Preparation kit for delegates – Savonlinna 2014

Savonlinna 2014

Regional Session of EYP Finland

Preparation Kit for Delegates

Greeting from the President

You anticipatory, you brave, and you awake: it is to you I address this message.

Choice is an interesting obsession, which today’s generations struggle with. Among many, there is an unhealthy anxiety surrounding the importance of the right decisions, and the best action. The obsession is to not make a mistake, not to set out on the incorrect path. I believe that with this frame of mind, you cannot learn, you cannot develop, and you cannot experience.

What I would like to portray to all those reading this, is to not take the concept is making choice all too seriously. Most of the choices you make are not rational anyway; they are based on your perception of what society thinks, what you want society to think, and then out of that composition, what is best for you. Making a decision based on the wrong criteria is not great, but not making a decision at all is much worse. Moreover, choices you make are never individual or singular, they must be seen as a whole. No one choice will determine your life, they all complement each other to shape it. But, whist no one choice will define your existence, you must make the choice, or else you just stand still.

Now, participants of Savonlinna’s Regional Session, you have made a choice. Your attendance of the Regional Session will not determine who you are or what you will become, but your engagement in the EYP will help you take ownership of yourself, and set you on a path which will still require decisions, but the decisions will be so much more rewarding to make.

I only speak from my own experience and my own choices, nonetheless I promise you that you have made the right decision, and I will guide you to help you realise why.

Hugo Dürr President of Savonlinna 2014

European Youth Parliament (EYP)

The European Youth Parliament represents a non-partisan and independent educational project, which is tailored specifically to the needs of the young European citizens. European Youth Parliament Finland, established in 2001, is the National Committee of the EYP in Finland.

The EYP encourages independent thinking and initiative in young people and facilitates the learning of crucial social and professional skills. Since its inauguration, many tens of thousands of young people have taken part in Regional, National and International Sessions, formed friendships and made international contacts across and beyond borders. The EYP has thus mad a vital contribution towards uniting Europe.

Today the EYP is one of the largest European platforms for political debate, intercultural encounters, political educational work and the exchange of ideas among young people in Europe. The EYP consists of a network of 41 European associations in which thousands of young people are active in a voluntary capacity.

The EYP is a programme of the Schwarzkoph Foundation.

European Union (EU)

The European Union is an economic and political union of 28 Member States. The EU was established by the Treaty of Maastricht in 1992 upon the foundations of the European Communities.

The EU has developed a single market through a standardised system of laws, which apply in all Member States, and ensures the free movement of people, goods, services, and capital, including the abolition of passport controls within the Schengen area. It enacts legislation in justice and home affairs, and maintains common policies on trade, agriculture, fisheries and regional development. Eighteen Member States have adopted a common currency, the euro.

With a view to its relations with the wider world, the EU has developed a limited role in foreign and defence policy through the Common Foreign and Security Policy. Permanent diplomatic missions have been established around the world and the EU is represented at the United Nations, the World Trade Organization (WTO), the G8 and the G-20

The EU operates through a hybrid system of supranationalism and intergovernmentalism. In certain areas decisions are taken by independent institutions, while in others, they are made through negotiation between Member States.

The EU traces its origins from the European Coal and Steel Community and the European Economic Community formed by six countries in the 1950s. Since the, it has grown in size through enlargement, and in power through the addition of policy areas to its remit. The last amendment to the constitutional basis of the EU came into force in 2009 and was the Lisbon Treaty.

The Institutions of the European Union

The European Council is responsible for defining the general political direction and priorities of the EU. It comprises the heads of state of government of EU Member States, along with its President (currently Herman Von Rompuy from Belgium) and the President of the Commission.

The Council of the European Union (commonly referred to as the Council of Ministers) is the institution in the legislature of the EU representing the governments of Member States, the other legislative body being the European Parliament. The exact membership depends on the topic: for instance, when discussing agricultural policy the Council is formed by the 28 national ministers whose portfolio includes this policy area.

The European Parliament is directly elected parliamentary institution of the EU. Together with the Council, it forms the bicameral legislative branch of the EU. The Parliament is composed of 751 MEPs. The current president is Martin Schultz from Germany.

