Connect with us

Europe

The Brexit issue

Giancarlo Elia Valori

Published

on

The issue of Brexit, namely Great Britain’s exit from the European Union, regards the age-old issue of what really drives the electorate: myths, real or imaginary identities, or short-term material interests? For the great political science and philosophical school of Italian elitism, ranging from Pareto to Gaetano Mosca, the political mechanism is substantially identity-based.

As the Genoese sociologist and economist Vilfredo Pareto maintained, there exist six classes of residues that he positivistically listed as follows: the instinct for combinations; the persistence of aggregates or group persistences (regarded as the old ideals and political myths); the need for expressing sentiments by external acts (activity, self-expression); the residues connected with sociality; the integrity of the individual and last – at that time but not today, with the full obsession of primary instincts and urges – the sex residue.  

With specific reference to derivations, the actions are not logically connected to the result, but they are always so in the conscience of those who take action. Regardless of the political form of the State, democracy, oligarchy, totalitarianism, communism, both residues and derivations provide a logic to the pseudo-rational instincts and symbols which drive to action.

Hence, again for Pareto, the Brexit choice regards two myths: the myth of economic growth for those who still want the United Kingdom to remain in the European Union or the identity myth of the old British Empire, or the de facto UK extraneousness to European politics and economics, in short, to the myths which created the European Union.

These myths regard the end of the long European civil war, as, from the French Revolution (or from 1914) to the Second World War, historians such as Ernst Nolte or, from another political perspective, Enzo Traverso called it.

The myth of peace in Europe through the expansion of trade and domestic revenue, as well as the creation of another myth, namely the myth of Europe as new homeland. Two geopolitical and economic myths in danger. Income growth is not recorded and will not be recorded for a long period of time. The European homeland entails the creation of rituals and symbols replacing the national ones, which has not happened yet.

But Great Britain is de facto alien to the logic of the European civil war: it certainly fought the two world wars, but with mindset, interests and heroism connected rather to its founding myths as autonomous Imperium. Only to yield its global empire to the United States, so as to repay the credits granted for the war, namely to a country which had backed the war effort and participated in it significantly and, with the Cold War, had to keep the dual global confrontation with the USSR. A translatio Imperii which, probably, has not been digested yet by British voters, at Pareto’s “residues” level.

In Gaetano Mosca’s opinion, the ruling class is the whole of hierarchies that materially or morally run a society. Today, in a context of universal globalization, of Pareto’s residues and derivations which are all defined and expressed in the same symbolic languages, where are Mosca’s ruling classes within nations? Can these ruling classes and “moral and material” hierarchies support the inevitably different needs, interests, myths of the various peoples, not yet united in a global large liquid mass?

In each EU Member State globalization has created asymmetric shocks which, managed by mediocre ruling classes, have been magnified in the individual nations, thus creating real transfers of sovereignty. Needless to say, this is Italy’s case, while it is not the case of Great Britain which, during the years of Thatcherism, had followed a crash diet to participate in the defilé of globalization before it began. This is also a central theme to understand Brexit from the philosophical and political viewpoint.

Hence is it currently possible to have cultural globalization applied to the development of political myths and their para-rational connection to interests? Is a unified political myth otherwise possible – a myth which, for irrelevant details, is defined and expressed in the symbolic language of every country? Yes, it is possible with specific reference to the myths of consumption, sexualized and reduced to instinctual images from the mass-media, but certainly not as regards the myths and modes of production, which cannot yet be universalized.

Suffice to consider the differences existing between the made in Italy craftsmanship and the Manchester-style factory. In this regard, Geminello Alvi spoke of the standardizing and impersonal “Chinese ideal” of “capitalism”. This is what I would currently call “Gaetano Mosca’s dilemma”. Are today the ruling classes truly such and are they able to put myths and interests together? The issue lies in establishing whether globalization entails a specific political mythology and its Mosca-style ruling class or not.

Let us revert, however, to Brexit in a strictly economic and financial sense.

