European Adventure – The Missing Variable

Cartoon: Jasper Rietman
Cartoon: Jasper Rietman – New York Times, Dec 18, 2013

The Europe we live in today is the worst possible Europe apart from all the other Europes that have been tried from time to time. No European alliance, empire, commonwealth or community has endured forever, but we should want this one to last as long as it can – Timothy Garton Ash 

Politically, the European endeavor appears as fragile as ever. Pockets of populism (extreme-right and extreme-left combined) have been popping out since the collapse of the financial markets in 2007. But the recent results of elections in Sweden, Poland, the United Kingdom, Greece, France, Spain, Denmark and so forth are demonstrating that the European electorate is increasingly voting more extreme than before. In the case of France, the Front National, which was historically a party of opposition has become the “first party of France” to take her President’s words. If populism is becoming attractive, it has created a complex national debate of incomprehension and anger between populist voters and the mainstream rest. National unity, in France, Europe and even in the US, is under attack.

Experts and political analysts have been identifying a series of variables in order to explain the rise of populism such as immigration, terrorism, economic stagnation, high level of unemployment, corruption, cronyism, globalization and Europe. Each variable is highly valid and can explain what motivate Europeans to seek for extreme alternatives. But one core dimension has been missing and is most likely the strongest component: an adventure, a story (for Europeans) and a dream (for Americans).

Loss of Memory/Direction in a Ever-More Globalized World

Globalization has been framed as the foundation of all national turmoils and traumas. For populist movements the word ‘globalization’ is a toolbox with no clear definition for obvious political reason. The concept of globalization should be understood as an acceleration in the degree of interaction and interconnection between humans, capital and goods. To some extent, the physical world is shrinking; the speed in interaction is accelerating [distance-time are disappearing]. A smaller shared space ultimately affects the understanding of one’ space and culture.  In her recent address about the reflection on a common strategy, HR Mogherini framed the question of globalization from a security angle, which contributes to the reflection on the definition of the globalization in this piece. She said that:

Everything that is important to our citizens is influenced by our international environment. And there is actually no distinction, no borders, no line between what happens far away, what happens at our borders, in our region, and what happens inside our European Union. Even these categories are now losing sense. 

‘Losing sense’ is quite a powerful part of her statement. Populist movements are directly responding to this sensation of physical, emotional and ideational feeling of dizziness. In addition, populist movements argue that the European Union is in fact a materialization of globalization and its global forces weakening national unity. Unfortunately, this is not true if one takes a historical look at globalization bringing us back to the 14th century with the Dutch empire. Globalization has roughly emerged at the end of the Dark Ages and pushed the economic and political transition of Europe and North America into the pre-industrial world. Arguing that globalization is the root cause of all national traumas is an absolute fantasy considering the longevity of such phenomenon.

However, one should talk about the speed of globalization and its acceleration in the last 20 years. “We live faster than ever before” writes Svetlana Alexievich “Content ruptures form. Breaks and changes it. There are no borders between fact and fabrication, one flows into the other.” Certainly globalization has become a powerful force highlighting serious limitations and weaknesses of European foundations. If capital and people can travel quicker than ever before [in roughly 12hours a human can be on the other side of the world], and in a less than a second billions of dollars/euros can be wired from one continent to another, such forces can undeniably create serious problems to the slow-moving entity of the nation-state and the EU. These realities of an ever-more globalized world is creating a distortion between immediacy and reflection. Immediacy could be embodied by the current economic model of casino capitalism; while, reflection is in fact the foundation of European political regimes, Democracy/Republic. If casino capitalism is based on economic gamble informed by pseudo-rational thinking as it is more a question of rumors and speculation, democracy is a slow process of introspection, discussion, collaboration and compromise. The discrepancy between casino capitalism and democracy is obvious and stretching the limits of European societies. Here lays the core of the problem in the globalized world of the early 21st century.

Ultimately, when a politician like Marine Le Pen, president of the extreme-right party le Front National, tells a story of national sovereignty, national control through the construction of physical barriers and implementation of protectionism, these narratives attract a confused audience. But the lie is obvious, the building of physical barriers to block invisible forces won’t do a thing in order to solidify national sovereignty and empower cultural exceptionalism. Building physical barriers in order to limit the flow of people is a myth. Millions of Europeans went through the Atlantic Ocean, an ocean, for a better future; are a series of walls around Europe be sufficient to stop refugees to come in. Not a chance.

European Adventure

The story of the European construction is a remarkable story and endeavor. In the rumbles of Europe, visionary leaders and thinkers drove European politicians to follow their visions

Europe
Cartoon: Paul Lachine

in order to avoid another war that could destroy the world. World War two was one of the most vicious global fights with genocides, mass-movement of troops and civilians, arms and technological race and so forth. Over 40 million individuals died in six years leaving Europe as a massive field of destruction. From the agreement of the Treaty of Paris in 1951 to the Treaty of Nice in 2001, the European construction was far from perfect but it was an adventure for greater political, economic, and institutional integration. It was an adventure in order to horizontally expand the Community/Union from six original members into a Union of 28. It was an adventure as European citizens saw the fall of physical borders, from the Berlin War to national borders under the Schengen Agreement. It was an adventure when on June 7 and 10, 1979, European citizens could vote for the first time at a European election for the European Parliament.

It was an adventure as Europeans could finally move within a wide group of states in order to start a career, to start a European life, to study. It was an adventure as the continent saw an unprecedented economic boost bringing struggling states – Germany as one of them – into highly sophisticated and developed economic and industrial levels. It was an adventure in the agreement to share a common currency, the Euro, in order to facilitate commercial and financial transactions at first, and then the flow of people. It was an adventure as the Community/Union demonstrated the world that cooperation at its extreme did not undermine national sovereignty, but rather empowered it.

The Quest for a European Life

Today, the European adventure has become a European set of technicalities. The European adventure, which was at first bold and big, has become a highly technocratic and reductive vision of politics, finance, economics, and culture. Emotionally, European citizens are not opposed to the European Union, but are thrown off by the appeared and perceived distance between them and “Brussels.”populism-400x300

Europeans are in fact in search of meaning, a raison d’être. Unfortunately, this quest for a raison d’être is being hijacked by populist movements selling a past that never was. Populism, either fascist or communist, is attracting audiences – from elder voters to first time voters – because they are selling a ‘mission,’ a purpose to reconstruct a past that never was. Unfortunately, these populisms have no serious political, foreign, economic, fiscal, educational agendas. These populisms are simply selling smoke.

Instead of talking of clash of civilization – in order to identify a mythical clash between Western societies and radical islamic movements, which do not speak for societies with a majority of muslim citizens – experts should be talking of a civilizational depression. Instead of seeking for external enemies, Europeans should be looking within, inside and reflect of this European state of confusion. Europe may be simply dealing with its mid-life crisis. Now it is a matter of avoiding a complete divorce with a supposedly dark and repressive past, the European integration process.

