of prime minister Lionel Jospin from 1997 to 1999 who worked to reduce the budget deficit to prepare for French entry into the eurozone, Strauss-Kahn would have come into office with an unrivaled economic credibility that would have allowed him to challenge Merkel on the direction of economic policy in the eurozone with vigor — and then some.  It’s not hard to imagine Strauss-Kahn pursuing a relatively ambitious reform program domestically while simultaneously calling for less punishing austerity measures in the more devastated southern European economies.

Certainly, Strauss-Kahn’s candidacy and his presidency would have been plagued with the same sort of scandalous affairs that brought his career to such a  screeching halt in 2011.  It’s difficult to imagine Strauss-Kahn being emasculated in his first month in office (fairly or not), unable to stop a very public spat between a current and former lover, one of whom happens to have been his party’s 2007 presidential candidate and a leading political figure in her own right.  Strauss-Kahn would have come to the French presidency after a career in the public eye, unlike Hollande, who had chiefly served a behind-the-scenes role — when he was half of France’s power couple, it was Royal, not Hollande, who was the public star.  Hollande, from 1997 to 2008, was the first secretary of the Socialist Party and, unlike Strauss-Kahn, he was never a minister in the Jospin government and he was certainly not among the presidential contenders in 2007.

Four years are a long time in politics, French or otherwise, and Hollande can at least point to a military intervention earlier this year in Mali that went relatively smoothly by accomplishing a narrowly defined goal, and the Mali operation represents the Hollande administration at its best.  Hollande could engineer his own comeback, especially if the economy improves this year or next — it’s hard to believe he can sink much lower in public opinion.  For now, Strauss-Kahn will still have some ways to go until he, if ever, reaches political redemption in France.  But he’s a formidable economic and political talent, and comebacks aren’t altogether unheard of in France.  Just look at the return of former prime minister Alain Juppé as foreign minister in the final 15 months of the Sarkozy administration, despite his 2004 conviction for mishandling public funds.

With such an uninspiring administration, Hollande could well turn to a cabinet shakeup in the future to replace Ayrault or other top minister, including finance minister Pierre Moscovici — and he might do well to bring Strauss-Kahn or Royal, whose political talents remain unutilized, back into the top tier of government.

Iceland

Gunnlaugsson now unexpectedly in line to form Icelandic government

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Despite the fact that Iceland’s long-ruling Sjálfstæðisflokkurinn (Independence Party) won about 2% more in voter support in Saturday’s parliamentary elections, it looks like Sigmundur Davíð Gunnlaugsson, the leader of the second-place Framsóknarflokkurinn (Progressive Party), will have the first shot at forming a government.Iceland Flag Icon

That’s because both parties ultimately won 19 seats each in the Alþingi, Iceland’s parliament, and Iceland’s president, Ólafur Ragnar Grímsson, surprisingly decided to give Gunnlaugsson the first shot at forming the next Icelandic government.

The decision shines a spotlight on the fact that in many countries, the head of state has quite an influential role in determining who will be the next head of government — in this case, it seems like Gunnlaugsson will nonetheless be on track to become the next prime minister, not the leader of the Independence Party, Bjarni Benediktsson.

It makes some intuitive sense — the Progressives have by far the most momentum, having garnered nearly an additional 10% of the vote in the 2013 election, and although the Independence Party won the vote in Reykjavík and the small southwestern region of Iceland surrounding Reykjavík, the Progressives won more votes in all of the other regions of the country (though they are more sparsely populated).

Although all signals from both Gunnlaugsson and Benediktsson are that they’ll form a center-right coalition, one possibility that I hadn’t considered is that Gunnlaugsson might join forces with other parties, leaving the Independence Party outside of government.

That seems unlikely, of course, but it’s an avenue that’s more open to the Progressives than the Independence Party, given that the Progressives can make a marginally better argument that they represent a rupture from both the Independence Party that dominated Icelandic government in the decades prior to 2009 and the more recent government led by Jóhanna Sigurðardóttir and the Samfylkingin (Social Democratic Alliance) and their coalition partners, the Vinstrihreyfingin – grænt framboð (Left-Green Movement).