Considering that foreign trade is the driver of all contemporary economies, Britain is no exception to the rule: exports, including financial products, account for about 30% of the British GDP. The EU, however, accounts for over 50% of all British exports.

On the other hand, over 50% of UK imports come from the European Union, with over half of these imports coming from Europe which serves as “intermediate asset,” namely useful to produce other made in England goods and services.

About 10% of the total EU exports go to Britain, with a share of goods and services which is about 36% (for services) compared to 64% for manufactured goods. Hence, in bilateral trade between the UK and the EU, trade issues are proportionately more important for Great Britain than for the rest (the rest?) of Europe. Furthermore, within the EU, Great Britain is the largest user of Foreign Direct Investment (FDI), with about 50% of FDI coming from Europe and 30% from the United States.

Moreover, it is well known that, since the end of the British rule in Hong Kong – which Margaret Thatcher accepted in 1997, with the last Governor, Chris Patten, who burst into tears – the real financial boom of the London Stock Exchange has started.

The London Stock Exchange is the one which regulates (or owns) most of European financial markets. A record achieved in spite of the EU and certainly not thanks to it. British industrialists point to collapse scenarios, should Brexit be voted by the UK electorate. The Confederation of British Industry (CBI) maintains that UK’s leaving the EU would lead to zero economic growth as early as 2017 and the following year.

Without a free trade agreement following Brexit within 2020, the British GDP might fall by 5% while, according to other scenarios defined by the City investment banks, the GDP would anyway decrease by 3% even with a new trade agreement with the former European partners.

The number and quality of British jobs would be particularly affected, with unemployment which would rise from the current 5.1% by additional three percentage points. Over 80% of the companies associated with CBI believe that Brexit would be a disaster for the British economy, with an estimated cost of 100 billion pounds. In many ways and to many extents, the opinions against UK’s stay in the EU are not less rational.

Obviously the UK exit from the EU would lead to the use of tariff barriers for British goods and services in the European single market, not to mention the difficulty in renegotiating the trade flows with the United States and China, after becoming an economy without the EU size, mass and volume. Obviously the Brexit advocates know this and do not deny the data reported by those who support the British presence within the European Union.

There are the British contributions to the European budget, which are remarkable – and we can still hear the Thatcherite cry “we want our money back!” at the EU meeting of 1980, as well as the speech delivered by the British Prime Minister in Bruges in 1988, when she thundered against “the European super-State exercising a new dominance from Brussels”. The UK contributions to the EU are certainly substantial: for 2015, they amount to as many as 10.4 billion pounds, with an increase equal to 1.3 billion pounds compared to forecasts. However, they account for 0.5% of the UK GDP.

Hence, first and foremost, the UK would save on contributions, but the Brexit advocates think that the difficult action of reconciling the interests of 28 different countries could never foster the British economic interest in global trade negotiations. Furthermore, the Brexit partisans believe that the UK exit from the EU would even foster the economy, since it would enable the British industry to avoid the EU countless laws and regulations. Hence the UK would lose part of the EU-28 market but, by capitalizing on its ties within the Commonwealth, it could enter the new market-world, without the fetters and constraints, reins and restraints of EU regulations.

The Brexit advocates also say that if the large European market is designed – as maintained – to reduce prices, optimize competition and stimulate trade and economic competitiveness, this holds true only if all EU countries are economically identical and work to their full potential. Otherwise for some EU Member States there may be – and, in fact, there are – forms of protectionism hidden in so many regulations which seem to benefit everyone. In fact, considering data, Great Britain’s new growth has the same shape and the same pace as the United States, and not as Germany or the rest of the European Union.

As the Brexit partisans say: “It is Europe that needs us, not the opposite”.

And here the rationality of Pareto’s derivations meets the old mental residues of the Rule Britannia and the special relationship between the United States and the United Kingdom, two countries united by many interests and separated by a common language. Here Great Britain’s traditional geopolitical obsession, namely Germany, comes back again. For the Brexit advocates the EU real problem is not Britain, but precisely Germany. Greece has very quickly turned into an export country through the collapse of imports. And this is what Germany wants, because it has to manage its booming exports and it uses the EU as its domestic market, without anyone requiring Germany to reduce its trade surplus.

