Much Ado about Labeling: EU’s guidelines on the products imported from Israeli settlements

 

Israeli minister Ofir Akunis said Europeans lost sight of "terrorism of extremist Islam" by focusing on boycotting Israeli goods.

Israeli minister Ofir Akunis said Europeans lost sight of “terrorism of extremist Islam” by focusing on boycotting Israeli goods.

Sante FIORELLINI 12/01/2017

 

In November 2015, the European Commission issued an interpretative notice on the “indication of origin of goods from the territories occupied by Israel since June 1967”. The document, formally related to customer protection, is drafted so as to sound non-political and unbiased; yet, it bears a remarkable diplomatic weight. It is in fact aimed at responding to Benjamin Netanyahu’s government policy of building Israeli settlements outside Israel’s recognized borders, an agenda widely regarded by the international community as being in stark contrast with international law and already condemned by the United Nations Security Council (UNSC) Resolution 2234 as recently as December 2016. This intervention will cover the main points of the document and its consequences for the EU-Israel relations.

In spite of its ambitious political intentions, it is appropriate to start with highlighting the (limited) scope of this interpretative notice, which is, giving guidelines to the Member States on how to apply existing EU legislation on product labeling. In other words, the EU recommends avoiding the label “Made in Israel” for goods produced in the occupied territories should be avoided, in favor of expressions such as “Made in the West Bank (Israeli settlement)”. However, the responsibility to implement said indication rests solely on the member states. It is worth noting that United Kingdom, Belgium and Denmark had adopted similar rules even before the the issuing of the Commission guidelines.

Second, the document only concerns those goods produced in the settlements to be exported to the EU (mainly grapes and dates, wine, poultry, honey, olive oil, and cosmetics). According to the Israeli Ministry of Economy, their value amounts to a mere €45 millions, a drop in the ocean of the €30 billions total value of Israeli exports to the EU.

Third, the EU identified as occupied territories the Gaza Strip, the West Bank including East Jerusalem, and the Golan Heights. Interestingly, the latter, annexed from war-ridden Syria, were not mentioned by the above mentioned UNSC Resolution. Commentators close to Israel, such as Eugene Kontorovich, felt that the mention of the Golan Heights accounted for clear evidence of EU’s real intention, namely, to indiscriminately sanction the state of Israel.

Finally, and most importantly, labeling products from the settlements is not the same as declaring them illegal, as the EU is not imposing a ban on their import.

It is clear that the document has a mere symbolic value: it neither affects Israel’s economy, nor it changes the existing agreements between the two parties, or really affects the situation on the ground.

As predicted, Israeli firms were barely touched by the Commission policy: since it was implemented only Ahava, a multinational cosmetics company, decided to relocate out of the West Bank – and the correlation with the EU labeling policy is dubious at best, as it was already facing financial difficulties prior to the issuing of the Commission notice, and it ended up selling its shares to a Chinese investment group soon afterwards.

Still, Israel’s response was quite assertive, to the point of chilling down diplomatic contacts with the EU. Amongst other reasons, Netanyahu, acting as interim Minister of Foreign Affairs, lamented EU’s double standard vis-à-vis Israel compared to other conflicts. A questionable argument, as the EU, simply does not have “one standard” and decides its position on a case-by-case basis, taking into account both international law and political opportunity. For instance, it can be argued that, on the one side, it quietly acquiesced to Moroccan’s control over Western Sahara, and it is not involved in the Chinese-Tibetan issue, while, on the other side, it banned any import of goods from Crimea and Sevastopol carrying the label “Made in Russia”.

Nevertheless, Netanyahu’s decision to play hardball over the document paid off, as he won the diplomatic standoff. In fact, more than a year later, EU’s expectations crushed under the weight of pragmatism and political divisions. If anything, the document served an unintended purpose: highlighting and exacerbating EU’s internal rifts. The majority of the member states essentially ignored the guidelines, while Hungary, Czech Republic and Greece openly opposed them. With these premises, in February 2016, the EU and Israel resumed talks through a phone call between Netanyahu and Federica Mogherini. The High Representative stressed that the implementation of the guidelines depends exclusively on the member states: implicitly, the EU admitted that it doesn’t have the political power to propose further restrictive measures. Overall, if the objective was to put pressure on the settlement policy, it certainly failed.

At the time of writing, only one country implemented the guidelines: France, in November 2016.

The Israeli-Palestinian peace process goes into 2017 with no progresses between an increasingly assertive Israeli government and an increasingly weak Palestinian leadership, with the issue slowly fading out of the international agenda. The EU, for its part, after the labeling guidelines’ blunder, is in search of a new role: a first indication of the Union’s intentions will come from the Middle East Peace Conference, to be held in Paris on January 15.

 

Sante Fiorellini is an IRD student from the Keynes Promotion.

 

SOURCES:

Vince Chadwick, Maia De la Baume, “How one phrase divided the EU and Israel”, Politico, 04/01/16, available at: http://www.politico.eu/article/best-before-1967-how-the-eu-labeled-israels-occupied-territories-food-labels-european-commission/

Eugene Kontorovich, “The ‘true origins’ of the E.U.’s Israel labeling policy”, The Washington Post, 16/11/2015https://www.washingtonpost.com/news/volokh-conspiracy/wp/2015/11/16/the-true-origins-of-the-e-u-s-israel-labeling-policy/

Hugh Lovatt, “EU differentiation and the push for peace in Israel-Palestine”, European Council on Foreign Relations, 31/10/16, available at: http://www.ecfr.eu/publications/summary/eu_differentiation_and_the_push_for_peace_in_israel_palestine7163#a4

Steven Schefer, “Israel fumes over planned EU labeling of ‘settlement’ products”, Reuters, 10/11/15, available at: http://www.reuters.com/article/us-israel-eu-labelling-idUSKCN0SZ21120151110

EU Trade Policy-Making: “The Times They Are A Changin’”

 

State of play & Perspectives

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The twilight of EU trade policy ?

Nicolas RENARD, 13/12/2016.

With Brexit, the CETA[ii] saga and the election of Donald Trump in the US, future is not looking good for EU common commercial policy (CCP) and we should really start asking ourselves if times are changing for EU trade. In this article, I analyze the consequences of the ‘CETA saga’. I will not discuss the content of the agreement, such as the controversial ISDS mechanism, but rather focus on the trade policy-making process itself. To broaden the debate, I will try to draw up a state of play, capture the current trends and go over some perspectives for EU trade policy.