(Copyright 2015 by Politipond. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed without permission.)
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Tsipras, a Political Master

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Europe and the world should be taking a moment and reflect on the political mastery of Alexis Tsipras of Greece. In less than a year, Mr. Tsipras won two general elections, won a referendum and implemented contradictory policies, all this by changing his political standing and under terrible domestic and economic conditions. Aside from political ideology, Alexis Tsipras is undeniably one of the most talented European politicians. However has his mastery of politics translated into sound governing skills?

Early 2015, most Europeans, including a some Greek citizens, had never heard of Alexis Tsipras. The 41 year old tieless politician finds his political ideology in extreme left affiliated at first to the Communist Party. His political house is centered in the extreme left side of the political spectrum. After years of internal evolution in the Greek lefts, he then became the leader of the exteme-left wing party, Syriza (which means Coalition of the Radical Left) and was elected at the helm of Greece in February 2015. This was the beginning of his true political exposition.

Chapter 1: His election in February 2015 marked the end of the decade long transfer of power between the two leading parties. Tsipras was elected based on a program of anti-austerity policies, fight for Greek interests before the Troika (ECB, IMF, and Commission), increase of minimum wages, restauration of state employees and increase of pensions. If European media were deeply skeptical about his rise and thought that he would not last a year, they have appeared to be wrong. Ensuing his election, Tspiras disappeared from European minds until the looming of the deadlines for debt repayments of the IMF and ECB.

Chapter 2: The second chapter of his reign started several weeks prior the eventual default 478861728of Greece for the repayment of a  €1.5 billion to the IMF on June 30th, and a second one to the ECB mid-2015. These negotiations at EU finance ministers level and EU leaders level were extremely tense as neither Tsipras nor his finance minister, Yanis Varoufakis, wanted to accept the deal put on the table by the Troika and Germany. At the last minute, PM Tsipras called for a referendum on July 5th asking Greeks to decide on their fate: voting yes to the deal implied more austerity measures; a no vote was a rejection of the deal and could lead to a Greek default and leaving the Eurozone, known as a Grexit. Not only did Tsipras organized the referendum without noticing his European partners, but he campaigned for the no vote.

Chapter 3: The no camp, or Oxi, won the referendum with 61.3% and Europe was expecting a progressive departure of Greece from the Eurozone. Even President Juncker of the European Commission asked for a report on how to accompany Greece outside the Euro area. Instead of using his domestic mandate, Tsipras fired his finance minister (officially he resigned desipte winning) and went back to the negotiation table

ATHENS, GREECE - 2015/06/29: The word 'OXI' (NO) written on a banner in front of the Greek parliament. Greeks demonstrate in Syntagma square in support to a 'NO' vote in the referendum that will take place on the 5th of July, whether to accept the new agreement between Greece and it creditors. (Photo by George Panagakis/Pacific Press/LightRocket via Getty Images)
ATHENS, GREECE – 2015/06/29: The word ‘OXI’ (NO) written on a banner in front of the Greek parliament. Greeks demonstrate in Syntagma square in support to a ‘NO’ vote in the referendum that will take place on the 5th of July, whether to accept the new agreement between Greece and it creditors. (Photo by George Panagakis/Pacific Press/LightRocket via Getty Images)

requesting the initial deal. Germany refused and France played an important role of holding together the parties and the negotiations alive. Ultimately, Greece agreed on a worst deal than previously offered and Tsipras implemented additional austerity measures and required reforms. The deal entailed the following aspects: raising the age for retirement; a VAT hike at 23% across sectors; privatization of key sectors of Greek economy; and removal of tax breaks for some Greek islands. These reforms would permit to unlock a third loan package of €86 billion until 2018.

Chapter 4: Tsipras agreed on the second deal, agreed at EU level on July 13th, which was worst than the initial offer, and brought it back home for a vote. The Greek Parliament voted and agreed on July 15th, on the bailout deal, which was approved with a 229-64 majority. However, Tsipras’ party, Syriza, seems to have lost some unity with 32 Syriza MPs defying their leader’s pleas and rejected the deal. Throughout July and August, Tsipras was facing serious political criticism and opposition by the members of his own party. Syriza was divided between a radical branch, led by Mr. Lafazanis, and a more centrist one counting Tsipras. The radical branch of Syriza had not accepted the political move by Tsipras to go against the popular vote of the referendum. “Mr Lafazanis’s supporters speak of an ‘ideological betrayal’ and ‘treachery’ by Mr Tsipras’s faction.”

Chapter 5: On August 20th, PM Tsipras announced his resignation and his candidacy for the next general election that would take place mid-September. His rationale was to get reelected without the radical branch of Syriza. His political gamble worked as he was reelected with 35.5% of the vote and was able to drop the hard-liners from his party. Syriza won 145 seats out of the 300 seats of the parliament, only four fewer than after the January elections. In order to assure a majority, Tsipras agreed on a coalition with right-wing party Independent Greeks (ANEL) with its leader Panos Kammenos. ANEL is an ultra-nationalist anti-immigrant party, often compared to UKIP in the United Kingdom. With this alliance, the Syriza-ANEL coalition offer the majority with 155 seats in the Parliament to Tsipras. Even President of the European Parliament, Martin Schulz, expressed his concerns directly to PM Tsipras about this political alliance.

Political Talent over Governing Skills?

In less than a year, PM Tsipras has demonstrated his political talent in remaining alive and electable despite party, domestic and European pressures all this under dire economic conditions and an unemployment level around 25%. If Tsipras proved to the world that he cannot lose an election, he needs to now tackle the true problems of Greece: crony capitalism, clientelism, systemic corruption, and implementing structural reforms of the economy and state. The country has been on life line for over 5 years, its intellectuals are fleeing away, higher education is barely financed and Greece cannot even protect its borders. Winning elections is one thing, implementing reforms and governing are another.

(Copyright 2015 by Politipond. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed without permission).

Juncker’s Trinity – Honesty, Unity and Solidarity

Source: The Parliament Magazine
Source: The Parliament Magazine

Jean-Claude Juncker, President of the European Commission, made his first State of the Union before the European Parliament in Strasburg (read his address here). As he recalled in the early part of his address, the State of the Union is an important institutional exercise solidifying the relationship between the Commission and Parliament. In the State of the Union, the President addresses the overview of the past year, and identifies the priorities for the coming year. The title of his address is State of the Union 2015: Time for Honesty, Unity and Solidarity. Juncker wants to take a hard look at the way the EU and Europeans behave, which has been quite disastrous these last years, and the types of solutions that could be implemented in order to solve the many crises facing the Union.