Hence, for the Brexit partisans, there is a geoconomic problem, namely Germany; a purely free-trade matter, namely the impossibility of really serving the interests of all 28 EU Member States; and, ultimately, the fiscal union – a subject matter never denied before – which never works to promote underdeveloped areas, as is easily demonstrated in the European context.

The British observers who support Brexit view the Union as a giant floundering in an irreversible crisis: in 1973, when Britain adhered to the EU, and many countries were not yet members, the European GDP accounted for 37% of the global GDP. According to the most favourable estimates, in 2025 the EU will only account for 22% of the global GDP. The countries which currently dominate the market-world are the United States and China; even the Commonwealth, as a whole, is larger and performs better than the EU.

In 2020, the workers/pensioners ratio will be 3 to 1 and in 2050 it will be 2 to 1 – namely impossible to sustain – due to technological backwardness, but above all to the generalized aging of the European population.

For the Brexit advocates, the mass of regulations and restrictions for goods made in the UK is hard to swallow and digest: since 2010 the EU has adopted 3,500 new laws which somehow relate to UK companies and their interests. For Great Britain alone, the cost of bureaucracy amounts to approximately 4-5 billion pounds – and this cost is not comparable to the national contribution to the European Union. Dysfunctional bureaucracy, always looking for a sort of “preferential clause” for some Member States, which generates an indirect cost of trade rules for Great Britain equal to 7.6 billion pounds per year.

And since the Lisbon Treaty entered into force in December 2009, the cost of regulations for British companies has amounted to 12.2 billions in terms of extraordinary standards. Furthermore, the Brexit advocates argue that Great Britain’s weight within the EU has dropped sharply: in 1973, when the UK adhered to the European Union, it had 20% of votes, while currently the British government can rely only on 9.5 votes.

Again at financial level, the Brexit partisans do not want the financial transaction tax, the FTT based on the old Tobin Tax model, a tax enshrined in the EU regulations last January. All the analysts who are in favour of Brexit, however, agree on a geopolitical factor: Europe’s irrelevance for Great Britain. This geopolitical factor is connected to the opinion that the British strategic ideal is a balanced Europe, without a leading country, in which the role of power brokers, mediators and strategic leaders can be played.

On the other hand, the advocates of UK stay within the EU maintain that Brexit would diminish the role played by the London Stock Exchange on the rest of European financial markets, attracted by the Stock Exchange of Frankfurt or Paris. Moreover, Ireland would pay a very high price for Brexit, considering it supplies 35% of British agricultural and food products, and it will also be affected by the British natural gas imports after Brexit. Furthermore, Brexit impact on the pound could strengthen the Euro against the British currency, as is already happening.

In short, if Brexit occurs, the EU will lose a large economic market, the second of the European Union, over and above the euro area. It will become increasingly irrelevant at geopolitical level and, above all, it will point the way out to all dissatisfied EU countries, thus creating a likely domino effect which could lead to the end of the European Union or to its economic and political irrelevance.

But there is more: will Brexit – the full recovery of British sovereignty – favour the creation of a single European State to better manage strategic and economic emergencies, in addition to huge immigration flows?

Or will the union rely on a “United States of Europe” model and perspective so as to avoid the EU collapse, but at what pace and for which purposes?

Great Britain is an independent military power; it retains a seat in the UN Permanent Council and, regardless of Brexit, it has no evident interest in adapting to European strategic unification processes.

We could even think of an exchange, with which Great Britain avoids every discrimination against the City, in exchange for UK’s greater involvement in Europe’s collective security. Not to mention the new tensions which would emerge within NATO after Great Britain’s exit from the EU. If identity wins – which, as we have seen, is also based on rational grounds and arguments – we will have Brexit. Conversely if, in the forthcoming referendum, we have an at least apparently “rational” vote, Great Britain’s exit from the EU will be avoided. At least for now.