The European Commission is the executive body of the EU. It is responsible for proposing legislation, implementing decisions, upholding the Union’s treaties and the general day-to-day running of the Union. The Commission operates as a cabinet government, with 28 commissioners. The Current President is José Manuel Barroso from Portugal. His term will end in the end of December and his position will be taken over by president-elect Jean-Claude Juncker from Luxembourg.

Other important institutions of the EU include the Court of Justice of the European Union and the European Central Bank. The EU also has several agencies and other institutions.

Committee topics Committee on Foreign Affairs (AFET)

Chairpersons: Ana Viitanen (FI) & Anthony Fedorov (FI)

Stopping ISIS: Swift territorial gains accompanied by images of shocking brutality have already

prompted some Member States to act against the Islamic State by supplying arms to Kurdish

Peshmerga forces. Is there a role to play for concerted EU efforts in this conflict and, if so, what

measures are to be implemented?

Committee on Economic and Monetary Affairs (ECON)

Chairpersons: Erik Lewenhaupt (SE) & Olcay Soyalan (TR)

The rapid growth of Bitcoin has captured the attention not just of the media, but also of financial

regulators and governments. As their use becomes more widespread, what stance should the EU

adopt with regard to cryptocurrency.

Committee on Employment and Social Affairs (EMPL)

Pieta Salonen (FI)

In the context of the economic crisis, many graduates from Southern and Eastern Europe are

moving to the more stable labour market of Northern countries, leading to an unequal distribution

of educational qualifications, large holes in different employment sectors, as well as the results of

brain-drain. What measures can the EU adopt in order to tackle this issue without restricting

labour market mobility?

Committee on International Trade (INTA)

Chairpersons: Anna Clara Örtendahl (SE) & Teemu Weckström (FI)

Exporting for growth: with small and medium size enterprises (SMEs) building the backbone of the

EU economy, how can the EU further promote the internationalisation of SMEs in order to help

them access international trading markets?

Committee on Industry, Research and Energy (ITRE)

Chairpersons: Yaprak Damla Yıldırım (TR) & Lauri Lahtinen (FI)

Creating a greener future: Following the failure of many EU Member States to meet the targets for

renewable energy set out in 2001 and 2003, and building upon the European Commission's

proposed 2030 climate and energy framework, how should the EU proceed to reduce its reliance

upon fossil fuels?

Committee on Civil Liberties, Justice and Home Affairs (LIBE)

Overview by: Konstantinos Andronikis (GR) & Cecilia Axelsson (SE)

Chairperson: Jeroen de Marteau

Human trafficking causes several hundred thousand victims in the EU annually and is amongst the most

profitable criminal activities. How can the EU effectively combat human trafficking in Europe and preserve

the Schengen agreement?

Committee on Security and Defence (SEDE)

Chairpersons: Juuso Kurokallio (FI) & Cassie Tingen (NL)

East versus West: With increased Russian activity on its borders and NATO's fear for the safety of its

members, tensions between Russia and Western countries are at their highest since the Cold War. How

should European states respond to Russia’s growing threat on post-Soviet states and what role should the

EU play in striving to uphold a diplomatic resolve to the situation?

Committee on Foreign Affairs (AFET) Stopping ISIS: Swift territorial gains accompanied by images of shocking brutality have already prompted

some Member States to act against the Islamic State by supplying arms to Kurdish Peshmerga forces. Is

there a role to play for concerted EU efforts in this conflict and, if so, what measures are to be

implemented?

Ana Viitanen (FI) and Anthony Fedorov (FI)

Summary

With thousands of murdered and internally displaced people, ISIS brings Iraq and Syria to the edge of

humanitarian catastrophe. Meanwhile, the threat of jihadism spreads throughout the EU, as people join

radical Muslim movements and travel to the Middle East to fight within ISIS troops. The EU debates the

idea of isolating the Islamic State while many Member States have already taken serious military actions

against the ISIS and its inhuman actions.