  • At the basis of trade policy making in the EU

First, the basics – how does the EU negotiate trade agreements? According to the Treaties, Member States (MS), through the Council[iii], authorize the European Commission (EC) to start and conduct the negotiations while the Council monitors the talks before voting to sign and conclude the deals. With the entry into force of the Lisbon Treaty in 2009[iv], trade was reinforced as an exclusive competence of the EU, encompassing new areas such as services, investment, etc. In theory, with those new areas covered by EU’s exclusive competence, the conclusion of free trade agreements (FTAs) cannot be blocked by MS or depend on the ratification by 28 national parliaments. The EU – which has legal personality – has the full powers to sign trade agreements.

In practice, two kinds of FTAs can be distinguished[v]: regular trade agreements covering exclusive EU competences, and ‘mixed’ agreements. So called ‘mixed-agreements’ have a much broader coverage – encompassing not only EU exclusive competences but also shared and even MS exclusive competences – and thus require a different legal basis. Mixed-agreements need to be signed, concluded and ratified by both Member States – and thus national parliaments – and the EU. According to the Treaties and practice, they can be provisionally applied – i.e. before ratification by the national parliaments. Though, a recent decision of the German Constitutional Court stated that national Parliaments, despite signature by the EU Council and their government, could veto the ratification process and thus block its conclusion.

If the distinction between regular and mixed trade agreements may appear evident, here comes the tricky part: there are no references to those ‘mixed-agreements’ in EU Treaties. Hence, “the choice of the proper legal basis of an agreement is often controversial”[vi]. In fact, a highly expected ECJ decision on the EU-Singapore FTA[vii] should clarify how to determine the nature of trade agreements – i.e. which part of an agreement can be considered as ‘mixed’.

In recent years, the EU has been negotiating more and more ambitious trade agreements, so called ‘comprehensive free trade agreements’, not only focusing on removing tariffs for goods but also including trade-related areas (or WTO + issues) such as investment, public procurement, sustainable development in the negotiations. The majority of recent EU “new generation” FTAs are thus considered as ‘mixed agreements’ – despite Lisbon’s developments – and MS are increasingly interfering with EC’s prerogative. That’s precisely what is happening with CETA.

  • The ‘CETA saga’ and its consequences on trade policy making

The ‘CETA saga’

About a month ago, the EU and Canada finally signed the CETA, after months of uncertainty. At one point, after having vetoed the signature of the agreement by Belgium and thus the EU[viii], Wallonia’s representatives started negotiating directly with Canada trade representatives, a grande première in the history of EU trade policy-making.

How did we end up here? A few months ago, pressured by MS, the EC stated that CETA should be considered as a mixed-agreement – and thus would have to be signed and ratified by both the 28 MS and the EU. As a result, we ended up with one region, Wallonia, representing only 0.45% of EU trade with Canada[ix], blocking the EC, the Council, and the whole ratification process.

Finally, the CETA was signed at the EU-Canada Summit on 30 October 2016, after the Walloon government negotiated the inclusion of an intra-Belgium Statement and a Joint interpretative declaration, putting a (very) temporary end to the ‘CETA saga’.

Consequences on EU trade policy-making

As Politico puts it, it seems that “Wallonia sends EU trade policy back to the drawing board”. Of course it might be a bit too soon to scrap EU trade policy and its policy-making processes, but it is true that doubts are raising and the CETA/TTIP saga won’t go without consequences[x].

Indeed, not only it reveals “Treaties’ structural flaws” but it can be analyzed as a major step back for EU trade policy-making. First, as recalled above, trade policy has historically been a core exclusive competence of the EU – even more with the Lisbon Treaty: “The origins of the EU’s role as an international actor lie the CCP”[xi]. Of course, the balance between supranationalism and intergovernmentalism has always been sensitive (and the distribution of competences a controversial process, inherent to the construction of the EU itself) but this episode illustrates how MS are increasingly and dangerously pressing to retake trade power over the EC. The risks being that they will use it as a bargaining chip as well as for domestic purposes unrelated to trade.

Secondly, it can also be perceived, especially from the point of view of our trade partners, as a blow to EU trade power. It questions EU’s ability to negotiate and conclude trade deals. The EU is often perceived as a “trade power”, thanks to its economic and trading weight, but also as a power “in” and “through” trade[xii]. Indeed, this ‘economic power’ gives the EU the possibility to be heard on the international scene and to influence its partners. The fact of not being able to secure and conclude trade deals, mainly because of internal disputes, will most certainly affect on-going and future negotiations[xiii]. Wolfgang Münchau from the Financial Times, even states that the “CETA debacle heralds a period of disintegration for the EU”.

In addition to the above structural and internal challenges, it is interesting to rise above the clouds and take some time to analyze the global trends and current factors affecting the EU and its trade policy:

  • A shifting trade strategy: For a long time, the EU had privileged the forum offered by the WTO. However, the successive failures of the negotiations in the framework of the Doha Round, within an organization crystallizing tensions and rivalries between ‘developed’ and ‘developing’ countries, set up a new deal and forced the EU to adopt a “second-best” approach. In fact, since the mid-2000s, EU’s approach to promote its economic, regulatory and political agenda has evolved. Focusing at first on regional agreements, it currently mainly negotiates free trade agreements (FTAs) bilaterally. The “new generation” FTAs mentioned above fall within this trend.
  • A global trade slow-down: Recent reports from the ECB and the IMF have shown that trade growth has been “dangerously” slowing down since 2012. If the IMF attributes this trend mainly to the decline in investment[xiv], the ECB isolated two main types of factors: (1) “compositional factors” such as “shifts in the geographical, sectoral and demand composition of global activity”; (2) structural factors such as the slowing growth in the global value chains, the rising protectionism – also within the EU – and “a declining marginal impact of financial deepening”. On the other hand, some economists such as Daniel Gros welcome this slowdown as an opportunity to end the dangerous “hyper-globalisation narrative”.
  • Other clouds include the dragging debate on the modernization of EU trade defense instruments, linked to the debate on whether or not to grant China Market Economy Status. As Charles De Marcilly writes, it is about “showing [EU’s] ability to protect itself by using adapted instruments”[xv].
  • But certainly, the main ‘threat’ for EU trade policy comes from the peoples themselves and the increasing inequalities dividing our societies. It is essential to differentiate the sound questioning of mega-trade deals such as CETA and TTIP by citizens and Civil Society Organizations (CSO) – partly explained by an opposition to an “unstoppable globalization”, unregulated finance and multinationals – from the rise of euro-skepticism and populism “giving voice to the anger of the excluded” as Dani Rodrik warns[xvi].