Advisory Board Co-chair Honoris Causa Professor Giancarlo Elia Valori is an eminent Italian economist and businessman. He holds prestigious academic distinctions and national orders. Mr. Valori has lectured on international affairs and economics at the world’s leading universities such as Peking University, the Hebrew University of Jerusalem and the Yeshiva University in New York. He currently chairs “International World Group”, he is also the honorary president of Huawei Italy, economic adviser to the Chinese giant HNA Group. In 1992 he was appointed Officier de la Légion d’Honneur de la République Francaise, with this motivation: “A man who can see across borders to understand the world” and in 2002 he received the title “Honorable” of the Académie des Sciences de l’Institut de France. “

Europe

The return of a “political wunderkind”: Results of parliamentary elections in Austria

Published

on

At the end of September, the Austrian People’s Party (ÖVP), led by the former Chancellor – the 33-year-old “political prodigy” Sebastian Kurz – once again came out on top in snap parliamentary elections. According to a preliminary count, to be finalized on October 16, the ÖVP secured 37.5 percent of the vote, and will take 71 of the 183 seats in the National Council (lower house of parliament).

Political commentators still predict serious problems Sebastian Kurz may face in putting together his new Cabinet. What consequences will the outcome of the September 29 vote have for Austria and for Europe as a whole?

The snap general election in Austria followed the publication of secret recordings in May, which led to the collapse of the ruling coalition of the conservative, center-right Austrian People’s Party and the “far right” “nationalist” Freedom Party (FPÖ). In the July 2017 video, published by the German newsmagazine Der Spiegel, the leaders of the Freedom Party are heard promising government contracts and commercial preferences to a woman, posing as the niece of a Russian oligarch on Ibiza, Spain. As transpired later, the hidden camera recording had been arranged by journalists dissatisfied with political gains, made by the FPÖ.

The results of the September 29 vote showed that while the “Ibiza scandal” had seriously undermined the Austrian voters’ support for the “ultra-right,” it simultaneously bolstered the positions of the ÖVP, which won nine more parliamentary seats than it did in the 2017 election. The center-left Social Democrats (SPÖ), who have dominated much of the country’s postwar politics, fell to their worst ever result with 40 seats – 12 short of their 2017 result. The Freedom Party suffered massive losses ending up in third place, losing 10 percent of the vote and winning just 31 parliamentary seats – 20 less than in 2017. The Greens (Die Grüne Alternative), previously not represented on the National Council, won 26 seats, and the liberal NEOS/New Austria party won 15 mandates, thus adding five seats to their previous number.

The People’s Party thus confirms its status as the country’s leading political force, winning a second back-to-back election for the first time since the 1960s. Most observers believe that the conservatives owe much of their electoral success to Sebastian Kurz, a young politician who, already as a former foreign minister, led the ÖVP in the spring of 2017, amid the growing popular discontent with the “triumph of political centrism.”

According to Fyodor Lukyanov, the chairman of the Council on Foreign and Defense Policy, just as the traditional parties kept promising their supporters “even more stability and predictability of the whole system,” the people were getting increasingly worried about the watering down of “the very essence of politics as a clash of views and mindsets.” Meanwhile, Europe has been grappling with crises, ranging “from debt to migration.” Voters were losing faith in the ability by the traditional parties, with their predilection for reaching consensus even at the cost of emasculating the proposed solutions, to find adequate answers to the new domestic and external challenges facing the EU. This is what the People’s Party, one of Austria’s two “systemic” parties, looked like when Sebastian Kurz took over as its chairman, as it tried to move even further away from ideological certainty and advocate “all things good against everything that is bad.” As a result, it was only losing the confidence of its onetime supporters.

According to the London-based weekly magazine The Economist, two factors were critical in Sebastian Kurz’s rapid political ascent. First, Kurz filled an empty “niche” among the center-right supporters of tough refugee policies. In 2015-2016, Austria found itself at the heart of the European migration crisis – in per capita terms, the small Alpine republic had taken in more migrants than any other EU country, except Sweden. Kurz, then foreign minister, gave up his previous, quite liberal view of migration issues, embracing a hard line that envisaged closing borders and limiting asylum opportunities. Together with the governments of a several Balkan countries, Kurz has done a lot to cut off routes of illegal migration.

