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Customs Union: The world’s largest trading block turns 50

MD Staff

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The Customs Union is unique in the world. It is a foundation of the European Union and essential for the proper functioning of the Single Market.The Customs Union is a single trading area where all goods circulate freely, whether they’re made in the EU or imported from beyond its borders. This means that there are no customs duties at the borders between EU countries. Duty on goods from outside the EU is generally paid when they first enter the EU. From then on, there’s nothing more to pay and no more checks. National customs services in all EU countries work together as one to manage the day-to-day operations of the Customs Union. Member countries share one single system for handling the import, export and transit of goods.

The Customs Union comprises the 28 Member States of the EU, Monaco and British territories. Over 114,000 customs officers work around the clock at airports, border crossings, ports, inland customs offices or customs laboratories. The EU’s customs administrations need to work closely to facilitate trade and protect the health and safety of all EU citizens.

How does the EU’s Custom Union help to protect and keep us safe?

The aim of the Customs Union is to protect society at large while making sure that legitimate trade can flow easily. The Customs Union defends against international trafficking and smuggling, protects consumers against illegal and dangerous goods, and preserves the environment and European cultural heritage as well as the financial interests of the EU and the Member States. In the EU, there are 90 state-of-the-art customs laboratories to carry out this job. Some labs specialise in certain types of analysis – for example, toy safety. When human senses are not enough to detect certain types of illegal goods, customs officers partner up with sniffer dogs which specialise in detecting illegal drugs, suspicious food, explosives or even large amounts of cash. 

HOW THE CUSTOMS UNION PROTECTS  

 DRUGS AND CIGARETTES  
  • In 2016, EU customs seized almost 4.6 billion illegal cigarette and 298.9 tonnes of drugs in the EU.
  • In Spain, for instance, law enforcement dismantled an organisation producing contraband tobacco products. In three of these operations, 15 persons were detained and more than 275 tonnes of tobacco products, valued at more than €20 million, were seized. Two types of machines were confiscated: for the manufacturing of the tobacco products and for drying the tobacco. Additionally, numerous sacks containing chemical substances used to fabricate the final product were also seized.
  • In Poland, a tobacco sniffer-dog discovered 10.5 million cigarettes inside a sea-container at the container terminal of the Gdynia sea-port.
  • On the west coast of France, 19 tonnes of cannabis resin were seized in a sailing ship. Three tonnes of cocaine were found in a maritime container. In addition, 120 000 doses of diazepam were seized.
  • In Spain, a customs boat supported by a customs helicopter intercepted a sailing ship loaded with almost nine tonnes of hashish.
  • In Belgium, customs seized 2 275 kilos of drugs which were smuggled through passenger traffic (by air) and 476kg by express consignments.
 
WEAPONS  
  • Some 6,256 firearms were seized in the EU in 2016, along with more than 1 million pieces of ammunition and 1 520 pieces of explosives.
  • Customs officials in Belgium were able to stop 126 pieces of weapons/ ammunition/ explosives from entering the EU. These weapons were being smuggled into the EU through air traffic or post.
  • In Spain, 737 assault rifles and 72 grenade launchers, including chargers and instruction books were seized.
 
FAKE AND DANGEROUS GOODS  
  • EU customs intercepted products suspected of violating intellectual property rights on more than 63 000 occasions. In 2016, more than 41 million articles were detained with an estimated value of nearly €672 million.
  • Estonian customs seized almost 34,000 pieces of fake “Diesel” jeans in Muuga Port.
  • Greek customs seized more than 1.3 million batteries, 537,000 packs of cigarettes and 24,300 wallets.
  • There were almost 14 000 cases of goods presenting a risk for consumers in terms of health (sanitary, phyto-sanitary and veterinary technical standards). More than 37 million items were identified as unsafe or uncompliant in terms of product safety.
 