The tone of his address was quite dark and accusative. At several occasions, Juncker was very critical, and pretty much started his address by saying that “our European Union is not in a good state.” In order to change the current path, Juncker urged to re-find a common European ground and solidarity among the 28 nations.

Source: European Commission. 2015
Source: European Commission. 2015

Five key priorities were identified by President Juncker: the refugee crisis; the euro area and the Greek future; the Brexit; the instability of Ukraine; and, climate change. They can be grouped into three categories: internal/institutional, regional and global.

Internal/Institutional Priorities

The first priority for the Europe as a whole is finding solutions for the refugee crisis. Juncker spent a considerable amount of time talking about the crisis and the solutions that can be implemented. Before talking cooperation and coordination, Juncker underlined the shared historical heritage of Europeans and the fact that migrations caused by political persecutions and oppressions have occurred at many occasions on the European continent. Juncker implied that forgetting our European past, or simply selecting moments of history, is not an acceptable approach. Juncker addressed the question of numbers of asylum seekers and correctly put it in perspective saying that they simply represents 0.11% of the overall EU population of 500 millions, when they are representing 25% of the Lebanese population (read

Source: New York Times
Source: New York Times

a previous piece on the topic here).

Juncker underlined that the Commission has been advocating for more integration on immigration policies in order to create a Common European Asylum System. If Juncker reminded the positive actions implemented by the EU like Frontex, foreign aid to Syria and so forth, he said that “Where Europe has clearly under-delivered, is on common solidarity with regard to the refugees who have arrived on our territory.”

In dealing with rising numbers of refugees arriving in Italy, Greece and Hungary, the Commission is pushing for the adoption by the EU meeting of ministers of September 14th of the “Commission proposals on the emergency relocation of altogether 160,000 refugees.”

The last sentences of his part on the refugee crisis was quite a powerful statement as it clearly illustrates Juncker’s vision of what Europe is and should be:

I do not want to create any illusions that the refugee crisis will be over any time soon. It will not. But pushing back boats from piers, setting fire to refugee camps, or turning a blind eye to poor and helpless people: that is not Europe.

Europe is the baker in Kos who gives away his bread to hungry and weary souls. Europe is the students in Munich and in Passau who bring clothes for the new arrivals at the train station. Europe is the policeman in Austria who welcomes exhausted refugees upon crossing the border. This is the Europe I want to live in.

The crisis is stark and the journey is still long. I am counting on you, in this House, and on all Member States to show European courage going forward, in line with our common values and our history.

Source: Politico. 2015
Source: Politico. 2015

 

The second priority concerns the Euro area, Greece and the European social model. The third priority consists in maintaining the unity of the Union by keeping Britain inside the EU. Juncker has always been clear on the fact that the UK ought to remain a core member of the Union.

Regional Priority – Ukraine

The fourth priority identified by Juncker deals directly with the stability of the European continent, and especially with the lingering military and political crises in Ukraine. Juncker’s view on the Ukrainian crisis is that the EU “will need more Europe and more Union in our foreign policy.” Juncker underlined that the 28 nations must show more unity in confronting Russia and demonstrating to Russia that it will have to pay a high cost in maintaining the regional instabilities in Eastern Ukraine. Interestingly enough, Juncker did not mention Crimea and its annexation by Russia.

Global Priority – Climate Change

In December, Paris will host the COP-21 meeting, which Europeans would like to be the meeting that brought global unity and commitment to addressing climate change. “Europe’s priority,” underlined Juncker “is to adopt an ambitious, robust and binding global climate deal.” The ultimate objective for the Europeans is quite grandiose as they hope to achieve the creation of an “international regime to efficiently combat climate change.” The creation of an international regime would be a fantastic first step, but having a regime without clear powers, independent enforcement mechanisms, and a fund would be meaningless. Then, each signatory of the regime will have to ratify it back home. If Europe can offer credible influence, it is uncertain that the United States, in period of presidential campaign until November 2016, would ratify it.

Juncker’s approach, which is in fact a Commission’s approach, to addressing the problem of climate change is a market-oriented strategy based on two aspects. The first one is the EU Emissions Trading System, which consists in trading quotas of emissions, and the second one is the development of the Energy Union, which is as well focused on innovations and on the interconnection with the markets.

Despite Being Political, the State of the Union Falls Short

Jean-Claude Juncker’s address is interesting as he, early on, underlined his legitimacy as President of the Commission as he was appointed directly after the elections of the European Parliament. Certainly, the President of the Commission is not directly elected by the European citizens, but for the first time ever the different candidates for his posts were semi-campaigning. Ultimately, he claimed that he has had “the opportunity to be a more

 Photo: REUTERS Italian Member of the European Parliament Gianluca Buonanno (L) wears a mask depicting German Chancellor Angela Merkel
Photo: REUTERS Italian Member of the European Parliament Gianluca Buonanno (L) wears a mask depicting German Chancellor Angela Merkel

political President” and he told the Parliament that he “wanted to lead a political Commission. A very political Commission.”

The Commission is the executive body of the European Union as its role is to enforce and advance the interests of the Union. In short, the Commission is the guardian of the Treaties. Even though President Juncker appears to be frustrated about the direction of the EU, the lack of solidarity and unity among the Member States, his first State of the Union falls short for several reasons (read here a piece by Tim King of Politico arguing that Juncker lacked in persuasive explanation):

First, the address is too complex and tends to go back to the legal texts at too many occasions in order to validate and justify the power and legitimacy of the Commission. The address could have been much shorter and direct without all these legal justification. It is not certain that Juncker needed to offer some lecturing about the institutional design and functioning of the EU. In addition, this quest by Juncker for legitimacy and perpetual justification of his power is quite interesting and may underline some complex tensions at the European level.

Second, if Juncker’s plan on reforming the asylum model in Europe is well thought out, the solutions for Greece are not present at all. The part on the Greek crisis reinforces the sentiment that the EU is unable to merge the gap between a common currency and national fiscal policies and most importantly find a solution in re-launching the European economic engine.

Last but not least, if the five issues identified are right on the approach to solving them is the traditional one coming from the Commission and can be summed up by “more Europe.” This motto advanced the Commission of “more Europe” in order to solve all internal, regional and global problems is for many the cause of the disconnect between Brussels and the European nations. In his first address, Juncker failed in connecting with European citizens.

To end on a positive note, one of the most meaningful statements made by Juncker, which was lost in the length of text, appears in the conclusion. He said “While I am a strong defender of the Community method in normal times, I am not a purist in crisis times – I do not mind how we cope with a crisis, be it by intergovernmental solutions or community-led processes. As long as we find a solution and get things done in the interest of Europe’s citizens.” Such statement shows the true colors, meaning political philosophy, of Juncker and the desire to find the most appropriate solutions to solving serious crises. This should have been the core argument of his address.