Problem

Following successful offensives against Iraqi government and proclamation of caliphate in June 2014,

advancing ISIS forces have seized the town of Sinjar in Northern Iraq. Since the conflict escalated in the

beginning of summer, ISIS managed to expand their control over significant territory in Iraq and Syria.

As reported by Amnesty International, ISIS is accused of persecuting regional and ethnic minorities, as

well as Shia Muslims on the captured territories. The United Nations (UN) published a report

highlighting the unprecedented violence of ISIS militants against civilians1. Furthermore, as a result of

ISIS's upsurge, Iraq and Syria face a severe humanitarian crisis, notably a significant displacement of

people from the occupied territories.

At the same time the European Union (EU) also encountered the threat of the ISIS supporters According

to CNN, allegedly roughly 2,000 EU citizens have "answered the call to jihad"2 and some 500 to 1,000 of

them might have joined ISIS. The rise of jihadism in the EU has already resulted in casualties caused by

extremists. Extensive online presence of ISIS attempts to target more Western Muslims.

1 Syria and Isis committing war crimes, says UN – The Guardian.

2 Europe faces 'greatest terror threat ever' from jihadists in Iraq and Syria - CNN

Main actors

• ISIS is believed to be "the wealthiest jihadist group in the world"3, owning the assets worth over $2

billion. During the Syrian Civil War, ISIS managed to increase its access to financial and weaponry

resources, yet the origin of its financial support remain unknown. ISIS aims at creating a pan-

national state, uniting all the territories of the world inhabited by Muslims.

• Sunni Muslims in Iraq and Syria constitute a basis of all ISIS supporters. Iraqi and Syrian Sunni

minorities are poorly represented in Shia governments of both countries, while anti-governmental

manifestations in these countries are often violently oppressed. ISIS attempts to exploit Sunnis'

dissatisfaction in Shia governors, and demonstrates its loyalty to Sunni communities by setting up

different facilities there.

• Iraqi government led by Prime Minister Nouri al-Maliki attempts to accumulate international

support to combat ISIS, since presumably it does not fully control the army composed of both Shia

and Sunni, previously oppressed by al-Maliki.

• Syrian government and the President Bashar al-Assad are believed to benefit from ISIS fighting

against more moderate opposition groups, and discouraging foreign supporters. Yet, recent

negotiations between Maliki and Assad prove the growing concern of Syrian leadership.

• NATO-led anti-ISIS coalition among others involves sixteen EU Member States, which support the

Iraqi and Syrian governments with air strikes, deployment of troops, as well as provision of weapons

and humanitarian aid. Furthermore, the EU set the amount of aid at $22-million.

Perspectives

In the end of the summer the ISIS debates unfolded on a Ministerial level in the EU. While France under

the authority of Iraqi government air stroke the ISIS's positions, and the UK was preparing to ship

weapons to the Kurds, many questions have been raised. Kurdish aspirations for own country suggest

that arming the minority might facilitate the destabilisation in Iraq rather than help to combat ISIS.

Repeated air strikes over ISIS's positions might provoke ISIS to target Western states. At the same time

presence of jihad communities in the EU is already as threatening as never before.

Hence, to which extent the EU and its Member States shall participate in the anti-ISIS coalition? What

measures shall be taken to ensure security of the EU citizens? How to ensure the rightful prosecution

and to avoid discrimination of the Muslims in the Member States?

3 Iraq crisis: how do Isis's cash and assets compare with other military spending? – The Guardian

Definitions

The self-declared Islamic State of Iraq and Syria (ISIS; referring to themselves as the Islamic State – IS)

is a religious extremist group active in Iraq and Syria that aims at creating a pan-national Sunni Islamic

state in the Middle East.

Sunni Islam - is a largest bunch denomination of Islam as opposed to Shia Islam (second largest group).

Theological difference of the denominations is believed to be very slim.

Jihad is defined as a violent struggle against non-Muslims, while the call to join the fight is referred to

as a "call to jihad".

Kurds are an ethnic group that mainly dwell in the region known as Kurdistan. Kurdistan is divided

between Turkey, Iraq, Iran and Syria, and seeks for a larger autonomy within respective countries and

ultimately the creation of an independent state of Kurdistan.

