Dossier No. 1 (2016) - The Giant Fall. A deeper analysis of the European Crisis

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The Giant Fall

A deeper analysis of the European crisis

Edited By Marcello Ciola

April 2016

Dossier No.

01

Copyright© 2016 by Mediterranean Affairs

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Updated at April 4, 2016

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Summary

Introduction ..................................................................................2

German leadership and European middle powers ...................5

The New German Foreign Policy Outlook ................................5

Economic Virtuosity and the Eurozone’s Drowning .................8

Neighbors and Energy Policy ..................................................17

The Migrant Crisis’ Unilateralism ..........................................22

References ................................................................................30

Recent developments in Greece ................................................37

The Economic Adjustment Plans and their Economic Impact 38

The Rise of Syriza .....................................................................41

The Third Economic Adjustment Plan .....................................43

Sustainability of the Agreement ...............................................48

Conclusion ................................................................................51

References ................................................................................52

The Schengen Crisis and future perspectives..........................57

The Schengen zone and its original goals ...............................57

Factors affecting the future of Schengen .................................60

Schengen as a necessary tool to guarantee the European

Integration Project ................................................................... 66

How to face Schengen’s crisis ................................................. 69

Future perspectives .................................................................. 73

The Eurosceptic Front ............................................................... 76

The challenges of the Union .................................................... 76

On the borders of Europe ........................................................ 79

The newcomers' suspicions ...................................................... 83

The founders' fears ................................................................... 86

Imagine a different future ........................................................ 88

References ................................................................................ 90

TTIP and Euro-Atlantic Ties: Trans-Atlantic Treaty and

European U.S. Relations ........................................................... 92

Introduction .............................................................................. 92

EU – U.S. relations: an economic overview ............................ 93

What is TTIP and what does it aim at?.................................... 96

TTIP: a possible Trojan Horse? ............................................ 102

TTIP (and TPP) in the global context .................................... 107

Conclusions ............................................................................ 110

References .............................................................................. 112

Conclusions ............................................................................... 116

About the Authors .................................................................... 120

The Giant Fall

2

Introduction

Almost a quarter century after the ratification of the Maastricht

Treaty, the European Union is going through probably one of its most

difficult moments. Hit by the proliferation of terrorist attacks in cities

important for its symbolism, like Paris and in the political heart of its

institutions such as Brussels, confused to respond with a unique voice

to the migrants emergency and to the growing economic difficulties, is

reacting so decomposed to the testes which is submitted in this early

twenty-first century.

Hence the need to analyse and deepen the many challenges and

difficulties that the EU will face if it still wants to be called "Union".

Not only that: in all probability this crucial step will be a test case,

useful to rethink the legal structure and the political balances of the

institutions which have hitherto ruled the European government.

This is the goal - however, fully achieved – of this dossier which,

from different viewpoints, faces threats to European stability and duly

explains the fault lines of possible fractures inside the European

Union.

April 2016

3

From the supervisory Unilateralism of German Chancellor Angela

Merkel who has extinguished the dream of an European Germany,

transforming it into the dream of a Germanic Europe, to the growing

consensus of the Eurosceptic parties in many EU states. From the

centrifugal impulses determined by the arrival of thousands of

migrants from the southern and eastern shore of Europe, to the

attempts to tear the historic achievement reached by the Schengen

Treaty on the free movement of peoples on European soil. From the

obstinate persistence in continuing with the economic austerity

policies that have driven many countries into a recession with no end

to the hypothesis of a Greek exit from Euro, until arriving at the non

European foreign policy still delegated to the needs and national

interests of the individual EU states.

The photograph of this Europe is - without question - that of a

"failed Continent", bent to the needs and wishes of the "majority

shareholders" like France and Germany. A neo-Carolingian Europe

that has relegated the countries of its Mediterranean shore to the

"Empire outskirts", allowing more space and political weight to some

states of East and North. A"Baltic Europe" that ends up betraying the

fundamental reasons behind its own constitution. A geopolitical short

circuit that imposes sanctions against Russia for the Ukrainian issue

and - under the counter – allows to Germany to sign the agreement

with Moscow for the construction of the "North Stream 2" energy

project and that openly supports the Transatlantic trade agreement

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4

(TTIP), except for working against it inside the political and European

technocratic underworld.

Understanding these dynamics is therefore of vital importance to

rethink the Europe of the third millennium and showing a way out of

the present moment of impasse. The work presented here is a useful

tool to plot a course.

Daniele Lazzeri

Chairman – Think Tank “Il Nodo di Gordio”

@DanieleLazzeri

April 2016

5

German leadership and European middle

powers

Silvia Nicolardi

In recent years, the German establishment has been able to express a new and

more active foreign policy agenda. The first testing ground of this assertion is the

European region. Going from the dated sovereign debt crisis, to the European

energy policy and to the recent migrant crisis, Germany has often had the last

prevailing word on the issue, at times colliding with other European powers’ raison

d’états and interests. Since when the Euro crisis broke out, Germany has expressed

in a complete and mature way, its leading role in modern European politics.

The New German Foreign Policy Outlook

Being the most populous, economically sound and industrially

powerful European country makes Germany naturally stand out from

the other European partners and empowers it to have a say on any

regional matter. What is more, from those years on Germany has been

undergoing a deep and final change in its foreign policy outlook.

Germany’s President Joachim Gluck at the Munich Security

Conference in 2014, clearly and loudly stated this de facto change and

the evolution of German foreign policy. Mr. Gauck called for a

needed shift in the foreign policy outlook of the nation, being the right

moment for Germany to stop acting as “the shirker in the international

The Giant Fall

6

community”, while using “its Nazi past as an excuse to duck out of rough-and-

tumble diplomacy”1.

Right after the Nazis defeat, Germany’s division and actual loss of a

genuinely independent foreign policy determined the international

behavior of both East and West Germany – and that of the 90s

reunited Germany too. The division of Germany right after the

second World War indeed, lead to the creation of two States whose

sovereign prerogatives

were severely limited

by the Potsdam

Conference terms and

the events occurring

in its aftermath (i.e.

Berlin Blockade).

Furthermore, both

Bonn and Berlin had

to follow the two

Cold War super-powers’ international positions. Hence,

notwithstanding some timid rooms for manoeuvre (for instance, the

Ostpolitik years), during the Cold War the two German States were

hardly having a say on their foreign policy, as well as on their internal

affairs. The only way for West Germany at first, then for the reunited

1 “A Lurch onto The World Stage. Germany is emerging, faster than it wanted, as a global diplomatic force”; 2015 Feb 28th; The Economist; retrieved from http://www.economist.com/news/europe/21645223-germany-emerging-faster-it-wanted-global-diplomatic-force-lurch-world

Willy Brandt (FDR) and Willi Stooh (DDR)

Source: Bundesarchiv

April 2016

7

Germany2, to be accepted again among the sovereign western

democracies and to regain sovereign prerogatives in the running of its

foreign affairs, was the European reconstruction and integration. This

feature of the German foreign policy has been lasting until nowadays,

as one of the main pinpoints of Germany’s diplomacy. Along with this

main feature, the legacy inherited from the Nazi regime and from the

Cold War division, has been weighting on the international behavior

of Berlin inducing it to a quiet, mild, non-imposing and non-

interventionist foreign policy. A constant endeavor has been oriented

toward one major goal: not to be isolated ever again.

Today’s Germany still carries the same foreign policy’s features: the

avoidance of isolation, hence an ever deeper European integration; the

wariness of an autonomous and uncontrolled use of force, hence a

close cooperation with NATO; an economic outreach in the global

stage, hence the commitment to the economic European integration

and to Germany’s intertwining with the most promising world

economies. Other than these elements, there is another one left, and

namely the one that is currently experiencing a deep change: the

reconciling and non-engaged attitude of the German establishment

when it comes to world politics and foreign affairs management. Little

by little over the past ten years approximately, Germany has been

showing an evolution in its diplomacy. It abandoned the mildness and

quietness of the early days, to become a more engaged and proactive

2 It was only in the 1990s with the reunification of the two sides of Germany, that the country formally acquired again the full sovereignty over its res publica, both internally and externally speaking.

The Giant Fall

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actor in the international and regional arenas. Especially in this latter

dimension, and more precisely in the European region, the

engagement of Germany could be proved better than in any other

global stage. Be it the Eurozone economic recovery, or the European

energy policy direction, Germany certainly has had the last word either

autonomously or with an acquiescent European Commission (EC).

The consequences for the European integration are tangible. If some

regional partners are following the German Chancellor by setting up

an allegiance with Berlin, some other are raising their concerns over an

unequal power distribution in the European architecture. Quite often

contrasts over a EC biased towards Berlin – that is what rebellious

States argue – arise to polarize Europe, thus giving the idea of a

compromised Union.

Economic Virtuosity and the Eurozone’s Drowning

Source: Forbes

April 2016

9

First of all, within the European Union (EU), Germany’s increasing

political weight has been attributed to the country’s economic strength

and to the decisive role held in the Eurozone’s3 sovereign debt crisis.

Germany’s role in the Eurozone has been deployed over the past 20

years in two moments: timidly, during the single common currency

area creation and openly, during the recent economic downturn’s

unwinding – being the largest creditor in Europe. The reactions of the

Eurozone’s partners, namely the debtors, have not been missing,

without so far materially changing something in the recovery’s

handling.

When the Economic and Monetary Union (EMU) of the EU was

created in 1992, its Member States (MSs) agreed on a common

European currency – the Euro – and the monetary system left control

of financial, banking and fiscal policies in the hands of national

governments. Little by little, in three stages EMU’s Members

proceeded with a closer and deeper economic integration, thus

creating a European Central Bank (ECB), devolving their sovereignty

over the economic policies to the EMU’s institutions and finally

adopting the single currency. The Eurozone’s economic structures and

economic policy orientations have been then inspired and influenced

by the German ones4. Not only was the ECB, like the Deutsche

3 Currently Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, The Netherlands, Portugal, Slovakia, Slovenia, and Spain. 4 For a historical and economic analysis of the Bundesbank’s influence over the ECB’s creation and the Eurozone framework see Huebner Kurt; 2015 March; “German Economic Governance and the Eurozone: Misguided Leadership?”; Conference Paper for

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Bundesbank, mandated to keep an anti-inflationary behavior, but also

the Maastricht criteria for the EU membership were oriented on price

stability rather than other economic indicators, being directly derived

from the Bundesbank’s economic policy orientation. At the beginning

this system worked well, helping the Eurozone to generate significant

economic growth for its MSs. Interest rates fell to the German low

levels as markets were having low inflation expectations and were

perceiving the ECB’s credibility as directly linked to the strong

German price stability orientation. But after a while, when the sub-

prime crisis broke out in the United States (US) it turned out that

some European banks had bought into the sub-prime loan system in

the US. Europe got contagious. The answer to this first hit to the

economic stability of the Eurozone had been an individualistic, non-

cooperative and detached one5. What is more, notwithstanding the

generalized involvement in the sub-prime crisis, the so-called

periphery countries were treated as if they were solely liable for their

misfortunes. Only when the financial crisis became a real economy

downturn and lead to a sovereign debt crisis for the weakest EU

economies, the Eurozone attempted a group response, by revising

(once again) the 1997 Stability and Growth Pact (SGP). This is the

moment were Germany openly stepped in and stroke back once again.

the European Union Studies Association (EUSA), Boston, Mass; retrieved from https://eustudies.org/conference/papers/download/31 5 Each State identified an autonomous way of approaching the problem and each one proceeded autonomously in facing its national banks’ troubles. For a technical point of view, see Obstfeld Maurice; 2013 April; “European Economy. Finance at Center Stage: Some Lessons of the Euro Crisis”; Economic Papers 493; retrieved from http://ec.europa.eu/economy_finance/publications/economic_paper/2013/ecp493_en.htm

April 2016

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The SGP indeed, already inspired by the German financial discipline,

has been further revised in 2012 (Fiscal Compact) in an even more

austere direction, imposing to MSs the so-called Balanced Budget Rule.

The strict fiscal monitoring discipline and the complete loss of the

state sovereignty over the economic policies was – and still is – the

suggested German recipe to the Eurozone’s fiscal consolidation and

economy recovery. Other than this, Germany and the other creditor

countries did the minimum necessary to preserve the Euro and did

nearly nothing to correct the emerging structural defects of the

Eurozone6. Rather, they continued to push the EC towards a strict

application of the treaties’ provisions, which in the end proved to be

flawed, and to impose the abovementioned new rules that prolonged

and aggravated the recession. Some economists7 and some Eurozone’s

6 Several economists argue on this point, i.e. on the German lack of the proper commitment to the eurozone’s economic recovery. Among them, George Soros; his opinion explained already in 2013, in “George Soros: How to Save the EU from the Euro Crisis”; 2013 April 9th; The Guardian; retrieved from http://www.theguardian.com/business/2013/apr/09/george-soros-save-eu-from-euro-crisis-speech; and also “Soros: ‘Germany should accept Eurobonds or leave the euro’”; 2013 April 10th; retrieved from http://www.euractiv.com/section/euro-finance/news/soros-germany-should-accept-eurobonds-or-leave-the-euro/; the latest statement from an interview to Soros by the German magazine Wirtshafts Woche: Soros George, Schmitz Gregor Peter; 2016 February 11th; “The EU is on the Verge of Collapse – An Interview”; The New York Review of Books; retrieved from http://www.nybooks.com/articles/2016/02/11/europe-verge-collapse-interview/ 7 As abovementioned, Soros’ position on the austerity method is the following: “Germany’s soft impositions on the eurozone’s MSs have been the wrong policies: shrinking the debt burden could not be done by shrinking the budget deficit. The debt burden is a ratio between the accumulated debt and the GDP, both expressed in nominal terms. And in conditions of inadequate demand, budget cuts cause a more than proportionate reduction in the GDP – in technical terms the so-called fiscal multiplier is greater than one. This means for every that for every million euro reduction in the budget deficit, the country's GDP falls by more than a million euros, leading to a rise in the ration of national debt to GDP.” quoting Soros George; 2013 April 9th; “How to save the European Union”; The Guardian; http://www.theguardian.com/business/2013/apr/09/eurozone-crisis-germany-

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members see austerity

inadequate in resolving the

Euro area’s economic

troubles and identify

Germany as the main

“guilty” party in the failed

Eurozone recovery. What

they point out is that the

Bundesbank helped design

the outline for the euro and the latter’s defects put Germany into the

driver's seat; and once the crisis spread out, the first measures adopted

to address it, helped the export-oriented Germany to keep the overall

price levels low, while letting the bank crisis evolve into a sovereign

debt crisis for its EU’s partners. Moreover, being the biggest creditor

among the Eurozone, Germany addressed its fellow partners’ troubles,

by setting up a creditor-to-debtor relation instead of acting jointly as a

monetary and economic union requires to its MSs.

Ever since, the Eurozone’s MSs split up into two different

categories: on one side, the irreproachable creditor States imposing

austerity on the mischievous ones, doing the minimum necessary just

to avoid the default of some countries and to keep intact the

eurobonds. For further reference, Krugman Paul; 2013 November 3rd; “Those Depressing Germans”; The New York Times; retrieved from http://www.nytimes.com/2013/11/04/opinion/krugman-those-depressing-germans.html and Skidelsky Robert; 2014 July 24th; “Germany’s Current-Account Surplus is partly to blame for Eurozone Stagnation”; The Guardian; retrieved from http://www.theguardian.com/business/2014/jul/24/germany-surplus-part-blame-eurozone-stagnation.

Angela Merkel and Matteo Renzi

Source: governo.it

April 2016

13

Eurozone; on the other side, the debtors, subjected to policies that

deepened their depression and eventually aggravated their debt

burden. Germany surely belongs to the first kind of actors: against any

demand-side policy and supporting austerity, the German proposal to

address the crisis has been the one always endorsed by the EC and the

ECB. On the other side, Portugal, Ireland, Italy, Greece, Spain (the so-

called PIIGS) and France sometimes, are those States in favor of a less

strict application of

the EU economic and

fiscal discipline. Some

of them also tried to

openly challenge the

German power in the

EU decision-making

system, in this way

striking the

European, at least apparent cohesion.