GOODS VIOLATING ENVIRONMENTAL RULES  
  • 3,500 infringements of regulations for endangered species (CITES) were detected. In 96 cases, exports were detected which did not respect the rules on exports of cultural goods.
  • Estonian customs seized almost 66,000 tubes of face cream which contained caviar.
  • In France, 110,000 cosmetic products with caviar and protected plants were seized, as well as 46 square meters of alligator skin and 20 tonnes of wood from the exotic “Dalbergia retusa” species.
  • In the United Kingdom, 300 map turtles (Graptemys spp), 5 live giant salamanders, 6 kg of caviar, 300 leather items made from python skin, 760 kg of traditional medicines containing protected plant species and 18 kg of ivory tusks were seized.
UNDECLARED CASH
  • Travelers entering or leaving the EU are obliged to declare amounts of cash valued at €10,000 or more (or its equivalent in other currencies or bearer negotiable instruments) to customs authorities. In 2016, there were 571 significant cases, where seizures of undeclared cash amounted to more than €50,000.
  • Each year, more than 100,000 cash declarations are submitted to customs, amounting to more than €62 billion. Each year, more than 10,000 cases of undeclared cash or incorrectly completed cash declarations are recorded
  • As part of the EU’s Action Plan against Terrorism financing, recently-agreed new rules will extend the rules to cover cash sent in postal parcels or freight shipments, to prepaid cards and to precious commodities.

How does the EU’s Custom Union help to facilitate trade?

The EU is one of the largest trading blocks in the world. In 2015, the EU accounted for almost 15% of world trade in goods, worth €3.5 trillion. Managing this volume of international trade requires handling millions of customs declarations per year in a fast and efficient manner. The Union Customs Code removed the need for hundreds of different customs forms and now allows the use of electronic transport manifests for customs purposes and the moving of goods under temporary storage without lodging a transit declaration. It also introduced centralised clearance, and is more straight-forward for businesses, providing uniform and harmonised rules on guarantees. Finally, it also reduces the administrative burden on compliant and trustworthy economic operators (AEOs) by allowing a number of simplifications of customs procedures, and of the use of guarantees, and by allowing self-assessment of customs debts under certain conditions.

What has the Commission proposed to support customs operations as part of the new EU budget?

As part of the plans for the next EU budget, the Commission has now proposed a continued financial commitment of €950 million for the EU’s customs programme, representing just 0.07% of the entire budget. The programme supports the essential cooperation between customs authorities across the EU and protects the financial and economic interests of the European Union and its Member States. It has helped to build a modern and innovative Customs Union that ensures the safety and security of all EU citizens, while at the same time facilitating growing global trade. It allows the joint development and operation of major, pan-European IT systems and establishes networks, bringing together national officials from across Europe.

The new proposed Customs Programme [LINK] will build on this success, helping customs administrations to deal with increasing trade flows and emerging trends and technologies, such as e-commerce and blockchain. It will also support customs authorities through enhanced cooperation on the ground and more training. The programme will help to provide better risk management to protect the EU’s financial interests and to respond to security threats and cross-border crime. A new Customs equipment instrument worth €1.3 billion is also being created to allow the purchase, maintenance and replacement of innovative customs equipment by Member States.

CUSTOMS UNION – TIMELINE AND KEY STEPS 

1 July 1968 

 

All customs duties and restrictions lifted between the six member countries of the European Economic Community (EEC). A common customs tariff replaces national customs duties on products from the rest of the world. Trade between the countries multiplies and investment and economic growth increases.
1987  One Single Administrative Document replaces hundreds of national customs declaration forms. At the same time, the common transit system is created.
1992  EU adopts the Community Customs Code, creating a common rulebook for customs legislation. This milestone leads to much simpler guidance for traders and customs alike.
1993 

 

Free movement of goods become a reality: no more customs formalities at internal borders of the EU and no more long queues for lorries filled with goods to be checked at border crossings. For the first time, uniform customs legislation becomes directly applicable in all Member States of the EU.
1994  Launch of the integrated tariff of the European Union in digital format (TARIC) with daily transmissions to the EU Member States. It replaced the first TARIC database with weekly transmissions since 1987.
1996 EU-Turkey Customs Union enters into force.
2003  A new computerised transit system becomes operational. It is the first European customs system that uses electronic declaration and processing.
2004  10 new countries join the EU and the EU Customs Union, marking the largest expansion of the EU Customs Union in its history.
2005