(Copyright 2015 by Politipond. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed without permission).

Dying for the European Union?

Credit: REUTERS/Jean-Marc Loos
Credit: REUTERS/Jean-Marc Loos

Can a national soldier be asked to die for the European Union? In other words, can a Hungarian soldier be sent under an EU flag on the battlefield for another national and/or European cause?

With all the recent talks about the creation of a EU army (read here a recent analysis on Juncker’s proposal), or a European Defense Union, and the perpetual French calls for increasing burden-sharing in defense spending and actions, one variable is missing, would it be acceptable for Member States and European citizens to let their soldiers die for the EU? Can national Member States require their soldiers to fight on the battlefield exposing them to possibility of death for the EU? Would European citizens support such idea? Such questions may appear as a futile intellectual exercise, when in fact it is at the heart of the overall issue of European integration in the realm of security and defense.

Geopolitical Realities

There is no army without a demos, an identity, shared symbols and a common national vision (see the excellent book by Christopher Bickerton on the subject of integration from nation-states to member states). The Europeans and Americans have now since the end of the Cold War tried to create armies in Afghanistan, Iraq, Nigeria, Mali, Niger, in the Balkans, and other countries around the world. This is a complex and lengthy process requiring specific criteria such as a state, a national identity, and a will to defend the values and institutions of such state. The recent examples of the Iraqi and Afghan armies are demonstrating how difficult it is and in some instances unrealistic. In the case of the EU, the talk of a European army goes back to the failed attempt of the European Defense Community (EDC) in 1954 foreseeing the creation of a European army composed of 100,000 soldiers (read here a book review of Debating CSDP). Since then, the topic reappears and disappears as quickly as it emerges. The question of a European army is directly intertwined with the old-federalist vision.

Additionally, the case of the EU is a little different from the other regions of the world. The EU has grown under the protection of the nuclear umbrella of the Americans for the entirety of the Cold War. With the implosion of the Soviet Union, the EU was for over 20 years leaving with no major direct threats to its survival. With today’s reemergence of a more aggressive Russia, NATO has re-become the primary instrument for defense. Ultimately, the core perception of European security and defense incorporates two dimensions: American protection and lengthy regional stability. But with the collapse of world markets and the Arab Spring, the EU is now encircled by serious threats with Russia, the Islamic State (IS), mass-migration and rogue regional countries. The European reactions have been to ignore the realities and instead focus on domestic problems.

In some ways, the Europeans have to re-learn in accepting the threats affecting one’ security requiring the use of force. For decades, Europeans did not have to worry about basic existential survival. Europeans were instead deploying forces based on liberal beliefs. Today, the world and Europe are much different places. Despite the lethality of the regional threats, most European leaders and citizens are unwilling to consider the use of military force. For instance, in dealing with Crimea and Eastern Ukraine, Europeans have never mentioned the deployment of troops on the Eastern European borders and even less the use of military force in stopping Russia. Europeans are not thinking in terms of hard power on their owns, only with NATO.

European Demos, Identity and CSDP

In most EU Member States, the mandatory military draft has been abolished. The military conscription policy in most EU Member States, at the exception of Austria, Denmark, Greece, Estonia and Finland, does not exist or is possible only in case of emergency. Most European armies are in fact composed of professional soldiers.

Military Conscription Policy by Country
ChartsBin statistics collector team 2011, Military Conscription Policy by Country, ChartsBin.com, viewed 4th April, 2015, <http://chartsbin.com/view/1887&gt;.

Additionally, since the financial crisis, EU Member States have seriously cut their military expenditures at the national and european levels. As illustrated below, the military expenditure of the EU in 2012 (with 1.5% of GDP) was one of the smallest in comparison to the other world powers. Taking into account to overall proportion of the percentage in the overall world economy, the 1.5% seems inappropriate. As per, many institutions (World Bank, European Commission) and agency (CIA), the overall GDP of the US ($16.7tn)  and EU ($15.8tn) in 2013 were almost equal, but not their military spending.

Source: SIPRI 2013
Source: SIPRI 2013

Certainly, the US is a unitary state (in terms of national security), while the EU is an international organization composed of 28 Member States. The US has its own yearly federal defense budget, while the EU does not have an united defense budget, but rather 28. But with 28 Member States, it is difficult to claim that solely 1.5% of the EU’s overall GDP is a fair share in military expenditure.

In January 2015, the European Parliament (EP) published a report about European perceptions on a variety of policy areas (access the report here). This report permits to shine a light on the perceptions of EU citizens on policy areas related to the eventual creation of a EU army.

European Parliament Eurobarometer. 2015. "Analytical Overview". (EB/EP 82.4) 2014 Parlemeter. January 30. Brussels.
European Parliament Eurobarometer. 2015. “Analytical Overview”. (EB/EP 82.4) 2014 Parlemeter. January 30. Brussels.

Based on the figure above, the strongest factors in composing the European identity are the values of democracy and freedom and the Euro. Interestingly, the three least recognized elements are in fact the ones that are the most symbolic in the formation and fostering of national unity: the anthem, the flag and the motto. Europeans principally feel united through the common share of beliefs – democracy and freedom – which are strongly ingrained in the membership process, the Copenhagen Criteria, in order to become an EU Member; and the currency, which is visible on daily basis in 19 Member States. However, the symbols remain strongly national. European citizens are in fact keeping their allegiance to their national symbols: flag, anthem and motto.

These symbols are necessary to be Europeanized in order to create a European army. Until European citizens do not envision the European symbols over their nationals, the creation of a European military allegiance won’t be possible.

Euro policies
European Parliament Eurobarometer. 2015. “Analytical Overview”. (EB/EP 82.4) 2014 Parlemeter. January 30. Brussels.

 The figure above illustrates the policies wherein European citizens feel that the EU should prioritize. In the case of high politics (defense, security and foreign policy), most Europeans disagree with a common policy. For instance, in the development of a ‘security and defense policy […] to face up to international crises’ EU citizens oppose it at 74%. In combating terrorism, once again the EU citizens are opposed at 71%, and in shaping a common foreign policy, 81% of EU citizens are opposing it. With such numbers, several explanations can be drawn: first, they consider high politics a national priority; second, the national governments are fighting in order not to loose the grip over the control of these policy-areas; third, citizens are overall against foreign, security and defense policy, caused by a certain power-aversion.

A United States of Europe?

All EU Member States are neither risk- nor power-averse. For instance, France since the turn of the century has not shied away from its rank of middle-power. In a matter of five years, it has waged war in Libya, Mali, Central African Republic, Iraq, the Sahel region, and almost in Syria. The United Kingdom was a very active international actor and French partner, but has been less interested in military action since the coalition in Libya in 2011. The UK is still dealing with the Iraq syndrome and lengthy Afghan war. Since the opposition of the legislature to go in Syria, the UK has been irrelevant in security and defense affairs at the great concern of its American partner. Other Member States have been more vocal. With the Arab Spring, the Russian incursions in Georgia (2008), Crimea, and now Eastern Ukraine, the rise of the Islamic State (IS), the Europeans may be united in rhetorics, but are neither willing to deploy forces nor empower the EU in doing more.

