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The New EU Voting system – the old west-east north-south division

Attila Marjan

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Economic governance reforms and Eurozone consolidation has significant institutional and political consequences: a multiple-tier integration is ever more realistic. „Out” countries seek to mitigate the negative impact of these developments. In this respect V4 – Visegrad countries differ a lot: Slovakia, a relative latecomer in economic reforms is part of the currency union. Poland, Hungary and the Czech Republic are not Euro-members.

But even this sub-group is divided: Poland intends to join whenever requirements are fulfilled while the Hungarian and the Czech governments are cool on accession. At the same time, further economic federalisation in the Eurozone is to come. Against this background, the question whether a long-term “great divide” among V4 group countries in relation to their EU policies and consequently their future situation in the rapidly altering EU will be maintained, is of key importance.

European economic integration in political perspective

Economy and politics walk hand in hand in the process of European integration. This has been clearly seen during the years of the euro crisis. During the worst crisis ever experienced by the EU as from 2008, the euro was not seen as the solution, rather than the source of the problem. But in fact, the true lesson from the recent malaise is that the institutions and policies behind the common currency need significant reinforcement.

The euro is one of the most sophisticated results of the process of modern European integration. It is also a symbol of peaceful collaboration between European countries, which has been accompanied by, or has resulted in, unprecedented levels of peace, stability and prosperity in Europe.

In order to restore confidence in the single currency zone, a more coherent fiscal union must be created, which will require further measures of economic integration in the long run, such as the creation of a European finance minister, a larger EU budget, and a fully operational banking union. Tax and even social policy coordination will also be on the to do list. Obviously not all members will be able or willing to go that far. EU members states are destined to go at different paces maybe even in different directions. A two-speed Europe has already come into existence in reality which was reinforced with the UK’s decision to stand aside. The dynamics of integration is uncertain. This is partly because the alliance between the 18 current members of the euro zone is not a stable formation per se; for many of them, the bar will be set too high, and they will not be able to accept the degree of harmonisation needed. An additional factor is that integration is to proceed on an intergovernmental – rather than supranational – basis, and there will be a need to clarify the roles of the EU bodies, in particular that of the European Commission. These developments have consequences for the V4 Group as well in the medium term.

One has to be aware of the fact that despite its undoubted successes, modern European integration – in historical terms – is a fragile construct. The main reason for this is the absence of a precise self-definition. Europe seems still to be a nascent formation, consisting of political compromises, a common system of law, a common economic zone, and a collection of political and institutional responses to crises. Although the peoples of Europe have lived side by side for thousands of years, they do not share traditions, living myths, a common identity or language; nor do they project a single image towards the outside world. The political class and the intellectual elite are just as divided: some want more Europe, while others think that even the present level of cooperation is far greater than desirable. The underlying reason is that no one has a clear picture of the function, goal and future development of the EU; there is no agreed vision.

The federalist school holds that the time has come to establish a political union, or the alternative is a collapse of the integration project brought about by the euro crisis. Others claim that political union is not only unnecessary but also impossible in Europe[1]. Many member states, much of public opinion and of the European cultural elite reject the idea of a political union. In addition, Europe is not yet prepared mentally for such a union. There are three reasons for this. First, the lack of common European traditions, identity and language. Second, the member states having extremely divergent visions for the European Union and holding a variety of opinions on what is the ideal economic and social model. Third, it is a physical impossibility to create a unified political union out of a Europe that has 28 members and is expected to expand continuously. Consequently, the result is a multi-speed Europe.

The UK is distancing itself from integration, thereby creating a good reason for the German-French duo to press on with moving towards Core Europe while avoiding the EU-28 setup as it is today. For eurozone key countries surrendering more of their sovereignty will be far less painful than a euro meltdown. Chancellor Merkel seriously believes that the demise of the euro would be the downfall of the EU.

By creating the euro (which was in many – especially in economic – respects either an irresponsible enterprise or a visionary act, depending on one’s perspective), Europe crossed the Rubicon: it pushed integration to a point of no return where it either presses on with a fiscal and economic union or must bear the dire economic and social consequences of a break-up of the common currency. As Ottmar Issing puts it: Der Euro “is still an experiment whose outcome seems likely to remain uncertain for a considerable time to come.”[2]

Euro-related challenges are not the only factors: Europe at the beginning of the 21st century is facing not only a financial crisis but also a political crisis (caused in part by the economic crisis). It is a political crisis in the sense that the political institutions established after World War II, including those of the EU, have lost the confidence of the electorate. Society and the economy are undergoing rapid change. For many, such change is an opportunity, but for even more people it is a threat. This undermines society’s confidence and leads to the chronic rejection of political institutions and a widening of the chasm between the elite and the man in the street. The welfare model that was designed to prevent a repetition of the disastrous social problems of the interwar period is now in a crisis, thereby jeopardising the social peace that was based on keeping the middle-classes satisfied. This in turn has added to economic and social tensions caused by immigration and to a hysterical fear of globalisation. In the view of many, globalisation – or as the anti-globalists call it: the unbridled competition of dog-eat-dog capitalism – finds embodiment in the European Union. It is therefore not accidental that there is a growing rejection of European integration, accompanied by a general rejection of the political mainstream.

Crises are inherent to capitalism, but the crisis that began in 2008 has several unique features. The first is its rapid spread in the financial sectors of the developed world, which was due to the unprecedented interconnectedness of the world’s financial markets. Many have drawn comparisons between the current crisis and that of 1929. True, at that time too, an irresponsible deluge of credit had caused economic bubbles, but the crisis was one of over-production. In other words, the problems of the 1930s originated in production, i.e. the real economy. In contrast, the crisis of 2008 originated in the financial sector. There were no problems with the foundations of the real economy until they were rocked by the financial meltdown. But the most important feature of this crisis is that – contrary to previous ones in the second half of the 20th century – it is a crisis of the West.

The scenario is not that of a collapsing emerging economy (Argentina, Mexico, Russia, East Asia) that has proved itself incapable of implementing the operating principles of Western liberal capitalism. On the contrary, the rest of the world remains relatively stable while the economy of the West (USA and EU) seems to be cracking. Ground zero of the financial crisis was in the United States, the key archetypal capitalist actor. However, by 2011, the eurozone had become the real focus of the crisis. China, Japan, and the United States are keeping a watchful eye on the success (or failure) of Europe’s crisis management, while drawing up various strategic scenarios. Thus the crisis has crossed the Atlantic, and made the leap from the financial sector to the real economy, affecting in particular national budgets. Act two of the current crisis centres on unsustainable national budgets. This explains why, in Europe, a rescue is needed not only for the banks but also for the member states.

