The ongoing NATO terror war led by the Pentagon has at least to negative consequences: one, acceleration of climatic change though deadly environmental pollution and, two, ever increasing number of hapless refugees driven out of the occupied cum attacked Arab nations.
Syria in the Middle East has generated refugee crisis although the NATO did not invaded that nation on the usual fictitious pretexts like searching for WMD as it happened in Iraq. People of Syria predominantly of Sunni sect led by the opposition want a change in the government being run by a Shi’ite Al-Bashar Assad for years without facing any democratic election in order to get popular mandate necessary to rule. The Assad military has ruthlessly attacked the protestors, leading to a civil war that the regime could not control
With the arrival of Russian forces in Syria, targeting the Syrians, the refugee crisis has escalated as the refugees flow increased to flow into EU nations. Deeply worried, even more terrorized than US sponsored terror wars, European Union has decided to strike a refugee deal with Turkey to send the refugees from other European states to Turkey, the only Muslim nation in European continent.
The European Union-Turkey agreement over Syrian refugees that came into effect on March 20 is being implemented with EU sending back the Syrian refugees back to Turkey. This agreement will affect 50,000 migrants and refugees stranded in EU after it closed its border for further intake.
At the heart of the deal between the EU and Turkey is a controversial refugee exchange program. Under the plan, Syrian refugees on the Greek islands would be returned to Turkey, while European countries would take asylum seekers currently living in Turkey. Asylum seekers should only be returned to other states if there was guarantees that that they would not then be sent back to the place they had fled. The country of return also had to ensure asylum seekers had access to work, healthcare, education and social assistance.
Under the scheme agreed with the EU last month, one Syrian refugee will be settled in Europe legally in return for every migrant taken back by Turkey from EU member Greece, which faced the biggest influx in recent months. All irregular migrants who have landed on the Greek islands since March 20 face being sent back to Turkey ─ although the deal calls for each case to be examined individually.
Their legal transfers under an agreement made between Turkey and the EU last month took place as Greece officially began to return migrants and refugees to Turkey under the deal that has run into strong criticism from rights groups. Under the agreement, all “irregular migrants” arriving in Greece from Turkey since 20 March face being sent back. Each case is meant to be examined individually. For every Syrian refugee returned, another Syrian refugee will theoretically be resettled from Turkey to the EU, with numbers capped at 72,000.
Factually, the implementation of EU’s plan to limit the amount of migration to Europe has begun as the first set of migrants and refugees are being deported to Turkey. The plan saw protest against deportations in the island of Chios. The agreement that came into effect on March 20 will see 4,000 migrants and refugees being detained on Greek islands. A total of 135 migrants were escorted onto small boats by officers from the EU border protection agency, Frontex. Despite receiving criticism from the human rights group, EU will continue to implement the plan and send the refugees to Turkish coast.
The arrivals of Syrian refugees were part of Finland’s quota of 750 refugees it has agreed with the EU to accept this year. In December, the government decided to focus on helping Syrian refugees but Interior Ministry officials said it was not clear how many of the annual quota would be made up of Syrian refugees.
The number of Syrians arriving in Germany and Finland from Turkey – 43 – does not tally with the two to three Syrians understood to have been returned from Greece to Turkey, suggesting that the twin operations are more a carefully coordinated attempt by the EU to demonstrate that its pact with Ankara is working than a precise enacting of the plan. Brussels has also agreed to provide the Turkish government with money to cover the costs of looking after those who have fled the civil war in Syria and have taken refuge in Turkey.
On the other hand, the first refugees to be brought into the EU under a migrant-exchange deal with Turkey have arrived in Germany and Finland. Two planes, each carrying 16 Syrian refugees, arrived from Istanbul in the northern German city of Hanover, according to the federal refugee office. They were taken by bus to a reception camp about 90 miles away in Friedland, near Göttingen. Eleven more Syrians from three families, meanwhile, arrived in Finland by plane directly from Turkey. Finland’s immigration officials say that 11 Syrian refugees have arrived as part of a European Union deal with Turkey to curb illegal migration. Most of the newcomers to Germany were young families with children, but no details of their identities were released. The 32 are believed to be from three separate families. German authorities asked journalists to respect their privacy. Secrecy is maintained since there is also a hidden agenda.