 

 

EU launches the Customs Risk Management system that connects more than 800 customs offices and provides a digital platform to exchange information about risks and irregularities. New security legislation is introduced providing for advance cargo information, risk-based controls and measures aimed at end-to-end supply chain security, including through use of technology.
2008 

 

 

EU introduces the Authorised Economic Operator (AEO) status: an internationally-recognised quality mark indicating that a company’s role in the international supply chain is secure, and that customs controls and procedures are efficient and compliant. It is voluntary and enables simplified customs procedures and in some cases the right to ‘fast-track’ shipments through some customs and safety and security procedures.
2011  Customs becomes a major actor for increased security in the EU. Common risk criteria for security and safety start to apply to all goods crossing the EU borders, ensuring equal protection of all EU citizens and member states.
2016 

 

 

The Union Customs Code takes effect, further modernising and streamlining customs procedures throughout the EU. It also introduces a number of IT systems to support harmonised customs rules and to reduce the administrative burden for trade. Full implementation of IT systems is foreseen in steps, with the majority of systems being available by 31 December 2020, with further upgrades during the period up to 2025.
2018 The EU Customs Union celebrates 50 years of operation.

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The spirit of “Greater Albania” acquires Brussels substance

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image source: interaffairs.ru

A meeting of Serbian and Kosovo leaders which is scheduled to take place in Brussels in September may result in the signing of an agreement on the normalization of relations. According to reports, the EU leaders, who act as mediators in the Belgrade – Pristina dialogue, have prepared a draft agreement. Serbian and Brussels sources say the draft provides for recognition of the self-proclaimed independence of Kosovo by Belgrade in exchange for Serbia’s membership in the EU.

However, even if Belgrade chooses to sign the above-mentioned agreement, – such a step will do nothing to secure normalization in the Balkans. On the contrary, it could open a new chapter in the political and administrative “reformating” of the region. What comes as a key factor here is activization on the part of Albania, which is using the Belgrade-Pristina deal for its own purposes, and these purposes are infinitely far from what the leading European capitals count on. It would hardly be an exaggeration to say that a full-blown international and legal recognition of Kosovo’s independence (which is supposed to result from the agreement prepared in Brussels on the normalization of bilateral relations between Belgrade and Pristina) will become a prologue to more active efforts on the part of Albanian radicals to establish “Greater Albania”, which would incorporate Albania proper, most of Kosovo, Presevo Valley, parts of Macedonia, Montenegro, and, possibly, Greece, with a total population of up to 10 million.

Statements in support of creating such a state have come recently from many high-profile political and public figures in Kosovo, who maintain close ties with the Albanian community abroad and with influential American and European politicians.  One of them is Azem Vlasi, who headed the regional branch of the Union of Communists of Kosovo and was a member of the Central Committee of the Union of Communists of Yugoslavia in the 1980s. He doubts that the recent talks in Brussels on the division of Kosovo will produce an agreement.  In his opinion, the authorities in Pristina are not prepared to give up control of the entire territory of the region. Besides, it’s Kosovo that could become a center of the “collection” of Albanian lands in the Balkans.

The main guidelines to methodologically justify the program of creating “Greater Albania” were presented in the 1990s, by one of the most outstanding of Albanian intellectuals, Recep Chosja, who pointed out that «Albania has never accepted its present borders, always trying to remind international circles that its present borders are unfair, as they divide Albanian territory into two parts. These borders run across the very heart of Albanian people».

The official position of neighboring Albania, which is same nationality with Kosovo, is the acknowledgment of inviolability of the existing borders. In 1992 the head of government from the Democratic Party of Albania Sali Berisha said in an interview that «the idea of creating “Greater Albania” is alien to Albanian ruling circles and political forces».

Nevertheless, in May 2011, member of the Presidium of the Democratic Party of Albania, Azgan Khaklai, openly demanded that all Albanian territories should be united to form one state, while the incumbent head of government Edi Rama has been indicating that unification of Albania and Kosovo is Tirana’s Plan A and should be regarded as such in connection with the agreement between Pristina and Belgrade.