Clearly, the present crisis is one of the most serious ones in the history of European integration. It is fundamentally a political crisis rather than a purely economic one. It is the consequence of a downward spiral of political and economic problems that mutually reinforce each other. At its centre lies a weakness of political vision in the EU and in the eurozone. In economic terms, Europe is better placed than the USA (when one considers the level of national debt or fiscal deficit); yet it is the eurozone that has become the epicentre of the crisis. History teaches us that monetary unions are unsustainable without political coordination and a fiscal union: a major economic crisis has now made this painfully clear to the eurozone too.

In the history of European integration, crises have acted as the triggers of major political and institutional changes. Europe and the EU face many external and internal challenges, the scale of which has grown in recent decades (greater international competition, a whole series of demographic, social and budgetary problems). Member states have often made feeble and belated responses to such challenges with delayed reforms and poor management of immigration and demographic trends. At the same time the European Union has not been more robust either (see weak and eventually failed policy visions as the Lisbon programme, diplomatic and geopolitical difficulties due to the lack of a common EU position, years of impasse after the failed European constitutional project, etc.)

The question is whether the present crisis, which threatens the existence of the most important achievement of European integration – the common currency – will lead to a ‘quantum leap’ towards closer political integration and a multi-speed Europe. It may indeed result in any of the two.

In the medium term, the whole of Europe must prepare itself for a decade of sluggish economic growth. The gap in economic, social and political development within the eurozone will only widen unless there is a major change of direction in the integration process. In the long term, the European welfare state is unsustainable in its present form (cf. ageing and shrinking populations, budgetary over-extension, an increasing competitive disadvantage vis-à-vis Asia). For this reason alone, it would seem sensible to pool European resources and to aim for a common European political and geopolitical agenda. But that will be the result of economic necessity rather than rationality.

In this socio-economic context a lot of discussion is taking place about European political union. But one thing has to be clear: not any form European political union should or could mean the formation of a regional world government or the elimination of Europe’s nation states. The nation state is a European invention, and Europe’s nations will never be dissolved into an all-embracing pan-European political unity – if for no other reason than because for Europeans a sense of European identity barely exists, and Europe does not have a common language like the United States does. Political union could mean closer political integration, a real common foreign policy, a real European (or Eurozone) president, real European parliamentary elections, a real (perhaps eurozone) budget, and a truly common economic policy. It could also mean unified European representation (a single seat and a single voice) in international organisations as well as stronger pan-European symbolism in daily life. The euro would still not be backed by a real country, but there would be regional integration with a far stronger political profile.

Currently, the key question concerning the future of European integration is whether or not a currency without a country is viable. The European Union has tried to establish a monetary union without a political union, but it has become increasingly clear that both are needed – or neither. Some thought that this ambiguous situation would lead to a great crisis, forcing the EU to establish closer political integration. That is to say, what cannot be achieved through nice words, will happen under pressure – as has been the case so many times before. Angela Merkel has a point saying that if the present crisis leads to the end of the euro, this would result in the collapse of European integration as a whole, at least in its present form[3]

Not only is the common currency without a country; it also has no backing in the form of political institutions or even the basic foundations of economic integration. The EU barely has a budget: in a modern market economy, the budget amounts to 40-50 percent of GDP, while the EU budget amounts to just one percent of European GDP. Moreover, money is not spent on things that a “normal” budget would target, but for very different purposes, such as farm subsidies – which still account for almost every second euro spent. These factors add up to a budget ill equipped to make significant transfers between eurozone members at different levels of development and in different stages of the economic cycle. An even more important deficiency of the eurozone is its lack of a common economic policy and the cumbersome decision-making with unanimity required, for instance, to adopt common fiscal rules.

A closer union in fiscal and economic policy terms – a European finance minister, eurobonds, common financial supervision, a closely coordinated economic policy – seems inevitable, as does, in certain respects, a political union. All this will require a new treaty, an amended ECB statute, and above all political will. Closer integration may certainly be envisaged in the form of a multi-speed union. A radically different European space is appearing before our very eyes. And in this new space the role of Europe’s major powers will change, and there will also be a shift in the relative clout of countries. Germany may be the greatest beneficiary of the reshuffle with its new-found regional primacy. German political elite supports closer integration, which will help mitigate fears of German hegemony, but the German-French tandem is no longer regarded as a partnership of equals. History (and necessity) has made the economy – and the common currency – the driving force of federalism, rather than political institutional development or the construction of a European cultural identity, which would have favoured the French. The French wanted the euro – and the whole process of integration – as a means of keeping the Germans in check, but in reality the opposite happened. The principles of France’s European policy – the multiplication of French power and capacities at the European and global level coupled with categorical inter-governmentalism – have been sorely wounded.

Historically speaking, hostility, rivalries and war are the norm on the European continent; periods of peaceful co-existence are the exception. Or, as prof. Anis Bajrektarevic rightfully questions our deceiving wonderworld: “Was and will our history ever be on holiday? From 9/11 (09th November 1989 in Berlin)… to the Euro-zone drama, MENA or ongoing Ukrainian crisis, Europe didn’t change. It only became more itself – a conglomerate of five different Europes”.[4] Also, in historical terms, modern European integration (voluntary cooperation between sovereign states, based on the respect for common laws, and which was launched after World War II with a strengthening of economic and commercial relations but with the primary purpose of pacifying Germany) is a vulnerable formation. As a consequence, peace and solidarity on the European continent may soon be replaced by growing hostility – if the economic situation deteriorates and becomes crisis-ridden in a geopolitical milieu that is increasingly unstable. The fate of the boldest achievement and symbol of EU integration – the common currency – is intertwined with the fate of integration as a whole: an anarchic collapse of the euro would be accompanied by the break-up of the EU and political paralysis in Europe. The euro is fundamentally a political and symbolic creation; in its present form, it does not have firm economic foundations.  In light of the above it is in the interest of the EU to save the euro by establishing a strong economic union.

With its present architecture, rules and stakeholders (whether they are the EU-28, the EU-26 or the EU-18), the European Union is incapable of moving forward at the right speed and depth. In addition, European public opinion gives a cool reception to any initiative coming from above, from Brussels. The European Union – it seems – faces two possible scenarios in the long term. Under the first scenario, it passively allows the centrifugal forces (markets, member-state sabotage, public disinterest) to break it up or it ceases to exist in its present form, with the unplanned termination of the euro. All of this would be temporarily accompanied by an extremely grave crisis. Under the second scenario, in the extended lands of Charlemagne a new intergovernmental treaty may be adopted, resulting in strong economic policy integration and preserving the euro. The second and third groups of countries could join later based on new conditions (which would be far stricter than they are today). The historical and European lesson is that regional integration projects are far from everlasting, and often the temporary break-up of a poorly designed form of integration is the key to a restructured formation that guarantees long-term survival.