What happened is that, in the recent years Germany showed a fierce

opposition to any loosing of the fiscal austerity or easing of the anti-

inflationary targets. So far, Berlin has won the battle against the

debtor’s side. The debtor’s requests for Eurobonds and demand-side

policies, as well as for the increasing of the interest rates and the

adoption of Fed-like policies, failed against the will of Germany and

hence, of the EC and the ECB. Nevertheless, some European States

raised some criticism in the past and continue to do so, with the goal

Bundes Bank HQ

Source: Eu Observer

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of downsizing the monopoly of the euro area economic policy’s

outline and of catching up with a decent economic growth. Especially

Greece, Spain and Italy’s governments have been expressing the

rejection of the austere method. They keep pointing out that after

almost 10 years of strict fiscal policy and German-backed

prescriptions, the Eurozone economy still underperforms8. Going into

details, in Greece the 2015’s victory of the aggressively anti-austerity

government lead by Syriza, together with the “no” vote in the Greek

referendum on bailout terms, posed for a while a challenge to decades

of European integration. That big “no” was the first, clearest and most

open way to express the voices of those in Europe who fiercely

criticize the austerity method and seek a rebalance of power within the

EU framework. Moreover, beyond the Greek open rejection of

austerity, there had been other forerunners in the opposition to what

is perceived as a German overwhelming economic power. For

instance, the Spanish antiausterity party Podemos (We Can) lead by

Pablo Iglesias: in January 2015, Iglesias urged Spain to take to the

streets and demonstrate in order not to become a German colony9. In

addition to Spain, Italy since 2014 with its Democratic Party’s

government lead by Prime Minister Matteo Renzi, has been

challenging the EC’s favoritism for Mrs. Merkel’s team. On each and

8 For instance, the below-zero real interest rates issue and the feeble recovery after the new strategy that couples quantitative easing with negative interests rates; see “Taking Europe’s Pulse. European Economic Guide”; 2016 February 18th; The Economist; retrieved from http://www.economist.com/blogs/graphicdetail/2016/02/taking-europe-s-pulse. 9 “100,000 Flock to Madrid for Podemos Rally against Austerity”; 2015 January 31st; The Guardian; retrieved from http://www.theguardian.com/world/2015/jan/31/podemos-spain-austerity-rally-madrid-syriza.

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every occasion, be it public or private/bilateral, the Italian government

has been fiercely criticizing the excessive power held by Germans

when it comes to others’ economic recovery. More precisely, Prime

Minister Renzi has had words of criticism against Germany and the

Commission: he openly blamed German-led austerity for the

weakening of the Eurozone’s economies, as well as for the rise of

populist politics across the EU. Mr. Renzi also blamed the EC of

being biased toward Berlin, accusing the European system not to

apply rules consistently and equally for all its MSs10. What is more, it is

almost one year now that the Italian establishment goes beyond the

inflamed press releases. Indeed, Italy at times backed by a more timid

France11, shows to be committed in the European unity, instead of

being destructive in its criticism. There have been attempts to join

10 Mr. Renzi openly declared that Germany is standing in the way of reforms needed to make the EU and the eurozone stronger, and that the proposals of countries such as Italy are being ignored. The reference goes for instance on the proposal to create a common European bank-deposit insurance fund in order to underpin confidence in the eurozone’s banking union. Italy pointed out recently, Brussels’s failure to confront Berlin over its vast current-account surplus, currently 8%, well above the EU’s definition of excessive. It believes that if Germany undertook the kind of structural reforms it has been urging on others, including liberalizing its highly regulated product and services markets and open up its infrastructure markets to private investment, the positive spillovers to the wider European economy could be substantial; from Nixon Simon; 2016 January 18th; “Italy Versus Germany: Europe’s Latest Fault Line”; The Wall Street Journal; retrieved from http://www.wsj.com/articles/italy-versus-germany-europes-latest-fault-line-1453062895. 11 For instance: Schlamp Hans-Juergen; 2012 January 1st; “Two versus ‘La Merkel’: Italy and France Team Up against Germany”; Das Spiegel; retrieved from http://www.spiegel.de/international/europe/two-versus-la-merkel-italy-and-france-team-up-against-germany-a-808443.html and also Barkin Noah; 2014 December 7th; “Italy and France Hit Back at Merkel over Economic Reforms Call”; retrieved from https://www.euractiv.com/section/euro-finance/news/italy-and-france-hit-back-at-merkel-over-economic-reforms-call/, while more recently Wagstyl Stefan; 2015 July 15th; “Merkel’s Tough Tactics Prompt Criticism in Germany and Abroad”; Financial Times; retrieved from http://www.ft.com/intl/cms/s/0/d533aa6e-2afe-11e5-8613-e7aedbb7bdb7.html#axzz44rwiSDbK

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forces in order to counterpoise the German-backed austere blindness:

indeed, the difference between Italy on one side, and the Greek voters

and the Madrid’s protesters on the other side, is that Rome is trying to

institutionalize the disorganized debate and the wild criticism. Unlike

Syriza and Podemos, the Italian center-leftist government is trying to

counterbalance the too assertive center-right Germany – in a center-

right Europe12 - with the same orderly language of the EU institutions.

The aim is to resolve the rifts and to bring together all the Europeans’

views, inside the institutional framework where the criticized

leadership is expressed.

Germany has received plenty of critics both from its States and

from the civil society. But so far, the only serious and promising

attempt in rebalancing the power sharing in the Eurozone without

compromising the European integration, has so far been the Italian

one. Italy almost succeeded in giving a political shape to the

dissatisfaction for the austerity method and to the criticism towards a

EU well disposed toward Germany. Italy seems to be able somehow

to express a certain leadership and guidance among its debtor

counterparts, introducing a political and economic alternative inside

the EU politics’ dialectic and defying the Chancellor Angela Merkel’s

undisputed power. Having said so, it should be highlighted that

Germany certainly still has the final, decisive word on the Eurozone’s

economic recovery agenda. But Italy’s standing out from the debtor

12 The reference goes to the current European Commission’s leading party, the center-right European People’s Party, with the EC’s President Jean-Claude Juncker.

April 2016

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States could be seen as a potential, consistent challenge to Berlin, i.e.

as the feasible, European alternative to the German one.

Only time will tell if Italy, alone or jointly with those who raised

some concerns over the austerity’s remedies (i.e. Greece, Spain, at

times France) will be able to exercise a certain counterbalancing power

to the so far undisputed weight of Berlin in the EU decision-making

process. What seems quite sure is that Germany’s power polarizes

Europe, and that the pushback against German power in Europe is

likely to grow if the Eurozone crisis worsens – or if Berlin’s policies

grow more assertive.

Neighbors and Energy Policy

Germany’s influence is not confined to matters related to the

economic and monetary union. It also extends to the EU external

relations and security policy. Especially in the area of external affairs

and neighborhood

policies, Germany

has shown a certain

weight along with a

non-coherent

behavior: the

reference goes to

the EU/German

energy policy’s North Stream II

Source: avgi.gr

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choices and hence, to the EU-Russia relations.

Focusing on the recent years, an external observer could easily

notice that 2014 has inaugurated a rambling German conduct towards

Moscow, despite their tight commercial relations and the German

well-known hydrocarbons dependency on Russia. Prior to the Ukraine

crisis, Germany had been the main European actor pulling Ukraine

towards the EU and far from Moscow, thus practically backing the

Ukrainians’ European aspirations and the pro-EU political forces.

Once the chaos spread within the country and Russia intervened

militarily in Ukraine, Berlin was showing a certain zeal in urging the

EU in implementing an economic sanctions plan against Moscow and

the pro-Russia Ukrainian politicians. But what is odd is that during the

Ukraine crisis’s unfolding, Germany was pushing the EU to take

action against Russia, yet at the same time preventing the EU from

becoming more assertive with Russia under the same circumstances.

The Chancellor took constant, direct phone contacts with the

Kremlin, in this way becoming the leader and spokesperson of the EU

when dealing with the issue13. Lately, the Minsk peace process saw the

EU couple, Germany and France, interceding between Ukraine and

Russia in order to prevent the spreading of violence and to normalize

and stabilize the political relations between the two States, and

between Russia and the EU. Behind this twofaced attitude, there

probably were – and still are – Berlin’s economic interests: the Russian

market and above all, the Russian gas. It is no coincidence that right

13 Pond Elizabeth, Kundnani Hans; March/April 2015; “Germany’s Real Role in the Ukraine Crisis: Caught between East and West”; Foreign Affairs.

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during the Minsk peace deal’s outlining, in September 2015 Germany

and the Russian gas export monopoly Gazprom finally signed an

agreement for the Nord Stream pipeline enlargement14. In the

meantime, the Italo-Russian South Stream was dropped by Moscow

under the EC’s strictness over the EU Third Energy Package, inflating

criticism and exacerbating the already existing political divisions within

the EU.

On the energy policy point of view, Germany has been going along

with Moscow it is about 10 years now15. During this span time

Germany has been politically ambiguous both towards Russia and its

European partners, be they involved in other pipelines construction

projects, be they against a too close rapprochement to a historically

antagonist State. In particular, Germany has been accused by some

EU partners involved in other energy routes planning, of practically

working against their energy policies. In order to do so, apparently

Germany has been pushing the Commission in being very strict when

evaluating the construction of new pipelines other than the Nord

Stream, and when applying the EU Third Energy Package’s directives

and regulations16. The disappointed EU States criticize also the

Commission, underlining that it does not seem to have a so firm hand

14 “Germany Seeks to Overcome Opposition to Nord Stream 2”; 2016 February 1st; retrieved from http://www.euractiv.com/section/energy/news/germany-seeks-to-overcome-opposition-to-nord-stream-2/. 15 In 2001 with the first steps taken towards the Nord Stream pipeline planning; in 2011 and 2012 with the ending of the first and second phase of the pipeline’s construction; in this past year with the ongoing Nord Stream enlargement project. 16 For a technical study http://www.acer.europa.eu/en/the_eu_energy_market/Legislation/Pages/default.aspx.

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when it comes to the evaluation of energy projects where Germany is

involved. More precisely, these harsh stances on the matter are the

ones that have been kept by Italy, during the recent debate over the

planned Nord Stream enlargement. Once again, the related discussion

saw at loggerheads Germany and Italy. In particular, the latter has

been criticizing the easiness of the EC when it comes to the Nord

Stream pipeline evaluation and application of the abovementioned

Third Package. The indulgent behavior of Brussels is practically

opposite to the demeanor held by the Commission when it evaluated

and then flunked the South Stream/Blue Stream project proposed by

Italy and Russia. Recently, the Italian PM raised this issue at the EU

level, contending that Germany is opportunistically breaching the rules

of the EU’s Third Energy Package, which maintains that one company

– in this case Gazprom – cannot own both the pipeline and the gas

being piped through it. He also highlighted that the doubling of Nord

Stream would undercut Europe’s quest for energy security and for the

diversification of suppliers and routes. Moreover, aside the legal basis

of the Nord Stream Two initiative, Renzi also warned that the

expansion of Nord Stream contradicts Europe’s current sanctions

policy against Russia17. What is more, the Nord Stream enlargement

has caused the protests of Central and Eastern European governments

17 Indeed, the EC’s attitude could be even odder if one is aware of the main Russian aim with the Nord Stream construction and enlargement. Moscow’s goal is to energetically isolate Ukraine and let Russia gain preeminence in Central and Eastern European energy markets. The Kremlin has been trying to pursue the goal with the setting up of various understandings, allegiances and pipelines outlines. The South Stream itself but also the Blue Stream pipeline, or the backup option of the Turkish Stream, are all intended to bypass a too-many-times-dissenting and often turbulent Ukraine when transporting to Europe its gas supplies.

April 2016

21

unwilling to see a dreaded historical friendship sprouting again. More

precisely, the governments Estonia, Latvia, Lithuania, Poland,

Hungary, the Czech Republic, Slovakia, Romania and Croatia have

tried to counter the recent developments in the Nord Stream project.

Among the various statements, press releases and joint statements,

they have recently signed a public letter of protest against the project,

addressed to EU President Donald Tusk18.

Those mentioned are all different attempts to stop the Germans

from achieving the goal of becoming the sole major interlocutor of

Moscow in provision of energy supplies to Europe. The achievement

would indeed give to Berlin a role of the outmost importance in the

EU: Germany would become the main hub for the distribution of gas

flows from Russia into the European countries. The two ways of

demonstrating against the German domination and a favorably

disposed Commission are however underpinned by different reasons.

If the group of Eastern countries is first of all historically and

politically afraid of the ever-occurring Berlin-Moscow rapprochement,

the Italian protests against Nord Stream have first of all economic

grounds, then also political ones. And of course these protests are not

about Rome’s relations with Moscow: Russia remains an important

political and economic partner for the Italian government. Rather, it is

all again about the balance of power within the EU, both the

economic power and the political one. Mr. Renzi once again defies

18 Blank Stephen; 2016 March 23rd; “A Comeback for South Stream?”; Eurasia Daily Monitor; The Jamestown Foundation; retrieved from http://www.jamestown.org/programs/edm/single/?tx_ttnews%5Btt_news%5D=45229&cHash=f5a441468521f55938f6b14244816fcb#.VwKHZDaLQy4.

The Giant Fall

22

Mrs. Merkel; and

consequently the EU

is defied by Italy’s

growing rift with

Germany and the EC.

On one side, Italy’s

allegations of

Germany’s self-

interested double standards toward Russia have soured relations

between the two European countries. On the other side, the ongoing

competition between Italy and Germany in becoming the center of the

EU energy supply, results in the mutual obstructing, although with

different results, of their respective energy policies. The Italian

attempts of downsizing the German weight in determining EU

positions (also) on energy issues, underpin the critics towards a doggy

EC. An overview of the situation reveals that the EC’s bending

towards Germany and the reactions of other EU States are bringing to

the European integrity some challenges also in terms of an effective

representation of common shared goals and positions.

The Migrant Crisis’ Unilateralism

Criticism addressed to Germany and coming from the European

bloc could be observed also on the handling of the immigration crisis.

And maybe the real threat to the EU unity and preservation could be

Angela Merkel and Vladimir Putin

Source: Radio Free Europe/Radio Liberty

April 2016

23

seen in the results that the seesawing Germany has been having since

the beginning of migrant arrivals.

As usual, the first EU reaction to address the refugee problem and

deal with the migrants’ influx has been a disorganized one. And also in

this case, as usual the Italian criticism towards the German influence

and the EC’s positions has been raised since the beginning of the

crisis. Mr. Renzi’s public statements have always expressed a certain

dissatisfaction on Germany’s unwillingness to handle the problem and

on the EC’s lack of cooperation. He certainly had a point when

declaring that such a crisis should be tackled by the whole Europe,

rather than autonomously by each and every EU State: given the

international turbulence and the geographical proximity of war-like

scenarios (like Libya, Syria, Iraq and so on), he pointed out, sooner or

later the problem could not be confined in just few European States19.

Hence, when Germany and so the EU, abruptly changed the

respective positions on the issue and in particular, on migration policy,

everybody in the EU was more than surprised. More precisely,

Germany in August 2015 unilaterally abandoned the EU’s Dublin

Convention, with the Chancellor declaring that the German State

would be willing to welcome Syrian refugees and give them asylum

independently from the country of first arrival. The catchy slogan was

“Wir Shaffen Das”, We Can Manage This. The catchphrase quickly

19 For instance, Renzi Matteo, 2015 June 23rd; “The Mediterranean Migrant Emergency is not only Italy’s. It is Europe’s”; The Guardian; retrieved from http://www.theguardian.com/commentisfree/2015/jun/23/mediterranean-migrant-crisis-not-italy-but-europe.