Public opinion polls conducted among the Albanian population of the Balkan countries suggest that the program of creating “Greater Albania” has been acquiring ever more popularity among the Albanian population of the Balkan countries. The idea of making Albania’s borders “ethnic” has already won the support of more than 80% of the population of Kosovo, over 70% of residents of Albania, and of more than a half of Macedonian Albanians. About one half of respondents in Kosovo and 40% in Albania believe that Greater Albania with its widest ethnically conditioned borders will come into being in the near future.

Meanwhile, at the end of 2006 a similar study conducted by experts of the UN Development Program found that only 2,5% of Kosovo Albanians considered unification with Albania the best solution, whereas 96% wanted Kosovo to become independent within the existing borders.

Such a situation may force leading world powers and international institutes to reconsider their recent policies, which focused on a state rather than on a territory and which envisaged that each Balkan country should search for a solution of its problems by itself. «A territory-focused policy regards the Balkan region not as a community of established countries, but as a system of territories that stay in dynamic balance and are thus capable of reformatting. «A carve-up of regional borders on the ethno-linguistic and religious principles may acquire fresh impetus in the course of current talks between Belgrade and Pristina. Serbia’s President Aleksandar Vucic has expressed readiness to recognize Kosovo in exchange for territorial concessions, while his counterpart Hashim Thaci hopes to invite to his country Serbian Albanians», – points out Le Monde diplomatique, emphasizing the situation in Presevo Valley, which borders on Kosovo.

Another potentially explosive “hot spot” covers three South Serbian communities (Bujanovac, Medveja and Presevo). According to the last census conducted in  Serbia, about 90, 000 people live on the territories of these three communities. The ratio of Serbs and Albanians is as follows: in Presevo  – 89% Albanians and 9% Serbs, in Bujanovac – 55% Albanians and 34% Serbs, in Medveja – 26% Albanians and 67% Serbs.

Chairman of Presevo community and leader of the Democratic Party of Albanians in Serbia Ragmi Mustafa has spoken in  favor of “exchange of territories” between Belgrade and Pristina, underscoring that all three communities “should join Kosovo” while “northern Kosovo should join Serbia”. In his words, the relevant proposal should be presented at the Brussels talks: «I think that this is the future of our region».

According to leaders of Presevo Albanians, the international community should make the Serbian government “refrain from impeding the expression of the freewill on the part of the population of the Presevo Valley».

Such a position echoes the program of the radical Kosovo movement “Self-Determination”, headed by former Prime Minister Albin Kurti. Kurti believes that Kosovo and Albania “should coordinate their actions and simultaneously streamline their legislation with a view to prepare for two referendums, in Albania and Kosovo,  on the outcome of which Kosovo will unite with Albania”. “I think that  this meets the interests of our people in the economic sphere and in the sphere of security”, – Albin Kurti points out, saying that after the  referendum the time will come to “solve pan-Albanian issues, in the first place, in Macedonia, Eastern Kosovo [Presevo Valley], Montenegro and Greece”. In the opinion of the “Self-Determination” leader, Kosovo authorities ought to hold talks not with Belgrade, about the  division, but with Tirana, about the unification.

Given the situation, there are grounds to expect activization of efforts on the part of both Kosovo authorities and Albanian  leaders in other Balkan countries and territories with a view to build up their military and political might. In fact, this process is already taking place. Deputy Director of the Information and Press Department of the Russian Foreign Ministry Aleksei Zaitsev has made a statement to this effect drawing public attention to the fact that the United States has begun to supply Pristina with military hardware. According to the diplomat, the US is thus openly undermining international efforts oriented at ensuring peace and stability in the Balkans.

Pristina has also stepped up efforts to establish military cooperation with Germany. All this testifies to the escalation of conflict in the Balkan Region amid the ongoing activization of the “Albanian factor”.  