Germany leads EU and now represents the new European nation in the UNSC almost as a permanent member. German observers are closely following the progress of the pact, not least the impact it will have on Merkel’s refugee policy, which has been widely criticised both at home and abroad. Angela Merkel, the German chancellor, is still under intense domestic pressure to ensure that there is no repeat of the situation where 1.1 million migrants and refugees arrived in Germany last year. Tens of thousands have already arrived this year. With the Turkey deal, Angela Merkel is operating an active refugee-crisis policy for the first time since the open-borders policy in September. She is eager to see the plan worked, sending out the right signal ‘to find legal ways to get to Europe’
Germany last year let in a record 1.1 migrants and refugees but Chancellor Angela Merkel has come under intense pressure to stem the flow. German officials have said they expect other EU member states to begin taking in refugees under the pact with Turkey.
Further, Germany profited from the recent closure of the Balkan route, because fewer refugees were able to enter Germany, Merkel has obliged the other 27 EU nations to take part in the course of action with Turkey. And in so doing she carries the main responsibility for the success or failure of this operation.
Having got Turkey agree for the refugee plan, now Jean-Claude Juncker, the president of the European commission, insisted that sending refugees back to Turkey was legal and in line with the Geneva convention. Citing specific paragraphs in the EU’s asylum procedure directive, he said Greece had decided Turkey was “a safe country”, he said, the returns policy was legal.
Meanwhile, refugees and migrants protesting Europe’s closed borders have closed a second section of Greece’s highway heading to the official border crossing with Macedonia, blocking all road traffic in both directions. The blockade was being done near the Greek village of Idomeni, where a sprawling refugee camp of thousands developed in recent months. The area had been a pedestrian crossing for migrants and refugees until Macedonian authorities restricted the flow, and then closed it completely last month. Hundreds of refugees and migrants were continuing to block trucks from using another section of the highway further south near the town of Polykastro, where another impromptu refugee camp has sprung up at a highway gas station.
Refugees and migrants protesting Europe’s closed borders have closed a second section of Greece’s highway heading to the official border crossing with Macedonia, blocking all road traffic in both directions. Greek authorities said about 100 people blocked the highway near the Evzones border crossing. The blockade was being done near the Greek village of Idomeni, where a sprawling refugee camp of thousands developed in recent months. The area had been a pedestrian crossing for migrants and refugees until Macedonian authorities restricted the flow, and then closed it completely last month.
Greek authorities say the 202 migrants and refugees in Greek islands who had not applied for asylum in Greece and were returned to Turkey. They included people from several countries including Pakistan, Afghanistan, Iraq and Congo. The Greek civil protection ministry said 136 people — 135 men and one woman — were returned from the island of Lesbos. They included 124 people from Pakistan, three from Bangladesh, one from Iraq, two from India, four from Sri Lanka and two Syrians.
A senior UN official says he is very concerned that a hasty EU deal with Turkey could leave Syrian refugees unprotected and at risk of being sent back to a war zone, without spelling out the refugee protection safeguards under international law.
The number of refugees that Europe would take would depend on the number of refugees prepared to risk their lives through other means – and that is staring at a moral abyss. EU leaders have hailed the one-for-one plan as a breakthrough that would deter Syrians from making dangerous journeys across the Aegean Sea.
Human rights organisations have been highly critical of the EU plans for refugee control, warning that individuals may be prevented from claiming asylum under the scheme. The deportation is seen as a symbolic kick off of a dangerous practice. Those migrants who did not apply for asylum or had their applications declared inadmissible were deported. Moreover, no details of the nationality status of migrants being deported were given out.
The UNHCR called on Europe to ensure safeguards for refugees being returned to the Middle East at an EU summit shortly. Regional director for Europe at the office of the UN high commissioner for refugees (UNHCR), said an EU commitment to resettle 20,000 refugees over two years, on a voluntary basis, remained “very low”. “The collective expulsion of foreigners is prohibited under the European convention of human rights,” he told a news briefing in Geneva.
Human rights groups are not convinced. Amnesty International has said it is absurd to describe Turkey as a safe third country, and that some Syrians have been returned to Syria and been shot at while trying to cross the Turkish border.
Human Rights Watch also said Turkey cannot be regarded as a safe country of asylum. “It is knowingly shortsighted for EU leaders to close their borders without considering the impact on Turkey’s borders with Syria,” said Bill Frelick, HRW’s refugee rights director.
According to the UNHCR, 31 out of Afghanistan’s 34 regions saw a surge in people fleeing conflict last year. The number of internally displaced Afghans has risen to a million people, up 78%. People often did not realize how many women and children were fleeing conflicts around the world.