Ultimately, the creation of a true European army would require two things: first, theChurchil creation of a clear European demos; second, a federal entity where most European interests are common. The creation of a United States of Europe will be necessary. In the US, the Congress or the President, under special circumstances, can declare war to other states. The different military branches – Army, Navy, Air Force – are all regulated under the Department of Defense (DoD) and can be deployed at anytime even if a Governor of a state is opposed to it. The Federal government is in charged of world military operation. In the case of the EU, there is no such thing as a European DoD. The European External Action Service (EEAS) is a ‘service’ in charged of shaping a common European Foreign policy with the consent of the Member States. Only the Member States can decide on using military force. A European army will remain a topic of discussion, nothing more.

(Copyright 2015 by Politipond. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed without permission).

It is Politics, Stupid!

CREDIT: ANADOLU AGENCY
CREDIT: ANADOLU AGENCY

“I really cannot remember, in all my time in European politics, whether I have come across a situation like this. This is really all about the European Union. If the EU is going to have any credible force, it is going to have to demonstrate it is capable of solving its own problems.” – President Martin Schulz on July 12th, 2015 during the Euro Summit Meeting

Forget about economics, finance, banking regulations, social welfare policies, debt forgiveness; the future of Greece solely depends on politics. “The answer [of endless negotiations on solving the Greek crisis these last five years] cannot be found in economics,” writes Yanis Varoufakis, the former Greek finance minister, “because it resides deep in Europe’s labyrinthine politics.” Greece’s destiny is a simple political question based on several concept: trust and confidence.

The Deal

After a week long of back and forth between Greece and the European capitals, Brussels is once again the siege of a Greek marathon. A meeting of the Eurogroup finance ministers started on Saturday, July 11th and ended the next day around 3pm. Ensuing it a general EU summit, with the 28 leaders, was supposed to take place, but was instead cancelled and transformed into a crisis summit of the 19 EU leaders of the Eurozone. The future of Greece as a member of the Eurozone was clearly on the line with a very reticent German team (Chancellor Merkel and her Finance Minister Wolfgang Schäuble proposing an eventual ‘temporary Grexit’).

As reported by the Financial Times, the finance minister negotiations, which were fruitless and tense, let the way to the EU leaders, whom could not do better considering Germany’s position. Until François Hollande, President of France, whom had been extremely active in advising, helping and defending Greece in the last mile, called for a meeting in Tusk’s office. Preisdent Tusk was reported saying “Sorry, but there is no way you are leaving this room” until a deal is reached.

Credit: Aris Messinis/Agence France-Presse — Getty Images
Credit: Aris Messinis/Agence France-Presse — Getty Images

Interestingly enough, Tsipras’ proposal prior the July 11th meeting included: raising the age for retirement; a VAT hike at 23% across sectors; privatization of key sectors of Greek economy; and removal of tax breaks for some Greek islands. These reforms would permit to unlock a third loan package of $59.6bn until 2018. Tsipras’ proposal was highly similar to the one offered by the international creditors. Even Jean-Claude Juncker during the meeting recognized the proposal brought by Tsipras as almost identical to the one put on the table by the creditors weeks earlier. And the President of European Parliament, Martin Schulz, called for avoiding a Grexit and find a solution.

Based on the deal reached on July 13th, the Greek Parliament voted and agreed on July 15th, on the bailout deal, which was approved with a 229-64 majority. However, Tsipras’ party, Syriza, seems to have lost some unity with 32 Syriza MPs defying their leader’s pleas and rejected the deal. Clearly the terms of the bailout are in direct contradiction with Syriza’s policies, beliefs, and promises, as well as sidelining the results of the referendum. These contradictions could push even further the political crisis in Greece and lead to yet another election during the summer.

Chancellor Merkel, the Finish government and others are not convinced about the proposal and especially Greece’s commitment. The Greek drama is taking more than a simple economic/financial turn, it is purely political. It appears that some EU Member States, like Germany, Finland, Slovakia and others, are more inclined to go after Greece and its leftwing government led by Alexis Tsipras, than finding a real deal that would help in the long term the country.

One core reason is trust, or at least ‘lack of trust.’ Some experts have argued that Tsipras was now on Merkel’s black list after his political coup, the referendum. Merkel and others EU leaders do not trust any longer Tsipras and his government. Or even has argued by Yanis Varoufakis, “based on months of negotiation, my conviction is that the German finance minister wants Greece to be pushed out of the single currency to put the fear of God into the French and have them accept his model of a disciplinarian eurozone.”

Death of the European Project?

The Greek file should be considered as an overall failure for the European ethos. Many economists, like Joseph Stiglitz, have been very critical of the negotiation process and the agreed deal. One of the most virulent denunciation of the deal was Paul Krugman, writing that “it’s [the deal] a grotesque betrayal of everything the European project was supposed to stand for.” Even the International Monetary Fund, a global advocate for austerity measures and straightjacket policies, has been critical of the dealbroken_euro_fit calling instead for a huge debt relief for Greece.

Last but not least, Nicolas Gros-Verheyde of Bruxelles2 wonders about a core question: “Is Europe becoming the sum of its egos?” The Greek file embodies more than solving an economic problem, it has become a vicious fight between powerful EU Member States. These egos are affecting their global visions and understandings of the core principles and values of the European endeavor. But right now, the EU is failing at this important crossroad. The EU cannot find a real solution on any major crisis from counterterrorism in Mali, to migration crisis in the Mediterranean, to Ukraine/Crimea, to the domestic rise of nationalism, and naturally Greece. Are politics killing the EU? It certainly looks like it.

(Copyright 2015 by Politipond. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed without permission).