The Giant Fall

24

spread to Syria and other war-torn neighboring regions, where people

were – and still are – eagerly awaiting any opportunity to escape from

poverty, political instability and war-like scenarios. Hence, after

identifying and treating the migrants’ problem as an internal one to be

addressed by each EU’s Mediterranean States alone, Germany

changed its position and launched this allegedly comprehensive, group

response to the ongoing migrant and humanitarian crisis in the

Mediterranean. The Commission followed, by for instance urging

States like Italy, Greece and the Central-Eastern countries to do more

in welcoming migrants and to perform better when providing them

with nutrition, housing and healthcare accession. Most of Germany’s

EU neighbors were appalled by the swift change in Merkel’s

autonomous group declaration (!). Their astonishment grew bigger

soon after the German slogan’s release: indeed, the Balkan Route

connecting Greece to Hungary and Austria, started witnessing an

unprecedented mass influx of refugees. Merkel’s single-handed

declaration resulted in an uncontrolled race towards Europe, quickly

causing the breakdown of the borderless Schengen area. The first soft

rebellion against the German unilateralism came with the EU States

more affected by the migrants’ inflows nowadays, turning their backs

on Schengen. An increasing number of EU countries followed

Hungary’s criticized reintroduction of national border controls. A

historical close ally of Germany, Austria with its democratic

Chancellor Werner Faymann who initially strongly supported Merkel’s

welcoming approach, has then suspended Schengen, reinstated border

controls and strictly enforced daily caps on asylum seekers.

April 2016

25

The German

Chancellor

continued with

the unilateralist

attitude. She

proposed the

introduction of

binding refugee distribution quotas, to be accepted by each EU State

on the basis of a Kantian moral imperative20. The EC followed by also

proposing the same solution. The reactions coming from the

Eurobloc have been various. First of all the so-called Visegrad 4

Group, composed by the Central-Eastern Countries of Czech

Republic, Hungary, Poland and Slovakia, traditionally Germany’s

closest allies, firmly got together to oppose the quotas proposal.

Following this first countering of the German proposal, France’s

Prime Minister Manuel Vallis, warned that the migrant crisis was

causing to Europe a destabilization if it was not brought under control

through a more efficient control of the EU’s external borders,

therefore supporting the British line – also rejecting the binding

quotas. Italy, at the frontline of Europe’s refugee crisis, criticized

Germany’s unilateralism and has always been asking for a joint EU

effort in increasing the external border controls, especially at the sea

20 The statement was made during a conference of the Christian Democratic Union Party (CDU) in Karlsruhe on the 14th December 2015. “Merkel Stands by Refugee Policy at CDU Conference”; 2015 December 14th; Deutsche Welle; retrieved from http://www.dw.com/en/merkel-stands-by-refugee-policy-at-cdu-conference/a-18915784.

The Giant Fall

26

borders. Greece as well, has started asking a new EU border force to

assume full control of the refugee inflows21. After the menaces to

Schengen, the Mediterranean States. i.e. France, Italy and Greece have

replied by suggesting a European solution: they have practically

proposed to close the European ranks, to keep the free movement

area and to increase external controls, rather than geographically

divide Europe.

When Mrs. Merkel started facing also the fading of internal political

consensus22, left alone, the German leader abruptly and again,

unilaterally performed a volte-face in September 2015. It turned out

that Germany could not manage anymore the influx of asylum seekers

and migrants. Germany, the champion of European integration,

reimposed temporary controls along the German-Austrian borders, in

this way accelerating an already galloping crisis inside the EU. Austria,

Slovakia and the Netherlands have followed with further control

impositions in order to avoid stranded refugees on their soil and limit

the refugees’ influx in the countries. Hungary declared an emergency

21 Sarantis Michalopoulos; December 18th 2015; “Greek Minister: New EU Border Force Should Assume Full Control of Refugees”; retrieved from http://www.euractiv.com/section/justice-home-affairs/interview/greek-minister-new-eu-border-force-should-assume-full-control-of-refugees/. 22 The conservative Christian Social Union (CSU) in the Bavarian State, one of those facing the biggest refugee arrivals from the Austrian border, declared itself outraged by Mrs. Merkel’s welcoming stance, calling it a grave mistake. Other regional and municipal governments as well, joined the criticism. Hence, this declared open-door refugee policy exposed deep divide in the Chancellor’s party; “Europe Starts Putting Up Walls”; 2015 September 19th; The Economist.

April 2016

27

status and completely sealed its border with Serbia23. The EC’s has

kept silence over the reintroduction of border controls of course and

its answer, so the German answer, has been Turkey24. This further

exacerbated tensions. The already mentioned Mediterranean States,

and especially Italy and Greece opposed the attempt to give in

Turkey’s hands the keys for the Schengen asylum policy25. But the

fiercest this time came from Italy, practically blocking the

EU/German plan to stem migrants coming to Europe through

Turkey. Once again Italy maintained, or at least tried to maintain, its

combative position against the German obvious weight on each and

every decision taken by the EU, as well as against the doggy behavior

of the EC. The reaction could also be observed from the EU cohesion

point of view. As already underlined, Italy together with Greece and

France, have risen up not only against the EC’s double-standard

treatment when it comes to the evaluation of policies’ suggestions

from EU MSs; rather they are also opposing the disintegration of the

political achievements that EU reached with difficulty over one

century of internal feuds and gridlocks.

23 Growing numbers of refugees are still trapped on the Serbian side and have started evading the barriers, via Romania and Croatia. The events occurred – and are still occurring – in cascade 24 It is necessary to add also that some criticism against the EU-Turkey deal and the German behavior has been raised also from European politicians. For instance we might think to Guy Verhofstadt: the Belgian politician, member of the European Parliament and leader of the Alliance of Liberals and Democrats for Europe (ALDE), criticized the deal on a legal basis. Indeed Turkey is not one of the parties of the 1951 refugee convention, this resulting in Turkey’s relieving of the cogent non-refoulement principle. 25 In particular, Germany, hence the EC, proposed a deal that grants to Turkey 3 billion Euros (€) for handling migrants and keeping them on its soil, and offers a package of political goodies, including speeding up visa-free travel for its citizens and restarting the stalled EU accession application of a not-so-democratic Turkey.

The Giant Fall

28

The final balance of the migrant crisis show that this time Germany

certainly faced some difficulties in determining its European partners’

choices. Nonetheless, despite the voices raised against its unilateralism,

Germany practically won it all. The EU has been following its ever-

changing positions and the Turkey’s deal. But what is dramatic after

almost one year of migrant influxes, are the step backwards made by

the highly integrated Shengen area. In this occasion Germany acted

not just as the main driving force to give direction and shape to the

final EU decisions; but also it directly acted as the main centrifugal

force threatening the EU’s integration.

Berlin’s ability to utilize its institutional heft within the EU means

that unless any European proposal is broadly compatible with the

German national interest, it is unlikely to be realized, irrespective of

the logic behind it. The three issues described above, well show the

EC’s favoritism for any German-backed solution, or flipping the

perspectives, the German weight in the EU decision-making system.

Either striking the EC’s favoritism or the German weight, fierce

criticism has been raised by other EU member States. Especially the

Mediterranean governments have been raising their voices and for this

reason they have been often accused of causing irreconcilable

divisions within the EU. On the contrary, what the three affairs just

described, and especially the consequences linked to the migrant crisis

show a completely different reality.

The rebellious States, among which a constant presence has been

the Italian one, try to counter the disparity of treatment that they

April 2016

29

experience, or at least that is how they feel like. In doing so, what

emerges is that their endeavors, especially the Italian one, are aimed at

rebalancing a sort of German monopoly in the power sharing of the

EU. The way preferred to seek this rebalancing, is the institutional and

democratic one, seen as the best way to propose a feasible, political

alternative to the current status of the EU decision-making system.

Hence, far from wishing the dissolution of the Union, the rebellious

countries, and especially Italy, are seeking to resolve divisions within

the European institutional framework; what they ask is to be heard in

Brussels, being themselves Members of a Union so hardly achieved –

some of them like Italy, are founding members as well. Inclusiveness,

dialogue and unity are far more preferred to partiality, unilateralism

and isolation.

The Giant Fall

30

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The Giant Fall

36

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April 2016

37

Recent developments in Greece

Davide Panadori

The following section will cover the second part “Recent Development in

Greece”. Section 2.1 will briefly explain in what consisted the two economic

adjustment plans imposed by the institutions on Greece in terms of cuts of the

public expenditure. Furthermore, when the term “institutions” is used it refers to

the group composed by the European Commission, the ECB ad the IMF, also

called “Troika”. It will also analyse, using descriptive data, the impact of those

measures on the country’s real economy (real GDP growth and unemployment),

showing the negative impact on the Euro convergence criteria such as the public

debt-to-GDP ratio. Section 2.2 will cover the victory of Syriza in the general

elections in January 2015, showing the rise of euro-sceptic movements in Greece

from the extreme right to the extreme left. Section 2.3 will consider in depth the

third economic adjustment plan and its negotiations. It will further discuss the

incapability for Greece in repaying the IMF instalment, the Greek referendum, the

final agreement and the new elections occurred afterwards. Section 2.4 will try to

assess the sustainability of the third plan arguing that without growth policies the

risk for a fourth economic adjustment plan is not that remote, forcing Greece to find

different sources to fulfil its repayments. An interesting example is the agreement

with China in implementing the “Silk Road Project” (or One Belt One Road

project) involving the Greek coasts. Section 2.5 will summarize and conclude..

The Giant Fall

38

The Economic Adjustment Plans and their Economic

Impact

Although Greece represents only 2.13% of the European Union

(EU) population and 1.46% of the EU GDP, it has increasingly

proved a cardinal middle power to include in any negotiation, thanks

to two main features. First, despite its small economic size, many

countries invested in its bonds, making Greece a contagious risk also

for too-big-to-fail economies. Second, his geographical position makes

any attempt at exclusion from the EU a geopolitical faux pas (Alesina

and Giavazzi, 2015).

In the past Greece faced two bailout programs. In 2010 Greece and

the institutions agreed the first plan establishing a 110 billion bailout

program in order to bring back the government deficit and debt below

Source: calculations by the author based on “Unemployment rate by sex and age - annual average, %

[une_rt_a]” and “GDP and main components - volumes [nama_gdp_k]”, available through Eurostat.

-10,0

-5,0

0,0

5,0

10,0

15,0

20,0

25,0

30,0

1998 2000 2002 2004 2006 2008 2010 2012

Figure 2.1 - GDP growth rate and Unemployment rate (%)

EA Unemployment Greek Unemployment EA Growth Greek Growth

April 2016

39

respectively 3% and 120% of the GDP. With this agreement, they

imposed a fiscal effort of 13% of the GDP. In other words, a

reduction of the government expenditure in order to make return it at

a sustainable level according to Euro convergence criteria. Most of

these interventions were planned to be imposed through expenditure

cuts and revenue measures. On the one hand, a spending reduction in

terms of public wages, public investment and pensions cuts. On the

other hand, an increase of public revenue especially through the VAT

rates. (European Commission, 2010, pp. 13-15). In a later stage

Greece requested for a second bailout program of 164 billion. It was

disbursed through the European Financial Stability Facility (EFSF),

and planning a 50 billion selloff of state owned companies. The

institutions also reconfirmed some cuts present in the first plan, for

instance in the public administration, social expenditure and health

care. (European Commission, 2012, pp. 31-36).

As pointed out by several economists such as Paul Krugman, those

austerity policies imposed by the institutions determined a negative

correlation between them and the economic performance of different

sectors (Krugman, 2015). Here are considered two main effects. The

first direct impact was related with the real economy performances

due to the cuts on the government expenditure and more specifically

on the welfare state. The consequences of those measures on the real

economy are represented by the negative trends of the real GDP

growth and the unemployment rate, showed by Figure 2.1. It is

possible to observe that since 2010 Greece faced different and sharper

The Giant Fall

40

movements on those variables compared to the Euro Area (EA). On

the one hand, the real GDP growth entered in recession in 2008 along

with the EA. However, while the EA got progressively better, Greece

faced a deterioration precisely with the introduction of the first

economic adjustment plan in 2010 with a GDP that on average fell by

4.4% since 2008. On the other hand, the effect of the economy

slowdown affected the Greek unemployment rate that grew up to

27.5% in 2013; more than doubled compared to the EA.

The second indirect impact affected Greek fiscal convergence

criteria, such as the government debt-to-GDP and deficit-to-GDP

ratio. Paradoxically, what the institutions seemed not to understand is

that more austerity measures like government expenditure reduction

lead to a fall of the GDP and a deterioration of the overall ratios. For

instance, Figure 2.2 shows Greece’s and the EA’s debt-to-GDP ratio.

It is possible to observe that from 1995 to 2007 Greece had a debt-to-

GDP ratio of 102.2%, compared to the EA’s 70%. However, with the

beginning of the crisis and the introduction of the economic

adjustment plans, Greece moved to a 178% ratio, while the EA raised

only up to 92%. In these terms, the EA presented better results thanks

to the positive impact on the average of pro-austerity countries such

as Germany, Netherlands, Finland and the three Baltic republics that

kept under control the government expenditure. The opposite could

be said for Greece, that experienced a fall in real GDP, largely

determined by austerity policies, triggering an increase of 70

percentage points in the debt-to-GDP ratio.

April 2016

41

The Rise of Syriza

These two main issues (recession and unemployment) brought the

Greek people to express their discontent towards the EU through the

general elections of January 2015. Syriza, the left party lead by Alexis

Tsipras, won and almost obtained the absolute majority of the

parliamentary seats: 36.3% in terms of votes and 149 seats out of 300

in the parliament (BBC, 2015). Thus, in order to obtain the absolute

majority, Syriza formed a coalition government with the populist right-

wing Independent Greeks party lead by Panos Kammenos, that had

obtained 13 seats. Surely they did not share the same ideological point

of view, but they shared something more relevant for their voters: a

firm anti-austerity stance (Smith, 2015). Furthermore, this government

brought forward one personality, Yanis Varoufakis, that argued for a

completely different economic perspective from the rest of finance

ministers in Europe, claiming to be a Marxist (Varoufakis, 2015). For

Source: calculations by the author based on Government deficit/surplus, debt and associated data

[gov_10dd_edpt1], available through Eurostat.

0,0

50,0

100,0

150,0

200,0

1995 1997 1999 2001 2003 2005 2007 2009 2011 2013

Figure 2.2 Public debt-to-GDP ratio

Euro area Greece

The Giant Fall

42

the first time people such as Junker, Osborne and Schäuble had to

deal with an economist with heterodox ideas, that put them in an

uncomfortable situation in which they were not able to deal with. For

instance, is memorable the meeting between Schäuble and Varoufakis

in Berlin by February 5th, when during the press conference both

parties confirmed that “we did not reach an agreement. It was never

on the cards that we would. We did not even agree to disagree”

(Wagstyl et al, 2015). However, not only the two above-mentioned

parties claimed an anti-bailout program, but also the extreme right

wing party, Golden Dawn, that obtained 17 seats in the parliament

making it the third national party (Hellenic Parliament, 2015). It is

remarkable that Eurosceptic sentiments caused a virtually Fascist party

to become the third most-voted at national level.

Considering the last 10 years, these Greek general elections were the

most EU-related for a single country. Politically speaking, they were a

democratic call for the Greek people to express their opinion on the

EU and its policies: although not officially, it was common knowledge

that they were called mostly to decide either to keep the austerity line

or to choose an anti-bailout strategy.

In the end, what happened in Greece had two main effects. The

first one regards what discussed so far: the rise of Greek Eurosceptic

movements. The second one is the consequence of the first one: the

new Greek approach in negotiating with the institutions. A negotiation

came to the fore with the third economic adjustment plan that

involved direct democracy.