The British foreign secretary, Philip Hammond, received a letter saying that Kurds fleeing Iraq, Syria and Turkey could face a “very dangerous situation” if they were forced to return to Turkey under the proposed EU deal. The increase in assaults by Turkish forces against the Kurdistan Workers’ party (PKK) has led to more Kurds trying to reach Europe. “I am concerned that Kurds will potentially be sent back to Turkey as a result of the proposals agreed between the EU and Turkey which will lead to a very dangerous situation for Kurdish people”.
Apparently, Turkey is not being considered a safe country for refugees and the implementation of the EU agreement is just the beginning of a difficult time for refugee rights.
Meanwhile, Turkish President Recep Tayyip Erdogan lashed out at Europe for turning back refugees on the first day that migrants were returned from Greece to Turkey. Speaking in Ankara, the president reproached Europe for not letting “these people into their countries” by raising razor wire fences. He asked: “Did we turn Syrians back? No, we didn’t, but they did.” However, Erdogan said Turkey had rescued 100,000 migrants from the Aegean Sea and spent $10 billion on Syrian refuges. Turkey, home to 2.7 million Syrian refugees, is a major departure point for Europe-bound migrants. The country has committed to crack down on smuggling in exchange for financial and political concessions from the EU. Greece began sending back migrants to Turkey in line with an EU deal to combat illegal migration.
Turkish Prime Minister Ahmet Davutoglu called on police officers to show compassion as his country received the first Syrians turned back from Greece. Speaking at the 171st anniversary ceremony of the founding of the Turkish police force, Davutoglu urged police officers not to “distinguish them from our own citizens.” A first group of 202 migrants were ferried from the Greek islands to Turkey as part of a controversial European Union plan to curb migration to Europe. Davutoglu said will send some of the Syrian refugees from the camps in Turkey to Europe as the first Syrians were brought across the Aegean to Turkey.
The Syrian conflict was entering its sixth year, adding that Syrian refugees were facing increasingly difficult conditions in Jordan and Lebanon: 90% lives below the poverty line as they were unable to work and had run down all their savings. Afghans, who many European states do not deem to have legitimate asylum claims, also had urgent protection needs.
Refugee advocates question whether the agreement is legal and ethical, fearing individuals will be denied the right to claim asylum, conversely their right to live. Europe could take a lot more, but Europe is determined not to. Europe has tried to isolate the problem in Greece and further to collaborate with Greece in exporting the problem back to Turkey. If the great powers of the world got their act together they would actually be able to stop the conflict and negotiate proper terms in Syria, so the whole thing is really a condemnation of international policy and of what passes for world governance nowadays.
While the Syrian refugees continue to suffer in the worst manner, nobody seems to be living up to their legal responsibilities either between the European Union and Greece and Turkey, lots of international law and conventions are being violated by those governments. Many people are concerned of what they see as divisions within Europe. At this point obviously Greece is shouldering a lot of the burden, because it’s a country recovering apparently from its economic recession itself.
The controversial European Union-Turkey deal may not find a credible solution to the refugee crisis. Syria peace talks will go ahead with more urgency in essence to try to solve this issue and it certainly puts pressure on the European Union to deliver, but they are exporting the problem back to Turkey and Turkey is of course a key player in whatever solution emerges in Syria.
Syrian refugees in alien nations have got no sovereignty, no freedom, and no rights. They are treated like street dogs. They are now the refugees thanks to arrogance of President Assad who considers his life more important than Syria.
Is British Democracy in Danger?
On Sunday 12th of December 2021 Boris Johnson went on national television to warn about a tidal wave that would threaten Britain. He was back then referring to the Omicron Covid-19 variant, little did he know back then that he could have been referring to his own political future. Johnson is facing increasing demands from his own party to step down after having admitted to attending a party in Downing Street on May 20th, 2020, during the UK’s first national lockdown.
Johnson has been facing increasing risks for quite a long time by now: from collapsing poll ratings, to violation of lockdown rules and an ill-managed pandemic that has continued to strain the National Health Service; among many others. These crises have compromised his moral authority both with the citizenry and with his own frontbenchers. Although in the UK confidence votes can happen relatively quick: the no confidence vote on Theresa May’s government was held on December 12th, 2018, just a day after she was informed that the minimum threshold had been reached, this is still not on the horizon for the current Prime Minister.