Greece votes Oxi, Europe says Grexit

ATHENS, GREECE - 2015/06/29: The word 'OXI' (NO) written on a banner in front of the Greek parliament.  Greeks demonstrate in Syntagma square in support to a 'NO' vote in the referendum that will take place on the 5th of July, whether to accept the  new agreement between Greece and it creditors. (Photo by George Panagakis/Pacific Press/LightRocket via Getty Images)
ATHENS, GREECE – 2015/06/29: The word ‘OXI’ (NO) written on a banner in front of the Greek parliament. Greeks demonstrate in Syntagma square in support to a ‘NO’ vote in the referendum that will take place on the 5th of July, whether to accept the new agreement between Greece and it creditors. (Photo by George Panagakis/Pacific Press/LightRocket via Getty Images)

“All of us are responsible for the crisis and all of us have a responsibility to resolve it.” – President Donald Tusk, July 7th, 2015

Greek citizens voted in majority Oxi to the July 5th referendum. The question asked by the Tsipras government, which was campaigning for a ‘no’ vote, was yes or no to accepting a continuation of the bailout program with all the austerity measures coming with it (read here a previous analysis). The results were very clear throughout the country with 61.31% for the no vote and 38.69% for the yes vote (see here the map produced by the Gr20150711_woc001_0eek Ministry of Interior showing that the no vote won in each Greek region). Greek citizens felt that the best option – out of two bad – was to reject the terms of the bailout on the table. If for a day the discussion was about the meaning of the ‘no’ vote (is it against the EU, the Euro, or simply a desire to remain a member of the Eurozone), today’s reality is about the future of Greece as a member of the Eurozone. So where do Greece and the EU go from now on?

Negotiations and Survival

In less than two days, a succession of events has taken place. For over five years, it seems that the Greek file was dragging, it has certainly taken an all new meaning and urgency. Prior to the results, Chancellor Merkel of Germany was meeting her counterpart, President Hollande, in Paris in order to find a common ground. The day ensuing the political victory of the Tsipras government, the infamous Greek finance minister, Yanis Varoufakis, announced his resignation. Many advanced that Tsipras had to go in order to demonstrate to his European counterparts that Greece was serious in seeking for a viable option. Varoufakis had gone too far and had lost some of his support within the Eurogroup of finance ministers.

Then on Tuesday, an emergency summit meeting took place with no substantial results.

Credit: Yves Herman/Reuters
Credit: Yves Herman/Reuters

Tsipras was supposed to bring, as highly recommended by the French government, a new proposal. But the summit meeting failed as Athens did not provide an acceptable option. Tsipras has now until Thursday (as requested by Merkel) in order to present a new proposal to his creditors. A failure in finding an agreement could lead to “the bankruptcy of Greece” warned Donald Tusk, the president of the European Council, “and the insolvency of its banking system.” Tusk added that “tonight I [Donald Tusk] have to say it loud and clear — the final deadline ends this week.” On Sunday, as announced by the 19 eurozone countries on tuesday, the 28 EU leaders will be deciding on the future of Greece.

In addition, the New York Times reported that for the first time – at least publicly – the President of the Commission, Jean-Claude Juncker, has announced that he has “a Grexit scenario prepared in detail.” If a Grexit scenario is now on the table, Tsipras will be defending his case before the European Parliament on Wednesday morning.

Consequences of Staying in the Eurozone, or Leaving It?

In the middle of the negotiations and in finding a solution, a key player is the European Central Bank (ECB). Currently the ECB is the institution that is keeping the Greek banks alive by providing liquidity. Because today Greece is unable to borrow money on the international market and the Europeans are the one providing money to Greece in order to have its economy and banking systems going. The ECB will continue to do so if a deal is agreed. However, in the case of a break-up, the ECB will remain a central player as it will stop providing liquidity to Greece. In addition, even if Greece missed its first payment of July 1st to the International Monetary Fund of $1.8bn, the second deadline of July 20th to the ECB of $3.8bn will be key for Greece and the EU.

If Greece wants to stay in the Eurozone, they will have to implement a set of policy measures that will require: tax reforms; fixing the pension program, which will affect early retirement program; labor market practices. Once these are ongoing the international and european creditors will have to give meaningful debt relief.

In the case Greece decides to leave, or is expelled from the Eurozone, then it will have to introduce a new currency. The country will ultimately default on their debts, and will have to create its own economic agenda in order to lay down the foundation for future economic growth. This scenario will naturally require serious structural reforms.

If Size does not matter, Precedent does

The Greek case is not about the size of the Greek economy. In fact the Greek economy only represents 2% of the Eurozone GDP. So far it does not appear that a Greek default could take with it the whole Eurozone and send a massive shockwave throughout the global markets. No, the case of Greece is a matter, for the EU and its Member States, of establishing a precedent. Germany and other wealthy Eurozone members want to avoid such precedent, where a member state refuses to pay its debts and call for a national referendum in order to provide such country leverage at the European level. Chancellor Merkel was correct in claiming that Greece is a sovereign state and has the right to organize such a referendum, however what type of legitimacy does that provide the Tsipras government in coming back at the bargaining table?

The Greek referendum is national decision on a complex financial question. But the Greek referendum does not affect the decision of Greece’s creditors. If the vote empowers Tsipras domestically, it does not at the European level. Now, Tsipras has to navigate in these tumultuous waters of a domestic electorate, opposed to additional austerity, while providing a proposal acceptable to his creditors, most of them highly in favor of additional austerity measures. Tsipras seems to be facing a conundrum, either remaining in the Eurozone and what it entails, or leaving the Eurozone, and dealing with the consequences of a default.

In the mid-term, there are many technicalities that need to be figured out if Greece decided to leave the common currency. The legal baseline is the 1992 Maastricht Treaty,

Photograph by Federico Gambarini — picture-alliance/dpa/AP
Photograph by Federico Gambarini — picture-alliance/dpa/AP

which does not provide any information in order to leave the common currency. In the contemporary European history (aside from the collapse of Habsburg empire), there are no precedents, no rules and no plans in order to leave a common currency. But with a return of the Drachma, the real question for the Greek government will be about the exchange rate between the Drachma and the Euro as all Greek accounts are in Euros. At the end of the day, the Greek savings will be severely devaluated causing massive financial losses.

The Greek drama illustrates the complexity of the unfinished European construction. Since the Treaty of Maastricht of 1992 laying out the current foundations of the European Union, the Member States have avoided any decisions for furthering/deepening the integration process or completely loosening it. Today, if Greece is in such trouble, is certainly because of its domestic problems (high level of corruption and lack of structural reforms), but as well because of an integration à la carte of the Eurozone. At the end of the day, a Grexit or not is only a technicality. The real question is: will the Eurozone members be working once and for all on finalizing a fully integrated and functional Eurozone?

(Copyright 2015 by Politipond. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed without permission).

Year in Review – A Relentless 2014

wiatrowski-us-eu-article-image

2014 has certainly been a complex and eventful year for the world; and 2015 already started at full throttle with the recent terrorist attacks in France. The relentless year was marked by a succession of events affecting directly or indirectly the Euro-Atlantic community at every level of analysis imaginable: individual, domestic, national, regional and naturally international. This year Politipond has identified six axiomatic issues occurring in 2014 with likely future repercussions.

