Economic policy and the Single Market, Future of the EU

A fine example of Euro-speak

I am sure you have all heard the old adage ‘No taxation without representation”. Here is the translation in Euro-speak:

“Further financial mutualisation requires commensurate political integration”  (from page 35 of the Commission’s
“Blueprint for a deep and genuine economic and monetary union”)

Academic research on the EU, Europe in the news, Euroscepticism, Future of the EU, Public opinion

Budget negotiations and the EU public sphere

Although the talks on the EU budget ended last Friday without a conclusion, the media coverage on the negotiations does tell us something about the state of the ‘EU public sphere’.

When we use media coverage on EU issues as a proxy for the emergence of a European public sphere, it seems that such a Habermasian-sphere rapidly developed in the last couple of years; newspapers and television programmes provided information to their readers and viewers in the EU member states on Greek bail-out packages, the Euro-debt crisis in general, and the budget negotiations (like now).

 However, most cross-national longitudinal studies show that media coverage on EU affairs is marginal at best, with peaks around EP elections, referenda, and the budget negotiations.

In contrast, my own research indicates that in the last decade news coverage in national newspapers of the negotiations on EU directives in the ordinary legislative procedure (i.e. the day-to-day EU level decision-making process) closely follows the newsworthy developments. Hence, the interested citizen could have gotten its information on the day-to-day decision making process by reading the papers. Although I do not claim on the basis of this research that there is such a thing like a European public sphere, it was not all bad in the last decade.

Future of the EU, the Netherlands, Uncategorized

We are back, with a new campus and ‘old’ themes as relevant as ever

We are back and apologize to our readers for the long break. We have a whole set of really good reasons why posting was interrupted for so long: the main ‘institutional’ one being that we, as part of the Institute of Public Administration, have moved during the summer to the Hague Campus of Leiden University. Our brand new building will be opened with a conference, which will take place on 20 September and is entitled Reinventing Global Order (to see the programme and links, here). We hope that a broad audience of our friends and students will attend.

In other exciting work-related news, we are working on finalizing an FP7 project assessing the last and future enlargements of the European Union. More about this will be posted soon.

Last but not least, despite our lapse in posting, I notice that our key themes are as relevant as ever. The European Union, or ‘Europe’ has emerged a key theme in the Dutch elections campaign which is now in its last week. Just yesterday, the grand Carre debate, there was some discussion among Dutch politicians whether they should do anything they could to save the eurozone. I did not watch the whole debate so cannot take a position on what was said, but this reminds me of a very interesting blog post by Greek economist Yanis Varoufakis about a mental experiment on saving the eurozone. I do not necessarily agree with many of the arguments he puts forward on his blog, but he always provides thought-provoking and different perspectives. Well worth a read.

and in other news: As we wrote in hope some months ago, Commissioner Neelie Kroes has taken up the issue of the disastrous state of Bulgarian media. She is visiting Bulgaria to investigate the problem and a group of distinguished journalists, nowadays many of them working in internet only, have written her an open letter on this occasion (in Bulgarian), requesting to meet her in addition to her officially  scheduled meetings. Among the distinguished journalists who have signed the letter there are well- known journalists, in the past working in main channels of radio and TV, as well as internet journalists and bloggers. The situation has become so bad that in recent years one can get informed about key developments in Bulgaria, such as, for example, the struggle of citizens to save the unique park along Varna’s beach (so called Sea garden) only via internet sources. No doubt Commissioner Kroes will recognize the importance of these journalists’ plea.