Key Words

Northern Iraq offensive, jihadism in the EU, ISIS propaganda, anti-ISIS coalition, Kurdish Peshmerga

forces, IDPs

Links

Iraq crisis: what is the Islamic State?

http://www.telegraph.co.uk/news/worldnews/middleeast/iraq/10891387/Iraq-crisis-what-is-the-

Islamic-State.html

Anti-ISIS coalition has mobilized up to 62 nations and groups

http://news.nationalpost.com/2014/09/26/mobilizing-the-world-up-to-62-nations-and-groups-have-

joined-coalition-against-isis/

EU Parliament discusses ISIS security threat with EU Counter-Terrorism Coordinator

http://eu-un.europa.eu/articles/en/article_15497_en.htm

Europe faces 'greatest terror threat ever' from jihadists in Iraq and Syria

http://www.cnn.com/2014/06/19/world/europe/lister-european-jihadists/

Europe Tries to Stop Flow of Citizens Joining Jihad

http://www.nytimes.com/2014/10/01/world/europe/isis-europe-muslim-radicalization.html

Committee on Economic and Monetary Affairs (ECON) The rapid growth of Bitcoin has captured the attention not just of the media, but also of financial

regulators and governments. As their use becomes more widespread, what stance should the EU

adopt with regard to cryptocurrency.

Erik Lewenhaupt (SE) & Olcay Soyalan (TR)

At a Glance/ Executive Summary - Should EU embrace or reject the use of cryptocurrencies

The software-based online payment system, Bitcoin, has boomed significantly since it was created in

2008. With the rapid expansion of the digital currency bitcoin (BTC), along with its ambivalent nature

due to the fact that it is not controlled by any government or bank, the EU faces need to form a stance

towards the use of the cryptocurrencies such as bitcoin. Should EU adopt new regulations concerning

the cryptocurrencies and promote its use, or avoid taking the risk of using digital currencies?

Problem

The virtual currencies, such as Bitcoin, may offer quite a few benefits such as faster transactions,

significantly lower transaction fees, financial inclusion and integrity. Although this innovative currency

may seem like the currency of the future, it is far from flawless and it includes several risks. The

online currencies are unreliable; Bitcoin has shown to be heavily volatile with severe value

fluctuations, hence making it an uncertain asset. The value of Bitcoin has changed drastically over the

past years, with both high peaks and crashes, where it had peak value of 1.147$ per BTC in December

2013, only to drop to its current value of 356$4. Moreover, there is a lack of safety for the individual

user; the money may potentially be stolen from the e-wallet5 by hackers, or if a debit was

unauthorised or incorrect, there are no refund rights. In either case, there is little to no prospect of

having it returned or reversed.

The cryptocurrencies also pose a threat on a larger scale. Due to its anonymous nature, virtual

currencies are used for transactions of financial crimes, such as money laundering, or payments for

illegal acts, like human trafficking. Furthermore, since the currency is regulated by no governmental

4 http://www.coindesk.com/price/

5 Once you have bought virtual currency it is stored in a ‘digital wallet’, on a computer, laptop or smartphone. Digital wallets

have a public key, and a private key or password that allows you to access them (European Banking Authority, 2013).

authority, the virtual currencies do not need to respect jurisdictional boundaries, and may therefore

counteract existing financial sanctions.

Actors, Interests and Conflicts

● The European Central Bank (ECB) – The central bank for Europe’s single currency,

euro. Its main objective is to maintain price stability in Eurozone. ECB recently concluded that virtual

currencies are not currently under the supervision or regulation of any agency or institution and the

fact that they are not linked to any specific currency or geographical area makes regulation and

supervision complicated.

● The European Banking Authority (EBA) - One of the tasks of the EBA is to monitor new

and existing financial activities and to adopt guidelines and recommendations with a view to promoting

the safety and soundness of markets and convergence in regulatory practice. EBA is currently

investigating whether virtual currencies should be subject to supervision and regulation.6

● World Trade Organisation (WTO) - Considers the use of cryptocurrencies as an

intermediary vehicle between countries in order to reduce trading barriers between countries.