Mathematically, a government needs 32 seats for a majority in the 63-member Alþingi.

Conceivably, and this is now in the realm of pure speculation, that means that Gunnlaugsson could team up with the Social Democratic Alliance and the Left-Green Movement for a 35-seat majority, though that seems nearly suicidal, given that the two parties suffered the heaviest losses in the recent election.  It seems even more unlikely given the Social Democratic Alliance’s support for joining the European Union, a position that both the Independence Party and the Progressives — and even the Left-Green Movement — oppose.

But another path might include a Progressive-led government that draws on support from the anti-EU membership Left-Green Movement and the most successful of the two newest parties in the Alþingi, Björt framtíð (Bright Future) — that would bring exactly 32 seats.  Bright Future was founded both by former Social Democrats and Progressives, which means that, despite its pro-EU membership views, Bright Future could be an easier coalition partner for the Progressives.

What’s clear is that, for now, Gunnlaugsson would appear to have the greatest number of options, including several novel paths to a government that could shake up Icelandic politics more than we thought even over the weekend.

Bulgaria, Cyprus, European Union, France, Germany, Greece, Italy, Spain, United Kingdom

What Iceland’s election tells us about post-crisis European politics

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Iceland was supposed to be different.Iceland Flag IconEuropean_Union

In allowing its banks to fail, neo-Keynesian economists have argued, Iceland avoided the fate of Ireland, which nationalized its banks and now faces a future with a very large public debt.  By devaluing its currency, the krónur, Iceland avoided the fate of countries like Estonia and others in southern Europe trapped in the eurozone and a one-size-fits all monetary policy, allowing for a rapid return to economic growth and rapidly falling unemployment.  Neoclassical economists counter that Iceland’s currency controls mean that it’s still essentially shut out from foreign investment, and the accompanying inflation has eroded many of the gains of Iceland’s return to GDP growth and, besides, Iceland’s households are still struggling under mortgage and other debt instruments that are linked to inflation or denominated in foreign currencies.

But Iceland’s weekend parliamentary election shows that both schools of economic thought are right.

Elections are rarely won on the slogan, ‘it could have been worse.’ Just ask U.S. president Barack Obama, whose efforts to implement $800 billion in stimulus programs in his first term in office went barely mentioned in his 2012 reelection campaign.

Iceland, as it turns out, is hardly so different at all — and it’s now virtually a case study in an electoral pattern that’s become increasingly pronounced in Europe that began when the 2008 global financial crisis took hold, through the 2010 sovereign debt crisis in the eurozone and through the current European-wide recession that’s seen unemployment rise to the sharpest levels in decades.

Call it the European three-step.

In the first step, a center-right government, like the one led by Sjálfstæðisflokkurinn (Independence Party) in Iceland in 2008, took the blame for the initial crisis.

In the second step, a center-left government, like the one led by Jóhanna Sigurðardóttir and the Samfylkingin (Social Democratic Alliance) in Iceland, replaced it, only to find that it would be forced to implement harsh austerity measures, including budget cuts, tax increases and, in Iceland’s case, even more extreme measures, such as currency controls and inflation-inducing devaluations.  That leads to further voter disenchantment, now with the center-left.

The third step is the return of the initial center-right party (or parties) to power, as the Independence Party and their traditional allies, the Framsóknarflokkurinn (Progressive Party) will do following Iceland’s latest election, at the expense of the more newly discredited center-left.  In addition, with both the mainstream center-left and center-right now associated with economic pain, there’s increasing support for new parties, some of them merely protest vehicles and others sometimes more radical, on both the left and the right.  In Iceland, that means that two new parties, Björt framtíð (Bright Future) and the Píratar (Pirate Party of Iceland) will now hold one-seventh of the seats in Iceland’s Alþingi.