From our partner International Affairs

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Legacy of antifascism for the common pan-European future

Manfred Nowak

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The post WWII architecture is a strong and decisive reaction to the Great Depression, the rise of fascism, the horrors of WWII and the Holocaust. The United Nations, created in San Francisco on 26 June 1945, are built on three main pillars: Freedom from fear and violence, freedom from want and poverty, human rights and respect for human dignity. For the first time in human history, war has been prohibited in international law with only minor exceptions, namely the right of States to self-defence and the collective security system under the guidance of the UN Security Council. For the first time in human history, the promotion and protection of human rights were acknowledged as a legitimate goal of the international community and international law. For the first time in human history, the main perpetrators of war crimes and crimes against humanity had been brought to justice before international military tribunals in Nuremberg and Tokyo. And for the first time in human history, economic and social development, prosperity and the eradication of poverty have been defined as goals of a new world order. These ambitious aims and objectives were only possible thanks to the antifascist consensus among the allies, which at that time seemed to be even stronger than the differences between capitalism and communism. When the UN Human Rights Commission, the predecessor of the current Human Rights Council, drafted the Universal Declaration of Human Rights between 1946 and 1948, this antifascist consensus was still strong enough to achieve a synthesis between the Western and the Socialist concepts of human rights. The Universal Declaration, solemnly adopted in Paris on 10 December 1948, contains civil and political rights together with economic, social and cultural rights and with the vision of a new “social and international order in which the rights and freedoms set forth in this Declaration can be fully realized” (Article 28).

As soon as the Human Rights Commission started to transfer this historic compromise between liberal freedoms and social security into a legally binding universal convention on human rights, the United States and its allies in 1951 forced a decision in the UN General Assembly to split human rights again into two categories, which dominated the ideological debates during the time of the Cold War. The International Bill of Rights, which was finally adopted after long negotiations in 1966, was divided into the International Covenant on Civil and Political Rights, favoured by the West, and the International Covenant on Economic, Social and Cultural Rights, favoured by the Soviet Union and its allies. Civil and political rights and freedoms were conceived as immediately binding State obligations to respect and ensure the rights to life, personal liberty, privacy, security and integrity, freedom of expression, religion, assembly and association and the right to participate in democratic decision making processes. Economic, social and cultural rights to work, fair, equal and healthy working conditions, social security, the rights to food, housing, health, education and an adequate standard of living, on the other hand, were conceived as mere “programme rights” to be achieved step by step through progressive implementation.

As WWII had started as a European war between fascist and democratic States, Europe felt a particular responsibility to prevent another war and catastrophe like the Holocaust through economic and political cooperation and the protection of human rights. While the European Communities of the 1950s aimed at preventing another war through economic integration, the Council of Europe was established already in 1949 as a political organization based upon human rights, pluralistic democracy and the rule of law. The Council of Europe was a Western European organization, which defended these “European values” against any form of totalitarianism, whether fascism (as practiced at that time in Spain and Portugal) or communism (as practiced in a growing number of Central and Eastern European States).By adopting the European Convention on Human Rights(ECHR) in 1950, which only contained civil and political rights, the Council of Europe left no doubt that it was a Western organization, which did not feel bound by the indivisibility and interdependence of all human rights, as expressed in the Universal Declaration. Economic, social and cultural rights played and unfortunately still play in the Council of Europe a subordinate role. The European Convention with the European Court of Human Rights in Strasbourg, which decides in a legally binding manner on tens of thousands of individual applications per year, is the light-tower of human rights protection in Europe, while the European Social Charter of 1961 and its monitoring system is much weaker and very little known to the public. Nevertheless, this is the time when the social welfare state, based on the economic policies of John Maynard Keynes, was developed in Western Europe, North America and other industrialized nations. The architects of the social welfare state or a market economy with a human face were, however, not even aware that they were implementing economic, social and cultural rights, as these rights were primarily associated with the Soviet Union and its allies.