The first embodies the increasing need for transparency and involvement of civil society in the policy-making process to ensure public understanding and support. Certainly, the EC is well aware of this and multiplies public consultations, impact assessments, dialogues, etc. With a rising impact of public opinion on EU trade policy-making[xvii], EU institutions need to step up the pace – starting with a coherent communication strategy for the EC (especially on values, standards and norms), questioning of MS inconsistencies at the Council and greater implication of the European Parliament.

The second, pushing forward a fierce opposition to free trade liberalism and globalization leads to national downturn, economic protectionism and isolationism. Brexit and the election of Donald Trump, two dramatic results of this (economic) disintegration trend, will certainly have a dreadful impact on EU trade policy.

  • Perspectives: What’s next for the EU trade policy-making process?
  1. Re-focus on core trade competencies? The EC could limit future negotiations and deals to ‘regular’ trade areas such as trade barriers and tariffs. It would mean the end of mega-trade agreements. In the current global context, it though seems unlikely and dangerous for the EU to leave out WTO+ and WTO-X areas[xx].
  1. Adjust the trade policy-making process?
    • Two-track trade agreements as a pragmatic second-best solution? MEPs such as Daniel Caspary and Manfred Weber came up with an alternative path: negotiating two-track trade agreements. At the first level, the EC would have full competencies whereas at the second level, MS and national parliaments would have their say and the ability to veto.
    • For Guillaume Van Der Loo, an alternative solution could be to require unanimity for Council’s decisions and votes on trade. Replacing the Qualified Majority Voting (QMV) rule “could mitigate the risk that a member state will hold an FTA hostage for domestic (non-trade related) reasons”.
    • David KLEIMANN and Gesa KÜBEK see democratic representation as EU’s main weakness and suggest three policy recommendations: (1) strengthen the role of national parliaments; (2) “strengthen the democratic capacity of the European Parliament”; (3) restore public trust in the European Commission[xxi].
  1. Re-build the CCP? Some MS and national politicians are asking for a CCP reform addressing the “democratic need”[xxii]. Exclusive trade powers could be withdrawn from the EC so that national parliaments and “regional powers” would also have the ability to negotiate. Wallonia also unveiled its own proposal for a new way to negotiate trade agreements, based on three clusters: “Respect for democratic procedures”, “Compliance with socio-economic, sanitary end environmental legislation”, and “Guarantee of public interest in the dispute resolution mechanism”.

A key question remains: would national political stakeholders, CSO and citizens throw themselves into less mediatised and ‘ideological’ trade agreements? Despite foreseeing similar provisions to CETA, EU-Japan FTA negotiations could be concluded in the months to come without any questioning. Moreover, avoiding that one country could block the whole negotiating process with domestic issues, and preventing national interests from interfering with the general interest – aren’t they the reasons why trade policy-making power was transferred to the EC in the first place?

In any case, many of these proposals could not happen without a reform of the Treaties, which is very difficult to foresee in the months – or even years – to come; not to mention that they could further weaken EU’s trade “power”. Maybe one additional option could be to go for WTO again? Although very unlikely, a multilateral system of governance remains the first-best solution for gathering EU’s and its partners’ trade and global interests[xxiii].

***

Trade policy, one of the symbols of EU integration and MS delegation of power to the EC, is going through difficult times. It is clear that the trade policy-making process needs to fully integrate all stakeholders from the very beginning and address their fears so as to regain public support and legitimacy; which is essential to its success. But this should not mean to renationalize trade policy or “politicize” the policy-making process by involving national parliaments. This is especially vital as, while ‘hyper-globalisation’ should give way to a more “moderate globalization[xxiv], EU trade policy weakening also means that the EU could lose part of its “normative power” in the promotion of high standards and regulatory rules[xxv].

 

Nicolas Renard – Falcone & Borsellino promotion (IRD 2014 – 2015) – works as Project Manager, notably in trade and private sector development (Brussels – nicolas.renard@coleurope.eu). 

 

References

BENDINI Roberto, “The Future of the EU trade”, European Parliament, DG EXPO/B/PolDep/Note/2015_227, July 2015

DE MARCILLY Charles, “Confronted by internal challenges, an ambitious trade policy is compromised”, Fondation Robert Schuman, European Issues n°407, 18 October 2016

GSTÖHL Sieglinde, “The European Union’s Trade Policy”, Ritsumeikan International Affairs, vol. 11, 2013, pp. 1-22

GSTÖHL Sieglinde & Dominik HANF, “The EU’s Post-Lisbon Free Trade Agreements: Commercial Interests in a Changing Constitutional Context”, European Law Journal, vol. 20, no. 6, 2014, pp. 733-748

Keukeleire  Stephan & Tom Delreux, The Foreign Policy of the European Union, Basingstoke, Palgrave Macmillan, 2nd Edition, 2014

KLEIMANN David & Gesa KÜBEK, “The Signing, Provisional Application, and Conclusion of Trade and Investment Agreements in the EU The Case of CETA and Opinion 2/15”, EUI Working Papers, RSCAS 2016/58

MEUNIER Sophie & Kalypso NICOLAÏDIS, “The European Union as a Conflicted Trade Power”, Journal of European Public Policy, vol. 13, no. 6, 2006, pp. 906-925

POLITICO, “Is free trade dead?”, Symposium Politico, 7 October 2016

PUCCIO Laura, “A guide to EU procedures for the conclusion of international trade agreements”, European Parliament, Briefing, October 2016

RENARD Nicolas, “Is ‘Green’ Really the Colour? Protecting the Environment through Trade Policy: EU’s Biased and Uncertain Approach”, Master Thesis, College of Europe, May 2015

TAYLOR Paul, “Europe’s trade genie is out of the bottle”, POLITICO, 24 October 2016

VAN DER LOO Guillaume & Jacques PELKMANS, Does Wallonia’s veto of CETA spell the beginning of the end of EU trade policy?, CEPS, CEPS Commentary, 20 October 20016

VAN DER LOO Guillaume, CETA’s signature: 38 statements, a joint interpretative instrument and an uncertain future, CEPS, CEPS Commentary, 31 October 20016

VAN DER MAREL Erik, “Why concluding CETA is so important for the EU”, ECIPE, ECIPE Bulletin No. 2/2016

VON DER BUCHARD Hans, MARKS Simon and MUCCI Alberto, “Wallonia sends EU trade policy back to the drawing board”, POLITICO, 24 October 2016

 

[i]The Times They Are A-Changin’”, song written by Bob Dylan, 1964.