Europe in the news, Future of the EU

a balanced view of the challenges European integration presents… and the discovery of the CAP

Posting has been irregular here, as we are preparing to physically move our Institute to the Hague and finishing the academic year. Apologies to our readers, at least the group of our students who read us will prefer their exams corrected on time, I am sure. In the meantime, the crisis in the eurozone is in full swing, Europe and the US and possibly everyone else awaits the results of the Greek elections this weekend. It is almost too close to meltdown to deliver meaningful commentary. And yet it is possible, as shown by the interviewed guest invited at the Dutch evening news program nieuwsuur of last night, 14 June, economics professor Barbara Baarsma. Admittedly, I do not follow more than half of news and commentary on Dutch television these days but still I would dare say that for a long time we have not heard such a balanced and competent commentary on the causes and solutions of the eurozone crisis. In contrast to numerous other speakers including experts and politicians, instead of emotional arguments and doomsday scenarios, she offered a competent and insightful commentary on the dilemmas we are confronted with right now. First, she explained why the support for Spain was not pointless even though the financial markets have now reacted with renewed mistrust and rent on Spanish state obligations has reached the symbolic threshold of 7 per cent. Baarsma pointed to Merkel’s speech on political Union and explained that to be successful in making transfers from one eurozone country to the other, there should be banking/ capital Union which is possible only if we gradually move towards political union in the EU. The quote from Merkel’s speech on political union is then presented to Dutch politicians who, in their reaction (with the predictable exception of Wilders and Roemer of the Socialist party who both declare Merkel’s’ comments to be ridiculous and shameless), pretend collectively that they have not heard anything about European problems in this pre-election time. Baarsma’s comment on this was sharp and incredibly to the point: Politicians should not avoid these questions now, they can bring a nuanced message to the voters, maybe explaining the euro was not introduced in the best possible way, but still, that it is important to stay in the euro and to take further steps towards political union. Her best quote: politicians that are afraid of the euro (and European integration)  and shun debate on the future of the eurocrisis, have made the Dutch electorate afraid and negative about European integration. The question is posed usually the other way around – what can Dutch politicians do to promote the EU when their electorate does not want more European integration. No, Baarsma said, politicians have made the public this way. I could not agree more with her.

In the next report presented in the same nieuwsuur programme, the reporters discover the trials and tribulations of the EU’s common agricultural policy (the CAP) with the help of some farmers who plead for abolishing the single farm income payment in favour of getting a  fair price for agricultural production. All very interesting and appropriate, except for the fact that these problems around the CAP have been known for decades. The only amazing thing about it is that the mainstream media have not shown much interest in these problems before. The report identify a VVD politician receiving CAP subsidies – by all not the first politicians from the Netherlands to do so, as can be seen from publications on the website: promoting a campaign for transparency in CAP payments for some years. The interview with minister Bleker which follows the interviews with the farmers provides somewhat of a summary of the pro-CAP arguments and an idea of some incremental reform the Dutch may propose to the European Commission. A useful introduction to the CAP for those who are not familiar with the policy at all.

Euroscepticism, Future of the EU

Debating EU’s future with the PVV

Yesterday I gave a talk to political science students for a small symposium on the ‘Future of Europe’. The other speakers were Joop de Kort (professor in Economics) and Auke Zijstra, MEP from the Dutch Freedom Party (PVV). Given that Mr. Zijstra is mostly famous for defending the PVV website for complaints against East Europeans, and given the PVV’ s  position for Dutch EU-exit, you might expect that the debate turned ugly. But in fact the discussion was rather interesting and definitely civilized.

The main point on which I and Mr. Zijstra couldn’t agree was the power and responsibility of the Commission. We agree that the not all decisions that the EU has taken have been necessary and appropriate. But while he blames mostly the Commission, ‘Brussels’, and the bureaucrats, I think that since it is the Council (and the European Parliament) that co-decide in Europe, they should take the blame or the credit for the EU decisions. The Commission only proposes, and in the vast majority of cases it is the member states governments which decide! So it seems rather preposterous to suggest that ‘Brussels’ has made a decision while it is the signatures of the national governments that appear on the final document. Of course, the myth that the faceless unelected bureaucrats decide on our behalf in Brussels is extremely popular, but precisely for this reason it should be debunked on every possible occasion! It is national civil servants who discuss the Commission proposals in the Council’s working groups, it is national ambassadors who negotiate the proposals in COREPER, and it is national ministers who ultimately decide in the meetings of the Council.

Obviously, it makes political sense to shift the blame to ‘Brussels’ for decisions unpopular at home. But this political ‘strategy’ erodes the little trust normal people have in the institutions of the EU.