During the Cold War, human rights were the subject of fierce ideological battles between Western and Communist States, and to a lesser degree, the newly independent States of the Global South. Nevertheless, this was the time when human rights were codified at the universal and regional level. In addition of the two Covenants of 1966, the United Nations adopted a number of universal human rights treaties, such as the International Convention on the Elimination of all Forms of Racial Discrimination of 1965, the Convention on the Elimination of all Forms of Discrimination against Women of 1979, the Convention against Torture of 1984 or the Convention on the Rights of the Child of 1989. These core human rights treaties are today almost universally ratified. On the regional level, the two most important treaties, which were largely based on the European Convention, are the American Convention on Human Rights of 1969 and the African Charter of Human and Peoples’ Rights of 1981.

With the implosion of the Communist regimes in Central and Eastern Europe and the velvet revolutions of 1989, which quickly led to the fall of the iron curtain and the end of the Cold War, a historic window of opportunity opened for a new world order based upon human rights, democracy and the rule of law. The 1993 Vienna World Conference on Human Rights and the Vienna Declaration and Programme of Action promised a new era, based upon the equality, universality, indivisibility and interdependence of all human rights, spear-headed by the newly created Office of the UN High Commissioner for Human Rights. For the first time, the collective security system of the UN Charter was applied in practice and led to new generations of peace-building missions with human rights components and peace-enforcement actions, which also tackled some of the worst human rights violations. Two ad-hoc international criminal tribunals for the former Yugoslavia and Rwanda were established by the UN Security Council as the first ones after the Nuremberg and Tokyo military tribunals and led to the creation of a permanent International Criminal Court in 1998. In the same year, the 11th Additional Protocol to the ECHR entered into force and transformed the European Court of Human Rights into a full-time court which since then has delivered thousands of judgments every year, most of them in relation to the newly admitted former Communist States in Central and Eastern Europe. In 2000, the EU adopted a Charter on Fundamental Rights, and the United Nations adopted Millennium Development Goals, which promised a better future, above all for the poor and marginalized communities in the Global South. Despite the genocides in Rwanda and Bosnia and Herzegovina, which happened before the eyes of UN peacekeepers, one can conclude that never before were human rights advanced in such a quick, innovative and forceful manner than during the 1990s.

Let’s go back to 1989, which was a truly remarkable year in human history. In addition to the velvet revolutions, the world wide web was created, and with the “Washington Consensus”, the World Bank and the International Monetary Fund agreed to adopt the neoliberal economic policies of privatization, deregulation and minimizing the role of the State, which had been advocated for many years by the Chicago School of Economics, thereby replacing the more interventionist economic policies of John Maynard Keynes. This meant that the rapid digitalization and globalization of our world were driven by neoliberal economic and financial policies. As a consequence, the historic opportunity of implementing a new world order inspired by universal human rights, democracy and the rule of law wassoon replaced by a new world order driven by transnational corporations and global financial markets. On the one hand, these policies led to an unprecedented economic growth and global digitalization, which contributed to more prosperity and a significant reduction of poverty, above all in China, India and other Asian States. On the other hand, these policies led to a dramatic increase of economic inequality, which is undermining the social coherence and democratic values of our societies. Radical policies of privatization, which had started already in the US and the UK during the 1980s, include even core State functions, such as the military, intelligence, police, justice and prisons (rise of private military and security companies), as well as providing social security, pensions, health care and education. The policy of minimizing the role of the State, which is often imposed on governments by the international financial institutions, result in drastic reductions in social security and social welfare and undermine the obligation of States to protect and fulfil economic, social and cultural rights, but also civil and political rights. In this context, we observe the rising phenomenon of failed and fragile states, which lead to insecurity, armed conflicts, the rise of organized crime and terrorism. Finally, the deregulation of global financial markets led to unprecedented speculations, tax evasion, money laundering, corruption and the undermining of the banking system, which directly resulted in the global financial and economic crisis of 2008. There can also be no doubt that the neoliberal economic policies contributed significantly to the current climate crisis, the ruthless exploitation of nature, deforestation and the destruction of our environment. The slim neoliberal state has no longer the power and the political will to regulate and control transnational corporations and global financial markets, and international organizations, such as the United Nations, the World Bank, International Monetary Fund, the World Trade Organization or the European Union, which would have the power by concerted efforts to regain political control over global markets, are either at the forefront of neoliberal economic policies themselves or are increasingly undermined by nationalistic and populistic politicians. The Brexit, attacks by the Russian Federation against the Council of Europe, the sidelining of the United Nations in relation to the armed conflicts in Syria, Libya and other regions, and open attacks by the United States against the United Nations, its specialized agencies, such as the World Health Organization, or against the International Criminal Court are only a few symptoms of the current crisis of multilateralism.