Secondly, many Austrians now saw Sebastian Kurz as the answer to their request for “fresh blood” and new ideas in politics. Before very long, the young leader managed to reshuffle the party leadership, including on the ground, and implement new approaches and methods of working with voters. His arrival breathed new vigor in the conservative party which, although respectable, had lost political initiative and the ability to generate fresh ideas. To the frustrated electorate, he projected an image of an energetic politician with a fresh look on the problems of Austria and Europe. During his first term as chancellor, Sebastian Kurz managed to convince a large segment of the Austrian population in his ability to successfully combine in the government the bureaucratic skills of the establishment with the ambitious and uncompromising, at times even exceedingly so, agenda of the “populists.” Kurz himself lists moves to reduce taxes and public debt among the achievements of his first government.

The outcome of the September 29 vote underscored the support the People’s Party enjoys among all sectors of the Austrian society, save, of course, for the Vienna liberals. The young politician, “who was widely viewed as a defender of the interests of the wealthy elite, can now be considered the choice of the entire people.” His electoral base continues to swell – Kurz remains the country’s most popular party leader. For his supporters, he epitomizes the political will for change, which they believe the majority of former ÖVP functionaries and the Social Democrats have lost a long time ago. And still, the traditional Austrian and European political establishment remains wary of Kurz, primarily because of his desire to team up with the ultra-right when forming his first government in late 2017. The collapse of the ruling coalition last May in the wake of the “Ibizagate” scandal with the SPÖ leaders seemed to have only confirmed these fears. However, many experts state that as Chancellor, Sebastian Kurz has proved himself as an able administrator who has “effectively deprived” the “right-wingers” of their ability to make many key policy decisions, including in the field of foreign policy.

Voters now expect him to respond to “changing expectations,” which many observers describe as historical and geopolitical pessimism. Many in Europe are worried by the weakening of the EU’s positions against the backdrop of an ongoing competition between the global powerhouses. Meanwhile, most observers believe that putting together a new Cabinet won’t be easy as there are three options for forming a majority (at least 92 mandates): a grand coalition, a renewed coalition with the FPÖ, and the so-called “dirndl government” (“turquoise-green-pink” – the colors of traditional Alpine clothing) with “greens” and liberals from NEOS. The first option could dishearten Kurz’s backers, who supported him precisely because they were fed up with a decades-long succession of governments made up of either one of the two leading parties, or both. Moreover, Kurz has “fundamental differences” with the Social Democrats on many social and economic issues. As for the new attempt to rejoin forces with the FPÖ, it is fraught with scandal that could undermine Kurz’s reputation in Europe. Finally, an alliance with the Greens and Liberals will most certainly lead to serious differences on migration, environmental and social policy.

There is an intense debate currently going on in Europe about the institutional arrangements the EU needs to resolve internal contradictions and meet external challenges. The participants in this fundamental dispute are pulling no blows, and the “Ibizagate” scandal that resulted in the collapse of Kurz’s previous government is a graphic example of that.  Meanwhile, the young and ambitious politician wants to secure a bigger role for his country in European affairs. Throughout his term as chancellor, he demonstrated a strong commitment to the political values of the “European mainstream.” He watched very closely the political processes going on in Europe, and provided maximum support for the reforms being put forward by French President Emmanuel Macron, even though he didn’t share many of Macron’s proposals for Eurozone reform, leaning more toward Germany’s more cautious stance. During his first term as Chancellor, Sebastian Kurz convinced his FPÖ coalition partners to reject the idea of Austria’s withdrawal from the EU. Now that “populists” have been on the retreat in a number of European countries – in Italy, perhaps Hungary, as well as France, where the “Yellow Jackets” movement is on the wane, few expect Kurz to brand himself as a “populist in a centrist’s skin.” The young Austrian, who has reached political heights thanks largely to his clear and unwavering stance on migration could inspire new hope in Europeans, reeling from half-hearted decisions so characteristic of the Brussels bureaucracy.