To trigger a leadership contest 15% of the Tory MPs need to submit a letter to the chair of the 1922 Committee. There are currently 360 Tory MPs, 54 of them are needed to spark a confidence vote. As up to now, very few have publicly confirmed to either have submitted or to have the intention to submit a letter. If such threshold is reached, this would open the debate as to whether there is someone suitable enough to replace him. The frontrunners are Chancellor Rishi Sunak and Foreign Secretary Liz Truss; neither have the proven record of vote-winning Boris Johnson has had ever since he was the Mayor of London. Such vote of confidence is also unlikely to happen as majority of the crises the government has faced are of their own making. Johnson is not the cause; it is the symptom of a deeper decay of the British State and their politicians.
While the Conservatives will not be able to escape the cumulative effects of current and past scandals, this latest turmoil us unlikely to trigger the collapse of Boris Johnson. The next British election is scheduled to happen in May 2024, giving both Johnson and the Tories enough time to move on from this crisis and work on rebuilding electoral support. Boris Johnson has long defied political gravity and has survived a long history of scandals and mismanagements that may have destroyed the electoral chances of many other politicians and their political parties. It is highly likely that in the coming local elections in May 2022 the Conservatives will suffer electoral defeats, this is still preferable than what the political and electoral consequences for the Conservatives would be if they were to get rid of Johnson. Sacking him now would be accepting losing the war rather than losing a battle in the coming local elections. The long-term aim of the Tories is to hold on power for as long as they can, and at least ensure their electoral base is secure coming the 2024 general elections. For this, Boris Johnson still may come in handy.
Although Boris Johnson’s record has been shockingly poor; the Tories will not give Labour a chance for a general election before the scheduled for 2024, especially not now that they are leading the polls on the question as to who would make a better prime minister. The reality is that although his ratings have plummeted dramatically over recent years, there is no real threat of a general election for at least 2 years if one considers the larger political landscape.
One of the major threats British democracy does not come from Boris Johnson but rather from a deterioration of what sustains democracy as a healthy system of government. The UK electorate is highly volatile. Unlike countries like the US whose electorate has become highly polarised, the British electorate has shown less party loyalty, and voters have switched more and more between political parties in each election. However, this volatility will not get Johnson out of office, that is something only the Conservatives can do. This is closely linked to trust in politicians and the government. Lack of trust in both is one of the major issues of contemporary democracies around the world. Trust, is, after all, the basic condition for a legitimate government. Lack of trust in politicians, institutions, political parties, and the government in general enables populist tendencies, polarisation, political extremism and impacts the voting preference of citizens. It also favours the support of more stringent stances towards minorities, opposition, immigration, and human rights violations. A second threat that should not be disregarded is the attitude towards democratic institutions and bodies that sustain the British political system. While it is true that Johnson’s behaviour does not push to extremes such as Donal Trump did, or many other highly divisive politicians around the world, he is drawn to the same unconventional styles to deal with political challenges.
Democracy around the world is facing a backlash that is organised and coming from within, from elected officials. Our democratic rights can either be taken away suddenly as a result of a revolution or a coup d’état, or gradually through the election of leaders who slowly erode rules, standards and institutions that help sustain democracy. This is potentially more dangerous for the overall prospects of democracy because gradual erosion of democratic values is harder to perceive. The state, under this progressive attack, becomes prone to the systematic corruption of interest groups that take over the processes and institutions in charge of making public policy. It is during this gradual democratic backsliding that elected officials disregard norms and institutions while, at the same time, trying to redesign the structure of the state. An informed and active citizenry is crucial to prevent further erosion of democracy. We need to be aware that it is not only democratic rules and institutions that are in danger, but also the respect of our fundamental civil, political, social and human rights.
The French Dispatch: The Year 2022 and European Security
2021 has been rich in negative events for European security: the world has witnessed the collapse of the Open Skies Treaty, American-French discord concerning AUKUS, the termination of the official dialogue between Russia and NATO, and the migration crisis on the Polish-Belarusian border.
Over the past year, the Western countries seem to have been searching for new strategies. Since the end of 2019, NATO has been developing a new concept, and in June 2021 at the summit in Brussels, to the displeasure of sceptics, it was possible to agree on its basis—the transatlantic agenda NATO 2030 (# NATO2030) . While the broad formulations and a direct hierarchy of threats still require clarification, new projects in the field of weapons development, combating climate change, and increasing interoperability have already been declared.