[ii]Comprehensive Economic and Trade Agreement (CETA)

[iii]aka. the Council of the European Union

[iv]The Lisbon Treaty also gave increasing powers to the European Parliaments (EP) which now has a “veto-power” on the adoption of trade agreements. Also more implicated during the negotiations, this is leading to an increasing “politicization” of trade negotiations but also guarantees a better integration of civil society.

[v]For clarity reasons, I differentiate here two kinds of FTAs: regular and mixed-agreements. In reality, “three types of trade-related agreements can be distinguished: trade, cooperation and association agreements”. See Sieglinde GSTÖHL & Dominik HANF.

[vi]Ibid.

[vii]Follow the case here or here.

[viii]Considered as a mixed agreement covering areas such as agriculture, non-tariff barriers, services, public procurement, investments, IPR, competition policy with a disputes settlement mechanism, CETA required unanimity at the Council for the adoption of the decision concluding the agreement. For Belgium to be able to ratify the agreement, Belgium federal entities first had to allow it.

[ix] For more figures on EU-Canada trade, see Bruegel’s blog post.

[x] On the contrary some analysts see it as a “stand for democracy” and a lesson to meditate, putting its consequences into perspective.

[xi]Stephan KEUKELEIRE & Tom DELREUX, p. 200.

[xii]Sophie MEUNIER & Kalypso NICOLAÏDIS, pp. 906-925.

[xiii]In fact, concrete consequences of the ‘CETA saga’ can already be observed. Vietnam, with whom FTA negotiations were concluded in January 2016, will send its ambassador to address Walloon parliamentarians in order to avoid a similar blockage.

[xiv]For the IMF, other factors include the rise of protectionist measures, the decline in the growth of global value chains and the evolving nature of demand for ‘non tradables’.

[xv] Charles DE MARCILLY, p. 5.

[xvi] Here a selection of articles on “anti-globalization” from Project Syndicate. Also read Bjørn LOMBORG’s opinion on “the free-trade miracle” and Paola SUBACCHI “Free Trade in Chains” from Project Syndicate. Dani RODRICK states that we shouldn’t “cry over dead trade agreements”.

[xvii] It is interesting to note the relative lack of academic studies on the link between ‘public opinion’ and trade policy. Understanding its role/impact on the policy-making process but also analyzing how to better inform and increase citizens’ participation is, I believe, essential to ‘solve’ the legitimacy and democratic crisis.

[xviii] On Brexit, also read Simon EVENETT, “Are trade agreements passé? Deal-making after Brexit”, published on http://www.ictsd.org/, 19 July 2016.

[xix] Also read “Trumping Trade”, a review of economists’ assessments on Trump’s trade policy proposals during the campaign, written by Silvia MERLER for Bruegel, 3 October 2016. “Europe in the Trumpworld: EU trade and security under the new US executive” by Fredrik ERIXON and Hosuk LEE-MAKIYAMA for the ECIPE.

[xx] See “Beyond the WTO? An anatomy of EU and US preferential trade agreements” by Henrik HORN, Petros C. MAVROIDIS and André SAPIR, for a distinction between trade-related areas.

[xxi] David KLEIMANN & Gesa KÜBEK, “The Signing, Provisional Application, and Conclusion of Trade and Investment Agreements in the EU The Case of CETA and Opinion 2/15”, EUI Working Papers, RSCAS 2016/58

[xxii] http://www.lemonde.fr/economie-mondiale/article/2016/11/08/apres-le-psychodrame-du-ceta-la-france-veut-reformer-la-politique-commerciale-europeenne_5027649_1656941.html

[xxiii] See Wade JACOBY and Sophie MEUNIER, “Europe and the management of globalization”, Journal of European Public Policy, vol. 17, n°3, pp. 299-317.Also, “Mega-regional Trade Agreements: Implications for the African, Caribbean and Pacific Countries” by Peter DRAPER, ECIPE, April 2014. On the state of play at the WTO, read Ricardo MELÉNDEZ-ORTIZ, “What’s ahead for the WTO: Looking around the corner and beyond”, published Voxeu.org, 26 July 2016.

[xxiv] Also read Paul DE GRAUWE, “How far should we push globalisation?”, CEPS Commentaries, 4 November 2016.

[xxv] As a complementary point of view, read MEP Bernd LANGE’s opinion in Politico, 14 November 2016.

Ukraine, the EU and the colorful materialization of misunderstanding

Political reflections on ‘your little Europe in the Kyiv metropolis

Picture: Colorful houses, Comfort Town, Kyiv, Ukraine by Stephen Rush, photo taken on November 3, 2012

Picture: Colorful houses, Comfort Town, Kyiv, Ukraine by Stephen Rush, photo taken on November 3, 2012

David Lodder, 18 November 2016. Originally published on www.natolinblog.com.

Comfort Town is an overly colorful city within a city that promises its inhabitants ‘the real European experience’. In reality the fenced off neighborhood and its alleged 5000 happy families achieve the direct opposite of this goal. They reveal the misinterpretation of a European Union that seems both incredibly close and very far away.

 

What is it that supposedly makes this little oasis on the eastern bank of the Dnepr so European? A long description on the website of the residential complex crowns the non-functional red windmill in front of a bright yellow flat as the symbol of the European conception according to which the town was build. Viktor, a middle-aged resident enjoying the afternoon in the park, chose to move to Comfort Town because “it’s a residential complex of a closed type and of a European type”. A more profound explanation of its European’ character can be found among the many pictures, stories and interviews featured on the website. Safety, color, an easy life and child friendly utilities seem to be the most dominant elements. Olena Yermakova, a Ukrainian student at the College of Europe in Warsaw provides us with a more straightforward answer: “The Ukrainian perspective of ‘European’ comprises that which is not Soviet”. What makes Europe so desirable is not something concrete and tangible, it is determined by its contrast with the relics of a very recent past. Moving away from modern housing into the realm of political considerations, this includes ideas of democratic values, economic prosperity and progressive values.