April 2016

43

The Third Economic Adjustment Plan

When Greece had to fulfil its repayment to the IMF the real threat

to the EU began. It is with the third economic adjustment plan and its

negotiations in 2015 that the EU trembled. Indeed, the Greek

government was unable to repay a tranche of 1.6 billion euros

scheduled by the end of June (Wishart and Deen, 2015), forcing both

Greece on one side and the institutions on the other to start a new

bailout program.

The official bailout negotiations started on June 8th. The Greek

authorities proposed a “Greece prior action” that involved 10 main

reforms providing, among others, for a privatization plan to develop

alongside the EIB and the EBRD, the establishment of a Fiscal

council in order to oversee the state of the deficit reduction and a civil

law reform (Varoufakis, 2015). However, the expected reforms in

terms of pensions (considered the red line to not across for the Greek

government) and in terms of value-added tax (VAT) harmonization

were not advanced, two fundamental points for the institutions,

necessary in order to fulfil the fiscal requirements (Blanchard, 2015).

The institutions argued that what had been proposed was in line with

the reform process, but that it could not be considered sufficient to

restore fiscal and financial sustainability in Greece. Therefore, on June

26th the institutions proposed the “Reforms for the completion of the current

programme and beyond” (European Commission et al, 2015). This

document aimed to modify the current proposal by the Greek

The Giant Fall

44

authorities, changing those 10 structural reforms present at the

beginning of the negotiation. The most relevant differences were on

the VAT and on the pensions reforms. First, in terms of VAT the

Greek authorities wanted to maintain the taxation by 13% in the

touristic sector, while the institutions proposed a unification by 23%,

as for most of economic sectors. Second, in terms of pensions the

Greek authorities proposed to set the retirement age at 67 or 62, and

40 years of contribution by 2022. Moreover, although the institutions

agreed on these terms, they also

claimed that the whole plan of

pensions was not sufficient and a

further structural reform would soon

be necessary. In the end, each single

point proposed by the Greek part

were adjusted and re-proposed by the

institutions.

After this new proposal of June

26th, the Greek authorities decided

unilaterally to conclude the

negotiations (European Commission,

2015) and to employ an instrument never used during a bailout

negotiation: a referendum. Alexis Tsipras called the Greek people to

decide in one week the following question: “Should the agreement

plan submitted by the European Commission, European Central Bank

and the International Monetary Fund to the June 25 Eurogroup and

Alexis Tsipras

Source: WikiCommons

April 2016

45

consisting of two parts, which form their single proposal, be accepted?

The first document is titled “Reforms for the completion of the

Current Program and Beyond” and the second “Preliminary Debt

Sustainability Analysis”“ (BBC, 2015). In other words, the government

asked to the Greek people whether or not accept what the institutions

proposed during the negotiations. Moreover, the government claimed

to be against the proposal of the institutions and promoted officially

the “No” campaign. Furthermore, this decision occurred without

giving to the institutions any first notice. Indeed, they did not expect

that during the negotiation Tsipras could call for a referendum. This

decision was an entirely unprecedented move, possible mostly because

of the large support he had obtained in January. In this way, his

Eurosceptic approach was used in order to deal with the EU, which

determined a great distance from his predecessors’ standing.

Eventually the Greek people did not accept that proposal and by July

5th the result of the referendum showed it pretty clearly: 61.31%

voted for “No” refusing the 10 prior actions advanced by the

institutions (Referendum 2015, 2015). This result brought Tsipras and

the Greek government to return to Brussels and to restart the

negotiation with the institutions by July 7th.

The first choice by the Greek government was to remove, by his

own means, the finance minister Yanis Varoufakis, that had since that

moment been seen as a major limit to the agreement between the two

parties. In his replacement Euclid Tsakalotos was appointed as new

finance minister. When the new negotiations started, many analysts

The Giant Fall

46

thought for one week that the possibility to face a Grexit and its

consequences were not very remote. Indeed, many member countries

in the Eurogroup were favourable to that option, in particular

northern countries such as Germany, the Netherlands, Belgium,

Finland, Slovenia, Slovakia and the Baltic republics. On the other side,

countries such as France, Italy, Spain and Portugal – in other words,

the Mediterranean countries – wanted to keep Greece in the

Eurozone. By July 9th the Greek authorities had proposed a new

“Greece: Prior action” that presented some differences, but that at the

same time did not go in the direction the institutions wanted. For

instance, the proposed pensions reform was in line with what asked by

the institutions. At the same time, the VAT reform did not provide for

all the proposals advanced by the institutions, like the VAT discounts

on islands. Also in terms of labour market the Greek authorities

proposed a very different plan compared to the one advanced by the

institutions, for instance by refusing any reform of collective

bargaining and industrial action. Despise those difference, by July 13th

an agreement was concluded.

In the end, they agreed for an 86 billion loan to allow Greece to pay

off its IMF instalment. However, in order to be saved, the institutions

forced Greece to implement by July 15th a set of short term prior

actions contained in a “Memorandum of Understanding” between the

two parties, to be approved by the Greek parliament (EuroSummit,

2015), and providing, for instance, for a reform of the VAT system

abolishing the discounts on islands. Another example is related with

April 2016

47

the pensions reform, that imposed the age retirement at 67 or 62 years

old with 40 years of contribution. In terms of social effort, they agreed

on a “Social Welfare Review” that imposed a reduction of the social

expenditure in order to save 0.5% of the GDP per year (European

Commission et al, 2015). The Greek Parliament maintained its word

approving the prior actions by July 15th with 229 “Yes” and 64 “No”,

most of them coming from the left MPs of Syriza (BBC, 2015).

Consequently, the European Stability Mechanism provided a first

tranche of 13 billion euros by August 20th (ESM, 2015).

The internal disagreement mentioned above among Syriza’s MPs

moved Greece from an economic turbulence to a political one. Just

five days after the first tranche was received, Tsipras resigned and

called for a new general election. The main reason was related with the

lack of support from within its party. Some of its members from the

extreme left seceded and formed a new party named “Popular Unity”,

claiming that the bailout plan did not represent what the Greek people

expressed during the referendum in July, and proposing to stop the

debt repayment and the austerity measures as a whole (Kouvelakis,

2015). In less than one month Greece faced another election and by

September 20th Syriza assured another astonishing victory as Popular

Unity did not even enter in the Parliament. Indeed, Syriza obtained

35.46% and 145 seats (Hellenic Parliament, 2015) – a little difference

compared with the previous election that at the same time showed the

large support from the Greek voters to Alexis Tsipras. Although

Popular Unity did not enter in the Parliament (it obtained only 2.8%,

The Giant Fall

48

while the minimum requirement is 3%), others Eurosceptic parties did

enter, such as Golden Dawn that confirmed its position as the third

national party obtaining 7%. In the end the same coalition government

formed in January was presented, with the only difference that the

anti-bailout wing of Syriza was put aside, guaranteeing more

independence to the re-confirmed Prime Minister Alexis Tsipras.

Sustainability of the Agreement

A final issue remains. Will more fiscal austerity improve the Greek

economic performance? Many authors think that austerity determined

Greece’s incapability to repay its instalment due to the limited chances

to grow (Jones, 2015). The European Commission also expressed its

concern about it. Indeed, it expected a significant reduction in terms

public debt over GDP by 125% by 2020 (European Commission,

2015, p.6). As it was previously explained, the very same austerity

measures used to remedy the situation can determine a worsening of

those criteria that the institutions really care about. Mostly, a fall in the

GDP will determine a fall both in the debt-to-GDP and in the deficit-

to-GDP ratio, as quite intuitively a drop in the denominator (the

GDP) will determine a worsening of the whole ratio. With a fall of

over 4% in terms of GDP since the beginning of the crisis both the

government debt and the government deficit to GDP ratio faced a

deterioration.

April 2016

49

For instance, in terms of the government deficit to GDP Figure 2.3

shows what explained theoretically until now. Greece never reached

the main goal to maintain the government deficit under 3% of the

GDP due to the worsening levels of the real GDP. At the same time

two considerations can be made. First, since the beginning of the crisis

Greece reduced the government deficit-to-GDP ratio from 10.2% to

3.6%, and even if this is not in line with the fiscal convergence criteria

it still represents a relevant effort. Second, Greece is one of the few

countries in Europe that implemented one of the higher fiscal efforts

in absolute value decreasing the government deficit from 35,990

million Euro to 6,346 million Euro (Eurostat, 2015).

What showed so far represent what was first introduced in section

2.1, the fact that fiscal compact policies (or austerity) are counter-

productive, but also that absolute-value data should be considered

during the policy making. Furthermore, those austerity policies

Source: calculations by the author based on Government deficit/surplus, debt and associated data

[gov_10dd_edpt1], available through Eurostat

-18,0

-13,0

-8,0

-3,0

2,0

1995 1997 1999 2001 2003 2005 2007 2009 2011 2013

Fugure 2.3 Government deficit/surplus

Euro area Greece

The Giant Fall

50

determined a decrease in Greek income, with a consequent fall in

terms of tax revenue and a resulting undermining of Greece’s chances

to repay the instalments to the institutions. These type of polices were

applied in the first two economic adjustment plans and in some way

repeated in the third one approved in July 2015. Therefore, it would

not be surprising if another Grexit crisis and new economic

adjustment plans would be faced again. One would argue that this

types of results are expected if austerity measures are not accompanied

with growth policies. Without them in the future the same crisis might

come back again.

It is for this reason that in the proximate future Greece will be

forced to find alternative sources of income. For sure, one that came

to the fore (also in terms of the international relations and the

Mediterranean affairs) is the agreement with China in implementing

the “Silk Road Project” (or “One Belt One Road” project). It will set

an investment of 140 million dollars in developing new infrastructure

across China, Central Asia and Middle East in order to boost the

international trade between China and the west (Lehmacher and

Padilla-Taylor, 2015). The role for Greece in this project is crucial

because the port of Piraeus represent today the destination for about

60% of Chinese shipped exports (Lihua and Trigkas, 2015).

Furthermore, the Chinese government provided an investment of 258

million dollars to develop the port in 2013, increasing Greek profits by

12% (Atzori, 2015). What is happening between Greece and China

could be seen as a paradox. Indeed, Greece could use the privatization

April 2016

51

plan imposed by the institutions in order to develop stronger

international relations with China. But this agreement also invites to

think that if Greece will not feel guaranteed by the EU, it might well

start looking at the East to seek for help in finding a firmer

geopolitical strategy in order to force the EU and the institutions to

rethink their austerity policies.

Conclusion

Three main conclusion could be summarized this final section, and

all of them are connected. First, in terms of internal politics, the Greek

people voting twice for Syriza and Tsipras sent a clear message: the

first time they showed a strong Eurosceptic sentiment, while the

second time they demonstrated their willingness to remain in the Euro

Area. In other words, they expressed a belief that is spreading across

the southern European countries: the Euro as a single currency is not

the main problem, rather the rules within the EU that govern the Euro

are. Second, in terms of international relations, if those rules will not

change to include growth policies, Greece might look at different

solutions in order to survive and search for new non-European

partners such as China or Russia. Third, in terms of European affairs,

this negotiation process showed clearly that every time that direct

democracy is involved EU credibility is undermined, and also that a

small country such as Greece has the power to shake the European

giant.

The Giant Fall

52

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to-hold-firm-on-greek-reforms-as-g-7-delegates-meet

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57

The Schengen Crisis and future perspectives

Sergio Castaño Riaño

The crisis caused by the two World Wars in Europe drove some European

countries to associate different entities which cooperated together as to address the

problems generated by the crisis in various fields. European countries’ alliance was

motivated mostly by economic aspects. However, more policies could be established

to guarantee such economic growth. In this regard, the free movement of people,

goods, capitals, and services was one of the main goals of the European Community

since its inception26. Although politicians kept these goals always in mind, external

and internal circumstances27 impeded them to put in practice the total freedom of

movement act, and the abolition of internal borders within the EU was delayed

until the 1980s.

The Schengen zone and its original goals

The crisis caused by the two World Wars in Europe drove some

European countries to associate different entities which cooperated

together as to address the problems generated by the crisis in various

fields. European countries’ alliance was motivated mostly by economic

aspects. However, more policies could be established to guarantee

such economic growth. In this regard, the free movement of people,

26 Dedman, M.J.. (2012). The Origins and Development of the European Union 1945-2008: A History of European Integration. Abingdon, Routledge. 27 The Schengen area and cooperation. For further information visit: http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=URISERV%3Al33020

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goods, capitals, and services was one of the main goals of the

European Community since its inception28. Although politicians kept

these goals always in mind, external and internal circumstances29

impeded them to put in practice the total freedom of movement act,

and the abolition of

internal borders within

the EU was delayed

until the 1980s.

The first agreement

aiming to phase out

national checkpoints in

Europe was signed in

Schengen30, a border

city in Luxembourg, on

June 15th, 1985. With

the exception of Italy, the other five European Community founding

countries agreed to create a passport-free zone, while the remaining

four countries (Great Britain, Ireland, Denmark31 and Greece) did not

take part in this accord for various reasons. Lacking consensus among

all member states, this agreement was signed outside of the EEC

framework. The benefits obtained by the Schengen participants led

28 Dedman, M.J.. (2012). The Origins and Development of the European Union 1945-2008: A History of European Integration. Abingdon, Routledge. 29 The Schengen area and cooperation. For further information visit: http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=URISERV%3Al33020 30 Kabera, S.. (2008). Transparency and Proportionality in the Schengen Information System and Border Control Co-peration. Leiden-Boston, Martinus Nijhoff. 31 Miles, L; Wivel, A.. (2014). Denmark and the European Union. Abingdon, Routledge.

Source: Nova Republika

April 2016

59

them to hold a convention in 199032 as to reinforce the accords

previously signed. However, only in 1995 other EU countries decided

to join the accord. On that year, Spain and Portugal undersigned the

agreement and two years later Italy agreed to abolish all internal

borders with countries included in the Schengen zone. In 1997, the

EU countries choose to incorporate the Schengen accords in the EU

legislation as part of the changes introduced by the Amsterdam

Treaty33. As a result, the Schengen area was extended to several other

EU member states on May 1st, 1999. The new disposition

incorporated Nordic countries, which had already arranged a previous

passport-free zone with two other non-EU states34, i.e. Norway and

Iceland, which were also accepted as Schengen countries in 2001. At

this time, the majority of EU member states belonged to the Schengen

zone. For a long time, freedom of movement was seen as the

consequence of one of the main goals of the European integration

project, and the majority of EU countries would see the elimination of

internal barriers as a positive change. In this respect, Schengen, the

common market, and the Euro must be interpreted as the elements

most valued by Europeans35.

32 For further information visit: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:42000A0922(02):en:HTML 33 Amsterdam Teatry. For further information: http://www.europarl.europa.eu/topics/treaty/pdf/amst-en.pdf 34 Jahan, S.. (2015). Nordic Cooperation: A European Region in Transition. Abingdon, Routlegdge. 35 González, C..Schengen: a collective asset no one stands up for. Real Instituto Elcano, 23/02/2016. For further information visit: http://www.realinstitutoelcano.org/wps/portal/web/rielcano_es/contenido?WCM_GLOBAL_CONTEXT=/elcano/elcano_in/zonas_in/Commentary-GonzalezEnriquez-Schengen-collective-asset-no-one-stands-up-for

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The challenge for the EU began after the incorporation of ten East

European countries to the European Union in 200436. The inclusion

of these countries meant that all citizens had the same rights within

the EU borders. Nevertheless, economic diversities between ancient

members and the new ones brought uncertainties on allowing

freedom of movement to all these countries. Responding to these

suspicions, the incorporation of Cyprus, Bulgaria, Romania, and more

recently Croatia to Schengen has been postponed.