Historical experience shows that monetary unions are successful when they have among their members at least one economic power-house acting as the engine. Central institutions are also needed to control and enforce the rules. The most successful ones are preceded by a political union, as in the case of the USA, the UK or Germany. Price and wage flexibility is a fundamental criterion, so that wages can be limited in poorly performing regions, just as inter-regional transfers can be useful. Fixing and applying criteria on economic convergence also prove to be necessary. In the eurozone, we can hardly talk about real flexibility of labour markets, just as we cannot talk about a political union either. The EU budget is not designed for major income transfers either, as it only disposes of 1% of GDP. The US federal budget is around EUR 3.3 trillion, compared with the EU “federal” budget of roughly 140 billion euros, a good part of which is transferred to non-eurozone countries. The difference between the internal transfer capabilities of the two monetary unions is obvious. In any case, the euro was created by politics. Politics must also help preserve it. As André Sapir and Jean Pisani-Ferry put it: the euro area needs fewer routine procedures and more ability to act in times of real crises[5].

This is the economic and political framework in which V4 countries (Hungary, Poland, Slovakia, Czech Republic), deeply integrated in the EU’s internal market and in the case of Slovakia as member of the Eurozone, should navigate.[6]

 

The case of the V4

 

The close link between economy and politics has been clearly demonstrated during the years of the euro crisis when the euro was often not seen as the solution, rather than the source of the problem. But in fact, the lesson from the recent malaise is that the policy system behind the common currency needs significant reinforcement. The way V4 countries approach the Euro accession and crisis management is also a mix of economic and political features.

Firstly, a few remarks on the V4 Group itself. The loose alliance of the four central European EU member states, namely Hungary, Poland, Czech Republic, Slovakia until introduction of the “double majority” voting in the EU in late 2014 had equal number of weighted votes with Germany and France put together. If counted as a single nation state, V4 with its sixty four million inhabitants would rank 22nd in the world and 3th in Europe. Moreover it is the seventh largest economy in Europe and the 15th globally. The Group had a significant blocking, therefore policy-shaping power in the EU. The V4 Group functions as a leverage of influence for their members not only in Council voting but also in diplomatic dealings. Chinese, Turkish, or Indian political leaders have been much more open to contact the Group as opposed to deal with members individually. V4 has also gained a certain appeal in the eyes of other countries in the region, but the alliance wanted to keep its doors closed until now[7].

From November 2014 though, the double majority replaced the current weighted voting system. According to the new rule the support of 55% of the Member States representing 65 % of the overall population of the European Union will be required. The new system significantly modifies the power distribution by strengthening the influence of big Member States – with a population of 60 million; Spain and Poland will lose their big Member State status and medium-sized countries’ – between 2 and 11 million inhabitants – voting power will be reduced dramatically. Germany and France will gain increased blocking capacities but V4 countries will not be able to form any blocking coalition any longer. Even the new Member States joined in 2004 and 2007 will not be able to block decisions under the new system. So with the new voting rules, plus and more importantly the largely diverging visions on decisive European issues, and with some of the states in some out of the Eurozone, and especially with Poland with way more significant geopolitical ambitions and Hungary’s political isolation (more on these issues later) the V4 cooperation will probably get less and less relevant.

As a start it is obvious that these countries are integral part of the European economy with Germany playing a key role as export and import market. 

Table 1.: Share of EU in V4 countries’ export and import

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The above table clearly shows the deep integration of the V4 countries in the EU market, especially on the export front. As far as import is concerned one has to bear in mind the fact, that these countries are dependent to a great extent on Russian energy sources which shows in the overall geographical distribution of imports

Differences: great divides to stay?

But homogeneity seems to stop here, since the success rate of the V4 countries harnessing the benefits of EU membership differs a lot. Some of the new members were more successful than others in using EU-accession as an economic and modernisation leverage by halving the number of people living in poverty and raising the per capita GDP by almost fifty percent. Bratislava, and Prague is richer than Vienna and Budapest also comes close. This is in itself a spectacular development[8]. At the same closing the wealth gap and decreasing internal territorial wealth gaps in individual V4 countries is much less of a success story in the case of Hungary and to a lesser extent in all the four new member states, although there are major differences in this respect.

Different development paths walk hand in hand with different policies, which indicates that economic success and political decisions are interlinked to a great extent in the region. This linkage seems even more pronounced than in the case of old member states. This stems from the fact that politics in general and the direction in which the political class wants to direct the country is more important in this region in terms of end results both in political and economic terms. A new government in the V4 countries can have dramatic impact on the geopolitical, EU-political and economic policy path the country takes. Long-term political stability is still in nascent form, or in a more pessimistic tone: is a rarity in the region. This is due to lack of self-conscious civil society, stable institutions and as a result: a hyperpuissance of the political classes.

There is obviously a clear difference in the group when euro-status is considered. When it comes to EMU issues, the four countries are in different position and have differing views. But this is only partly justified by economic factors or by the fact that being in or out makes a significant difference. It is also stemming to a great extent from political considerations.

When considering the most important economic trends and features of the first decade of EU-membership of the V4 countries, growth, competitiveness, per capita GDP and obviously the Maastricht-related indicators are worth being analysed. Although one can draw remarkable conclusions from this analysis related to the specificities of the economic development of the four countries in question, the key finding is that Euro-accession is a function of the combination of the existence of the fulfilment of the nominal (Maastricht) criteria, and political determination. They are interlinked and none of the two in itself suffices. Also these two factors will explain the attitude of these countries towards the ongoing and future EU and Eurozone-level EMU reform measures.

In the following section a series of comparative economic data is provided to assess the first ten years of EU membership of the V4 countries.

Table 2.: Growth rate of V4 countries between 2004-2014[9]

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To close the development gap vis-à-vis “old member states” a much stronger economic growth performance is needed over the long run in the V4. The above table shows that basically Slovakia and Poland were able to pull out that performance during the first decade of EU-membership.

The below table somewhat in contradiction to the first one indicates that as regards international competitiveness the V4 countries (including Slovakia) except for Poland are true underperformers

 

Table 3.: Competitiveness ranking 2003-2014.

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Table 4.: Employment level 2004-2013

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As far as employment level is concerned, where even the EU – including Western European countries – in an underperformer, V4 countries except for the Czech Republic could not even reach the unsatisfactory EU-average.