One should also keep in mind the fact that Kurz owes the notable increase in popular support to those who used to vote for the Freedom Party. And, according to the more realistically-minded people, the two political organizations still have much more in common than Kurz is willing to admit in public. Well, Kurz may have managed to solve the problem of opposing the “populists” by embracing, albeit in a softer form, some of the ideas espoused by Eurosceptics and “sovereignists.” The result, however, has been a Conservative shift “to the right.” And no matter how much Kurz and his associates insist on their firm commitment to “centrism,” it is a very different “center” – that is, a dangerous trend of the entire political spectrum of Austria and Europe gravitating “to the right.”

“Populists” may have “retreated” somewhere in the European Union. However, the third place won by the Freedom party in parliament, which still gives it an “arithmetic” chance of participating in the government, is a clear sign of the party’s potential for political survival.

The Austrian elections seem to confirm the trend that made itself so clear during the May elections to the European Parliament: fortune usually favors the political forces that do not quibble – firm supporters of “strengthening sovereignty.”

Future will show whether Sebastian Kurz’s return to power leads the way to the renaissance of “new-look” European centrists amid the gradual retreat of “nationalists” and “populists.” And also if it is a sign of the gradual adaptation of the European political establishment to the voters’ request for  a more balanced course, combining protection of the sovereign rights and national interests of EU member states and the EU’s objective need for greater federalization and centralization of common political institutions.

From our partner International Affairs

Continue Reading

Europe

EU to mount decisive summit on Kosovo

Published

on

The European Union is planning to hold an important summit on Kosovo in October this year with a view to get Belgrade and Pristina to normalize bilateral relations. French President Emmanuel Macron and German Chancellor Angela Merkel will pose as guarantors of the deal. Reports say a senior US official may take part in the Paris summit as well. The participation of the American side was strongly advocated by the authorities in Kosovo, headed by President Hashim Thachi.

If this scenario goes ahead, Serbia may face pressure from both the USA and the EU. The West plans to require Belgrade to not only de facto recognize Kosovo but to confirm the course for European integration – which, according to Brussels, means departure from a comprehensive partnership with Russia and from the signing of a free trade agreement with the Eurasian Economic Union (EAEU) scheduled for the end of October.

Given the situation, Serbian leaders are set on consolidating Belgrade’s position in the forthcoming talks by reducing international support for Pristina. To this end, Belgrade is trying to persuade countries that previously recognized Kosovo’s self-proclaimed independence to reconsider their positions and withdraw their statements. Serbian Foreign Minister Ivica Dacic has already announced in wake of consultations on the sidelines of the UN General Assembly that the number of countries that recognize Kosovo’s independence will dwindle by the end of this year. According to Dacic, such countries will make up less than half of the world community.

According to the Serbian Foreign Minister, the Serbian delegation led by President Aleksandar Vucic succeeded in holding talks in New York with representatives of about a hundred states on withdrawing recognition of Kosovo’s independence. “The President spoke with representatives of some states about strategic issues, about a dialogue with Pristina, but there were also many meetings dedicated specifically to the status of Kosovo and Metohija. As the president announced, our citizens can be sure that in the near future the number of countries that will withdraw or “freeze” their recognition of Kosovo will increase,”- Ivica Dacic said.

In recent years, the number of countries that recognize Kosovo’s independence has decreased, though so far mainly due to small American and African states. Among them are the Comoros, Dominica, Suriname, Liberia, Sao Tome and Principe, Guinea-Bissau, Burundi, Papua New Guinea, Lesotho, Grenada.