On the other hand, contrarily to the independent position held by

Switzerland regarding the EU, the benefits given by Schengen pushed

the Swiss government to accept most of the Schengen clauses, even

though Switzerland did not abolish borders controls with the EU.

Therefore, both Swiss citizens and EU citizens benefit from the

Schengen agreements37.

Factors affecting the future of Schengen

While freedom of movement has brought important benefits to EU

countries, gaps in Schengen clauses have led some governments to

reconsider the convenience of having no border controls. Massive

immigration, growing terrorist threat, the effects of the economic

crisis along with the current international circumstances have caused a

36 Tatham, A.. (2009). Enlargement of the European Union. Alphen aan den Rijn, Kluwer Law International; Cremona, M.. (2003). The Enlargement of the European Union. Oxford, Oxford University Press. 37 Schwok, R.. (2009). Switzerland--European Union: An Impossible Membership? Brussels, Peter Lang

April 2016

61

serious crisis in the Schengen zone. The economic crisis started in

2008 marked the turning point of the general positive trend towards

Schengen and other EU policies. Some European countries began to

observe the ongoing arrival of people from other EU member states

with suspicion. Generally, these people left their countries as a

consequence of high unemployment rates after the crisis. People from

Spain, Portugal, Italy, and Greece together with people from recently

incorporated Eastern countries began to move to other more stable

countries seeking job opportunities. These European citizens

benefitted of the same social services as nationals. In this regard, the

increased presence of people from other countries was used by

eurosceptics to begin a campaign against the EU and its free-

movement policies38.

Apart from internal movements, external immigration has always

been a challenge for the EU. Since the 1960s, immigration from

MENA countries has been

continuous. In some terms,

the EU was able to establish

policies addressed to handle

the situation. For a long time

immigration did not

represent a problem in

38 Fundation Robert Schuman. Euroscepticism and Europhobia: the threat of Populism. 14/12/2015. For further information visit: http://www.robert-schuman.eu/en/european-issues/0375-euroscepticism-and-europhobia-europe-under-the-test-of-populism

Source: MMM Global

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Europe. In the 1980s, however, the increasing presence of people of

Muslim backgrounds in Western European countries such as Great

Britain, Belgium, Germany, France, and Holland, generated social

tensions that were later used by far-right political groups to gain

greater political presence in their respective countries39. Once these

parties achieved that greater presence in European parliaments, they

began to pursue populist policies addressed at reinforcing their

campaigns against immigration and the continuity of the passport-free

zone. They blamed the EU for increased immigration fluxes, and

rejected EU achievements in various fields. Similarly, the economic

crisis in southern Europe caused the emergence of anti-EU leftist

parties such as Syriza in Greece and Podemos in Spain, as well as the

re-emergence of left-wing parties in Portugal, which have shown

reluctance toward EU policies40.

Although the EU countries have been destination countries of

migrations from Africa and Asia for decades41, recent migration waves

caused by wars in MENA countries have given rise to a difficult

situation. As a result of these wars, hundreds of thousands of people

have decided to flee from conflict areas and move to Europe. The

EU’s early response to these facts was at first sympathetic, and

39 Bremer, I.. These 5 Facts Explain the Worrying Rise of Europe’s Far-Right. Time, 15/10/2015. For further information visit: http://time.com/4075396/far-right-politics-rise-europe/ 40 The Rise of the European Left: Syriza and Podemos. Cambridge Globalist. 5/02/2015. For further information visit: http://cambridgeglobalist.org/2015/02/05/rise-european-left-syriza-podemos/ 41 Triandafyllidou, A; Gropas, R.. (2014). European Immigration: A Sourcebook. Farnham, Ashgate.

April 2016

63

European authorities agreed on hosting refugees arriving from Syria

and other war-affected zones42. Nevertheless, as of today, after several

meetings the EU has not yet been able to provide answers to the

permanent massive arrival of refugees and immigrants to EU frontiers.

The European Union does not have capacity to accommodate such a

large number of refugees. In 2015 alone, after Merkel’s announcement

of accepting refugees in Germany, about one million refugees got

Europe by seeking asylum in Germany43.

One of the first decisions adopted by the EU to manage this

situation was aimed to increase border controls in the Mediterranean

Sea44. Additionally, the EU sought partners in South Mediterranean

countries as to host some of the refugees fled from Syria and Iraq.

Moreover, the Netherlands proposed a reduction of the Schengen

zone and the creation of a "mini-Schengen" free-travel zone for a

smaller number of countries. This proposal was rejected by most of

the East EU countries. Another option called Greece to be excluded

of the Schengen agreement because of some countries’ criticism of the

way the Greek government managed the refugees’ arrivals on its

coasts.

Once most of the European countries realized the inefficiency of

these measures, some of them decided to reintroduce border controls

42 For further information visit: http://europa.eu/rapid/press-release_MEMO-15-5597_en.htm 43 44 TA safer sea: The impact of increased search and rescue operations in the central Mediterranean. Amnesty International Public Statement. 9/07/2015. For further information: https://www.amnesty.org/en/documents/eur03/2059/2015/en/

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in the most exposed areas. In this regard, and following the

exceptional circumstances as described in Articles 23-25 of the

Schengen Borders Code45, some countries opted for re-introducing

internal border controls because of possible threats to public order or

internal security46. Since September 2015, eight EU member states

have restored

national border

controls47. Germany

re-established

controls on its

borders with

Austria. Likewise,

Austria imposed

new restrictions to

cross the frontier with Hungary. And as for Hungary, a country

situated at the EU external borders of the Schengen area, showed

inclined to build a fence along its border with Serbia. Not only:

Hungarian Prime Minister Viktor Orbán has proposed the

construction of a wall alongside the Macedonian and Bulgarian

45 Schengen Borders Code. For further information visit: http://ec.europa.eu/dgs/home-affairs/what-we-do/policies/european-agenda-migration/background-information/docs/the_schengen_rules_explained_20160210_en.pdf 46 Temporary Reintroduction of Border Control. For further information: http://ec.europa.eu/dgs/home-affairs/what-we-do/policies/borders-and-visas/schengen/reintroduction-border-control/index_en.htm 47 Schengen: Controversial EU free movement deal explained. BBC News, 7/03/2016. For further information: http://www.bbc.com/news/world-europe-13194723

Source: Europe 1

April 2016

65

borders with Greece to restrain the flood of refugees48. Following

similar behavior, Sweden has established identity checks on all

travelers, and in January 2016, Denmark also established new border

controls with Germany. Only few countries had introduced temporary

controls before the current crisis, and these controls had always been

set up as security measures related to particular events49 such as the

visit of international personalities or relevant sporting events.

On the other hand, one important factor that has driven some EU

countries to restore borders checkpoints is the growing terrorist threat

within Europe50. Recent terrorist attacks in Paris, Copenhagen and

Brussels have led European governments to increase security

measures. In this regard, freedom of movement hampers secret

services to follow those who are suspected of collaborating with

terrorist networks. At the same time, the lack of border controls

facilitates terrorists to operate without restrictions in all EU

countries51.

Now that we examined all these issues, we can affirm that the

Schengen zone has faced various critical elements and situations in

recent times that have put into question its very continuity.

48 Kingsley, P.. "Where there's a wal, there's no way: refugee crisis needs a better idea", The Guardian, 25/01/2016 49 Schengen: Controversial EU … cit. 50 Worth, J.. "Cancelling the Schengen agreement won’t make Europe safer", The Guardian, 24/11/2015. 51 Kirkup, J.. "After Paris, Europe’s open borders are dying. That won’t end terrorism, but it will make us poorer", The Telegraph, 15/11/2015.

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Schengen as a necessary tool to guarantee the European

Integration Project

Along with factors leading to reconsider the advisability of keeping

a free movement zone within the EU, there are many reasons for

which the Schengen agreements and the common European process

should be kept alive. Freedom of movement is one of the pillars of the

European integration project. The reestablishment of borders between

the EU member states would mean the first step towards the end of

the EU, since it wouldn’t make sense to continue working on further

integration if one of the fundamental cornerstones was dismantled.

Restoring border controls would have a major impact on the

European economy52. Firstly, thousands of workers who are currently

working in a different country to where they live would be subject to

border controls that would jeopardize the continuity of their jobs53.

Secondly, new movement restrictions within the EU would make it

difficult to transport goods within the European territory. Thirdly, the

president of the European Commission, Jean-Claude Juncker, has

referred to this issue by stating that “without Schengen and the free

movement of workers, of citizens, the euro makes no sense54.” This is

a fact; there is no reason to have a common currency if the EU

countries are not able to respect the fundamental agreements and

52 European Commission - Press release. For further information visit: http://europa.eu/rapid/press-release_IP-16-585_en.htm 53 Becker, A.. "EU border controls: Controversy over costs." Deutsche Welle, 7/03/2016. For further information visit: http://www.dw.com/en/eu-border-controls-controversy-over-costs/a-19099455 54 Pop, V.. " End of Schengen Would Destroy Euro, Warns EU’s Juncker." The Wall Street Journal, 15/01/2016.

April 2016

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guarantee the integration process. However, the majority of the

European leaders are aware of the benefits that the Schengen zone has

brought to the EU countries in the past and thus of the necessity of

protecting them.

Difficulties encountered by the EU authorities to find solutions to

current troubles have been used by eurosceptics to reinforce their anti-

EU theories. Their populist discourse55 has reached to the sectors

affected by the consequences of the crisis, who blame the EU for the

economic and social instability in their respective countries. This fact

has caused the emergence of political opinions criticizing the EU

project. What is necessary to analyze at this point is whether the

emergence of these political parties responds to the people’s real

disaffection towards EU values, or if, on the contrary, these groups

have taken advantage of the present context to spread a suitable

discourse to attract people affected by unemployment and migration

troubles. Would they find similar support in a favorable economic and

social context? This is what the EU has to analyze to undermine

populist discourses. Many sectors could be seduced by anti-EU

proposals and the euroscepticism could increase its followers in the

future56. In this regard, the position adopted by some of the EU

countries regarding Schengen does not help to avoid the consolidation

of anti-EU political parties contraries to the EU. The significance of

these groups in national and the EU Parliament would mean a failure

55 Mudde, C.. (2016). "Populist Radical Right Parties in Europe Today", in John Abromeit,York Norman,Gary (eds.), Transformations of Populism in Europe and the Americas: History and Recent Tendencies. London Bloomsbury Academic. 56 Arató,K; Kanio, P.. (2009) Euroscepticism and European Integration. Zagreb, CPI.

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for the EU project. Similarly, although the UK does not part of the

Schengen zone, the future referendum to reconsider its belonging to

the European Union does not facilitate to raise awareness in the

European society to work together to overcome adversities.

Although some people tend to endorse anti-EU ideologies, there is

a large segment of people who still value the advantages brought by

the EU agreements. The benefits of the Schengen area along with the

opportunities provided by the common currency have permitted EU

citizens to enjoy new options both in private and professional lives57.

The European Union needs to adapt its structures to the present

circumstances in order to prevent other EU countries to adopt similar

negative stances on the EU pillars, but this does not mean ending with

the important achievements getting so far. Schengen and other

European policies have shown their convenience in the past, and for a

long time, they have helped strengthen Europe. The combination of

different EU agreements permitted European countries to set

themselves as benchmarks of prosperity. Europe has faced challenges

along history. In this regard it should be convenient to remember how

negative experiences and difficulties in the twentieth century were

overcome by acting together. For this purpose the EU must modify

some of the present structures. Probably Schengen must be adapted to

the contemporary context. However, keeping freedom of movement

within the EU must represent a priority for all of the EU member

states.

57 González, C..Schengen: a ...

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69

How to face Schengen’s crisis

Along with economic troubles and terrorism, one of the main threat

to Europe, and therefore to the Schengen zone, is the migration crisis.

The EU must increase its efforts to mitigate the effects of the massive

influx of refugees. This should be the first measure to guarantee

Schengen continuity. The policies adopted to control immigrants’

arrivals so far haven’t brought positive results, and new instruments

must be put in practice to handle today’s challenges. Contrary to the

opinion of EU detractors, restoring EU border controls may not be a

solution58. Most people coming to Europe flee a war or escape from

inhuman living conditions. Therefore, the solution is in Europe but is

also to be found in the countries of origin of these refugees and

immigrants.

58 Worth, J.. "Cancelling the Schengen...

Source: Disclose Tv

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Since 1972, Europe has tried to reinforce collaboration with

southern Mediterranean countries59. However, different projects

established to cooperate with southern neighbors have been diluted

and have not brought great results. The Arab Spring changed

completely the Euro-Med approach. As a result, most of the Euro-

Med projects were postponed60. In this regard, the first goal for the

EU must be to pacify Syria. After five years of war, humanitarian crisis

and material destruction represent a difficult work to provide decent

living conditions for Syrian people61. Once the war ends, a long term

project needs to be launched to rebuild Syria. Peace in Syria represents

a priority for the EU. A new peaceful scenario in Syria will stop

massive migration and could lead people who are currently struggling

to get Europe to come back to their homeland. Nevertheless, present

Syrian environment does not make this aim easy, due to the plurality

of actors involved in the conflict.

On the other hand, the EU must increase cooperation with other

African and Asian countries in order to help them to develop their

economies. The improvement of general conditions in the area will

provide people opportunities to remain in their own countries.

Actually, the EU has established programs to foster relations with

both regions. In 2007 was issued the “2007 Joint Africa-EU

59 Xenakis,D; Chryssochoou, D.. (2001). The Emerging Euro-Mediterranean System. Manchester, Manchester University Press. 60 Bicchi, F., Gillespie, R.. The Union for the Mediterranean. Abingdon, Routledge. 61 Humanitarian crisis in Syria ‘much greater than previously reported’, Euronews, 11/02/2016. For further information visit: http://www.euronews.com/2016/02/11/fresh-figures-suggest-scale-of-humanitarian-crisis-in-syria/

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Strategy”62, in 2014 the 4th EU-Africa Summit held in Brussels

confirmed the purposes agreed seven years before on peace, security,

democracy, good governance and human rights. On this subject the

Pan-African Program was set up in 2013 with € 107 million to invest

in migration, education, public finance manage and developing

essential statistics between 2014 and 2017. However, these efforts

have not been enough to improve standards of living in these

countries and to reduce migration to Europe. Therefore a bigger

effort should be done in this field. This must be planned as a long

term project aimed to restore the balance and to make Asian and

African countries attractive to people again.

As previously stated, terrorism is another of the factors

undermining the Schengen agreements. Since 2001, and especially

after terrorist attacks in Madrid and London, the EU member states

have committed to fight together against this global menace63. For this

purpose the Council adopted the EU counter-terrorism strategy in

2005. The strategy was focused on four pillars: prevent, protect,

pursue, and respond. However, as Jean-Claude Juncker claimed after

the suicide attacks in Brussels in March 2016, the EU members have

not put in practice EU agreements on terrorism64. In this sense, it

62 EU-Africa relations. For further informations visit: http://www.eeas.europa.eu/africa/ 63 Castaño, S.. El Islam en Europa, Madrid, Ebook. For furhter information visit: https://www.amazon.es/Islam-Europa-Sergio-Casta%C3%B1o-Ria%C3%B1o-ebook/dp/B016S89J18/ref=sr_1_1?ie=UTF8&qid=1459181049&sr=8-1&keywords=el+islam+en+europa 64 Pérez, C.. " Juncker culpa a los socios de pasividad contra el terrorismo", El País, 24/036/2016.

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should be necessary to improve control systems, share databases, and

develop EU counter-terrorism strategy. Likewise, the EU countries

must implement tougher laws against jihadists and prevent situations

like the one that occurred in Brussels where terrorists who were in the

police’s records were not monitored65. Answering to this issue,

François Holland along with other European leaders called to approve

the Passenger Name Record (PNR)66 as one of the necessaries

measures to control terrorist movements inside Europe.

Reinforcing external

borders is an important area

where the EU has to work to

protect the Schengen zone.