Table 5.: Inflation 2004-2014

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In keeping inflation under control which is one of the Maastricht criteria the Czech Republic’s and especially Hungary’s 10 year performance proved to be especially poor. Hungary’s performance in relation to the long-term interest rate (another Maastricht criteria for euro introduction) was again the most humble (see below). Not surprising that Hungary is the country that spent the longest period (9 years, between 2004 and 2013) under the excessive deficit procedure.

 

Table 6.: Long-term interest rates

 

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Table 7.: Debt 2004-2014.

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The EU as a whole and even more so, the Eurozone was heavily hit by the sovereign debt crisis, which resulted in way above the mark national debt to GDP ratios. In the light of this, V4 countries’ performance in controlling the national debt was a relative success, although in absolute terms all of them experienced a rising debt. Here again, Hungary is a relative underperformer with a debt hovering around 80 percent of GDP (although this is lower than the EU average).

 

 

Finally, looking at the most important Maastricht criteria, one sees, that the EU28 average’s and V4 countries’ deficit developed in a correlated way, with a slight disadvantage at the V4 camp. Two outliers stand out: positive balances for Hungary and Poland. But one has to be very cautious with these peaks: they are the results of the nationalisation of the private pension fund assets that later on have been evaporated without either supporting growth or reducing national debt. More importantly the cost of annulling the private pension wealth will be payed dearly by future generation.

 

Table 8.: Budgetary balance 2004-2014

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Concluding remarks

In contrast to the nineties and early two thousands when Euro-Atlantic accession was the unquestionable central theme of politics, the V4 countries have started to get separated not only in terms of their economic performance but – and mainly – in terms of their overall EU policies.

Poland clearly aims for a regional power status in the EU and in the Eastern Neighbourhood context, wanting to punch over its weight with the help of a historical reconciliation with Germany and in the absence of France as a capable partner for Germany to shape the future of the integration and with the UK withdrawing itself from the European political mainstream. In this light it is not surprising that Poland is doing everything to be in the potential future core, which necessitates a eurozone membership.

By contrast, Hungary that has manoeuvred itself to a quasi pariah status, with its political freedom fight against the EU and with its clumsy geopolitical rapprochement with Russia, clearly turned its back on the EU, shunning eurozone accession for an undefined period. This rather difficult explain from any economic point of view. Hungary is one of the biggest net beneficiaries of the EU budget, although this country has become a clear underperformer in harnessing the economic benefits of membership. Nor is the anti-EU stance explicable from a reasonable geopolitical point of view since it has resulted in international isolation.

Slovakia the only, member of the Eurozone, experienced a major per capita GDP increase, nevertheless still suffering from territorial inequalities, regularly voiced its discontent with EU and Eurozone (see the issue of the contribution to the Greek bailout) policies and measures, but generally follows the political directions coming from Brussels and Berlin.

The Czech Republic is a cautious EU-partner. Like Hungary it is selective in accepting EU reforms and reluctant to join the common currency. Parts of the political elite voice harsh anti-EU and pro-Russian views. Although the mainstream political discourse is not as militant vis-à-vis ”Brussels” as in Hungary.

What seems to be obvious from the comparative economic analysis is that Slovakia as the only eurozone member does not stand out from the general V4 performance level in a striking way )in fact Poland can be singled out as a success story). This reinforces the fact that Eurozone membership is a function of multiple factors, including political decisions and geopolitical benefits.

In 2014 the V4 group is divided not only by its status (Slovakia in, Poland, Hungary, Czech Republic out) but by its political drive as well (Poland: determined to join, Czech Republic being much cooler, Hungary being even hostile to the idea). This situation also determines these countries political stance related to political decisions relevant to EMU reforms. And – as we saw it earlier – EMU reforms will probably have significant impact on the way the European Union is going to develop not only from an economic but also from a political and institutional point of view. With the reinforcement of Eurozone institutions a deeper divide is expected between the EU18 and the rest. This may be an annoyance to Hungary and the Czech Republic but can be a serious geopolitical concern for Poland that wants to get into the inner circle of the EU to enhance its political and geopolitical clout.

The Stability Pact and the Euro-Plus Pact was not signed by the Czech Republic. The Euro Plus Pact which envisages coordination in areas such as taxation was not signed by Hungary either. A clear political divide is visible here. Is the current political situation a long-term “great divide” in the V4 group? As Hungary and the Czech Republic – without a clear indication of an entry date – leaves the timing of Euro membership hovering somewhere around the beginning of the next decade, this divide seems to be stuck and it will probably deepen as the EU18 will push ahead.

A long-term non-membership has significant economic and political consequences. In exchange of an (often sceptically received) higher level of economic autonomy, out countries lack the firepower of ESM, and ECB in crisis situations. Moreover it is obvious that saving a eurozone country is much higher on the agenda of Brussels and Berlin than otherwise. EMU membership is obviously not only an economic but also a geopolitical or even a security issue especially in Eastern Europe and in the Baltics. Individual countries ponder these factors in a different way. Contrary to the facts that the crisis has tarnished the image of the common currency and that eurozone accession has become a more difficult exercise because of economic tensions and a higher level of suspicion in Brussels and Berlin after Greece had lied itself into the elite club, the eurozone is still desirable place to join. Not only – maybe even not primarily – for economic, but for geopolitical reasons. One of the main drives for EMU membership in the Baltic states is security policy which has gained further relevance since the Russian aggression in Ukraine.

The political manoeuvring of the V4 countries does and will take place in the broader context of how the Europe of 28 will react to the pressing economic and political issues ahead. Member states and EU institutions will have to agree on how to guarantee the long-term sustainability of the common currency, and how take the European citizens on board for this, especially because most of the steps need to be taken will have significant consequences on national sovereignty. The grand design of an institutionalized two-speed Europe that makes room for the UK, and maybe Turkey and Ukraine will also be on the menu. All in all the economic, political and geographical setup of the EU will have to be rearranged and the relevance of being a new or old member state will eventually fade away. But at the same time, the differences between individual V4 countries’ EU policies will remain significant, due to mainly national politics and choices of the political class.

From the above analysis it seems obvious that the choices of the political class in some cases – mainly in Hungary – cannot be based either on proper geopolitical, or on economic considerations. Therefore the research analysis of the V4 countries’ economic policies and general EU-policies should have a strong political economy element. A purely economic policy approach in the research of this topic has clearly reached its limits. A political science and political economy approach should follow up.