This is essentially what happened last year in Greece, too.  Greece Flag IconIn the first step, Kostas Karamanlis and the center-right New Democracy (Νέα Δημοκρατία) initially took the blame for the initial financial crisis.  In the second step, George Papandreou and the center-left PASOK (Panhellenic Socialist Movement – Πανελλήνιο Σοσιαλιστικό Κίνημα) overwhelming won the October 2009 elections, only to find itself forced to accept a bailout deal with the European Commission, the European Central Bank and the International Monetary Fund.  In the third step, after two grueling rounds of election, Antonis Samaras and New Democracy returned to power in June 2012.

By that time, however, PASOK was so compromised that it was essentially forced into a minor subsidiary role supporting Samaras’s center-right, pro-bailout government.  A more radical leftist force, SYRIZA (the Coalition of the Radical Left — Συνασπισμός Ριζοσπαστικής Αριστεράς), led by the young, charismatic Alexis Tsipras, now vies for the lead routinely in polls, and on the far right, the noxious neo-nazi Golden Dawn (Χρυσή Αυγή) now attracts a small, but significant enough portion of the Greek electorate to put it in third place.

The process seems well under way in other countries, too.  In France, for examFrance Flag Iconple, center-right president Nicolas Sarkozy lost reelection in May 2012 amid great hopes for the incoming Parti socialiste (PS, Socialist Party) administration of François Hollande, but his popularity is sinking to ever lower levels as France trudges through its own austerity, and polls show Sarkozy would now lead Hollande if another presidential election were held today.

It’s not just right-left-right, though. The European three-step comes in a different flavor, too: left-right-left, and you can spot the trend in country after country across Europe — richer and poorer, western and eastern, northern and southern. Continue reading What Iceland’s election tells us about post-crisis European politics →

European Union, Iceland

Iceland’s election spells the end for its EU accession hopes

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(110) Tides pushes out at Vik

With capital controls still in place, a massively devalued krónur and galloping inflation, Iceland’s economy is not back to normal.European_Union Iceland Flag Icon

But it’s enough back to normal so that the window for Iceland’s accession to the European Union — or even, as was assumed during the worst days of its 2008 banking crisis, accession to the eurozone — is now very unlikely to happen.

Regardless of whether Sigmundur Davíð Gunnlaugsson and the Framsóknarflokkurinn (Progressive Party) or Bjarni Benediktsson and the Sjálfstæðisflokkurinn (Independence Party) come out on top in Saturday’s election, they are likely to form a center-right coalition that will look to reverse many of the initiatives of the social democratic / leftist government of Jóhanna Sigurðardóttir over the past four years.

Above all, none of the Sigurðardóttir government’s priorities is more endangered than the project of Iceland’s EU accession.  Most news stories note that both a Progressive-led or Independence-led government would slow accession talks, but it seems likelier that Iceland’s next government would essentially end the talks indefinitely — they might not formally withdraw Iceland’s EU application, but they certainly won’t take any action to further discussions.

While Gunnlaugsson has called for a referendum on the eventual result of talks, his party  virtually alone among Iceland’s parties argues that the country should not reimburse the British, Dutch and other governments who reimbursed non-Icelandic depositors who put their savings in Icesave prior to its collapse in 2008.  Benediktsson is hardly any more pro-Europe — he’s argued that Iceland should break off talks altogether and focus on deeper global ties, such as Iceland’s recent free trade agreement with the People’s Republic of China — the first such free trade pact between a Chinese and a European country, likely due to Chinese eagerness to enhance its role in the Arctic north.

If for some reason a Progressive/Independence government does complete the accession talks, the result would be put to a referendum of Icelandic voters who remain highly skeptical of Brussels’s pernicious influence.

Sigurðardóttir’s government formally applied for membership in July 2009 and negotiations began a year later, but with her party likely to return to opposition, the window for Iceland’s EU membership seems likely to end with her government, as Alda Sigmundsdóttir writes today in The Guardian:

So, what makes the Progressive party so popular?

They are vehemently opposed to joining the European Union…. Indeed, many of the Progressives’ policies and declarations lean precipitously towards a new nationalism, with mildly xenophobic stances on issues such as immigration and asylum seekers, and party symbols that are vaguely reminiscent of fascism. The Progressive party was also the party that was most fiercely opposed to Iceland repaying the UK and Holland for the failure of the Icesave online bank.