The world was in disarray when the Corona virus appeared on the global agenda at the beginning of a new decade, and when the COVID-19 pandemic led to an unprecedented lockdown of the global economy, a fundamental restructuring of our daily life and drastic restrictions of our most cherished human rights. Our world was certainly not well prepared to deal with this pandemic, which has caused already more deaths worldwide than the tsunami as the worst disaster of the 21st century. The most neoliberal States, such as the US, the UK and Brazil, which happen to be governed by politicians, who are used to “solve” crisis situations by spreading fake news and searching for scapegoats, seem to be hit most severely. In Europe, States which had cut down their public health and social security systems most radically, such as the UK, Italy and Spain, encountered much more serious problems to contain the spread of the virus than States, where the public health and social security systems had somehow survived neoliberal policies. Even politicians, who for many years had preached that free markets are much better equipped to solve problems than governments, realized that we need strong and well-functioning States to take the necessary measures and that we should listen to experts rather than populists, fake news and social media in order to cope effectively with this pandemic. It is too early to draw far-reaching conclusions since we are still in the middle of this health crisis and do not know how the coming months will develop. Nevertheless, there is a growing awareness among the people, irrespective of their political opinions and political party alliances, that there is something fundamentally wrong with the way how we are living and that we need to drastically change our economic, political and social world order if we wish to ensure the survival of our planet and a healthy and satisfactory life for our children and future generations.

Where does this leave us with respect to the topic of this conference? What can we learn from this short historical overview for a pan-European future, built upon antifascism as a European confidence building block, mutual trust and good neighbourly relations? One conclusion is obvious: In order to deal with the COVID-19 pandemic and other global challenges, such as the global climate crisis, growing economic inequality or global migration, we need to strengthen, rather than weaken, the regulatory functions of States and of international organizations, both at the global and regional (European) level. Secondly, we need to replace the neoliberal economic politics by a new and more social market economy “with a human face”, which is more responsible towards nature, towards economic equality and solidarity with the poor and marginalized sectors of our societies, at the national, regional (European) and global level. This also means that politics need to regain its power to control and regulate the economy, as has been well illustrated during the COVID-19 pandemic. We need to use this new confidence in a responsible regulatory power of politics to also tackle other global threats, such as the climate crisis. At the same time, we need to strengthen the EU by transferring certain powers in the field of social justice, public health, environmental protection, asylum and migration policies from the member States to the EU institutions. The EU, which, despite the Brexit, is still a major global economic and political player, shall further be entrusted by its member States to pursue and strengthen these socially and ecologically sustainable politics also at the global level, above all in the international financial institutions and the WTO.

With respect to the Council of Europe, which is a truly pan-European organization with currently 47 member States and a pioneer in international human rights protection, we need to introduce economic, social and cultural rights on an equal level with civil and political rights and try to overcome the deep distrust between the Russian Federation and Western European States. This requires confidence-building from both sides. The Council of Europe, as a Western European organization, had quickly opened its doors after 1989 and invited the former Communist States to join. Many States used the Council of Europe as an entry door for quick EU and/or NATO membership, which was not always properly coordinated with Moscow and led even to armed conflicts in Georgia and the Ukraine. Many “frozen conflicts” in Europe, such as Nagorno Karabakh, Abkhazia, South Ossetia, Tansnistria, Eastern Ukraine, Kosovo and the Republika Srpska, can only be solved if the Russian Federation is again better integrated into European politics. The Council of Europe and the Organization for Security and Cooperation in Europe (OSCE), provide the necessary diplomatic platforms, but the political will for mutual confidence-building is still lacking. Antifascism is no longer a meaningful basis for a pan-European confidence block, and in fact it had played this role only for a few years immediately after WWII. If the Council of Europe, with the active support of the EU, would be able to build a pan-European social welfare system, which is based on the indivisibility of all human rights rather than on neoliberal economic policies, then it would resume its pioneering role as a political organization that is uniting Europe on the basis of common European values.