In parallel, since the end of 2020, work has continued on the EU European Parliamentary Research Service project—the Strategic Compass. The dialectic between Atlanticism and Europeanism softened after Joe Biden came to power in the United States, but the European interests and red lines retain their significance for transatlantic relations. In 2022, together with the rotating post of the President of the EU Council, the role of a potential newsmaker in this area has been transferred to Emmanuel Macron, who feels very comfortable in it.
On December 9, the provisions of the Paris programme were published under the motto “Recovery, power, belonging” France, as expected, is reiterating its call for strengthening European sovereignty. The rhetoric of the document and its author is genuine textbook-realism. But now for the entire European Union.
Objectives of the French Presidency, are not articulated directly but are quite visible—making the EU more manageable and accountable to its members, with new general rules to strengthen mobilisation potential, and improve the EU’s competitiveness and security in a world of growing challenges.
Paris proposes reforming the Schengen area and tightening immigration legislation—a painful point for the EU since 2015, which has become aggravated again in recent months. This ambitious task has become slightly more realistic since Angela Merkel’s retirement in Germany. At least a new crisis response mechanism on this issue can be successful, even if it is not fully implemented.
In addition, the Élysée Palace calls on colleagues to revise the budget deficit ceilings of the Maastricht era to overcome the consequences of the pandemic and finally introduce a carbon tax at the EU borders. The latter allows for a new source of income and provides additional accountability for the implementation of the “green” goals by member countries.
The planned acceleration of the adoption of the Digital Markets Act (DMA) and Digital Services Act (DSA), developed by the European Commission at the end of 2020, is also aimed at unifying the general legislation and consolidating the European position in the world. In other words, the French Foreign Ministry quite soberly assesses the priority areas and vulnerabilities of the European Union and focuses on them, but with one exception.
A special priority of the French presidency is to strengthen the defence capabilities of the EU. On the sidelines, the French diplomats note that the adoption of the Strategic Compass in the spring of 2022, as originally planned, is a fundamental task, since otherwise the process may be completely buried. With a high degree of probability, this is so: the first phase of the development of the Compass—the general list of threats—lasted a year, and consisted of dozens of sessions, meetings, round tables with the involvement of leading experts, but the document was never published. If Macron won’t do it, then who will?
As the main ideologist and staunchest supporter of the EU’s “strategic autonomy”, the French president has been trying for five years to mobilise others for self-sufficiency in the security sphere. With his direct participation, not only the Mechanism of Permanent Structured Cooperation (PESCO) in the defence area was launched, where France is the leader in a number of projects, but also the so-far failed European Intervention Initiative. Even without focusing on French foreign policy traditions and ambitions, the country remains a major European arms exporter and a nuclear power, where the military-industrial complex is closely affiliated with the state.
Implementing the 2022 agenda is also a matter of immediate political gain as France enters a new electoral cycle. The EU Summit will take place on March 10-11, 2022, in Paris, a month before the elections, and in any case it will become part of the election campaign and a test for the reputation of the current leader. Macron has not yet officially announced his participation in the presidential race, but he is actively engaged in self-promotion, because right-wing politicians espousing different degrees of radicalism are ready to take advantage of his defeats to purchase extra points.
The search for allies seems to be of key importance for victory at the European level, and the French Foreign Ministry has already begun working on this matter. In 2016–2017 the launch of new initiatives was predetermined by the support of Germany and the Central and East European countries. The change of cabinet in Germany will undoubtedly have an impact on the nation’s policy. On the one hand, following the results of the first visit of the new Chancellor Olaf Scholz to Paris on December 10, the parties announced the closeness of their positions and a common desire to strengthen Europe. On the other hand, the coalition of Social Democrats (SDP) was made up with the Greens and Free Democrats (FDP) who are not at all supporters of excessive involvement in security issues. What “strategic autonomy” means for France, constitutes a more restrained “strategic sovereignty” for Germany Therefore, an intensification of dialogue with Italy and Spain, which are both respected and potentially sympathetic, is likely. The military cooperation agreement concluded in the autumn of 2021 with Greece, an active member of PESCO, can also help Paris.
Gaining support from smaller countries is more challenging. Although the European project is not an alternative to the transatlantic one, the formation of a common list of threats is a primary task and problem for NATO as well. As mentioned above, it is around it that controversy evolves, because the hierarchy determines the distribution of material resources. The countries of Eastern Europe, which assume that it is necessary to confront Russia but lack the resources to do so, will act as natural opponents of the French initiatives in the EU, while Paris, Rome and Madrid will oppose them and the United States in the transatlantic dialogue. The complexity of combining two conversations about the same thing with a slightly different composition of participants raises the bar for Emmanuel Macron. His stakes are high. The mobilisation of the Élysée Palace’s foreign policy is one of the most interesting subjects to watch in the year 2022.