These strong, often dichotomous perceptions of the EU reached their height during the Revolution of Dignity on the Maidan Square in 2014. The organizers of the protest utilized the European flag as a symbol of freedom and democratic liberty as opposed to the semi-authoritarian rule of Yanukovych. By contrast, in his ‘Ukraine Diaries[1]’ Andrej Kurkov explains how at the same time the anti-European Ukrainian Choice movement managed to persuade many Ukrainians that closer association with the European Union would lead to a universal conversion to homosexuality. Where the last claim is not difficult to debunk, the former seems more deeply rooted in both the convictions of many young Ukrainians as well as in the external communication strategy of the European Union itself. Notwithstanding the political and economic achievements of decades of European integration, to declare the project as an ultimate democratic success seems somehow premature. With record-low electoral participation, what many see as democratic back sliding in Poland and Hungary and increasing dissatisfaction with the unfairly distributed advantages brought about by European integration, it seems there is still quite some trouble in ‘paradise’.

Democratic disillusion

One could ask why defining a somewhat overly glorified goal to strive for should be criticized. The fact that it can motivate an otherwise politically less active community to work together to change the status-quo can only be applauded.  The danger lies in the disillusion that follows the confrontation with a reality that will never be able to live up to the ideal that inspired it. The Russian poet and dissident Joseph Brodsky accurately describes a similar quick succession feeling of high expectations and consequent disillusion among dissidents in the USSR: “Hopelessly cut off from the rest of the world, they thought that at least that world was like themselves; now they know that it is like the others, only better dressed”[2]. Even though the context might be different, there is an increasing risk that the young Ukrainians who turned their hopeful gaze to the West will cultivate a similar feeling of disillusion with the pace and depth of the European project.

The mutual idea of a somehow democratically superior European Union furthermore obstructs the lessons the European Union can learn from Ukraine. A practical and slightly ironic example of this is provided by Prof. Yaroslav Hrytsak from the Ukrainian Catholic University of Lviv, who explains that the Revolution has created an unprecedented level of political participation among the young Ukrainian population. In the process of protesting in favor of the European model of democracy they have, at least in terms of participation, easily surpassed their peers in that very same European Union.

It is hard to imagine Comfort Town in Amsterdam, Paris or Berlin; not because the people in these cities categorically despise color, but because of an increasing dissatisfaction with anything associated with ‘the European experience’. Comfort Town nonetheless has more in common with the European Union than meets the eye. Both started out in a relatively open and inclusive manner and ended up as communities fenced off from their neighbors. Both promise a set of European values that in reality rarely live up to the ideals that inspired them. This should not dissuade those living in these two communities to keep on striving for this European ideal. It should make us aware that its realization will require more than buying a house or signing an association agreement.

[1] Kurkov, Andrey. Ukraine Diaries: Dispatches from Kiev. Translated by Sam Taylor. Random House UK, 2015.

[2] Brodsky, Joseph. Less Than One: Selected Essays. 4.1.1987 edition. New York: Farrar, Straus and Giroux, 1987.

 

 

David Lodder is currently a student of the College of Europe, Natolin Campus. 

European Parliament to EU Governments: ‘Ban nukes in 2017!’

Leo Hoffmann-Axthelm, 29 October 2016

Brussels/Strasbourg. European Union’s legislature takes clear stance on upcoming negotiations on international treaty to prohibit nuclear weapons: the EU’s Member States should “support the convening” and “participate constructively” to its negotiation.

Non-proliferation we can agree on. The EU scored a major foreign policy success in brokering the talks between Iran and six major world powers on the dismantling of parts of its nuclear programme. It is less vocal on the nuclear weapons of the other countries pictured here.

Non-proliferation we can agree on. The EU scored a major foreign policy success in brokering the talks between Iran and six major world powers on the dismantling of parts of its nuclear programme. It is less vocal on the nuclear weapons of the other countries pictured here.

Even as the EU expands its foreign policy machinery and acquires new powers to represent its Member States at the United Nations, it has been oddly silent on one of the most exciting topics at this year’s UN General Assembly meetings.

Its silence on nuclear disarmament and the humanitarian-led push to ban nuclear weapons, is even more striking if one considers the EU’s status as “civilian super-power” and the world’s largest provider of humanitarian assistance.

So what is its stance on the last weapons of mass destruction not yet subject to a universal treaty prohibition? In two words, embarrassingly reactionary. On the occasion of the 2015 NPT Review Conference, when 185 countries joined statements entitled “Humanitarian Initiative” or “Humanitarian Consequences Group”, the EU’s representative was unable even to utter the word “humanitarian”, positioning the EU on the outer fringe of the nuclear discourse.

Nuke watchers will not be surprised to hear that a veto is to blame for this diplomatic blunder. The EU’s Foreign Affairs Council is the Council formation composed of foreign affairs ministers, which formulates EU foreign policy – if they can reach unanimity. France’s reticence in particular left the EU with only one option to show that it cares about nuclear disarmament: ensuring highest-level attendance and sending Federica Mogherini, the EU’s “Foreign Minister” and Chair of the Foreign Affairs Council, to deliver the EU statement in person. Ms Mogherini is known to be a longstanding supporter of nuclear disarmament.

With the Council and by extension the European Commission’s foreign affairs apparatus deadlocked, attention turned to the European Parliament. Freed from formal obligations in foreign policy matters, the European Parliament – like most national parliaments – finds it easier to ‘do the right thing’ and put moral considerations above so-called ‘realist’ constraints, e.g. the claim that NATO states cannot be leaders on disarmament matters, having to move at the speed of the slowest members.

Alas, after progressive resolutions reinforcing the global calls for complete nuclear disarmament in years past, the 2014-19 legislature had so far remained silent on the matter. Leading up to the 2015 debacle, the parliament declined to pass a resolution to call for a progressive EU position, in spite of efforts to the contrary. Ms Mogherini voiced her dismay in the next plenary session.