If [Gunnlaugsson] wins, it will be because Icelanders fear abuse and exploitation by outside forces more than they do a return to the corrupt days of old.

Those are some fairly strong accusations, but I have to wonder if Icelandic voters aren’t simply being rational with respect to EU accession — they already have the benefits of free movement of goods and free borders with Europe, as well as much of the legal harmonization that typically comes with membership and a robust economic relationship with Europe that developed without Icelandic membership.  Why formalize the deal when they already have so many of the benefits of membership without any potential for considerable drawbacks that could harm Iceland’s cherished (and highly protected) fishing industry or the fierce national pride of a uniquely compelling nation that won its own independence from Denmark in 1944? Continue reading Iceland’s election spells the end for its EU accession hopes →

Iceland

Center-right parties poised to return to power in Iceland

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Kim Jong-un, at age 30, is the world’s youngest leader, and there are only a handful of thirtysomething world leaders.Iceland Flag Icon

But if polls are correct, Sigmundur Davíð Gunnlaugsson (pictured above) may lead Iceland’s Framsóknarflokkurinn (Progressive Party) to victory in April 27’s parliamentary elections, giving the Progressives their best victory since 1931 and, perhaps, in its history.  That would make Gunnlaugsson, at age 37, the country’s youngest prime minister since its 1944 independence.

Icelandic voters go to the polls Saturday after a fairly tumultuous time over the past five years following the 2008 collapse of its banking sector, a massive depreciation and the introduction of capital controls on Iceland’s currency, the krónur, despite a return to tepid GDP growth after a 6.5% contraction in 2009 and an unemployment rate that’s now below 5%.

I’ll sideswipe the long debate among American economists over whether Iceland’s economic policy was smarter than that in Ireland or the Baltic states.  If you want an in-depth take from an Icelandic observer, read this instead.  I’ll add that Iceland’s ability to set its own monetary policy certainly helped it bounce back in terms of GDP growth, but it also glided the path for a massive krónur depreciation and inflation that’s eroded those gains that Iceland has made in the past five years.  Much of Iceland’s household debt, before 2008, was denominated in non-krónur currencies, and debt today is otherwise linked to currency or inflation indices.  That has made debt repayment, especially for home mortgages, a grueling nightmare in post-boom Iceland.

So the economic situation is Iceland is complicated, and though there’s a lot of evidence to suggest that Iceland’s economy might even be worse if it were part of the eurozone, that doesn’t mean that the everyday Icelandic voter feels like things are quite back to normal.

But politics, however, do seem set to return to the pre-boom ‘normal,’ given that the Progressives were a longtime ally of the dominant party in Iceland’s history since independence, the Sjálfstæðisflokkurinn (Independence Party), which was formed precisely — as you may have guessed — to enact Icelandic independence from Denmark.

The two parties are now fighting for first place in the April 27 parliamentary elections, and it’s virtually certain that they’ll form the coalition that constitutes Iceland’s next government.  No party in Iceland’s post-independence history has even won an absolute majority in the 63-member Alþingi, Iceland’s parliament.

Polls have shown the Progressive Party with a growing lead throughout 2013, stemming largely from their insistence that Iceland should not reimburse the U.K. and other governments for the Icesave debacle — non-Icelandic savers who had deposited their money in Icesave were wiped out in late 2008, and though their own government have largely made them whole, they have turned to Iceland for repayment with interest.  Although most Icelandic parties agree that Iceland should make the payment, the matter’s been tangled up in both domestic and international litigation, and the repayments are very, very unpopular among the Icelandic electorate.

But the Independence Party seems to be catching up once again, and the two parties are now essentially tied for the lead, meaning that either party could win the greatest number of seats in the Alþingi.  If the Independence Party does edge out the Progressives, Iceland’s new prime minister could be the Independence Party leader, Bjarni Benediktsson (pictured below), who only narrowly survived a leadership challenge a couple of weeks ago, when the party’s polling numbers were more depressed.

bjarni Continue reading Center-right parties poised to return to power in Iceland →