The election of the European Parliament – the European earthquake

Were the European Parliament elections in May 2014 a wake-up call for Europe? Or the beginning of a new direction for the Union? The elections underscored a trend in most EU Member States, a shift towards the extremes (right and left). Some EU Member States have seen an increasing attraction to extreme-left parties. Greece, which has been at the heart of the future of the Eurozone since 2009, is still experiencing considerable traumas caused by the austerity measures implemented as required by the terms of the bailout. Today, Greece is still facing political problems, which has been a blessing for Syriza, a far-left populist party led by Alexis Tsipras. In other EU Member States, the shift has been towards the extreme-right wing political parties. This is the case in several large EU Member States such as France (with the Front National led by Marine Le Pen), the United Kingdom (with UK Independence Party with Nigel Farage), the Netherlands (Party of Freedom with Geert Wilders), Austria (Freedom Party of Austria and Alliance for the Future of Austria with Heinz-Christian Strache and Josef Bucher), among others.

Among these parties, the Front National, UKIP and the Freedom Party have increased their visibility on the European stage and their influence on shaping national debates. In the case of the Front National, the party received the most votes in France for the 2014 EP elections with 25% of the votes representing an increase by 18.9% from the 2009 EP elections (read analysis on France here). Marine Le Pen even called her party the first one of France. The graph below illustrates the votes received by extreme-right wing parties in the 2014 EP elections.

Graph by Alexandre Afonso
Graph by Alexandre Afonso

The 2014 EP elections were certainly a political earthquake in Europe as large EU Member States fell to extreme parties. However, institutionally, the influence of right-wing parties at the EP remains minor as they only have 52 seats out of the 751. At the end of the day, the EP remains in the hands of the EPP (Social Democrats) and the S&D (Socialists). But the increase of votes received by extreme-right parties underlined several aspects: a high discontentment with the EU; a misunderstanding of the EU; nationalist feelings; and the permanent anger towards immigrants. During Pope Francis’ speech before the EP in December, he described the EU as an “elderly and haggard” Europe. Europe needs to reconnect with its citizens, and it won’t be with the help of its radical parties.

A new EU leadership

2014 was the year of the renouveau in terms of changing personnel at leadership positions in the EU. This was the case for the High Representative (HR/VP), known as the EU foreign minister, the President of the Commission, and the President of the European Council. Ensuing the European elections for the European Parliament (EP) in May, the President of the EP remained the same, Martin Schulz. Considering the HRVP and the

Source: Getty
Source: Getty

President of the Commission, the latter went to former Prime Minister of Luxembourg, Jean-Claude Juncker (read here an article on the Juncker Commission) and to the former Italian Foreign Minister, Federiga Mogherini. These two individuals have been welcomed as they are expected to bring a new wind to Europe and their respective institutions. The José Manuel Barroso’s years have affected the dynamism of the Commission, especially in his last quinquennat; while, for his counterpart, Catherine Ashton, she never seemed at her ease leading the European foreign policy machine and the EEAS. However, Herman Van Rompuy, President of the European Council left the position to Polish Prime Minister, Donald Tusk, in excellent standing. Herman Van Rompuy, undeniably discrete but efficient, was axiomatic in holding European unity especially during the period of tense negotiations to save the PIIGS and the Eurozone (read here one of the best peer-reviewed articles on Ashton and Van Rompuy).

Soon after his appointment Jean-Claude Juncker pledged before the EP that he would seek to reboost and/or reboot the European economic engine. Later this fall, he announced his strategy, known as the Juncker Plan, a €315bn investment fund program intended to kick-start the European economy/ies. The Commission argues that the Juncker plan could “create up to 1.3 million jobs with investment in broadband, energy networks and transport infrastructure, as well as education and research.” This public-private investment fund program (the Commission and the European Investment Bank (EIB) would create a €21bn reserve fund allowing the EIB to provide loans of a total of €63bn, while the bulk of the money, €252bn, would come from private investors) would allow to fund broad construction and renovation programs across Europe. Some experts argue that the Juncker plan is too little, in terms of the size of the investments, while EU Member States are reluctant to invest their shares in such program. In any case, it won’t start before mid-2015.

Sluggish negotiations around the TTIP

The Transatlantic Trade and Investment Partnership (TTIP), initiated in July 2013, has become a sluggish and complex series of negotiations between the EU and the US. At first this massive bilateral trade agreement was expected to be quickly completed and agreed. The TTIP consists in removing trade barriers in a wide range of economic sectors as well as harmonizing some rules, technical regulation, standards, and approval procedures. According to the European Commission, the TTIP is projected to boost the EU’s economy by €120 billion; the US economy by €90 billion; and the rest of the world by €100 billion. “The TTIP’s goal” argue Javier Solana and Carl Bildt, “is to unleash the power of the transatlantic economy, which remains by far the world’s largest and wealthiest market, accounting for three-quarters of global financial activity and more than half of world trade.”

Almost two years in, the negotiations on the TTIP are facing serious criticisms inside Europe. The TTIP has provided the arguments to anti-globalization movements, fear of decline of democratic foundations, declining national sovereignty, as well as destruction of national/regional identities and cultures. Nevertheless, as demonstrated below, a majority of European citizens are in favor of the TTIP at the exception of Austria.

Source: Eurobarometer
Source: Eurobarometer

The TTIP is seen as a way to relaunch the transatlantic economy, but mainly European economies stagnating since the financial crisis. The TTIP is as well a response to the other trade agreements, like the Trans-Pacific Partnership (TPP), and the rise of Asian economies. Economists and experts argue that a failure to conclude the TTIP in 2015 could lead to the collapse of the negotiations and leave the European economy in difficult position in the years/decade to come.

A Climate Deal for the Earth?

President Obama announced on November 11 the historical climate deal with his Chinese counterpart to control the level of pollution of the two nations. The US pledged to reduce its greenhouse gas emissions by at least 26% below the 2005 levels by 2025, while China committed to increase its share of power produced by non-carbon sources, nuclear and solar, to 20%. Nevertheless, China recognized that its greenhouse gas emissions will continue peaking until at least 2030.

pol_climatechart48_630

This climate pact between the two largest polluting nations was agreed weeks prior the Lima summit laying down groundwork for the comprehensive UN greenhouse gas reduction pact expected to be agreed at the 2015 Paris summit, known as the United Nations Climate Change Conference (UNFCC COP21). The 2014 US-Chinese climate pact is an important stepping-stone prior the 2015 climate summit in Paris. The 2015 Paris summit may be a turning point for the EU and the EU-28 to lead on this question after the 2009 Copenhagen fiasco.

A Terrorist Triad: ISIL, Boko Harm, and Al-Shabaab

Terrorism has always existed and will continue to live on. However, the type of terrorism faced by the Euro-Atlantic community since the mid-1990s has been principally based on radical islamic terrorism. The principal group on top of Western lists was Al-Qaeda, which has lost some of its grandeur since the assassination of its leader Ben Laden. The year 2014 was important as three groups have shaped Western foreign policies: the new comer, Islamic State in Iraq and Levant (ISIL, also now referred as the Islamic State, IS), and two more established groups, Boko Haram and Al-Shabaab. Each group does fall under a similar category of being inspired by Islam, but have different agendas and different radiance.