As the Humanitarian Initiative unfolded into a movement to negotiate a treaty prohibition of nuclear weapons, parliamentarians took notice, however. Unlike the majority of the EU’s governments, who appear to prioritise NATO cohesion over their moral convictions, the European Parliament took a clear stance last Thursday. With impeccable timing, on the same day as the start of voting in the United Nations General Assembly’s First Committee tasked with disarmament matters, the EU’s Parliament:

  • “Welcomes the recommendation to the UN General Assembly … to convene a conference in 2017 … to negotiate a legally binding instrument to prohibit nuclear weapons”
  • “Invites the EU Member States to support the convening of such a conference in 2017 and to participate constructively in its proceedings”
  • “Invites VP/HR Federica Mogherini and the European External Action Service to contribute constructively to the proceedings of the 2017 negotiating conference”

In a particularly encouraging development, almost all of the EU’s centre-right and conservative parties also voted in favour of this language. While their governments at home are almost the only countries globally to oppose a Ban Treaty, except for the nuclear-armed themselves, the people’s representatives took a view that much closer mirrors what surveys have been showing for a long time: we reject nuclear weapons, and will not want to entrust our “security” to a deterrence gamble that has failed far too often to guarantee 100% reliability. Even while condemning Russia’s nuclear sabre-rattling, the resolution sends a clear signal of de-escalation. No nuclear warfare in Europe, please.

Nobody said banning nuclear weapons was easy: otherwise, it would have happened decades ago. Banning nuclear weapons takes courage, or, as President Obama would say, it takes a “moral revolution”. Let’s ban the worst weapons of all under international law, and help his successors to overcome obstacles in taking more decisive steps to reduce investment, posture and numbers.

Nuclear disarmament is a process, after all, not a black-and-white dichotomy. A ban helps.

@leo_axt

 

Leo Hoffmann-Axthelm (Voltaire Promotion) has followed nonproliferation and disarmament diplomacy since 2010. After a stint as disarmament envoy for the Republic of Nauru, he co-founded the International Campaign to Abolish Nuclear Weapons (ICAN) in Germany. Today he is in Brussels for ICAN and Transparency International.

 

Free passes for InterRail ?

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Vincent Delhomme, 14 October 2016

Violeta Bulc, the Commissioner for Transport, recently told the European Parliament[1] that she was ready to carry through an old idea of offering free InterRail tickets to all young adults turning eighteen, sparking a wave of enthusiasm among MEPs and Brussels officials. These tickets enable their holders to travel by train freely through Europe for a certain number of weeks and has quickly become a masterpiece of the young European tool-kit. The aim of such a measure is clear: enhancing youth mobility and fostering the European feeling among new generations. However, if on the face of it, the plan may sound appealing, it is neither a legitimate policy instrument, nor an efficient way of fighting Euroscepticism and increasing mobility.

First and foremost, this idea will be costly, tremendously costly. Estimates vary from 1,5 to 3 billion euros, between 1 and 2 % of the EU budget, at a time where this budget is precisely subject to fierce negotiations and is put under stronger pressure due to the financial impact of Brexit. Which program is going to be trimmed in order to pay for this generous plan? Which other source of financing is available? These remain open questions.

It is not to say that building a European sense of belonging is not worth a couple of billions. It undoubtedly does. But it is doubtful that offering InterRail passes is the best way of reviving the love for the EU among youngsters. Frequent trips throughout Europe are already a reality for many young Europeans thanks to InterRail and low-cost carrier flights. Alternatively, this money would be better employed to fund the Erasmus programme whose financing has been put under threat for the last years and which still remains inaccessible for many students. This money could also be provisioned for the programme of an apprenticeship Erasmus, put forward by the French MEP Jean Arthuis[2].

This idea is also problematic on a political point of view. Is it really the role of a government to offer free journeys with taxpayer’s money? And even if it were, is it the role of the European Union? If something needs to be done to help the least well-off to discover their continent, it seems that national governments are perfectly capable, and better suited, to conduct such a policy. At a time where resentment for the Union is at a record high, when it is regarded as an out of touch and wasteful institution, it is not the moment to make its detractors right.

Moreover, the EU has better tools at its disposal to make travelling easier and cheaper for all European citizens. It could carry on with the opening of the European rail network to competition, especially international lines, currently in limbo. If the EU seeks to increase mobility as a whole, it should continue to break down barriers on the continent, a task it has been very good at for the last decades.

Simply put, this plan is demagogic and clientelistic. It is just wrong to buy the love and support of the voters with gifts. It is ridiculous to expect to get the respect of young people by offering them a trip to explore the night-clubs of Budapest and Berlin. Youngsters are perfectly capable of rationally understanding why the EU is so important in their lives and for their future. The EU is an extraordinary journey that has done more than any other institution to connect the European peoples, and this is precisely why it should give up this idea that undermines its credibility and will do nothing to improve it.

[1] https://www.euractiv.com/section/transport/news/eu-ready-to-explore-free-interrail-tickets-for-european-youngsters/

[2] http://jean-arthuis.eu/fr/presse/393-un-erasmus-des-apprentis-experimente-en-2016.html

Vincent Delhomme is currently a student of the College of Europe, Legal Studies Department.

European regulatory perspectives: Less is more!

Maxime Bablon, 9 September 2016

Post originally published on SAB

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Jonathan Hill, former European Commissioner, took stock of his achievements on July 12, during a speech at the Bruegel Institute. He drew up the work carried out during his mandate as Commissioner for Financial Stability, Financial Services, and Capital Markets (FISMA) and detailed upcoming challenges for the institution.

Strong supporter of ‘smart regulation’ taking into account the financial sector’s specificities, the former Commissioner stressed the possibilities to enhance the regulation by stepping back and to harmonize the multiple texts issued in recent years.