Some countries have acted

independently and in some

cases have decided to

establish border controls. Contrary to the position adopted by these

EU countries, the EU member states need to cooperate to find

common solutions. For this purpose, Frontex was established in 2004

to foster cooperation among European countries in this important

issue. The action of Frontex has been focused on preventing illegal

immigration. However, current immigration crisis has led the

European Commission to create a new agency, European Border and

Coast Guard addressed to strengthen cooperation between Frontex

65 Phipps, C.. "Brussels suicide bomber el-Bakraoui 'caught in Turkey last June' – as it happened", The Guardian, 24/03/2016. 66 Foster, P.. "European cross-border security years away, experts warn", The Telegraph, 23/03/2016.

Source: LA Times

April 2016

73

and national authorities67. The EU has drawn the suitable strategy to

protect Schengen frontiers. Present context moves countries to work

together. Nevertheless, the ongoing arrival of migrants to Europe will

make difficult to carry out these plans.

Future perspectives

Recent circumstances have pushed the European Union to give

answers to present challenges. What is clear is that the EU needs to

adapt its structures and offer solutions to current threats. That does

not mean that the EU takes a step back and dismantles all what has

been achieved so far. However, the unclear position adopted by some

of the EU, especially regarding to guarantee the free passport zone

within the EU, gives rise to various possible scenarios.

One of the plausible scenarios is the creation of a mini Schengen

zone among the more stable EU countries. The majority of the

countries belonging to the new "Mini Schengen Zone" would be far

from conflicted areas and could control people coming to the reduced

free passport zone. At the same time, these countries have important

common economic and political interest that could lead them to

conserve previous Schengen accords that guarantee internal free

movement. This restricted agreement would permit them to establish

borders controls with European Mediterranean countries and with

67 European Commission - Press release. A European Border and Coast Guard to protect Europe's External Borders. For further information visit: http://europa.eu/rapid/press-release_IP-15-6327_en.htm

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their East neighbors addressed to avoid non EU immigrants and

refugees coming to the protected territory. In any case, this decision

would not be accepted by other EU members, since it would mean the

confirmation of a two-speed European Union and would be

interpreted as the beginning of the end of the European Integration

project.

Far from this negative scenario, recent episodes, in particular those

linked with global terrorism, could move European countries to

reinforce their cooperation on different fields and put in practice

instruments to reinforce common activities. In this case, Schengen

agreement would be reinforced and the EU would seek increasing

internal activity to give answers to present menaces.

In the case that the EU has not reached to manage current crisis,

eurosceptic parties would take more political relevance and some

countries could abandon the EU. In this possible scenario, the EU

would be obliged to reformulate its objectives. The remaining

countries would keep pursuing current EU aims but less ambitiously.

The EU will be integrated by the group of countries actually

committed with the European project. This new stage would allow the

remaining countries to redefine the passport-free area and guarantee

the application of new policies aimed to reinforce cooperation.

Finally, another possibility is the continuity. Here, each country

would protect its own interests. The difficulties found to respond to

present challenges would drive countries to establish independent

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75

policies to handle the situation. This instability would undermine the

EU, and therefore the Schengen zone on the mid-term.

Beyond the future perspectives, the crisis started in 2008 with the

economic troubles in some of the countries, along with the instability

caused by massive immigration to Europe, terrorism and the

emergence of the eurosceptics have placed the EU in greatest

challenge since its inception. Whatever the solution, changes are

coming not only in the Schengen area, but also in the whole EU

structures.

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The Eurosceptic Front

Simone Massi

The so-called eurosceptic front brings together movements and people who oppose

further European integration, which implicitly demands a return to a greater

autonomy of the single states. It is a cross-party group, without a clear political

identity, which is nonetheless rapidly gaining consensus in many European

countries, especially those most affected by the economic crisis of 2008. This

analysis will take into consideration more than one country, thus showing the

diversity that lies within the EU, while also highlighting its complexity. Some

important cases are left out (e.g. Greece and the United Kingdom) where problems

are tangled with specific economic and social issues. In order to address

euroscepticism, States have been divided into three groups: the Outsiders, the

Easterns, the Founders. In conclusion, the aim of this work is to offer a summary

of the three challenges that the EU will have to face in the short term to continue

along the path of integration that has characterized its recent years.

The challenges of the Union

Euro-skepticism was born with the Union itself: by definition, each

group is at the same time an element of inclusion and exclusion.

Indeed, the European history of the early years did not show a spread

of this feeling at a general level, at least not until the EU began

replacing nation states in the exercise of certain tasks.

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The feeling of skepticism towards Europe, however, includes two

major subdivisions. The strongest form skepticism is more

antagonistic because it puts into question the very existence of the

union policies and demands the return of the full sovereignty of

nation states. The strongest critic within the European Parliament has

always been the Europe for Freedom and Democracy (EFD) group.

However, there are also more moderate Eurosceptics. Although

they do not question the existence of a federal supranational

organization, they do disagree on institution's operational areas and

they prefer to maintain as much as possible an intergovernmental

system. These MEPs belong to the conservative group Europe of

Freedom and Direct Democracy Group (EFDD) or to the socialist

group Confederal Group of the European United Left - Nordic Green

Left (EUL-NGL).

The formal organization of this movement – which has no specific

ideology, seeing that it brings together parties and people with very

different political experiences – can date back to 2004, at the

beginning of the sixth legislature of the European parliament, when 37

members from ten countries (mainly from Poland and the United

Kingdom) founded the group Independence Democracy

(IND/DEM). The parliamentary group was not decisive in the

political decisions, but it got the attention of the press for its

unconditional criticism of the European institutions. In particular,

they supported a campaign against the Treaty that would have

established a Constitution for Europe, signed on October 29th 2004 in

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Rome in the same room, where the EU treaties were signed in 1957.

Upon ratification of eighteen states, the process was interrupted due

the rejection enhanced by the French referendum on May 29th 2005.

Three days later, a similar referendum in the Netherlands confirmed

the rejection, with a significant percentage of the detractors (61,54%).

The traumatic arrest of the ratification process put an end to the

constitution: two years later, it was rewritten as the Lisbon Treaty

which was signed on December 13th 2007. In order to prevent the past

to repeat itself, the ratification became an exclusive power of the

national assemblies. However, since 1987, the Supreme Court of

Ireland has been requesting to organize a referendum on treaties that

may conflict with the Irish constitution. Despite the approval of the

government and main political parties (except the separatist Sinn Féin

movement), on 12 June 2008, the 53.4% of the Irish people rejected

the constitutional amendment that would allow Ireland to incorporate

the Lisbon Treaty. The economic crisis and the concessions obtained

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during the European Council held on December 11-12th 2008

comforted the Irish public opinion, which expressed itself again by

referendum on July 9th 2009, but in which the votes in favor were the

majority (67.1%).

As we have seen, despite continuous challenges, the EU institutions

have been able to adapt to the demands from below, while avoiding

relegation in the process of integration. Interestingly, popular demands

often become a conflict issue between governments, so much that

they had to find a compromise to achieve the desired results on all

fronts. The next challenge will be the referendum in Great Britain of

June 23rd on the EU permanence. In the previous cases, the EU has

shown an unexpected resilience, but its challenges seem to be getting

more intense and dangerous.

On the borders of Europe

The following paragraph focuses on how to evolve the policy within

the European countries that have not yet completed the process of

European integration, namely Denmark and Sweden.

The history of Denmark's relations with the EU has to The Danish

relations with the Great Britain. Denmark historically exported many

agricultural products to the British islands. To protect these

businesses, in 1961 Denmark applied for the EEC membership,

immediately after the British had done the same. De Gaulle prevented

the access of Britain until 1973, when also Denmark finally joined the

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organization. In 1972 the referendum approved this choice with

63.3% of the votes, but a large part of the opposition founded the

People's Movement against the EU. The movement has been in the

European Parliament since 2004, with one representative. Despite not

having the voters of the past, the party has gathered for a decade

about 8% of Danish electors in the EU parliamentary elections. The

quite low numbers of the movement must not mislead: in 1992, the

votes against prevailed in the first referendum for the ratification of

the Maastricht Treaty (albeit for a very small number, about 1.4%, or

less than 50,000 voters). The ratification failure led to signing the

Edinburgh Agreement in December, which allowed Denmark to get

four exceptions: about citizenship, economic and monetary union,

common defense, justice and home affairs (the Amsterdam Treaty of

1997 weakened the first exception). Denmark basically keep its

monetary policy and can not adopt the common currency. On 18 May

1993, a second referendum agreed to the Treaty and the agreement,

with a margin way too modest. In 2000 another referendum

confirmed the people's will not to join the European currency.

Actually, the Danish krone belongs to the ERM-II system and

maintains a 2.25% fixed exchange rate with euro.

At the popular level, in fact, the gap with the EU is represented by

two officially Eurosceptic parties in the Folketing, the Danish

unicameral parliament: the Red-Green Alliance and the Danish

People's Party, which together occupy 51 out of the 179 parliamentary

seats. In June 2015, the conservative alliance won the political

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81

elections and Lars Løkke

Rasmussen took over as

prime minister, replacing

the previous Social

Democratic government.

His liberal party, Venstre,

for the first time has been

exceeded by the People's

Party, which became the

second most voted party in the country. However, the Red-Green

Alliance, a far-left party, is the main Danish Eurosceptic movement.

In the early 2000, the People's Party supported the Liberal bloc in the

government, but during the Social Democratic government of Helle

Thorning-Schmidt stood out for its strong anti-European policy. The

party opposes the redistribution of migrants according to the EU

proposal and in last January it passed a bill to confiscate the assets of

more than ten thousand Danish kroner (about 1350 euro) to the

migrants, in addition to unilaterally reintroduction of border checks

since 2016. The strong popular opposition to further European

integration emerged also in the last referendum held in December

2015. The 53,05% of the voters confirmed the decision to not

transpose European legislation within the country, as established in

1992 Edinburgh Agreement. Despite the referendum numbers being

always meager, it should be noted that a relative majority is still

opposed to greater integration, even after many years. The

Michael Farage, Ukip

Source: Environmental Europe

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phenomenon of migration, which interests Denmark partially, seems

to emphasize this popular sentiment.

Sweden is another EU country that has maintained some degree of

autonomy, such as the monetary policy. The country joined the

organization in 1995 with two other historically neutral countries,

Austria and Finland. While these two countries continued along the

continental integration process, Sweden maintained its skepticism. The

1994 referendum showed that only over half of the voters (52.3%) was

in favor of entry into the European Community. Unlike Denmark, the

Corfu Treaty - which accessed these countries to the EU community,

transposing the Maastricht Treaty - required the new members to

enter the monetary union once the economic constraints are

respected. The basic requirement is to join the ERM-II system, which

requires a moving window for the local currency. Sweden does not

adhere to this system and in 2003, a year after the euro started

circulating, a referendum confirmed this political choice. The 55.9%

of voters rejected the common currency, despite the moral weight of

Anna Lindh's assassination, the pro-euro Minister for Foreign Affairs

stabbed to death in Stockholm three days before the consultation.

Some parties in power in Sweden, as the Left Party and the Swedish

Democrats, are officially Eurosceptics and together now have three

representatives in the European Parliament. The ruling parties do not

show themselves as opposed to integration, but they do not seem to

be pushing for any progress in this regard either. The treaty accession

of Sweden requires to adhere to the ERM-II system, and the Swedish

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83

krona is too appreciated for the Swedish exports. However, there is no

date for the Sweden membership of the Eurozone. In fact the major

polls show that only a third of Swedish would want to share their

monetary policy with other European countries. Again, the incredible

increase of asylum seekers in the country resulted in tighter regulation

and increased border controls. Sweden has a policy of great openness

and acceptance towards international protection, but in 2014 the

country reached the highest percentage of asylum applications in the

West, that is 76.6% for a total of 30,000 people. The social distress felt

by the population, especially in rural areas of the country, has led to an

increase of consensus of the extreme right party, the Swedish

Democrats. This may be the reason why the government has

announced a reduction in the amount of requests accepted at the

entrance, although without saying anything in absolute numbers.

Basically, recent events are confirming people's idea that preserving

their independence in decision-making is equal to be protected against

external risks.

The newcomers' suspicions

As in other European countries, in Poland there are many minority

parties with eurosceptic ideas: Congress of the New Right, National

Movement, and the more recent Korwin (Coalition for the Renewal of

the Republic – Liberty and Hope). They are mostly conservative

political groups. The most important Polish eurosceptic party is Law

and Justice, which has been ruling the country since last October. In

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the last election this party obtained its best historical result and

confirmed the success of its policies that go against a greater EU

integration. The new Blessed Szydło government is the first single-

party government since 1989 and both the President as the Prime

Minister belong to this party. Law and Justice supports the

strengthening of the national economy and military defenses,

expressing itself in a manner contrary to the adoption of the euro in

the country. The political history of Law and Justice shows

antagonism to the liberal ideology. In particular, it has a very tough

attitude towards the Union's migration policy. Despite the current

president of the European Council, Donald Tusk, has long been the

prime minister of Poland (2007-2014), the country is moving far away

from the European integration process of the past, while nearing the

authoritarian policies of Hungary.

The recent Polish reforms have been challenged hardly both inside

and outside the country, in particular within the European institutions.

In November 2015, the Polish government had reformed the

Constitutional Court, which, however, was declared unconstitutional

by the Supreme Court for fear that in this way the government could

also control the judiciary. Before the summer, the previous

government appointed five new judges of the Constitutional Court,

whose appointment was blocked by President Andrzej Duda. After

the victory of Law and Justice in the elections, the new government

chose five other judges. Finally, the Supreme Court recognized as

legitimate only three of the five nominations of the first government,

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85

but the current government refuses to accept the previous elections.

Other measures, such as the reform of the public media and the

appointment of the head of intelligence at first instance sentenced for

abuse of power.

According to the last year surveys, Hungarians seem to be the most

Eurosceptic people, almost two thirds of the country. During the last

elections of 2014, the nationalist and conservative party Fidesz

achieved a remarkable

victory by gaining 44.87% of

votes, while the Movement

for a Better Hungary – the

radical right party, better

known as Jobbik – is the

third party in the national

assembly with 20.22%. The

prime minister Viktor Orbán

has been in office since 2010 and has won two consecutive elections,

confirming his appreciation, with grapes being the electoral campaign

based on opposition critics and especially the EU. However, the clash

between the Hungarian government and the European Commission

has been going on for years. In 2012 the constitutional reforms

wanted by Orbán have been the subject of three infringement

procedures by the EU: the organization denies the influence of the

government on the Hungarian central bank, on the authority of

guarantee privacy and the strong anticipation of the judges' retirement

Viktor Orbán

Source: Hungarian Spectrum

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age to name others closer to the government. Despite these

reservations, Hungary continued its authoritarian reform path. In

March 2013, Parliament amended the constitution, implementing

some reforms sought by Orbán. The new laws provide for the

limitation of the Constitutional Court on Parliament's rules, the

reduction of political parties in the national media, the redefinition of

the family based on marriage heterosexual, and other limitations on

civil liberties.

The hardness of the Orbán rhetoric toward the EU should give

pause. Despite his political activity is very orthodox, including from an

economic point of view, we must observe that the Hungarian Prime

Minister is fueling the anti-EU protest. Not the population has always

been consistent with his thinking, think of the 2014 protests in

Hungary on increasing Internet taxation. However, the eurosceptic

Orbán government seems to enjoy a considerable popular support.

The founders' fears

In Italy, the only officially Eurosceptic party is the Five Star

Movement, a populist and anti-establishment party founded by the

comedian Beppe Grillo in 2009. The movement bases its ideology on

direct democracy, honesty and politics as a vocation. It obtained the

21.2% of votes at the 2014 European elections, coming in second

place among the Italian parties. Even without a clear opinion on the

decisions to be taken, the movement proposed a referendum to return

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to the national currency, abandoning the euro to which is assigned the

primary responsibility of the economic crisis. This comes close to the

nationalist right parties, including the Brothers of Italy, The Right and

New Force. Another strongly Eurosceptic party, is the North League.