(Exclusive speech for the Conference at the DAW, Vienna, 1 July 2020)

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Making Europe’s future rhyme for the Next Generation

Ursula von der Leyen

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History does not always repeat itself but for Europe it does usually rhyme. Or at least it used to.

In the face of a virus that has taken lives and livelihoods across the world, Europe did not give in to age-old instincts or re-open barely healed wounds from the financial crisis a decade ago. Instead, we chose to pull each other through and invest in a common future.

This is why we can say that last week’s decision by the Leaders of the 27 Member States to endorse the European Commission’s recovery proposal was historic.

Firstly, the numbers. Europe will have at its disposal a recovery tool worth 750 billion EUR to support those hit hardest by this crisis. Called NextGenerationEU, it will invest in a recovery that builds a greener, more digital and more resilient Union for our children. This will be topped up by the EU budget for the next seven years, bringing the overall package to 1.8 trillion EUR.

Secondly, it is historic because of how Europe makes it work. For the first time on this scale, the European Commission – backed by the 27 Member States – will use its strong credit rating to raise money on the capital markets for NextGenerationEU.

In past crises, the better off survived while the most vulnerable paid a heavy price. But this time it has to be different. This time we can only get back to our feet if we all pull each other up. This is why most of NextGenerationEU funds will be distributed in grants to Member States to finance crucial reforms and investment. This is European money supporting projects and people from Flensburg to Freiburg, creating jobs locally from Cottbus to Cologne, and Europe’s strength globally.

Reforms and investment will be tailored to what each country needs and be in line with our wider European goals. For some, this will support reforms in the labour market to boost productivity, while others will focus more on education and training to help people develop the skills they need. Some will invest in improving digital infrastructure and others on transport connections. But, crucially, all will contribute to the goals of the European Green Deal. 30% of the overall 1.8 trillion will be ring-fenced for climate related spending and a new Just Transition Fund of 17.5 billion will help those people and regions who have to make a bigger transformation than most.

The third reason we can use the word historic is because of how the money will be repaid. To avoid sending a higher bill to Member States in the future, Europe should repay the funds through what we call new own resources. These will include a levy on big tech companies, a tax on non-recycled plastics and putting a carbon price on imports coming from countries with lower climate ambitions.

Some people will ask about why Germany should raise or repay money with another country thousands of kilometres away. The answer is simple. Europe’s prosperity lies in its unity, its community and its single market. So for us solidarity is actually self-interest and a euro invested in one country is actually a euro invested for all.

Think about what happens to our tourism industry if people from across Europe cannot afford to come to our Alps or to visit our Baltic Sea beaches anymore. Think about what happens to our manufacturers if they cannot get the parts they need from their suppliers in different European countries. Think about how the crisis has taken its toll on us all – on the wellbeing of people, the solvency of businesses, the functioning of society and the health of every single European economy. And it is not over yet.

This is why we need to act urgently, decisively and collectively. And last week, Europe has shown that it is up to the task. Of course, some will point to the long and difficult Summit and see that as hesitation or weakness. We see it as the ultimate sign of Europe’s unique strength.

Just take a step back and look around. Nowhere else in the world could 27 different countries even discuss financing their recovery and future together. We did it over one long weekend. At this very fragile moment in history, being in Europe is the best place to be. And now we need to keep it that way for all by working with governments and parliaments to bring this recovery to life.

Our Union should always be judged on what it can offer for the future. That vision of a common future enabled us to take every bold step in our history: uniting Europe after the Second World War or the end of the Cold War, creating our common market and introducing our common currency. Today, it is that same pioneering vision enabling us to make another historic step for our Union.

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