The persistency with which the US and the EU is trying to “press” for the normalization of relations between Belgrade and Pristina and force Serbia to cut down on its active cooperation with Russia has yet again pushed the Serbs into streamlining their national foreign policy priorities. According to available data, Brussels is ready to slap more conditions on Belgrade, including the most painful of the Balkan issues, not only on Kosovo, but also on Bosnia and Herzegovina. For one, as Serbian Minister of Technological Development and Innovation Nenad Popovic said,  one of the conditions for Serbia becoming a member of the EU could be recognition of the “genocide” in Srebrenica.

This is confirmed by Zoran Milosevic, an expert at the Institute for Political Studies in Belgrade, who sees the new condition as nothing unexpected, since some EU member states, and also Switzerland, have passed a law that envisages criminal liability for the denial of the so-called “genocide in Srebrenica.” Some  European countries are already following suit having drafted the relevant bills to be submitted to parliament. “Something of this kind was proposed by the High Representative of the international community in Bosnia and Herzegovina, Valentin Inzko. What is the point of adopting laws in defense of this counterfeit on the genocide in Srebrenica if they do not make a condition for Serbia’s membership in the EU?” – Zoran Milosevic points out. The mere word “condition”, he says, signifies that Serbia “is treated as a minor who needs to grow to perfection and fight tooth and claw to enter the EU”. Serbia “accepted this burden of its own free will” the day its parliament passed a resolution according to which the country’s strategic goal is European integration, ” – said the Serbian expert.

He also made it clear that it was by no means accidental that Brussels never announced the full list of conditions for Serbia’s membership in the European Union: “If they did, it would tie the hands of pro-Western Serbian politicians. So they release more and more conditions gradually, one after another. First, it was about recognizing Kosovo – whether this is a condition for EU membership or not. It turned out that it is. Now it is about the recognition of “genocide” in Srebrenica. It is said that Serbia’s entry into NATO will also be a condition for joining the European Union. And, as in the previous cases, we are wondering if such a condition exists or not. As a result, it will turn out that there is. ”

Where Brussels’ pressure on Belgrade is particularly noticeable at present is Serbia’s intention to sign a free trade agreement with the EAEU at the end of October. According to the Minister of Trade of Eurasian Economic Commission (EEC) Veronika Nikishina, negotiations between the EAEU and Serbia on the creation of a free trade zone are over with the parties involved preparing to sign the agreement on October 25. Nikishina says the document will be signed in Moscow by the prime ministers of the five member states of the EAEU, the Prime Minister of Serbia Ana Brnabic and the Chairman of the EEC Board Tigran Sargsyan. Even though Serbia has agreements on a free trade zone with three of the five EAEU members – Russia, Belarus and Kazakhstan, the transition to a common free trade regime has several advantages, emphasizes Veronika Nikishina: “Three bilateral deals that were signed earlier and were not fully identical are being harmonized, giving Armenia and Kyrgyzstan the opportunity of preferences in preferential trade. ”

Also, a trade agreement provides access of the EAEU members to the Serbian market: “For example, it concerns certain kinds of cheeses, some strong alcoholic drinks, and cigarettes from Armenia, Belarus, Kazakhstan and Kyrgyzstan, which could not enter the Serbian market under the free trade regime. And it also spreads on various types of engineering products that have also been removed from bilateral agreements.” “In other words, we give a fully-fledged free trade status to Kyrgyzstan and Armenia and improve the existing bilateral free trade arrangements for Belarus, Kazakhstan and Russia,”  – the Minister for Trade of the EEC emphasizes.

According to Serbian Deputy Prime Minister and Minister of Trade, Tourism and Telecommunications Rasim Lyayic, an agreement with the EAEU may allow the country to increase its export volumes by nearly 1.5 times. According to the minister, in 2018 Serbia’s trade turnover with the EAEU countries amounted to about 3.4 billion dollars, of which 1.1 billion accounted for exports, mainly to Russia. Exports into the EAEU will increase to $ 1.5 billion within a few years after the agreement comes into force, the Serbian Deputy Prime Minister predicts.

According to the Bruegel International Analytical Center, in 2016, 62% of all Serbian imports came from EU countries, 8.3% from China, 7.9% from Russia. 64% of the republic’s exports go to the EU, 17.8% to other Balkan countries, 5.3% to Russia.