It better rooted in northern Italy and it is promoter of a federal

Europe. The party in fact claims the strengthening of the autonomy of

regions and of local authorities in domestic policy. Despite fierce

opposition to the European institutions, the parliamentarians have

ratified the Lisbon Treaty in 2008. In recent months, the League

leader, MEP Matteo Salvini, became very popular for his criticism of

Europe on migrants.

Germany was one of the six founding countries well before its own

reunification. The main party in the country that promotes some

Eurosceptic arguments is Alternative for Germany. Despite being

officially favorable to European integration, the party asked to return

to a national currency. On 13 March, the party has achieved an

important result in the election of three German states (Baden-

Württemberg, Rhineland-Palatinate, Saxony-Anhalt), where he passed

in some constituencies the CDU, Angela Merkel's party in governing

the country. The defeat of the ruling party is interesting because it was

the first popular consultation to evaluate the policy of “open door”

Merkel towards migrants. Although not represented in the national

parliament, Alliance for Germany occupies seven seats in the EU

Parliament, within the Eurosceptic European Conservatives and

Reformists group.

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The solution that the European countries have found to the

migration crisis does not offer positive prospects. Despite an initial

agreement reached in Malta last year, the redistribution of refugees

among the States did not work, mainly because of the opposition of

the Eastern EU countries. The blocking of borders in the Balkans

highlighted the difficulties to find a common solution, which would

allow to share the burden of the situation. The European sharing

solution failed both because of the Eurosceptic governments both of

the moderate governments' fear to be attacked by anti-European

internal opposition. The risks of this situation, which could be

repeated next summer, are obvious.

Imagine a different future

This summary overview on some European countries tried to

identify some of the pressing challenges that the EU has in front on

his immediate future. The next European elections are still far away,

but national governments faced internal strife and continue to loose

support in favor of more extreme movements.

The first challenge is populism. The populist movements, as in Italy

and Germany, do not seem to be a threat to the ruling parties, but

certainly erode important percentages of voters. Populism is an

ideology without ideas, which still lives as an opposition to the

establishment. Rulers need to answer the populist demand, without

losing sight of the common European goals. The risk that populist

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parties come to power – as

seems to be in Hungary

and Poland – is that states

prefer an autonomous

path of European

integration, especially in

times of crisis.

The second challenge is

negative spillover. During

the last summer, the border management in the Balkans showed the

weakness of European cooperation on this topic. In part a result of

the first challenge, the construction of the walls and restoring border

controls is not in itself a concern, though temporary. The problem

was the domino effect that hit the Balkan countries – which are

candidates or potential candidates for EU membership – and its

neighbors in Eastern Europe. The EU must show the usefulness of

enhanced cooperation.

The third challenge is centripetal force. The combination of

populism and negative spillovers can stave off EU states from their

center, taking them onto a path in order to remove them from the

continental cooperation. In this sense the next UK referendum on

staying in the organization is an example of such. The very fact that a

nation so important and relevant in the mainland ask itself publicly

this question appears to be an important signal to be monitored.

De Gasperi, Adenauer and Shumann

Source: Chaiers Libre

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The European institutions do not appear to be distant from these

reflections. However, the European Union – even with its

supranational bodies – the European Council recognizes its maximum

authority, which is composed of the heads of national governments.

So the future of the Union is in the hands of its own citizens, who

choose their own governments which in turn sit at the board table.

References

Boomgaarden, H. Schuck, A. Elenbaas, M. De Vreese, C. (2011).

Mapping EU Attitudes: Conceptual and Empirical Dimensions of

Euroscepticism and EU support. European Union Politics 12, 241-266.

Curtice, J. Evans, G. (2015). Britain and Europe: Are We All

Eurosceptics Now?, in Ormston, R. Curtice, J. (eds.). British Social

Attitudes. The 32nd Report. London, United Kingdom: NatCen

Social Research.

Gabel, M. (1998). Public Support for European Integration: An

Empirical Test of Five Theories. Journal of Politics 60: 333-354.

Garry, J. Tilley, J. (2009). The Macroeconomic Factors

Conditioning the Impact of Identity on Attitudes towards the EU.

European Union Politics 10: 361-379.

Hartleb, F. (2015). A Thorn in the Side of European Elites. The New

Euroscepticism. Bruxelles, Belgium: Wilfried Martens Centre for

European Studies.

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91

Szczerbiak, A. Taggart, P.A. (2008). Opposing Europe? The Comparative

Party Politics of Euroscepticism. Oxford, United Kingdom: Oxford

University Press.

Sides, J. Citrin, J. (2007). European Opinion about Immigration:

The Role of Identities, Interests and Information. British Journal of

Political Science 37: 477-504.

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TTIP and Euro-Atlantic Ties

Trans-Atlantic Treaty and European U.S.

Relations

Federico Brembati

“[…] We should remember that today’s world presents not just dangers, not

just threats, it presents opportunities. […] To boost American exports, support

American jobs, […] tonight I’m announcing that we will launch talks on a

comprehensive Transatlantic Trade and Investment Partnership with the European

Union, because trade that is fair and free across the Atlantic, supports millions of

good-paying American jobs.”68.

Introduction

With these words, on February 12, 2013, in Washington DC,

President Obama announced to the Congress the beginning of talks

on the Transatlantic Trade and Investment Partnership (TTIP). This

proposed project, if achieved, would be the biggest “comprehensive”69

bilateral trade agreement ever witnessed. The European Union and the

United States do not share just similar geopolitical outlooks. The

68 Remarks by the President in the State of the Union Address. (2013). Retrieved

March 12, 2016, from https://www.whitehouse.gov/the-press-office/2013/02/12/remarks-president-state-union-address

69 The adjective “comprehensive” indicated that the agreement would include both goods and services.

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economic relationship between the two areas today is, in fact, the

largest in the world. TTIP will probably not just affect the two parties,

but could potentially have an impact on developing and emerging

economies as well.

Nonetheless, the devil could be in the details. Supporters of this

agreement claim it will actually not just boost the EU - U.S. economies

but the entire world’s trade as well whilst opposers denounce it is a

threat to democracy and only multinationals will benefit from the

accord.

TTIP: a still under discussion “comprehensive” (and secret)

agreement.

EU – U.S. relations: an economic overview

With a total population of around 900 million people and an

aggregate GDP of around $35 trillion (nearly half of global GDP),70

the United States and the European Union constitute what today is

the biggest existing trading bloc.

First, Europe is, cumulatively, the largest regional investor in the

United States. Between 2004 and 2012, the European FDI stocks in

the U.S. more than doubled. In 2012, EU FDI in the United States

amounted to $1.6 trillion, mainly focused on manufacturing,

finance/insurance, banking, wholesale trade, and information sectors.

70 2014 data

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On the other side, U.S. FDI in the EU was $2.2 trillion (with a 10.0%

increase from 2011), mainly concentrated in the nonbank holding

companies, finance/insurance and manufacturing sectors.

Second, a relatively high share of the EU-28’s trade in services71 is

with the United States. The latest data available related to the

European Union, from 2012, report a value of $184 billion for export

and $168 billion for imports.72

Third, and most importantly, according to the official data

published by the U.S. Department of Commerce and Eurostat, in

71 Trade in services refers to main categories such as: transport, travel,

communication services, construction services, etc. 72 Conversion from Euro to US Dollar realised according to rate exchange of March

the 14th 2016.

EU trade in goods and services with the US in 2012

Source: European Parliamentary Research Service Blog

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2015 the European Union73 has remained the principal trading partner

of the United States, with a total trade value of roughly $700 billion.

U.S. exports to the EU accounted for $272 billion while its imports

$426 billion. Interestingly, the American trade deficit of $154 billion

underlines the high amount of “Made in Europe” imports over its

“Made in USA” exports.

Nevertheless, despite the already excellent trade situation, many

investors regard that the enormous potential of the transatlantic

commercial relationship is still far from being fully exploited. Given

the importance and attractiveness of the North American region for

the EU investors and of the European market for the U.S. investors,

in fact, any attempt aiming to remove regulatory barriers to

transatlantic investments can be expected to potentially have a very

large impact. This is where TTIP comes into play.

73 The top three European partners in 2015 were Germany ($174 bln), United

Kingdom ($114 bln), and Netherlands ($57 bln.)

Trade flows by SITC (Standard International Trade Classification) section 2010 – 2014

Source: Eurostat

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What is TTIP and what does it aim at?

TTIP, as mentioned before, stands for Transatlantic Trade and

Investment Partnership: a proposed comprehensive trade deal

negotiated between the European Commission and the U.S.

government.

It all goes back to November 2011 when American and European

leaders agreed it was necessary to incentive reciprocal trade to react

against the disastrous effects of the financial crisis. TTIP was then

officially announced and launched in the U.S., first, in February 2013

and in Europe, afterwards, in June, on the margins of the G8 Summit

at Lough Erne, Northern Ireland.

In July, the first round of talks took place in Washington DC. Dan

Mullaney (U.S.) and Ignacio Garcia Bercero (EU) represent the two

parties in the negotiations.

The agreement is expected to have 24 chapters covering three main

areas:

Part 1 - Market Access: by ratifying TTIP, the already

relatively low transatlantic traffic barriers74 would be further

reduced, if not removed. The target is to achieve the highest

levels of liberalization and investment protection that both

74 5.2% for the EU and 3.5% for the U.S. (WTO estimates)

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the EU and the U.S. have negotiated to date in other trade

deals. The four chapters of the first part are:

o Trade in Goods and Customs Duties;

o Services;

o Public Procurement;

o Rules of Origin.

Part 2 - Regulatory Co-operation: the real obstacle for EU

– U.S. goods are the so-called “behind-the-border” obstacles,

and not just the tariffs paid at the customs. Because of the

different production standards, in fact, goods belonging to

sectors such as transportation, health, ICT, etc. need to be

further approved to match the regional markets’ standards.

The 12 chapters of the second part are:75

o Regulatory Coherence;

o Technical Barriers to Trade (TBTs);

o Food Safety and Animal and Plant Health (SPS);

o Chemicals;

o Cosmetics;

o Engineering;

75 Food Safety and Animal and Plant Health (SPS), Chemicals, Cosmetics,

Engineering, Medical Devices, Pesticides, Information and Communication Technology (ICT), Pharmaceuticals, Textiles, and Vehicles are classified as “Specific industries”.

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o Medical Devices;

o Pesticides;

o Information and Communication Technology (ICT);

o Pharmaceuticals;

o Textiles;

o Vehicles.

Part 3 - Broader Rules and Principles and Modes of

Cooperation: in the fashion of the impact of such an

agreement, both parties will be committed to maintaining

and promote a high level of intellectual property protection,

by operating in a sustainable way to respect the environment,

and in a more and more simplified and transparent system.

The eight chapters of the third part are:

o Sustainable Development;

o Energy and Raw Materials (ERMs);

o Customs and Trade Facilitation (CTF);

o Small and Medium-Sized Enterprises (SMEs);

o Investment;

o Competition;

o Intellectual Property (IP) and Geographical Indications

(GIs);

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o Government-Government Dispute Settlement

(GGDS).

The dynamic of the TTIP is relatively simple: boosting both EU-

U.S. exports by eliminating almost all tariffs and regulatory barriers,

allowing companies on both coasts of the Atlantic to easily access

each other’s markets.

Former President of the European Commission José Barroso, in

2013, stated: “These negotiations can be a game changer.” A research

conducted in the same year by the Centre Economic Policy Research

(CEPR), a European think-tank, identifies five major points in favor

of the agreement. Ratifying the TTIP would hence result such as:

A total gain for the EU as up to €119 billion per year ($132

billion) and €95 billion ($105 billion) for the United States, that

would be translated into an extra €545 for a European family

(of 4 members) and $729 for US families;76

A trade liberalization between the U.S. and the E.U. with a

positive impact on the world’s trade, increasing global income

by €100 billion ($111 billion);

76 These forecasts, even if hardly accurate in the long term and extremely optimistic,

aim to give an idea of a possible TTIP impact.

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An increasing in EU exports to the US by 28%, equivalent to

an additional €187 billion worth of exports of EU goods and

services;

A reduction of non-tariff barriers (NTB), a pivotal part of the

TTIP, resulting in an 80% of overall potential gains coming

from cut costs imposed by bureaucracy and regulations, as well

as from liberalized trade in services and public procurement;

Benefits for EU and US labor markets, both socially and

economically. It would, in fact, increase wages and create new

job opportunities.

To better understand the benefit of such an agreement, let us

analyze the European automotive industry, a sector that provides jobs

for 12 million people and accounting for 4% of the EU’s GDP.

Summary of macroeconomics effects of TTIP (estimates to be interpreted as changes relative to a projected 2027 global economy)

Source: Centre for Economic Policy Research

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Countries such as Germany, Italy or France are global leaders in car

production; however, European cars cannot be sold in the United

States. The reason is because EU – U.S. auto regulations are not

harmonized: in other words, cars are not produced with the same

components and standards. A study sponsored by the Washington-

based Alliance of Automobile Manufacturers (AAM), announced in a

joint press release with the European car lobby ACEA and the

American Automobile Policy Council, was initially commissioned to

show that existing EU and U.S. safety standards were quite similar, but

turned out to prove the opposite. The outcome, in fact, was that

American models are much less safe in case of front-side collisions, a

common cause of accidents that often result in serious injuries.

Harmonizing both parties’ standards could be worth, considering what

is at stake: forecasts provided from the European Automobiles

Manufacturers Association (AEMA), as a matter of facts, claim that

TTIP would increase EU vehicle and parts exports to the United

States by 149% for the period 2017-2027.

Seen all these benefits and the economic gains for both EU and

U.S., ratifying the accord should only be a matter of time. However, all

that glitters is not gold. Talking about TTIP in merely economic terms

would be extremely reductive. Furthermore, despite being a trade

agreement, there are several elements that somehow make it slightly

different from a standard one. In fact, in the past years, more and

more anti-TTIP associations have denounced the many controversies

of an agreement that has been kept secret from the media.

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TTIP: a possible Trojan Horse?

In spite of the many promised economic befits, many criticisms

have been expressed against a TTIP. According to many associations

and organizations, ratifying the accord would be a real disaster: here

are some of the main reasons supporting why the trade agreement

should not be signed.

Lack of transparency: TTIP talks are confidential. As stated on

the EU’s website: “The European Commission is negotiating TTIP as

openly as possible.” Concerns about the secret talks have not just

been expressed by anti-TTIP associations, accusing the accord of

being an assault on democracy, but UN lawyers as well called for the

suspension of TTIP talks, fearing major corporations could

undermine human rights through a mooted system of secret courts.

Similarly to TPP,77 the text of TTIP can only be read in a secure

“reading room”. Molly Scott Cato, professor of green economics at

Roehampton University and participant to the transatlantic trade’s

inner workings, had the access to this room. This is what she reported:

“[…] Before I had the right to see such “top secret” documents,

which are restricted from the gaze of most EU citizens, I was required

to sign a document of some 14 pages, reminding me that “EU

institutions are a valuable target” and of the dangers of espionage.

77 TPP stands for Trans-Pacific Partnership. It is another trade agreement similar to

TTIP, which includes Singapore, Brunei, Chile, New Zealand, Japan, Australia, Peru, Vietnam, Malaysia, Mexico, Canada, and United States.

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Crucially, I had to agree not to share any of the contents with those I

represent.”78

What kind of trade agreement needs to be kept secret? Data show

that 92% of those involved in the consultations have been corporate

lobbyists. Of the 560 lobby encounters that the commission had, 520

were with business

lobbyists and only

26 (4.6%) were with

public interest

groups. In other

words, for every

meeting with a trade

union or consumer

group, there were

20 with companies and industrial federations. Furthermore, following

several TTIP text leaks, the European Commission has increased

security levels.