As for the a country’s possible exit from the EU, I am rather pragmatic about the issue and don’t feel that such a perspective shouldn’t be discussed. The problems I see, however, are two. First, even if you exit the EU but still want to participate in the Internal Market, you still have to apply the bulk of EU legislation (ask Norway) and you might need to pay to access the markets (ask Switzerland). Second, being out of the EU while the EU still exists might be a better option than being in the EU, but there is no guarantee that once you exit, the other countries would not follow. And most ‘pragmatic’ Euroskeptics would agree that a world without the EU (no single market, no freedoms to travel and trade, etc) is worse than a world in which the EU, even if imperfect, exists. So, free-riding on the integration efforts of others might be a myopically rational national strategy, but it would lead to the unraveling of the whole EU project, leading to a collective outcome that none wished for.

Here is a link to my presentation for the symposium. It might seem a bit cryptic without the narration but, hey, it’s another Prezi beauty.

Europe in the news, Future of the EU

Forthcoming debate on Europe

Munk Debates will hold a debate under the slogan ‘The European Experiment Has Failed’. Niall Ferguson and Josef Joffe will argue that it has, and Peter Mandelson and Daniel Cohn-Bendit will defend the good other side. Brace yourselves, the EU debate of the year is coming!

The teaser from Niall Ferguson is already rather irratating: “For more than 10 years, it has been the case that Europe has conducted an experiment in the impossible.” Not sure what he means, but as a historian he should know that the dominance of the nation-state is a relatively short and recent episode in world history and that the domain of the possible often proves to be surprisingly vast.

Here is some (highly selective) background on Niall Ferguson: link, link. Felix Salmon has an entertaining post on the forthcoming debate here.

Economic policy and the Single Market, Future of the EU

Europe’s Growth: An Optimistic Perspective

Europe gets a solid ‘B’ for its economic growth and an ‘A’ is within reach’.

That was the evaluation given by Indermit Gill, Chief Economist for Europe and Central Asia at the Wolrd Bank, at the annual Jean Monnet conference hosted by the Leiden University‘s Institute of Public Administration. The assessment summarizes a 112-page overview of a 500+ page new report prepared by the World Bank on the past and future of Europe’s economic growth. Mr. Gill presented some of the conclusions of the report and discussed his vision of the challenges facing the European economies. The overview of the full report is well-worth reading – it is quite accessible for non-economists and richly illustrated. In this post we want to take up just a couple of issues that seemed especially salient to us.

The report points out that by the late 2000s, the ease of doing business in South Europe (Greece, Italy, Spain, Portugal) has plummeted below the levels of the Central and East European countries. This is remarkable if we remember that 20 years ago the CEE countries still had state-led planned economies. Many people imagine that setting up a market economy requires just cutting state interference and then the market would grow on its own. But this is hardly the case – in fact, the establishment of a market and the right environment for doing business requires a huge effort in state-building. Installing the rules and regulations conductive for business growth is by no means an easy achievement, and the CEE countries should take the credit they deserve for that.

In the questions and answers section, Dr. Gill pointed out that while the low labour mobility in the EU has not impeded the working of the European ‘convergence machine’ (a very apt metaphor used in the report to describe how Europe has been helping poorer countries to grow and converge with richer EU member states), it is a problem for the eurozone. Inside the eurozone, as the monetary policy instruments are removed from the toolbox of governments, one way to compensate for the imbalances that have occurred since the eurozone is not an optimal currency area, is to allow labour mobility. Without it, the balances become even more glaring. The implications for the current policy of many European governments of restricting immigration cannot be clearer.

Another finding emphasized by the report is that the EU is a huge trading partner for the whole world, but also that a large part of trade happens inside Europe and among European partners. This was presented as the strongest pillar of the European economic success and it’s worth remembering that it is, by and large, an achievement which can most directly be linked to the Single market established by the EU between 1986 and 1992. Again, if any political leaders would seriously consider what their economy would look like without the EU, it’s worth relaying the comment of Dr. Gill, that there is no such thing as a successful small closed economy in today’s world.

Antoaneta Dimitrova and Dimiter Toshkov