From our partner RIAC
Unilateral vs Bilateral Euroisation: Political, technical and practical issues in the curious case of north Cyprus
The island of Cyprus has been split between a Greek Cypriot south and a Turkish Cypriot north since 1974. The Turkish Cypriot state declared in the north is recognised only by Turkey, while the Republic of Cyprus in the south is recognised internationally and is a European Union (EU) member since 2004. In 2004, 65 percent of Turkish Cypriots voted in favor of the United Nations’ Annan Plan for reunification only for Greek Cypriots to reject it. As a result, Cyprus joined the EU as a de facto divided island. Despite joining the EU as a divided island, the whole of Cyprus is considered an EU territory. However, the EU law is suspended in the north until reunification is achieved.
This resulted in the euro being the legal tender only in the southern part of the island. With the recent and continuous depreciation of the Turkish lira, the long-standing question of whether and how the north could switch to the euro has once again intensified. While a bilateral adoption of the euro is not on the cards until a reunification on the island, north Cyprus could technically unilaterally adopt the euro. However this could cause complications in the future as the EU is adamant that unilateral euroisation cannot be used as a mechanism by Member States to circumvent the stages foreseen by the Maastricht Treaty.
Under normal circumstances, “Member States with a derogation”, i.e. the Member States that have not yet fulfilled the necessary conditions for the adoption of the euro are first required to enter the Exchange Rate Mechanism (ERM II) to achieve eurozone membership. This is a “waiting room” where any country aspiring to adopt the euro is required to stay for at least for two years. It is now a well-known fact that the ECB shares the opinion of the Economic and Financial Affairs Council (ECOFIN), i.e. the meeting of the finance ministers of EU Member States adopted in 2000, that this requirement should not be waived. Assuming the northern part of Cyprus is considered a Member State, the same principle will apply and therefore it would not be welcome to adopt the euro unilaterally, bypassing the convergence process foreseen by the Treaty for the adoption of the euro.
Currently, ERM II comprises the currencies of Bulgaria, Croatia and Denmark. Just like these countries, north Cyprus would be expected to peg its national currency to the euro and, given the consent of the European System of Central Banks, fixe a “central exchange rate” and a “deviation margin” under Exchange Rate Mechanism (ERM II) for a duration of no less than two years. If successful based on its ERM II performance, a final exchange rate would be determined and the redenomination would be done over a transition period.
In the case of north Cyprus, it is understood that the EU might have already agreed to apply a fast track approach where there would be a one-year transition period. However, this has not been confirmed officially by the EU so the EU’s stance in practice is not known. After all, even Denmark, a Member State which has negotiated an opt-out arrangement before the adoption of the Maastricht Treaty has been participating in ERM II although it chose not to adopt the euro. So the EU’s approach in the case of northern Cyprus would not expected to be too lenient. There is no way to find out unless north Cyprus continues the dialogue with the EU.
In the meantime, a more relevant question is whether a unilateral euroisation could be possible. The short answer is yes. For instance the euro was introduced in Kosovo and Montenegro that did not have a status of a sovereign state at the time. In both cases, the decision was made in 1999. Kosovo, defined the Deutsche Mark as the designated currency, which was replaced by the euro in 2002. Similarly, Montenegro introduced a parallel currency system in 1999, in which the Deutsche Mark was allowed to circulate alongside the then legal tender. In 2001, the Deutsche Mark became the only legal tender and was replaced by the euro in June 2002.
In the case of Montenegro, now an official EU candidate, the adoption of the euro without an agreement with the European Central Bank (ECB) was acknowledged by the European Commission as a measure which had to be taken due to “extraordinary circumstances” present in the country at the time. This could be precedent for north Cyprus. However, it is important to note that the ECB still supports the view that unilateral euroisation is not compatible with the Maastricht Treaty and cannot be a way to bypass the convergence process.
The implications of the Treaty framework for in the case of Montenegro currently remain unknown and are expected to be detailed “by the time of possible future negotiations for accession to the EU”. In particular it remains uncertain whether the country would be required to introduce its own currency before it can join ERM II. Should this be the case as Montenegro makes further progress towards EU membership, this would entail substantial operational and changeover costs. Authorities in north Cyprus, should therefore monitor the developments very closely.