References

–          European Commission: Five years of an enlarged EU – Economic achievements and challenges. COM(2009) 79/3, Brussels, 2009.  http://ec.europa.eu/economy_finance/publications/publication14091_en.pdf

–          Marján, Attila: Europe’s Destiny, Johns Hopkins University Press, 2010, USA

–          Central Europe fit for the future: 10 years after EU accession – Milan Nic, Pawel Swieboda (ed.). 2014. január 21.CE Policy.org; http://www.cepolicy.org/publications/central-europe-fit-future-10-years-after-eu-accession

–          Bajrektarevic, A. (2014), Europe of Sarajevo 100 Years Later, Routledge – London, UK

–          Krulis, Krytof: Enlargement Ten Years on: New Europe’s Contribution to Single Market. Association for International Affairs. Research Paper 1/2014. Prague, February 2014.

–          Think Visegrad Platform: Between Institutional Engineering and Crisis Management: The Visegrad Voice in the EU Governance Debate;

–          Timo Baas and Herbert Brücker: EU Eastern Enlargement: The Benefits from Integration and Free Labour Movement;

 


[1] Attila Marján: Europe’s Destiny, Johns Hopkins University Press, 2010, USA

[2] Ottmar Issing: Europe: Common Money – Political Union? p. 6. European Central Bank, 1999.

[3]http://www.spiegel.de/international/germany/if-the-euro-fails-europe-fails-merkel-says-eu-must-be-bound-closer-together-a-784953.html

[4]Bajrektarevic, A. (2014), Europe of Sarajevo 100 Years Later, Routledge – London, UK (page 143)

[5]Pisani-Ferry, Jean, et al.: Coming of Age: Report on the Euro Area, Bruegel Blueprint 4. p.4. 2008, Brussels

[6] M. Nic – P. Swieboda (ed): Central Europe fit for the future: 10 years after EU accession  2014. January  21. CE Policy.org; http://www.cepolicy.org/publications/central-europe-fit-future-10-years-after-eu-accession

[7] Attila Marján: EU rule changes force a Visegrad re-think. Europe’s World No. 26. 2014.

[8] See more on this in: K. Krulis: Enlargement Ten Years on: New Europe’s Contribution to Single Market. Association for International Affairs. Research Paper 1/2014. February 2014. Prague.

[9] All data from European Commission, Eurostat

Hungarian economist, PhD in international relations. Based in Brussels for fourteen years as diplomat and member of EU commissioners’ cabinets. Two times visiting fellow of Wilson Center in Washington DC. University professor and author of books on EU affairs and geopolitics. Head of department, National University of Public Administration, Budapest.

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UK’s post-covid foreign policy

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UK’s foreign policy post corona is likely to be driven by some crucial economic factors. On the one hand, it is likely to work closely with countries like US, Japan Australia and India, to reduce its dependence upon China. On the other, UK can not totally bank on the US for achieving its economic goals, given the unpredictability of US President, Donald Trump.

UK needs to look at new Free Trade Agreements (FTA’s) and also be part of arrangements, such as the Trans Pacific Partnership which enable it to diversify it’s supply chains

Important economic decisions of UK with a bearing on UK-China economic ties

UK has taken some important steps with an eye on enhancing self-sufficiency, and reducing reliance on China given the changing environment.

The Boris Johnson government has set up a committee — ‘Project Defend’ — which seeks to study UK’s economic dependence with hostile countries (with a specific thrust on China) especially for sensitive imports. Based on the findings of this report, UK will work towards relocation of pharmaceutical companies. While changing supply chains over night may not be an easy task, this is an important decision which the Boris Johnson Administration has taken.

UK’s recent decision on Huawei

The Boris Johnson Administration has also recently taken a decision to reduce Huawei’s participation in the 5G network to zero by 2023. In January 2020, Boris Johnson had given a go ahead to Huawei’s participation in the ‘non-core’ element of the 5G network, with important restrictions, as well as a 35% market share cap. This decision drew flak from a section of Conservative Party politicians, who for long have been arguing that the UK needs to be cautious with regard to close economic ties with China, since this has serious security implications. The Trump administration had also expressed is displeasure with the Boris Johnson administration. The US President and senior officials in his administration had expressed their unhappiness, saying that this decision could have an impact on security cooperation between both countries.

In the aftermath of the coronavirus pandemic, ties between UK and China have gone downhill (senior officials of the Johnson administration have criticized China for suppressing information with regard to the outbreak of the pandemic), and Johnson’s decision was driven by two factors. One increasing pressure from Conservative MP’s who had threatened to vote against the government’s decision and second the fact, that UK is keen to go ahead with an FTA with the US (there have been differences between the US and UK however on the issue of the FTA, with the US urging UK to make a choice between China and the US)

Apart from this, the recent US sanctions imposed on Huawei, have also played a role in Johnson’s decision of reducing Huawei’s participation by 2023 (the Trump administration has made it compulsory for foreign manufacturers using U.S. chipmaking equipment to obtain a license before being able to sell chips to Huawei).

D 10 network

Interestingly, the UK has also proposed, that a group of 10 countries, dubbed as D10, joins hands to provide an alternative to Huawei’s 5G network and other technologies with the aim of reducing dependence upon China. The proposed grouping should consist of US, UK, Japan, South Korea, India, New Zealand, Australia,

UK has thus taken the lead in providing an alternative. Significantly, US President Donald Trump has also stated, that he is keen to expand the G7 and include not India, South Korea but also Russia.

UK also keen to play an important role in the TPP

While on the one hand, the UK is trying to reduce its dependence upon China, by joining hands with the US and like minded countries, on the other UK is also seeking membership of the Comprehensive and Progressive Agreement for Trans Pacific Partnership (TPP) which consists of 11 members (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam).

While the idea of the TPP was proposed by former US President, Barack Obama, though the first decision taken by Trump was to withdraw from the agreement. Japan has been playing an important role in the CPTPP, given it’s strategic importance. Efforts are also being made to expand its membership, so that dependence upon China is reduced.

The UK faces numerous challenges, while on the one hand it does need to reshape the economic relationship with China, on the other hand this can not be done overnight, so enhancing FTA’s and joining the CPTPP is important in this context. 

From a purely strategic perspective, the UK-US relationship has been important and with Johnson and Trump at the helm, and increasing convergence on attitudes vis-à-vis China, this is likely to get further strengthened (though there could be differences on both economic and geo-political issues). The idea of the D10 grouping mooted by UK has also sent a clear message, that in spite of numerous economic challenges, the UK is keen to emerge as an important player, in its own right, in the post covid world order.

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Europe

What is Multilateralism in European Terms?

Dr. Andrey KORTUNOV

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The term “multilateralism” is not specifically elaborated in Russian international relations theory. For a long time, it has remained in the shadow of the much more popular term “multipolarity,” although the latter is gradually being replaced in Russian literature by the term “polycentrism.” Sometimes, it seems that “multilateralism” and “multipolarity” are used in Russian scientific and political discourse as synonyms, both reflecting the democratisation of the international system that began with the collapse of the “unipolar world” at the beginning of the century.