● Online hackers - Several trading platforms for cryptocurrencies have been hacked,

consequently forced to go bankrupt.

● Merchants and customers using Bitcoin – The number of merchants and customers

enjoying the benefits of Bitcoin is rising. Merchants offer easier payment methods, resulting in higher

sales. Customers get use of many aspects of Bitcoin, lower transaction costs being the most

appealing of them.

Current Legislation & Policies

Currently, little to no EU legislation or regulation exists, and since the market of cryptocurrencies is a

new experiment, the EU head towards uncharted territory. Although, the virtual currencies are

unregulated at an EU level, some Member States have introduced minor regulations or

acknowledgements to the use of the currency, such as Germany, which accepted Bitcoin as a “unit of

account”.7 At an EU level, the only existing measure is an official warning, issued by EBA, which

highlights the risks involved with buying, holding and trading virtual currencies8. However, some

6 http://www.eba.europa.eu/documents/10180/657547/EBA-Op-2014-08+Opinion+on+Virtual+Currencies.pdf

7 http://www.cnbc.com/id/100971898

8 https://www.eba.europa.eu/-/eba-warns-consumers-on-virtual-currencies

countries have called upon the EU to create guidelines for the use and taxation of Bitcoin9. Sweden, for

instance, requested a ruling by the European Court of Justice to decide whether the exchange of

Bitcoin into fiat money and vice versa would be a transaction liable to the Value Added Tax (VAT).

Perspectives

The future of Bitcoin within the EU is uncertain, as guidelines and directives are yet to be officially

announced. The European Commission stated that it will likely impose regulations on the virtual

currencies in order to inhibit the use of the cryptocurrencies in illegal matters and activities. Should

the EU impose regulations and what should those regulations look like? Are the risks of using virtual

currencies worth taking? How can the EU minimise the negative aspects, such as money laundering,

of cryptocurrencies? How can the EU turn the use of Bitcoin into an advantage in its monetary affairs?

Should the cryptocurrencies be taxed according to VAT?

Definitions

Fiat money - Currency that a government has declared to be legal tender, but is not backed by a

physical commodity, where the value is derived from supply and demand.

Digital currency - Simply put, it is a form of currency or medium of exchange that is electronically

created and stored.

Virtual currency - Defined by the European Central Bank as “a type of unregulated, digital money,

which is issued and usually controlled by its developers, and used and accepted among the members

of a specific virtual community”.

Cryptocurrency - Similar to digital currency, a medium of exchange, but uses a cryptography to

secure the transactions and to control the production of new units.

Deflation/inflation - An increase or decrease in monetary value.

Volatility – Measure of variations in price over a time period.

VAT - Value added tax, which is a form of consumption tax.

Key Words

Bitcoin / Virtual currency / Cryptocurrency / European Banking Authority / Pros & Cons of

cryptocurrencies / Unregulated and decentralised currency

9 http://www.euractiv.com/euro-finance/paris-wants-put-bitcoin-eu-agend-news-534017

Statistics

The value of Bitcoin, from April 2012 to April 2014.

The graph shows the fluctuation of the currency. The image shows a time interval of 12:00 to 06:00 the

next day.

The revenue in million USD for BTC miners. Even here there is a distinct fluctuation in the value the

miners earn.

Links

https://www.youtube.com/watch?v=Um63OQz3bjo

A detailed video on many aspects of Bitcoin:

https://www.youtube.com/watch?v=000UtKtm7kUhttps://www.youtube.com/watch?v=000UtKtm7kU

A more practical approach to Bitcoin for users:

http://finance.yahoo.com/news/bitcoin-pros-cons-consumers-merchants-

140041526.htmlhttp://finance.yahoo.com/news/bitcoin-pros-cons-consumers-merchants-

140041526.html

An article explaining Bitcoin:

http://www.economist.com/blogs/schumpeter/2014/06/bitcoinhttp://www.eba.europa.eu/documents/1