Here are five key take-home messages from his speech, providing a good overview of ongoing challenges regarding EU financial regulations:

  • Growth and risk dilemma: In holding that ‘without risk there is no growth’, the British has put a cat among the pigeons. Main target: the aggregation of individual risk aversion which may cause a market risk and impact negatively the financial stability as a whole. This argument correlates with the analysis carried out by a consulting firm, estimating the decrease of the net banking income from -1.64% to -1.93%[1] for major banks subject to the Tax on Systemic Risk over the next decade. For the Commission, the decrease of the European growth domestic product (GDP) shall reach around -0.15% for each percentage points increase of the common capital ratios (CET1). Negative impact should remain cyclical and be cleared after 2019[2].
  • Keep it simple to rule: For the former Commissioner, the current regulation is so complicated that only a handful of lawyers and compliance officers can fully understand it. This constitutes a strong challenge for the long-term sustainability of the banking union. The lack of clarity in textual reference feeds the reluctances of national compliance officers in charge of the implementation of these regulations (for example financial reporting (FINREP) refers to a whole variety of texts to fill out the templates, some of which go back as far as 1978[3]).
  • Streamline and create synergies: Several regulations can conflict in their scopes and objectives. For instance, the leverage ratio has increased the cost of clearing, in contradiction with European Market Infrastructure Regulation (EMIR) requirements which aims to… increase the number of transactions going through central counterparty clearing houses (CCPs)! On these points, Jonathan Hill called for capitalizing on direct consultations to avoid crossfire between regulations and seize the opportunity to review existing regulations. For further flexibility, he also proposed to exempt certain players from clearing obligations (non-financial counterparties, pension funds and some small non-systemic financial companies, etc.).
  • Differentiation and proportionality principles: It occurs that enforced regulations do not take sufficiently into account the diversity of players, whether in terms of business model, risk profile and entity size. The capital requirement regulation review should focus on this point, especially regarding prudential requirements. The former Commissioner has mentioned the standard approach taken to define the credit risk and the margin for systemic risk. He implied that these factors impact negatively on the competitive advantage of small and medium banks. The simplification of the capital requirement calculation or the introduction of a specific exemption for smaller players – such as the credit unions – could be carried out to better take into account each actor’s specific characteristics.
  • Reduce the reporting burden: In accordance with the consultation carried out last year by DG FISMA, several entities have complained about information overlapping between the reports displayed (ex. EMIR, Markets in Financial Instruments Directive II (MIFID II) and the Securities Financing Transactions Regulation). For instance, Jonathan Hill mentioned the possibility to review EMIR to “avoid ‘dual reporting’ obligation, at least for non-financial firms”. Moreover, if the Commissioner welcomes the increase of data exchange between the national and European regulator, he wonders if “it [data exchanged] is all essential”. This quote also reflects the need to clarify tasks between the multiple regulatory layers (National authority, European Central Bank (ECB), European Banking Authority (EBA) etc.).

In the wake of the crisis, the banking union was set up within a very short time. It permitted to harmonize the prudential and resolution standards over a set of heterogonous countries, which was anything but easy. Given that the framework is now defined, regulators can start focusing on quality, in particular, by taking into account feedbacks given by financial services’ professionals (inter-text synergy, proportionality, optimization of the reporting scope, subsidiarity principle, etc.).

Valdis Dombrovskis (the new Vice-President of DG FISMA) has declared his will to pursue the work building upon the guidelines set up by his predecessor. However, other challenges are looming ahead, in particular the complex issues of the European deposit insurance scheme or the implementation of the capital markets union. Eventually, the main recommendation granted by the former Commissioner is to regulate less but better.

To go further:

[1] Banks reviewed are BNPP, CASA, SG and BPCE (see here)

[2] Capital Requirements – CRD IV/CRR – Frequently Asked Questions (see here)

[3] This is the case in particular with 4th council directive (78/660/CEE)

 

 

Maxime Bablon – Marie Sklodowska-Curie promotion (2012) – works as bank regulatory compliance consultant between Paris and the Maghreb in a French FinTech (Sab IT).

A la source de la radicalisation: comprendre les causes, imaginer des solutions

Tommaso Emiliani, 1 September 2016

Post originally published on ForYouth.

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Students from the Chopin Promotion at the College of Europe taking part to the project “EUnited against Extremism”

Un concept qui échappe une définition univoque. L’Europe contemporaine vit quotidiennement l’échec de ses services de sécurité et d’intelligence vis-à-vis de l’élaboration d’une stratégie efficace de prévention des attentats. Une des raisons principales reste dans la difficulté de définir le processus de radicalisation des aspirants terroristes et d’identifier les conditions et les sujets aptes à faciliter la réussite de ce processus. Cela s’explique par le fait que la radicalisation ne se suffit pas à elle-même, mais existe selon un contexte déterminé par des facteurs sociaux, politiques et économiques.
Dans le cadre de l’Europe, le radicalisme actuel peut être mieux décrit comme un développement progressif de croyances extrêmes et d’idéologies qui remettent en question les valeurs et le régime politique au nom de l’islam politique. Si à cet aspect plutôt théorique s’ajoute une composante pratique – ce qu’on appelle « extrémisme » – le chemin vers l’acte criminel est marqué.

Push factors et pull factors. Dans la différence de cas particuliers, le trait commun à l’origine de la radicalisation semble être une prédisposition des individus aux sentiments de frustration par rapports à leur vie, à la société qui les entoure ou au système politique qui les incube. Les mouvements extrémistes sont capables d’intercepter ce mécontentement et d’offrir, selon le besoin, un « sens » et une « mission » aux jeunes désorientés; une réaction à l’ « injustice » vécue ou aperçue; un sentiment d’appartenance aux membres de communautés désormais atomisées.
L’impossibilité de dresser un profil unique de l’« extrémiste potentiel » et l’incapacité de cerner les motifs individuels au cœur de la quête radicale sont justement à la base de l’inefficacité de la réponse portée par les autorités européennes.

Des facteurs de risque différents pour des profils personnels variés. L’action de persuasion des mouvements extrémistes vise un public vaste et mélangé. Les jeunes à la recherche d’un sens existentiel trouve dans l’extrémisme violent cette dimension utopique – plutôt eschatologique que religieuse – qui manque à leur vie. C’est le « grande récit » dont parle O. Roy, qui offre une lecture simplifiée et manichéenne de la réalité. Ainsi s’explique le changement soudain opéré par la radicalisation sur des sujets occidentalisés et peu croyants auparavant, qui se transforment en prédicateurs de l’Apocalypse en très peu de temps.
Sur un autre front, plusieurs jeunes cultivés, issus de familles relativement aisées et bourgeoises, sont motivés par le désir de redresser les « injustices » de la société contemporaine. Que ce soit l’oppression de l’héritage colonial en Afrique et Moyen-Orient, l’« impérialisme » américain en Afghanistan et en Irak ou la situation de la Palestine actuelle, ces injustices provoquent un élan de révolte radicale que seul les mouvements extrémistes semblent comprendre et apaiser.
Enfin, un autre segment social constituant le squelette des groupes terroristes est représenté par des individus marginalisés à l’intérieur de leur communautés et qui cherchent un point de repère dans la « camaraderie héroïque » typique des bandes vouées à l’(auto)destruction. Ces jeunes, qui agissent souvent sans l’appui ou la connaissance de leurs familles et groupes d’amis, sont très loin de ce que l’approche culturaliste de certains média définit comme « exemples de la population musulmane radicalisée ». Bien au contraire, il s’agit de sujets qui – n’étant pas intégrés dans le réseau des mosquées et dans les pratiques sociales communautaires – choisissent de s’échapper de la société pour essayer de la détruire et prendre ainsi leur revanche.