Yet, “multipolarity” is obviously not the same as “multilateralism.” The former denotes pluralism in the distribution of power in the international system among three or more independent decision-making centres, while the latter describes a possible way for these centres to collaborate. Without multipolarity, there can be no multilateralism, since a unipolar or bipolar system simply does not provide enough actors for multipolar interaction. But multipolarity does not necessarily imply multilateralism, since relations within a multipolar system can theoretically come down to a set of bilateral relations between individual centres of power.

In the United States, at least prior to the Trump administration, multilateralism was formally considered the preferred foreign policy practice, especially in relations with allies. For example, NATO is a multilateral military-political alliance and the North American free trade area (NAFTA, recently superseded by USMCA) is a multilateral trade and economic integration initiative. Yet, the United States has acted as the undisputed leader in all multilateral agreements, which has raised questions as to how multilateral these agreements really are. As for Donald Trump, he has expressed doubt as to whether multilateralism is an effective means for promoting American interests at all, preferring, wherever possible, to negotiate with partners in a bilateral format.

Unlike the United States, EU countries consider multilateralism not only a convenient format for foreign policy but one of its fundamental principles. This principle is embedded in many official EU documents, including the Treaty on the European Union (Article 21). The commitment to multilateralism was once again reaffirmed last spring when France and Germany announced the creation of the international Alliance for Multilateralism, already joined by about fifty countries from various regions of the world. “Multilateralism” in European political discourse is, however, often little more than a uniting slogan, representing one of the basic values of the European Union that distinguishes the EU from other global players who prefer a unilateral foreign policy (USA, Russia, China).

That is why the essay Multilateralism: Variants, Potential, Constraints and Conditions for Success, authored by one of the pillars of modern German foreign policy thought, Professor Hanns Maull, and published by the German Institute for International and Security Affairs (SWP), merits careful reading. For over twenty years, Hanns Maull has held the Foreign Policy and International Relations Chair at the University of Trier in Germany and is now a professor at the Johns Hopkins University in Bologna. Let us discuss the main points of his essay.

Interpretations of the Term

The author of the essay offers the reader three levels of understanding of multilateralism. The first level of understanding, designated by Maull as Multilateralism I, reduces this concept to diplomatic interaction between three or more states (or other actors) in international politics. This understanding does not present any difficulties or controversies: multilateralism comes down to formal issues and is contrasted to unilateral and bilateral formats. Nor does this understanding offer any substantive content: participants in the multilateral format can pursue any goals and base their cooperation on any principles that suit them. From the essay, we may conclude that, for example, the three agreements made in the second half of the 18th century between Russia, Prussia and Poland on the partition of the Polish–Lithuanian Commonwealth fall well under the definition of multilateral diplomacy, since all three parties participated in all the agreements.

Modern German foreign policy employs a broader interpretation of multilateralism, designated by the author as Multilateralism II. The essence of the German understanding is that multilateralism, in addition to formal criteria, should also include substantive criteria. Therefore, it includes interaction of more than two actors with action within the framework of international organizations, oriented towards the principles and norms and carried out in accordance with the rules and regulations that underlie those organisations (such as, for example, the United Nations Charter). In this version, a multilateral foreign policy stands not only for a specific diplomatic approach but also for a commitment to certain principles, substantive goals and methods of foreign policy. Ultimately, we are talking about a limited set of common values that do not exclude conflicts between individual participants. A possible example of Multilateralism II is probably the way European countries cooperated within the framework of the Conference on Security and Cooperation in Europe (CSCE) in the 1970s and 80s, while maintaining a mostly competitive relationship between two different social and political systems.

Historically, this understanding of multilateralism is closely connected with the concept of the Western liberal world order, the foundations of which were laid in 1945 and which began to claim universality after 1990. Yet, this does not mean that Multilateralism II must inevitably disappear along with the decaying liberal world order. It may be based on other values and principles; the main element is the creation of common norms in world politics, to be agreed in a multilateral format. In fact, multilateral mechanisms should enable us to agree on common norms and values, a universally desirable world order and regulatory practices acceptable to each individual participant in multilateral negotiations.

Multilateralism III represents a more radical understanding of the term. Whereas the main task of Multilateralism II is to achieve the broadest possible compromise on the basic issues in the regulation of international life, despite significant differences in the interests of the participants, Multilateralism III is to find “right” or “appropriate” solutions to the problems of world politics, i.e., achieve a transition to “effective global governance.” If Multilateralism II proceeds from what the participants in the system think achievable, Multilateralism III operates in terms of what is desired and what should be done. In the first case, we are talking about a tactical alliance of players with very different aspirations and, in the second case, about a strategic partnership of like-minded parties who interact with one another to achieve common goals.

Accordingly, in order to move from Multilateralism II to Multilateralism III, two complex problems must be resolved. First, tactical allies should become strategic partners, that is, agree on a general picture of a desirable future, on practical steps to make this future possible, on an equitable distribution of the burden and costs associated with this transit, etc. Second, international institutions must be established that are capable of ensuring effective coercion of independent players in the international system to implement multilaterally adopted decisions. As history shows, for example, in the case of multilateral efforts to combat climate change, even a general agreement on the principles, values and goals of cooperation does not necessarily guarantee that the international community will move towards its stated goals.

Why is a “Multilateral” Foreign Policy Necessary?

Proponents of multilateralism (any of the above variants) rely in their reasoning on three interrelated assumptions: regarding the magnitude of impending global challenges; the persistence of a trend toward power diffusion in world politics; and the great potential of multilateral cooperation.

The first assumption, according to Maull, needs no detailed justification. Some of the global challenges — from climate change and a possible environmental disaster to uncontrolled development of new technologies and the threat of a global nuclear war — call into question the continued existence of mankind. Another thing is equally obvious: many of these challenges place extremely high demands on the quality of global governance, including not only cooperation between states but also involvement of non-state players — private businesses, international organisations and civil society. Constructive co-operation, even between such large states as China and the United States, will not in itself suffice to solve the problems. Within the framework of today’s predominantly Westphalian international system, achieving a new quality of global governance does not appear feasible.

Power diffusion is likely to continue. Consolidation of the world based on a revival of a unipolar or even rigid bipolar system seems unlikely. Nation-states will remain the main players in world politics, with preservation (at least formally) of the principles of sovereignty and territorial integrity. At the same time, the number and international activity of non-state players will continue to grow, undermining the hierarchy in world politics and economics. Traditional formats of international cooperation will increasingly prove ineffective and the need for complex new multilateral and multi-level formats will grow. A multitude of multilateral schemes crop up in international relations, which could not have existed even theoretically throughout human history.

