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Convergence report reviews Member States’ progress towards joining the euro area

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The European Commission has published the 2020 convergence report in which it provides its assessment of the progress non-euro area Member States have made towards adopting the euro.

The report covers the seven non-euro area Member States that are legally committed to adopting the euro: Bulgaria, Czechia, Croatia, Hungary, Poland, Romania and Sweden.

Convergence reports have to be issued every two years, independently of potentially ongoing euro-area accessions.

Valdis Dombrovskis, Executive Vice-President for an Economy that Works for People, said: “Today’s convergence report shows encouraging progress by some countries, although there are still several milestones to pass before they can join the euro area. As ever, the Commission is ready to support those Member States. One significant stepping-stone on this path is joining the ERM II, which Croatia and Bulgaria are currently preparing to do. We welcome the efforts of both countries towards it.”

Paolo Gentiloni Commissioner for Economy, said: “For the past few months, we have been focused on fighting economic divergence within the euro area and the broader single market, an effect of the uneven nature of the coronavirus recession. Today we take stock of convergence towards euro area membership for seven Member States. It’s a necessarily rigorous process because an enlarged euro area must also be a stronger euro area. It remains important that countries also work to ensure real convergence towards higher levels of productivity and prosperity – not least through the future-oriented reforms and investments we wish to support through Next Generation EU.”

Euro area accession is an open and rules-based process. The report is based on the convergence criteria, sometimes referred to as the ‘Maastricht criteria’, set out in article 140(1) of the Treaty on the Functioning of the European Union (TFEU). The convergence criteria include price stability, sound public finances, exchange rate stability and convergence in long-term interest rates. The compatibility of national legislation with the rules of the Economic and Monetary Union is also examined.

The report concludes that:

  • 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.
  • None of the Member States fulfils the exchange rate criterion, as none of them is a member of the Exchange Rate Mechanism (ERM II): at least two years of participation in the mechanism without severe tensions is required before joining the euro area.

While Croatia and Sweden fulfil all of the economic convergence criteria, they do not meet the exchange rate criterion for the above reason.

In addition to the assessment of the formal conditions for joining the euro area, the report finds that national legislation in each of the Member States, with the exception of Croatia, is not fully compatible with the rules of the Economic and Monetary Union.

The Commission also examined additional factors referred to in the Treaty that should be taken into account in the assessment of the sustainability of convergence. This analysis found that the non-euro area Member States are overall well integrated economically and financially in the EU. Nevertheless, some of them show macroeconomic vulnerabilities and/or face challenges related to their business environment and institutional framework.

The impact of the coronavirus pandemic on the results of the report has been limited, as most of the historical data used in the report refer to the period before the outbreak of the crisis, as prescribed by the methodology strictly defined in the Treaty. The Commission provided an initial assessment of the implications of the pandemic in its Spring 2020 Economic Forecast and its subsequent proposal for country-specific recommendations to all Member States, both of which feed into the forward-looking elements of this report.

Background

The Convergence Report by the European Commission forms the basis for the Council of the EU’s decision on whether a Member State fulfils the conditions for joining the euro area.

The convergence report of the European Commission is separate to, but published in parallel with, the convergence report of the ECB.

Convergence reports are issued every two years, or when there is a specific request from a Member State to assess its readiness to join the euro area, e.g. Latvia in 2013.

All Member States, except Denmark, are legally committed to join the euro area. Denmark, which negotiated an opt-out arrangement in the Maastricht Treaty, is therefore not covered by the report.

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Uzbekistan’s Artel joins UN’s ‘Orange The World’ campaign against gender-based violence

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Artel Electronics LLC (Artel), Central Asia’s largest home appliance and electronics manufacturer, has teamed up with the UN Population Fund (UNFPA) on a public information campaign against gender-based violence.

The campaign is in line with the UN’s 16 Days of Activism against Gender-Based Violence, which utilizes the color orange to symbolize a brighter future. Artel’s green branding turned orange for several days in advertising material throughout Uzbek capital Tashkent, and public figures made statements to raise awareness.

Artel joins an international movement that kicked off on 25th November and lasts for 16 days. Since 1991, it has been used by individuals and organizations to call for the prevention and elimination of violence against women and girls.

This is the second year the company has ‘gone orange’. Artel Electronics HR Director, Lazizbek Mamatov, also took part in a panel discussion about Gender Equality in the Workplace hosted by the UNFPA at Westminster International University in Tashkent in line with the campaign.

Shohruh Ruzikulov, CEO of Artel, said “It is a privilege to once more work with the UN in raising awareness about the issue of Gender Based Violence. In Uzbekistan, this conversation is at a relatively young stage. We are proud to stand against domestic violence and continue Artel’s work in all areas to contribute to a better society.”

Mr. Yu Yu, Country Representative of the United Nations Population Fund, said “We are delighted to partner with a company like Artel on such an important issue. The public reach of the private sector is vital in ensuring our message to stand against domestic violence can be heard across all segments of society. We are grateful to Artel for taking leadership on this important issue in Uzbekistan. Together, we can make the change.”