Normally, non-euro area Member States are denied the option of unilateral euroization due the principle of equality, i.e. the EU considers bypassing the convergence process incompatible with the EU Treaty and actively discourages it.In particular, the Treaty sets out that there has to be a Community assessment of the fulfilment of these criteria and mutual agreement on the appropriate exchange rates. This means that the ECB does not welcome unilateral euroisation, as such an adoption of the euro outside the Treaty process would run counter to the underlying economic reasoning of European Monetary Union.
However, as north Cyprus is already an EU territory the adoption of the euro could be considered a “common interest of the EU” and therefore an exception could be possible. In fact, the policy of the EU with regard to the Turkish Cypriot community which was set out by the General Affairs Council in 2004 states that “the Council is determined to…facilitate the reunification of Cyprus by encouraging the economic development of the Turkish Cypriot community”. So in the case of north Cyprus, a switch to the euro could be allowed by way of exception although this would obviously imply circumventing the process of multilateral assessment by the EU Member States.
While the EU could give the green light to adoption of the euro by north Cyprus without a successful exchange-rate procedure under ERM II, it would not allow this to undermine the process of convergence prior to the adoption of the euro. In other words, the Convergence criteria outlined in the Maastricht Treaty would still remain relevant and important as the Treaty requires Member States to achieve a high degree of sustainable economic convergence before they can join the euro area.
In other words the economies of Member States with a derogation must be able to keep pace with those already using the euro. Exchange rate stability, for instance, is evaluated by assessing whether the exchange rate of the country’s currency has remained within the fluctuation bands provided for by ERM II for at least two years without devaluating against the euro.
Besides exchange rate stability, the convergence criteria also include price stability, sound public finances, and convergence in long-term interest rates. This means, for instance, that a country’s long-term interest rate, measured on the basis of long-term government bonds or comparable securities, should not exceed that of the three best-performing Member States in terms of price stability by more than 2 percentage points during the one-year observation period prior to the assessment.
On the other hand, a country is considered to meet the price stability criterion if its average inflation rate does not exceed the inflation rate of the three best-performing EU Member States by more than 1.5 percentage points during a one-year observation period. These criteria are intended to ensure the sustainability of public finances and that the government is able to manage its debts.
Article 140 (1) of the Treaty on the Functioning of the European Union (TFEU) requires the European Commission (EC) and the European Central Bank (ECB) to report to the Council, at least once every two years, or at the request of a Member State with a derogation on the progress of the country in fulfilling their obligations regarding the achievement of economic and monetary union. In addition to preparing these “Convergence Reports”, both the ECB and the Commission regularly monitor progress throughout the year.
A Convergence Report is normally published at least once every two years or at the request of an EU Member State which would like to join the euro area. Both the ECB and the European Commission issue these reports describing the progress made by non-euro area Member States towards achieving the criteria necessary for a country to adopt the euro. According to the latest report, among countries legally committed to adopting the euro, Croatia and Sweden fulfil the price stability criterion, Bulgaria, Czechia, Croatia, Hungary, Poland and Sweden fulfil the criterion on public finances, Bulgaria, Czechia, Croatia, Hungary, Poland and Sweden fulfil the long-term interest rate criterion. However none of them meet all the requirements for adoption of the euro. So convergence process is very strict and challenging.
In particular, it should be noted that convergence must be sustainable, meaning that satisfying the economic convergence criteria at one point in time is not enough and they are expected to be met on a lasting basis. A Member State’s general financial position is considered sustainable based on two criteria, namely, the government’s annual fiscal deficit should not exceed 3% of gross domestic product, and overall government should not exceed 60% of gross domestic product. This is very important for northern Cyprus as it will need to ensure that its economy is resilient.
It is known that the Maastricht Treaty provides some flexibility and the final assessment depends on the ECOFIN Council. Whether and how this would apply in the case of northern Cyprus remains a mystery. While details remain unknown to the public, the one-year transition period envisaged in the case of northern Cyprus could be related this. However, it should be noted that the decision on whether north Cyprus can adopt the euro would ultimately be a political one and would lie with the Council of the European Union. This means that representatives from all EU countries would be required to take a decision based on a proposal by the EC and after consulting the European Parliament.
Given that participation in the ERM II is a precondition for as well as fulfilment of the nominal convergence criteria to join the euro, it is binding and is unlikely to be waived for any country regardless of any special circumstances. This is because ERM II provides the framework to manage the exchange rates between EU currencies, which is necessary for exchange rate stability. As such north Cyprus would be expected to participate in the mechanism without devaluing its central rate against the euro before it can qualify to adopt the euro.