Naturally, the EU is more than concerned about Serbia’s trade and economic policy following a different direction. Brussels has already warned the Serbian government that a free trade agreement with the EAEU could harm integration with the EU. “You can’t follow several directions at once,” – said Slovakian Foreign Minister Miroslav Lajcak, thereby warning Belgrade and expressing the position of his counterparts in the European Union: “If you are serious about Europe, you must make decisions that bring you closer to it, but this move is totally out of line. ”  

Meanwhile, Serbia maintains composure and has no intention of giving up on the plans. Explaining his country’s decision to conclude an agreement with the EAEU, Rasim Lyayic said that it follows economic agenda alone: “It is not about politics, but about trade.”

According to the minister, a refusal to sign an agreement with the EAEU would call into question a free trade agreement with Russia.

The EAEU is calm about warnings addressed to Serbia, – Veronika Nikishina says: “Until Serbia becomes a full-fledged member of the European Union, it has full autonomy in its trade policy. “In our agreement there are no obligations on the formation of a trade regime between Serbia and the European Union, which is absolutely impossible to imagine.” Nikishina made it clear that until Serbia joins the EU, “we are trading with it in a regime we consider appropriate, and we will upgrade this regime.” As for Serbia entering the EU (which is a matter of remote future), in this case “all agreements of this kind, including our agreement, naturally, will have to be terminated,” – Veronika Nikishina says.

Nevertheless, there is no doubt that pressure on Belgrade, both in terms of recognizing Kosovo and in connection with relations with Russia and the EAEU, will boost considerably in the coming weeks. In these conditions, the Serbian authorities will obviously have to assume a more determined position with regard to the country’s list of national priorities. 

From our partner International Affairs

Continue Reading

Europe

EU politicians turn to “ball of snakes” to make own careers

Published

on

Some of EU politicians are very successful in making their careers using the weak points of the European Union member states.

Current tensions between Russia, China, Iran, North Korea and NATO (including EU countries) lead to the development of many expensive programs and projects that European taxpayers have to pay for.

Current security situation provides a huge space for ambitious politicians. Those, in turn, involve the population of European countries in an arms race, trying to achieve personal goals at the expense of frightened citizens.

Thus, such statements as: “we’re at war”, “Russia and China threaten Europe and the Word”, “we need to increase defence spending” are populist in nature and distract attention of people from more pressing social issues. The more so, loud statements let such experts be in the centre of attention in European politics.

Thus, new European Commission President Ursula von der Leyen has flagged her ambition for political weight to take more responsibility for defence programs and projects.

“That’s likely to trigger turf wars with EU national governments, NATO and the United States over who should be in charge of European military cooperation and the West’s lucrative defence industry,” writes Paul Taylor, a contributing editor at POLITICO and a senior fellow at the think-tank Friends of Europe.

Franco-German efforts to press EU countries to buy European military equipment rather than U.S. vehicles and weapons have not been successful yet. But taking into account the pertinacity of French and German politicians in the EU governing bodies it could become a reality. Though the Baltic countries, the Netherlands, and Poland, are suspicious of such plans.

“They simply want the best value for money and quality for their limited defence budgets. The Poles and Balts believe they get an unspoken extra level of bilateral defence insurance if they buy U.S. equipment beyond NATO’s mutual defence clause.” explains Paul Taylor.

This is one of the few cases when small Baltic States oppose European influencers – France and Germany. On October, 2 in his interview to Europäische Sicherheit & Technik, Raimundas Karoblis, the Minister of Defence of the Republic of Lithuania said that he hates even the subject of European military autonomy. He totally relies on NATO.

So, in this fight for decision making in the European Union only one side will loose – people of the countries who will pay for NATO or European defence projects.

People are only the tools of satisfaction of political ambitions. In case of peace in Europe they will pay for excessive amount of military equipment and foreign personnel deployment. In case of war they will be the targets of missiles.

Continue Reading

Latest

Trending

Copyright © 2019 Modern Diplomacy