In the case of Boko Haram and Al-Shabaab, both groups are located on the African continents. Boko Haram, an Islamic sect, recognized by the US in 2013 as a foreign terrorist organization, seeks to create an Islamic state in Nigeria. Boko Haram became a familiar house-name in 2014 with the kidnapping of hundreds of school girls creating an outcry in the US. In the case of Al-Shabaad, a somali islamic terrorist group, is an Al-Qaeda militant group fighting for the creation of an Islamic state in Somalia. The group has started to increase its attacks outside of Somalia’s borders and especially against Uganda and Kenya (remember the terrorist attack on a Nairobi Mall in 2013) as both states are actively involved in fighting Al-Shabaad.

The last terrorist group, ISIL, is more recent. It has risen from the rubbles of the Syrian civil war, ensuing the Arab Spring. Prior its existence as ISIL, it was identified as Al-Qaeda in Iraq (AQI) and emerged during the US campaign against Saddam Hussein. The group became ISIL in 2012 when the ambition of the group became regional and some fighters moved their fight to Syria. Even though Western governments were aware of its existence, ISIL became a top priority for Western citizens – regardless of its real threat to Western homelands – in June 2014 after several victories in overtaking large Iraqi cities like Mosul and Fallujah. ISIL has progressively begun a territorial warfare in order to create its own state, a caliphate, over parts of Syria and Iraq.

Sources: Jasmine Opperman, Terrorism Research & Analysis Consortium; Hisham Alhashimi. Photograph by The Associated Press.
Sources: Jasmine Opperman, Terrorism Research & Analysis Consortium; Hisham Alhashimi. Photograph by The Associated Press. Published in the New York Times on September 16, 2014

The core distinction between ISIL and the two other groups lays in their soft power. ISIL has been extremely attractive to many Europeans and Americans citizens, while Boko Haram and Al-Shabaab have remained more local/regional in their recruiting efforts. A large number of Western citizens, mainly from France, Belgium and the UK, have decided to join the fight aside ISIL fighters in Syria. These fighters have been perceived as a real threat to homeland security (as proven by the January 7th attacks in France against Charlie Hebdo).

Published in the Economist of August 30, 2014
Published in the Economist of August 30, 2014

Ultimately, these three terrorist organizations will keep their importance on influencing Western foreign and defense policies as the US and some of its European allies are already involved in military actions in Iraq and Syria. In the case of Europe, France is actively fighting terrorist networks in the region of the Sahel (Operation Barkhane, read here a previous analysis) and other African nations like in Mali (Operation Serval).

Russia Unchecked?

On the European chessboard, 2014 belongs to Russia. Russia brought back the European continent to traditional warfare with territorial invasions and other types of military provocations unseen since the Cold War (including the destruction of an airliner above Ukraine). 2014 started with the ‘invasion‘ of Crimea by the Russian army leading to its annexation to Russia validated by a referendum. By mid-Spring 2014, Ukraine had lost a part of its territory without any actions by the members of the Euro-Atlantic community. The West started to act against Russia during the summer once reports revealed the presence of ‘green men’ in Eastern Ukraine and movement of military equipments across the border.

During the summer, EU Member States agreed on a series of sanctions against Russian individuals and some financial institutions. At first, many experts thought that20141122_FBC287 the sanctions were too little too late, but in late 2014 the Russian economy was showing serious signs of weakness. However, one needs to underscore that the slowdown of the Russian economy is related to the collapse of the oil prices and a decrease in consumer spendings. In almost one year, the rouble has lost 30% of its value and the Russian economy is on the verge of recession. As reported by the Economist, “Banks have been cut off from Western capital markets, and the price of oil—Russia’s most important export commodity—has fallen hard.”

Despite the economic situation of Russia, at least until now, Vladimir Putin has maintained throughout 2014 a very strong domestic support and sky-high approval rating. Putin’s decision to invade and annex Crimea was highly popular in Russia (as illustrated below). Additionally, the anti-Western narratives advanced by Putin have been well received domestically. However, with the decline of the Russian economy the shift from Russian foreign prestige to more concrete concerns, like jobs, economic stability, and social conditions, may re-become of importance in the national debate.

PutinApproval2000-sept14

2015, Year of the Renouveau?

The economists seem very optimistic considering the forecast of the global economy. According to Les Echos (of December 30, 2014) 2014 was indeed an excellent year for world markets with record results for Shanghai (+49.7% since December 31, 2013), New York (+13.1% for S&P 500 since December 31, 2013), a modest result for Stoxx Europe (+4.9%), a stagnating French CAC40 (+0.5%), and a declining British FTSE (-1.7%). But with rising world markets, declining oil prices, increasing US gas production, and an increasing American growth, 2015 looks bright for the US, but remain mitigated for European economies.

The Grexit may be back on the table based on the elections of January 25th. With Syriza at the head of the polls, his leader has been calling for a renegotiation of Greece’s loan terms implemented by the Troika (IMF, Commission, and ECB). Neither Berlin nor Brussels want to go down this road. According to Der Spiegel, Berlin is willing to let Athens leave the European Monetary Union (EMU) if it decides to abandon the austerity measures. Two aspects can be underscored: on the one hand, some argues that Berlin is not worried anymore about a contagion to other European economies in case of a Grexit. While on the other, some others are claiming that it is part of a ‘tactical game’ played by Berlin in order to lower the chances of a Syriza victory at the end of the month. In any case, the question of the Euro and EU membership will remain throughout 2015.

Will the Brexit occur? In 2015, British subjects will be voting for the next Prime Minister. The elections are going to be closely monitored considering the possibilities of an eventual referendum on the future of the United Kingdom’s EU membership. The current PM, David Cameron, has been promising a referendum for 2017 if re-elected and has been a counter-productive force in Brussels. Additionally, Nigel Farage, leader of the UK Independence Party (UKIP), getting strong results at the 2014 EP elections seem a strong frontrunner for the post of PM. He has, as well, promised a referendum on the EU membership of the UK. The financial hub of Europe, the City, has been concerned about the financial and economic repercussions of a Brexit. The City’s argument is that by being outside a powerful club, the EU, the UK won’t be able to influence its decision-making and direction. In a recent poll, 56% of British citizens are favorable in staying within the Union.

Last but not least, 2015 may be the year of another large debate in Europe about terrorism versus immigration, freedom versus security and the solidification of the rise of anti-immigrants parties. The terrorist attacks of January 7th, 2015 in Paris will change the national and European debate about counterterrorism, social-economic policies, domestic political narratives, and naturally foreign policies towards the Arab world.

(Copyright 2015 by Politipond. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed without permission).