While no provision of the EU Treaty states explicitly that Member States with a derogation must have their own currency, the Treaty is by and large based on this assumption. In addition, the entry into ERM II is decided by mutual agreement of all ERM II parties, which consist of the ministers of the euro area Member States, the President of the ECB and the minister and the central bank governor of Denmark, as the only non-euro area Member State currently participating in the mechanism.
So in the case of north Cyprus adoption of the euro could mean that the country should first introduce its own currency. This could be a more viable alternative and north Cyprus could then peg its currency to the euro as a preparation for an eventual switch to the euro. Indeed, some countries joined ERM II with their preexisting currency pegs. To give a recent example, the currencies of Bulgaria and Croatia were already closely tied to the euro at the time of applying to the ERM II. Bulgaria had a currency board, first with the Deutsche Mark, and subsequently with the euro after 1999. Croatia had a peg first with the Deutsche Mark, and from 1999 to the euro, with a narrow band.
During this process, legal requirements should not also been underestimated. Article 140(1) of TFEU requires the convergence reports to assess the compatibility of national legislation, including the statutes of the national central bank and the Statute of the European System of Central Banks and of the ECB. There could also be additional unprecedented requirements and countries may be required to commit to implementing specific policy measures on a variety of topics. For instance, in the case of Bulgaria and Croatia, such requirements range from the anti-money laundering framework, state-owned enterprises and the insolvency framework, to the non-banking financial sector, corruption and even organised crime. It is highly unlikely that the national legislation in north Cyprus is currently compatible with that of the EU as the latest convergence report suggests that the respective national legislations in none of the seven new EU Member States would be deemed “fully compatible” with the exception of Croatia.
In fact, the former north Cyprus President Mustafa Akıncı himself had confessed that “serious work” would needed to ensure the harmonization of the national institutions with the EU acquis. As can be seen in the case of Croatia and Bulgaria, this has now become a prerequisite not only for joining the EU but also in terms of adopting the euro as a new Member State. For instance, this was the main reason behind the delay in Bulgaria’s acceptance to ERM II. Bulgaria was able to get the green light to join ERM II two years after it formally announced its intention to join the mechanism.
The delay was due to the requirement imposed by the Eurozone governments requiring Bulgaria to join ERM II and the Banking Union simultaneously. This prerequisite is known as “the Cooperation Decision” and requires Member States which adopt the euro to also participate in the Banking Union, i.e. the Single Supervisory Mechanism (SSM), the Single Resolution Mechanism (SRM) and the Single Resolution Fund (SRF). . Therefore, participating in ERM II with a view to later adopting the euro will also involve preparing for joining the Banking Union.
This requirement will now apply to all future candidates including north Cyprus. However, it should also be noted that the procedure for entering the Banking Union is separate from the assessment of the convergence criteria. Joining the Banking Union is irreversible and involves direct powers of the SSM and the SRM over its banking system. This has important implications for the banking sector as banks that will come under the direct supervision of the ECB will also be subject to the direct supervision of the Single Resolution Board (SRB).
To be more specific, this means that, the ECB will become responsible for the direct supervision of the significant credit institutions following the “significance assessment process”. This applies to banks considered to meet the “materiality criteria” as set out in the SSM Regulation (Regulation 1024/2013) and the SSM Framework Regulation (Regulation 468/2014). The criteria include “economic importance for the country” so could technically apply to banks in north Cyprus despite their insignificant sizes in comparison to the EU economy. Therefore, for new joiners like north Cyprus the accession process would involve not only the harmonization with the aquis but also the strengthening of their institutions and administrative capacity that will enable them to implement and monitor the enforcement of the harmonized legislation.
Therefore, adoption of the euro by north Cyprus, bilaterally or unilaterally, would not be as easy as it may look. More than anything else, this would require political will, courage and determination. The former President Mustafa Akıncı, a devoted supporter of a federal solution and the EU, had set an ambitious target of the euro going into circulation “from the first day” in the case of a reunification. However with the failure of the last reunification talks in 2017 in Crans Montana, Switzerland, political conditions have changed dramatically. The current President Ersin Tatar who is a very passionate proponent of the two-state solution is wholeheartedly against the EU and the euro. Therefore, the general stance towards the adoption of the euro in the northern part of the island remains fragmented. Given these circumstances, adoption of the euro in north Cyprus seems a distant prospect.
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