The true rate of domestic violence in Uzbekistan is not known. However, the government alongside diplomatic partners and aid organizations are prioritizing the issue. In recent years the Presidential Administration has issued decrees targeted at domestic violence prevention, the government has adopted laws guaranteeing equal rights for women, and funding has been provided for information campaigns and rehabilitation centers.

Support for this campaign is just one of Artel’s initiatives to support women’s empowerment. Internally, the company has introduced whistle-blowing mechanisms, and is implementing an internal legal clinic to improve the legal literacy of employees. Over the last year, the proportion of women in the company’s 10,000 employees has risen by 5%, to 35%. The global average for the manufacturing industry is thought to be around 30%.

In 2021, Artel became a full participant of the UN Global Compact (UNGC), the world’s largest business community focused on sustainable development. In doing so, the company committed to promoting ten principles covering human rights, labor rights and environmental protection.

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Douglas Macgregor: ‘Russia will establish Victory on its own terms’

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The Biden administration repeatedly commits the unpardonable sin in a democratic society of refusing to tell the American people the truth: contrary to the Western media’s popular “Ukrainian victory” narrative, which blocks any information that contradicts it, Ukraine is not winning and will not win this war, notes in his new article Douglas Macgregor, Col. (ret.), who was the former advisor to the Secretary of Defense in the Trump administration.

Months of heavy Ukrainian casualties, resulting from an endless series of pointless attacks against Russian defenses in Southern Ukraine, have dangerously weakened Ukrainian forces.

Predictably, NATO’s European members, which bear the brunt of the war’s impact on their societies and economies, are growing more disenchanted with Washington’s Ukrainian proxy war.

European populations are openly questioning the veracity of claims in the press about the Russian state and American aims in Europe.

The influx of millions of refugees from Ukraine, along with a combination of trade disputes, profiteering from U.S. arms sales, and high energy prices risks turning European public opinion against both Washington’s war and NATO.

After concluding that the underpinning assumptions regarding Washington’s readiness to negotiate and compromise were invalid, Putin directed the STAVKA to develop new operational plans with new goals:

– first, to crush the Ukrainian enemy;

– second, to remove any doubt in Washington and European capitаls that Russia will establish Victory on its own terms;

– and, third, to create a new territorial Status Quo commensurate with Russia’s national security needs.

It is now possible to project that the new Russian armed forces that will evolve from the crucible of war in Ukraine will be designed to execute strategically decisive operations.

The new military establishment will consist of much larger forces-in-being that can conduct decisive operations on relatively short notice with minimal reinforcement and preparation.

Put differently, by the time the conflict ends, it appears Washington will have prompted the Russian State to build up its military power, the very opposite of the fatal weakening that Washington intended when it embarked on its course of military confrontation with Moscow.

Biden’s “take no prisoners” conduct of U.S. foreign policy means the outcome of the next phase of the Ukrainian War will not only destroy the Ukrainian state. It will also demolish the last vestiges of the postwar liberal order and produce a dramatic shift in power and influence across Europe, especially in Berlin, away from Washington to Moscow and, to a limited extent, to Beijing, writes Douglas Macgregor.

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Politicians and journalists targeted by spyware to testify at Council of Europe parliamentary hearing in Paris

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Politicians and journalists from Poland, Spain and Greece who have been targeted by the Pegasus or similar spyware are to give testimony at a public hearing of the Parliamentary Assembly of the Council of Europe (PACE) in Paris on 12 December 2022, to be live-streamed in English.

The hearing, organised by PACE’s Committee on Legal Affairs and Human Rights, will focus on the role played by spyware in secret state surveillance, as part of a report on this topic being prepared for the Assembly by Pieter Omtzigt (Netherlands, EPP/CD).

Participants include:

  • Krzysztof Brejza, a member of the Polish Sejm from the opposition Civic Platform party, and a former member of PACE (accompanied by his lawyer, Dorota Brejza).
  • Diana Riba, a Spanish member of the European Parliament from Catalonia’s Republican Left Party, and Vice-Chair of the European Parliament’s committee of inquiry which is also currently investigating the use of Pegasus and similar spyware.
  • Thanasis Koukakis, an investigative journalist from Greece specialising in financial affairs, who has reported on corruption and money laundering (via teleconference).

In two earlier hearings, the committee heard from journalists who first revealed the spyware surveillance, as well as data protection and legal experts, and the UN High Commissioner for Human Rights.

In an April 2022 introductory memorandum, Mr Omtzigt listed the different Council of Europe member states where it is alleged Pegasus has been used, those individuals targeted, and the different national inquiries into its use that have been launched, as well as international reaction so far.

He concluded that the use of this software had “serious implications” for the human rights of those targeted, and questioned whether its use on journalists, lawyers, politicians and human rights activists could be justified on national security grounds or to investigate crime.

Mr Omtzigt’s final report is due for possible plenary debate by PACE in June 2023. The Assembly, which brings together 306 parliamentarians from the 46 member states of the Council of Europe, has powers to investigate human rights abuses in member states and make recommendations to Council of Europe governments.

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