Raffiner l’étude de la radicalisation: fondamentalisme ≠ djihadisme. Toute stratégie de prévention de menaces terroristes de la part des autorités publiques doit tenir compte de la différence existante entre le salafisme doctrinal et l’action politique terroriste de soi-disant djihadistes.
Le fondamentalisme enseigné par certains imams érudits, qui prévoit une approche littéraliste à la lecture du Qu’ran et une stricte observance des mœurs et rituels traditionnels, exprime sans doute une vision anti-moderne et ultraconservatrice de la société. Cependant, très rarement ce courant religieux trouve une débouchée politique dans l’action radicale violente. En effet, la pratique de l’exposition à la mort, les attaques médiatisées et les techniques employées par les extrémistes sont eux même des éléments trop modernistes pour le fondamentalisme. En outre, le salafisme requiert une connaissance et une maîtrise du texte sacré qui requiert des années d’étude, et qui s’adapte mal aux profils des jeunes occidentales radicalisés décrits plus haut.
Le djihadisme, par contre, travaille sur le plan de l’action. Charmés par la dimension totalisante de l’aventure radicale, les jeunes « moudjahidins » ne passent pas par l’étude approfondie du Qu’ran – souvent ils parlent très peu d’arabe – et se dédient plutôt à la « lutte ». C’est le cas de tant de jeunes combattant parmi les troupes de DAESH en ce moment : ils font la guerre à leurs « ennemis », s’occupant très peu des questions religieuses, et se mêlant encore moins au contexte de la société civile locale. Si le fondamentalisme procède par « endoctrinement », le djihadisme travaille par « embrigadement ».
Cependant, il serait naïf de ne pas reconnaître un lien entre le deux phénomènes. En effet, lorsque les jeunes radicalisés se vouent au djihadisme, un certain degré de fondamentalisme apparaît – et cela complique ultérieurement la situation et rend le travail de prévention et réaction encore plus difficile.

Des recommandations stratégiques. Le ton martial récemment assumé par le président français Hollande et nombre de ses collègues reflet le choix européen en faveur d’une politique contre-terroriste strictement sécuritaire. Le risque reste en la
mise en scène d’une guerre des identités, dans laquelle l’islam est censé être l’ennemi antisocial. C’est-à-dire que l’on provoque ce que DAESH attend: que l’Europe s’en prenne à l’islam afin de sortir le djihadisme du cercle restreint des individus actuellement concernés.
L’incapacité de distinguer entre fondamentalisme et djihadisme mène à l’insistance sur la nécessité de surveiller (ou même fermer) les mosquées. Mais comme l’on voit souvent, les groupes extrémistes recrutent en dehors des mosquées et sur internet. S’en prendre aux mosquées, c’est aussi méconnaître les dynamiques locales de surveillance qui existent entre les celles-ci et les autorités publiques locales.
D’autre côté, attribuer une importance excessive à l’ « asocialité » et au « nihilisme » des djihadistes, comme le fait Roy, implique une déresponsabilisation des gouvernements européens par rapport à l’échec de leurs stratégies d’intégration sociale qui ne joue pas en faveur d’une approche préventive et efficace à la menace terroriste.

Certaines actions doivent être mise en place au plus vite possible. Premièrement, dans nos sociétés, l’islam n’est pas suffisamment encore un objet de savoir. A présent, il est enseigné dans les manuels scolaires comme un objet de croyance, notamment à travers des mythes fondateurs, mais il n’est pas expliqué ni aux croyants ni aux non croyants. Cela n’alimente pas simplement le fondamentalisme islamiste, mais également les préjudices occidentaux qui renforce l’attrait de l’offre djihadiste. Deuxièmement, la réponse sécuritaire doit s’accompagner de moyens et d’actions sur le long terme dans des secteurs clefs comme l’éducation civique, l’emploi, l’enseignement et la cohésion sociale. Le chemin pour faire face à la radicalisation est long et difficile, et l’Europe a sans doute un rôle à jouer.

Bibliographie
Burgat, François, Réponse à Olivier Roy : les non-dits de « l’islamisation de la radicalité », Nouvel Observateur, http://rue89.nouvelobs.com/2015/12/01/reponse- a-olivier-roy-les-non-dits-lislamisation-radicalite-262320
Deroubaix, Christophe, Raphaël Liogier : « Le risque est de provoquer ce que l’on veut éviter », L’Humanité, http://www.humanite.fr/raphael-liogier-le-risque-est-de- provoquer-ce-que-lon-veut-eviter-590011
Lamlili Nadia, Rachid Benzine: « Pour faire face à Daesh, il est temps de nettoyer l’imaginaire islamique »,  Jeune Afrique, http://www.jeuneafrique.com/279520/societe/rachid-benzine-faire-face-a-daesh-temps- de-nettoyer-limaginaire-islamique/
Puwels, Lieven et Fabienne Brion (coord.), « Comprendre et expliquer le rôle des nouveaux médias sociaux dans la formation de l’extrémisme violent », Etudé commissioné par la Police Belege Fédéral (BESPO), 2013
Roy, Olivier: « Le djihadisme est une révolte générationnelle et nihiliste », Le Monde, http://www.lemonde.fr/idees/article/2015/11/24/le-djihadisme-une- revolte-generationnelle-et-nihiliste_4815992_3232.html#RcSp4GwHwRUJKmOL.99
Torrekens, Corinne, Comprendre le basculement dans la violence jihadiste, La Revue Nouvelle, http://www.revuenouvelle.be/Comprendre-le-basculement-dans-la- violence-2835

Tommaso Emiliani is Academic Assistant in the Department of EU International Relations and Diplomacy Studies at the College of Europe, Bruges. He is an alumnus from the Falcone&Borsellino Promotion, Natolin.