Proponents of multilateralism suggest that the transition to a new level of global governance will make it possible to use resources more efficiently, streamline strategies and priorities, avoid duplication of efforts, etc. Maull, however, entertains serious doubts about this assumption. First, transferring even some of the functions of national states to multilateral structures is already difficult since the states themselves have long become much less omnipotent on their own territory. Second, the effectiveness of existing multilateral structures — from the United Nations and the European Union to the International Monetary Fund and the World Bank — is also controversial. Global governance based on multilateralism has yet to prove its worth.

Multilateral Diplomacy: Benefits and Challenges

The obvious advantage of multilateral diplomacy, according to the author, is its inclusive nature: only multilateralism allows the broad coalitions necessary for resolving complex problems to be formed. In addition, multilateralism enhances the international legitimacy and sustainability of any agreements. Of course, this only applies to situations when the multilateral coalition is sufficiently representative, that is, when the problem is solved bearing in mind the positions and interests of all significant players.

On the other hand, it is precisely these features of multilateral diplomacy that, in some cases, turn out to be its downfall. It can be difficult to focus the agenda in multilateral negotiations, as each of the participants has its own priorities. Multilateral negotiations usually require more time and resources than bilateral ones, not to mention unilateral actions. Procedural issues are much more difficult to negotiate in a multilateral format than a bilateral one.

Decisions made following multilateral negotiations often turn out to be half-hearted, fuzzy and declarative, as negotiators focus on the search for the “lowest common denominator,” allowing them to keep the support of the maximum number of contracting parties. Multilateral negotiations can be blocked by any of the participants. There is an inverse proportion between legitimacy and effectiveness: high legitimacy is achieved at the cost of low effectiveness and vice versa. The same correlation usually applies to the time needed to reach an agreement and its stability: agreements concluded in a scramble are generally less stable and reliable than ones resulting from lengthy negotiations.

As a general rule, we can conclude that multilateral and representative formats have no alternative when it comes to fundamental systemic problems in world politics or economics. Even so, when it comes to the need to respond quickly to a sudden challenge, the actions of small groups of players who are more interested in solving the problem may be more effective. Of course, you have to pay with a part of legitimacy for efficiency and effectiveness.

There are many other problems and difficulties associated with multilateralism. For example, it is not entirely clear how to distribute the responsibilities and burdens associated with implementing an agreement “fairly” among all the participants in multilateral negotiations. The question of what measures should be taken with respect to those who take a selective approach to multilateral agreements or even sabotage their implementation is also not a simple one.

In multilateral negotiations, mutual confidence between participants is more critical than in bilateral negotiations because there is always a fear that groups of participants might coordinate their negotiating positions behind the scenes so that the others will have to face a consolidated opposition promoting unilateral interests in a coordinated manner. Digressing for a moment from the discussion of Maull’s essay, we may note that it was precisely such a problem that arose in the work of the Russia–NATO Council, established at the NATO–Russia Summit in Rome in May 2002. The Russian side proceeded from the Council becoming a fully-fledged multilateral organisation with each participant acting in its individual capacity. Western countries turned the Council into a mechanism for bilateral cooperation between NATO and Russia, de facto abandoning the principle of multilateralism. A similar situation arose over time in the Group of Eight, after it was joined by Russia. On many fundamental issues, Moscow was forced to confront a combined coalition of the other seven members of the G8. The transformation of a formally multilateral format into a virtually bilateral one significantly reduced the effectiveness of the two negotiation platforms, both for Russia and, ultimately, for its Western partners.

Conditions for Effective Multilateralism

Given the above problems, we can formulate several conditions that might allow multilateral negotiation to be successful. These conditions relate mainly to the approaches and expectations of negotiators. First, participants should be interested in achieving sustainable results, not winning a diplomatic “victory” over partners by securing tactical advantages. A diplomatic “victory” of this kind could undermine the agreement at some point and turn it into a defeat.

Second, participants must be orientated on compromise, including a willingness to make concessions. Practice shows that violation of a reasonable balance between concessions by the parties inevitably undermines the stability of the agreement.

Third, negotiators should proceed from the principle of “diffuse reciprocity,” that is, be prepared to demonstrate solidarity with partners in difficult situations, sacrificing their immediate interests for the sake of longer-term gain, if necessary.

Fourth, negotiators must have “internal legitimacy”, that is, be able to make commitments on behalf of those they represent. This means that only strong leaders with broad political support in their own countries can be successful negotiators.

Fifth, implementation mechanisms should be identified from the outset. If these conditions are not met, multilateral negotiations will prove useless at best and harmful at worst, acting as a smokescreen masking the unilateral actions of certain players.

The author emphasises that the success of multilateral diplomacy paradoxically depends on the willingness of participants to make unilateral and bilateral steps. Practice shows that, behind any success of multilateral efforts, there is always a leader or group of leaders who take the initiative in determining the agenda, prioritising its issues and maintaining the negotiation schedules, as well as acting as mediators in reaching a compromise. The multilateral format does not cancel out and will not replace the bilateral format but it is a necessary addition to or prerequisite for the latter. An example of such a combination is the bilateral German–French negotiations on creating the Alliance for Multilateralism.

Alliance for Multilateralism

The Alliance for Multilateralism, as an informal association of countries promoting multilateral approaches to resolving international problems, remains a flagship foreign policy project of Germany. Although this initiative has a very brief history, its work allows us to draw some conclusions about the possibilities and limitations of Multilateralism in world politics.

First of all, the initial meeting of interested countries was held on the sidelines of the UN General Assembly in New York in September 2019 by seven states: Germany, France, Canada, Mexico, Chile, Ghana and Singapore. These countries are very different in size, economic development and political systems. For example, according to the Freedom House classification, Mexico and Singapore are among the “partly free” countries. So we may conclude that the desire for multilateralism (perhaps even in the format of Multilateralism II) is not a feature inherent exclusively in liberal democracies.

In addition, the first practical steps made by the Alliance confirm the assumption that multilateral structures tend to focus on relatively uncontroversial, technical issues, where there is more chance of developing a common position. One such issue was the Alliance’s proposal to ban lethal autonomous weapons systems (even though the countries most actively working on such systems did not participate in the Alliance). More complex issues, such as freedom of trade, the future of international law and international organisations, human rights, etc., were left on the periphery of the Alliance’s attention. We should add that most of the decisions taken by the Alliance are to be implemented by the interested players on a voluntary basis.