Standards harmonization: TTIP would harmonies standards

between two similar but still very different world regions. A group of

170 European civil society organizations complains that TTIP would

result in "downward harmonization". Let us take into account food

78 Cato, M. S. (2015). I've seen the secrets of TTIP, and it is built for corporations

not citizens | Molly Scott Cato. Retrieved March 15, 2016, from http://www.theguardian.com/commentisfree/2015/feb/04/secrets-ttip-corporations-not-citizens-transatlantic-trade-deal

Source: Euractive

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and environmental safety, a major stumbling block in the talks. The

EU and the U.S. both have very different rules, meaning that, again,

they cannot freely trade food:

GM crops: In the United States, over 90% of soya, corn and

cotton grown is genetically engineered, while the European

Union grows virtually none. Furthermore, the European

Commission has given States the power to ban GMO

cultivations: every government of the Union is, in fact, free to

decide whether to use such products or not. Yet, in the EU

most animal feed is imported, with soya the main component.

In 2013, nearly all of that came from the U.S. and South

America, where soya is overwhelmingly GM: the U.S. provided

16% of those imports;

Pesticides: Over 80 kinds of pesticides used in the U.S. are

banned in Europe, and the EU generally accepts lower levels of

pesticide residue in food. The European Food Safety Authority

(EFSA), regulating the usage of pesticides in Europe, might be

bypassed by TTIP. In the U.S., however, authorities insist their

food is still safe.

American meat: in the specific, beef and chicken. The EU

forbids the use of growth-promoting hormones in cattle and

pigs, but, in the United States, it is a standard practice. After

years of debates, the EU has agreed to import high-quality U.S.

beef, supposed not to contain hormones; nonetheless, most of

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U.S. beef can’t still be sold in Europe. In the U.S., chicken is

washed with chlorinated water to kill bacteria; yet, in the EU,

this practice for poultry is banned. Overall, European food

safety lobbyists warn that U.S. animal welfare standards are

generally lower than those in Europe.

Occupation: The EU has admitted that the trade agreement will

result in increasing unemployment. This, as employment will move to

the U.S., where trade unions and labor standards are lower.

Nonetheless, States might need to draw on the Union’s funds to

compensate the losses.

The world is not new to this kind of agreements. Actually, an

infamous similar situation happened in the years after 1994, when the

North American Free Trade Agreement (NAFTA)79 was established.

According to the poverty statistics of the UN Economic Commission

on Latin America (ECLAC), the drop in poverty in Latin America

went from 46% to 20% (20 percentage points) whereas in Mexico

went from 45.1% to 37.1% (8 percentage points): more than two and

a half times. In addition, the U.S. economy lost nearly 700000 jobs.

Public Services: TTIP aims to open up the EU’s public health,

water and education services to American enterprises.

As the U.S. health system is globally known for being private, this

could mean the privatization of the European national healthcare

79 The NAFTA was established between Canada, Mexico, and the United States.

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system (NHS). Despite the European Commission’s declaration of

having excluded public services from TTIP, the former UK Trade

Minister Lord Livingston admitted that it was false information.

Democracy: By ratifying the accord, Investor-State Dispute

Settlements (ISDS) will be introduced.

ISDS is an instrument of public international law, that grants an

investor the right to use dispute settlement proceedings against a

foreign government in case of loss of profits. It would indeed give

more power to transnational corporations. ISDS are composed of

three arbitrators (lawyers) and are already in place in other bilateral

trade agreements around the world.

After Japan’s Fukushima in 2011, Germany decided to shut the

oldest power plants down. Two of these power plants belong to the

Know ISDS cases, annual and cumulative (between 1987 and 2014) Source: UNCTAD, ISDS database

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Swedish State-owned energy colossus Vattenfall, operating power

plants in other European countries. Following the German decision,

the Swedish company denounced having suffered substantial financial

damage and sued Germany for $6 billion. Around the world, there are

around 600 similar cases of enterprises versus nations going on.

Banks and businesses: TTIP will weaken financial regulation for

the benefit of financial institutions. According to Corporate Europe

Observatory (CEO) and The Centre for Research on Multinational

Corporations (SOMO), which analyzed some leaked documents, the

EU would be prioritizing the protection of the EU’s banking sector

over strictly financial regulations and supervisions.

These so-called “regulatory cooperation” proposals would

guarantee that measures taken by regulators pose no harm to the

financial sector, it would allow EU banks to operate in the U.S. on the

EU's (generally laxer) rules and in general that financial corporations

on one side of the Atlantic do not have to abide by host country’s laws

but only by home country laws on the other side of the Atlantic.

TTIP (and TPP) in the global context

Since the launch of the talks for both TTIP and TPP, all the major

global economic actors have been observing the U.S.’s economic

strategy: the first of which, probably, China, busy accomplishing its

“One Belt, One Road” project. The reason is quite simple: none of

the two agreements includes the Asian colossus; on the contrary, they

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could be seen as an attempt to reduce China’s impact on the world’s

trade. Both the Transatlantic actors are, in fact, major players for the

Chinese import/export.

According to others, the two accords are aiming at something even

bigger. They would be trying to have a long-term impact on the global

multilateral trading system, centred on the World Trade Organization

(WTO). If both ratified, TTIP and TPP would likely shape the WTO’s

future. Once established, TTIP could be enlarged to include Canada,

Mexico and Turkey, as well as the European Free Trade Area (EFTA)

nations (Switzerland, Lichtenstein, Norway, and Iceland).80 TTIP and

80 Canada and Turkey both already enjoy trade benefits from commercial agreements with the EU. Canada has recently created the Canada’s Comprehensive Economic and Trade Agreement (CETA) in 2014, while Turkey, in 1996, established the Association Agreement with the European Economic Community and a Customs Union agreement. Similarly, Mexico signed, in 1997, the Free Trade Agreement between Mexico and the European Union (FTA EU-MX). In addition, States member of the EFTA already have numerous treaties and executive agreements with the EU. Therefore, in such scenario, it should not be too difficult to expand the TTIP to include these potential actors.

Dan Mullaney (U.S.) and Ignacio Garcia Bercero (UE)

Source: EU bulletin

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TPP members together would account for 61% of the global GDP.

Exports between the respective group members will amount to 19%

of World exports, while direct investment between the members will

amount to 25% of world outward investment.

Even developing countries could be affected. The European Union,

just like the United States, massively imports from developing

countries.

On the one hand, higher incomes in the EU and the U.S. will

increase demand for goods and services (raw materials, semi-finished

products, services, tourism) in third countries, which should benefit

from the new prosperous market conditions. Additional export could

mean higher incomes for the third world countries in question.

On the other hand, the accord could cause trade diversion.

Suppliers from TTIP countries benefit from better price

competitiveness as their internal trade costs in the Partnership

countries are lower. This may be to the detriment of suppliers from

third countries, which may lose shares in the European and American

market. Many developing countries export goods (such as textiles,

shoes, and processed foods) that are subject to high tariffs in the

TTIP countries. Thanks to unilateral trade facilitation measures

between the EU and the U.S., these countries are eligible for tariff-free

access. Yet, these preferences might be eroded by the elimination of

trade tariffs.

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Conclusions

The slow rhythm of the talks, retarded by blockages on several

issues, has caused the official establishment of TTIP to be constantly

postponed. What is certain is that it will have to be approved by the

European Parliament and European Trade Ministers.

Ministers usually vote on trade by what is called qualified majority,

though unanimity might be required. Depending on the legal nature of

the final agreement, it might also need to be approved by all the EU

member States. From the American side, it will need approval by the

Congress. President Obama is struggling - unsuccessfully so far - to

get Congress to give him the so-called Trade Promotion Authority,81

which would make US ratification less difficult.

From what it has emerged so far, it might appear that TTIP is an

unfair trade agreement; nevertheless, it is undeniable that its secrecy

increases the public degree of suspiciousness and skepticism. The path

to the establishment is still long, however, at the same time, the

ratification is likely inevitable.

The chapter has analyzed the potential economic advantages of an

extremely delicate agreement, taking into account all the denunciations

issued by anti-TTIP groups. It sure is that its effect will change the

lifestyle of American and European citizens, first, then would

probably have an effect on other countries. Transparency could be the

first step towards a democratic way of managing the talks. Media

81 It refers to the authority of the President of the US to negotiate international

agreements that Congress can approve or deny but cannot amend or filibuster.

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should then give more attention to the matter. It is not acceptable that

most of Europeans and Americans ignore what is being discussed in

these years. Free market could definitely bring opportunities and

advantages, improve our economies ad generate more jobs. The

question, however, remains the same: “At what costs?”

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References

ACEA. (2015, July 17). USA. Retrieved March 17, 2016, from

http://www.acea.be/industry-topics/tag/category/usa

Aichele, R., Felbermayr, G. J., & Heiland, I. (2014). Going deep:

The trade and welfare effects of TTIP.

Beeton, D. (2014, February 12). Veinte años después del TLCAN,

México ha tenido un crecimiento rezagado, pobreza persistente y mayor

desempleo. Retrieved March 17, 2016, from http://cepr.net/en-

espanol/spanish-press-releases/veinte-anos-despues-del-tlcan-

mexico-ha-tenido-un-crecimiento-rezagado-pobreza-persistente-y-

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Conclusions

The economic crisis is the root cause of the European Union’s

political decay. It deeply and further jeopardized policy coherence in

home affairs and foreign policy, especially in those crises occurring

just outside the EU borders, which keep on being managed by

traditional actors, i.e. the states, with the USA playing a crucial role in

spite of the apparent and progressive disengagement. Since 2008, EU

member states have gradually found themselves on different playing

fields, far away from the ideal of European integration. The

intergovernmentalists on the one hand and the sovereignty claimers

on the other.

Domestic issues have never been so closely linked to the main

foreign policy matters to the extent that they are today. This is

especially true in the case of Germany. The consequences of civil and

proxy wars elsewhere have had an impact on the German political

system in terms of policy response to the refugee influx. Facing a

shrinking of the internal and external political space, German

government failed to assess the increasing pressure of domestic

politics on what had been regarded as an opportunity to show to the

key global political actors the German leadership in the EU. The

events in Cologne changed the public opinion’s perception of the

newcomers in the EU’s wealthiest countries, and along with the

terrorist attacks in Paris have shouldered nationalist and demagogic

political positions. Actually, during the last months of 2015, Germany

was already losing its grip when it failed to secure the implementation

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of the EU political decisions. Apart from EU Institutions, at that time

Germany could count on the cooperation of Austria and Sweden.

These countries eventually withdrew their support, announcing tough

measures to deter asylum seekers in a sharp reversal of the open-door

policy towards people fleeing war and persecution. The lack of

leverage power of the EU has severely affected German leadership as

well. The EU has always been seen by German government as the

best venue where to exert influence and drive German foreign policy

interests. The weak position of the EU in the Middle Eastern check-

board has been read as the flagging of German leadership. This

instability is reflected in domestic politics as Merkel’s CDU begins to

feel threatened by the anti-refugee party, Alternative für Deutschland

(AfD), which entered state parliament for the first time in three

regions in the last elections, and by more left-leaning parties which

took over Baden-Württemberg, a Land dominated by the CDU since

the end of the second world war.

Historically, the European Union crises have always been an

important driver for change. The refugee crisis has turned political

priorities upside down, as the phenomenon has concurred with a deep

sovereign debt crisis which brought with it financial instability and

high unemployment rates, especially for some EU member states. As a

result, national interests are very high on the political agenda of most

European leaders and have consistently trumped a common European

answer to the crisis. The long negotiations of the planned TTIP and

the debates in many European societies on the growth of free trade

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set a huge challenge for EU politics. Since the early days of European

integration the competence to define a common external trade policy

has been a keystone of the European bodies. Many critics refer to the

procedures adopted to conclude the negotiation as a watershed for the

European project itself. TTIP is considered by many as a manna, a

necessary instrument to drag the EU out of the consequences of the

economic crisis. What if not? And, what would a breakdown of the

negotiations mean for European integration?

It is a critical moment for the EU. What happened in Cologne, in

Paris, in Brussels has sped up an inescapable process. The EU has to

get the refugee crisis under control, as not only the Schengen system is

put into question, but the European Union project as a whole. Social

and political side effects of the migratory inflows, beyond the

economic ones, are contributing to shape what has already been

labelled as the failure of the EU to help people turning up on its

countries’ doors after fleeing violence, conflicts, and persecutions.

Southern and Eastern EU member states have been left bearing the

brunt of the influx, notwithstanding the pledge for a fairer distribution

of refugees and asylum seekers. Greece, in particular, has become an

obligatory passage point to reach Europe for many migrants coming

from the Middle East. Greeks have legitimately showed harsh feelings

against EU policy-makers over the year. The deep economic crisis

they fell in, after that the so-called troika offered them “nothing but

blood, toil, tears and sweat” in order to receive bailout loans, resulted

in the far-left Syriza party winning the most votes and parliamentary

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seats at the parliamentary elections and in the willingness to remain in

the Euro-zone.

To ease the pressure on the Greek government on the issue of

migration flows, the EU brokered a deal with the Turkish

government. The deal between EU and Turkey at the recent summit

caused doubts about its legality and morality. The agreement foresees

that all migrants arriving in Greece being sent back to Turkey. The EU

in turn will resettle thousands of Syrian asylum seekers directly from

Turkey. In return, Turkey might have the chance speeding up the

negotiations on EU membership. By the way, the implementation of

the plan will not be easy, and some setback is expected.

Now that terrorism, fanaticism, fear seem to threaten the European

most relevant achievement, i.e. the Schengen agreement, the Union is

at a crossroads. The issue at stake is not the very existence of the EU

but the essence of the EU as it has been dreamt over 60 years.

Gabriele Quattrocchi

Vice Director of Mediterranean Affairs

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About the Authors

Silvia Nicolardi, graduated with honors in International Relations

at Sapienza University of Rome, with a research on the Iranian power

projection in the Middle East, taking as an allegedly turning point the

nuclear affair. Silvia specialized in Diplomacy Studies at the Italian

Society for International Organization (SIOI - UNA Italy). Her main

research topics are: Middle Eastern Affairs, World Economy, Global

Security, European Affairs.

Davide Panadori Cino, Master 2 student of “Economic policies”

at Sorbonne Paris Cité, profile of International Macroeconomics and

Financial Policies, and a former master student of Kingston University

in Political Economy. He previously studied as undergraduate student

in Economics at the University of Verona. He collaborated with

Kingston University as Research Assistant on the Debt-led growth

regimes in Europe (2014-2015).

Sergio Castaño Riaño, Ph.D. European Studies. Along his career

he has worked in different fields. At present he works as a lecturer at

UNADE and ISG. He also works as an analyst at the international

geostrategic consultant Wikistrat while he collaborates with different

media. His area of research is focused on the Euro-Mediterranean

relations and immigration in Europe.

Simone Massi, graduated in Middle East Archeology at Sapienza,

University of Rome and in International Relations at University of

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Turin. Expert in political movements and political economy of Middle

East. Previously, He studied at the Pace University in New York and

at the Bilgi University in Istanbul, Turkey. He also worked as an

advisor for the Italian Trade Agency in Cairo, Egypt. He is attending a

second level master about "Economics and Institutions of Islamic

Countries" at LUISS School of Government.

Federico Brembati. LSE-PKU Double MSc Degree Candidate in

International Affairs. Federico got his Bachelor’s Degree in Languages

for the International Relations with Honours at Università Cattolica,

Italy, in 2013. In 2014, he established himself in Beijing. He is now

attending a double degree Master program in International Affairs at

Peking University and London School of Economics. Since 2015, he

works as Research Analyst for Geopoliticalatlas.org

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Ed. Mediterranean Affairs©

www.mediterraneanaffairs.com

Cover image source: CIMSS

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