Such a choice of priorities raises the fundamental question of whether the transition to a new level of global governance can go from bottom to top — from specific, depoliticised and relatively simple issues to more complex, sensitive and politically loaded problems, or whether it should go from top to bottom — from general, politically determined, fundamental problems to technical details. If we assume that a bottom-up transition is feasible, the Alliance’s work should be welcomed and supported in every way. If the only possible transition is top-down, then the Alliance’s work may even be counterproductive because it creates the illusion of moving forward where, in fact, no progress is being made. Replacing strict international legal rules with voluntarily assumed obligations, for all its attractiveness, can erode the foundations of the modern world order without creating any effective alternative.

It Is Not That Simple

The essay by Hanns Maull leaves us with the feeling that only the very first steps have been taken so far in studying the complex problems of multilateralism and the number of questions that arise significantly exceeds the number of available answers. In any case, it seems obvious that multilateralism (just like, for example, multipolarity or polycentricism) can in no sense be considered a universal mechanism for resolving all international problems. The multilateral format, as the author rightly notes, has many significant drawbacks: it is cumbersome, complex, slow and often has disappointing results. Multilateralism cannot and will not replace the bilateral approach and unilateral foreign policy actions.

Even so, one may agree with the author that multilateralism has its obvious comparative advantages. It would be a mistake to ignore or downplay such features of multilateralism as democratism, representativeness and the legitimacy and sustainability of the results of multilateral negotiations. Multilateralism is a chance for relatively weak players to make their voices heard and their interests taken into account. It is also an opportunity for relatively strong players to make their leadership more civilised, less burdensome and less intrusive for all other participants in the international scene.

Ultimately, however, multilateralism, like any other format of diplomatic activity, will always be as effective or ineffective as the players who practice them want. So far, most of these players are guided by an understanding of multilateralism somewhere between Multilateralism II and Multilateralism I, gradually sliding from the first to the second. Reversing this negative trend to start moving towards Multilateralism III will require tremendous efforts.

From our partner RIAC

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Europe

A New Wave of Euroscepticism in the Heart of Europe?

Lisdey Espinoza Pedraza

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As we are about to enter a new decade, the European Union seems to be facing one of its worst existential crises since its conception. Euroscepticism is not something new; ever since the efforts to achieve the European integration started in the 1950s political parties that made of anti-integration their main platform started to mushroom throughout the continent. the current pandemic, lockdown measures, an economic crisis that looms seem to be exacerbating divisive trends in Europe.

Most recently, the 2008 and 2009 financial crises that brought radicalism, populism, and fringe politics to the forefront of the political agenda again, especially in southern Europe which felt the worst effects of the economic downturn: Spain, Portugal, Italy, and Greece. six years later, in 2015, the migrant crisis further deepened the already existing fractures among member states, and particularly throughout Eastern Europe, the continent witnessed can you surge in populist narratives, however this was also the case in countries that had been traditionally immune to such rhetoric such as the Scandinavian countries, and  Sweden in particular.

There is a false sense of Swedish exceptionalism for welcoming refugees. it is true that Sweden has been a generous safe haven for migrants, and they have received more refugees than many other European countries. However, one cannot assume such policy truly reflects the sentiments of the population. soon after Sweden started welcoming migrants, political parties started to turn to an ultra-nationalist, anti-immigrant rhetoric blaming massive immigration for a possible collapse of their health, social and welfare systems.

Sweden is not an isolated case, populists have had considerable media exposure and have successfully started to alter the political agenda of the European Union in recent years. they cannot and should not be taken lightly. radical political parties do have realistic chances to become mainstream alternatives and attain power in many European countries such as  France, Italy, Greece, The Netherlands, Austria, Poland, Hungary, and the UK.

Populism is particularly appealing to those that feel they do not belong in a new ever-changing reality because of its reactive nature. populism reminds voters of glorious pastthat is long gone because of the actions of those currently in power. populism thrives on the division  of “us” vs “them”, and on the need to protect national institutions and inherent values that are being eroded and attacked.

While Euroscepticism trends started to subside ask the European economies started to grow and the migrant inflow started to stabilise , there was a widely spread false sentiment of stability and the assumption that Euroscepticism would wither away. Brexit and the domestic and international chaos it caused in the UK and in Europe reinforced this perception. soon after the failure in negotiations and the never-ending extensions of the process did translate into a drop in the demands for a membership referendum in most European countries. However, the current development may as well reverse that trend  

Populist leaders across the continent have already started to use the pandemic to legitimise many of their prior ideological stances: protectionism; anti- globalization; anti-immigration policies; closure of borders; nationalism and tougher law and order policies. Italy so country that could dictate where European politics will head to in coming months or years. Italy has been hit particularly hard in this pandemic, not only by the high human cost, but also by the dark economic prospects for the country. Italy will be stricken by the worst economic contractions in Europe and its debt  is expected to rise two over 150% of their GDP. Italy is therefore set for one of the longest recoveries in Europe. with all this into account, the idea that Italy could follow the UK in its anti-European mode  is something that should not be that lightly put away.

Italy has been suffering from a wave of European anti integration sentiment since the 2008 crisis, according to a survey by the Tecné Agency, 42% of Italians are in favour of withdrawal from the EU, by December last year, only 26% of them supported the idea. This percentage could increase if Italians are not happy with post-pandemic measures and could further enflame North and South existing tensions. the pandemic has struck pre-existing weaknesses and frailties and has played on a sense of abandonment. populists in Italy are not an exception amidst this pandemic: they are returning to their very familiar core book: they are portraying themselves as the only answer to protect the people.

Italians feel they were abandoned by the rest of the European Union to fend for themselves; even now when the European Union has decided on a massive asset-purchase scheme of Eurobonds or coronabonds, the Union is blind to the fact that economies among their member states will be affected differently. these has also reinforced the belief that this measure is contrary to the solidarity principle the union is based upon. Ideally, to prevent widespread feelings of inaction a lack of solidarity, Germany and France should possibly toy with the idea of a shared debt, especially when there are already apparent cases of serious insolvency from southern member states. this can also potentially limit the support for populism across the continent.

Italy in particular he’s a worrying case, unlike the UK with Brexit, Italy is a founding member of the European Union and if they were to hold a referendum on European Union membership with the same result as the 2016 one in the UK it would be catastrophic for the European Union’s credibility and legitimacy. this is a very realistic result as the post pandemic continues to impact on the continents social, economic, and political cohesion; and especially in countries, like Italy, which have been flirting on and off with populism, and they seem to be a crisis away from becoming the next Brexit or the next debt disaster in Europe.

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