0180/598344/EBA+Warning+on+Virtual+Currencies.pdf

Article on online drug market Silk Road and its association with Bitcoin:

http://money.cnn.com/2013/10/02/technology/silk-road-shut-

down/?iid=ELhttp://www.europarl.europa.eu/sides/getDoc.do?pubRef=-

//EP//NONSGML+MOTION+B7-2014-0168+0+DOC+PDF+V0//EN

Bank of England on Bitcoin:

http://www.reuters.com/article/2014/09/11/britain-boe-bitcoin-

idUSL5N0RC3IY20140911http://www.reuters.com/article/2014/09/11/britain-boe-bitcoin-

idUSL5N0RC3IY20140911

Online shopping uses Bitcoin:

http://www.reuters.com/article/2014/08/28/us-usa-bitcoin-retailers-analysis-

idUSKBN0GS0AG20140828http://www.reuters.com/article/2014/08/28/us-usa-bitcoin-retailers-

analysis-idUSKBN0GS0AG20140828

http://www.reuters.com/article/2014/07/03/us-bitcoin-circle-idUSKBN0F827J20140703

Committee on Employment and Social Affairs (EMPL) In the context of the economic crisis, many graduates from Southern and Eastern Europe are moving

to the more stable labour market of Northern countries, leading to an unequal distribution of

educational qualifications, large holes in different employment sectors, as well as the results of brain-

drain. What measures can the EU adopt in order to tackle this issue without restricting labour market

mobility?

Pieta Salonen (FI)

Summary

Stable economies and better working conditions in Northern European countries, such as Ireland and the

UK, have attracted many Europeans to leave their home countries and move abroad10. Countries affected by

economic crisis suffer from brain-drain and emigration of academically educated citizens more than others.

For example, with the youth unemployment rate reaching 57 % in Spain, many young professionals could not

find a job or being underpaid. The migration tendency leads to uneven distribution of academically skilled

labour between European countries, leaving Southern and Eastern Europe disadvantaged.

Problem

According to various studies well-educated young people from developing and stagnating EU economies are

particularly likely to emigrate. For instance, 89 % of people leaving Spain have a college degree11. The main

reason of the brain-drain is the individuals seeking new economic perspectives, recognition, higher earnings

and better living standards. With the GDP per capita in the Western and Northern Member States, largely

outweighing the same indicators in the Eastern and Central Europe, the minimum and average wages also

vary significantly.

Brain-drain negatively affects the economy of a donor country, that lose highly skilled labour force, financial

resources spent on their training and potential tax income that these workers could have generated in the

economy. At the same time influx of the workers may increase the tension on the labour market of receiving

country.

10 UK is Europe's top destination for immigrants: We attract twice as many as France – Daily Mail 11 Overqualified and Underpaid – The European Magazine

The EU brain-drain phenomenon is the most developed in the South (Greece, Spain, Portugal) and Eastern

Europe (Romania and Bulgaria). For example, in Romania the healthcare system is visibly affected by the

doctors and nurses’ migration, which has led to a shortage of specialized medical staff.

Main actors

• The European Commission, as an executive body of the EU, oversees the implementation of the

single market principles and the incorporation of the EU labour law legislative acts into national law

in the Member States. The aim of the Commission is to foster social cohesion and economic growth

in the EU.

• National governments follow the principle of four economic freedoms, providing migrant EU

workers with equal to the domestic employees working conditions and wages.

Current legislation

Free movement of labour force is one of four economic freedoms stipulated by Article 45 of the Treaty on the

Functioning of the European Union (TFEU) and developed by EU secondary legislation and the case law of the

Court of Justice. TFEU guarantees the equal and fair treatment of the workers of all the EU nationalities in

all Member States.

Moreover, the EU plays a significant role in the area of job creation with the ample programmes and

initiatives currently in place. Among them; the "Employment Package" (2012), that among other supports job

creation and restores the dynamic of labour markets, and "Youth Employment Initiative" (2013) reinforces

the "Employment Package" aims by supporting young professionals in the areas where the rate of youth

unemployment exceeds 25%.

Perspectives

While some Western economies such as Germany significantly benefit from the inflow of skilled young

workers, the others witness increase hostility towards EU migrant workers. EU has already taken some

measures to decrease the outflow of the labour from Eastern European Member States. One of the latest

examples is approval by the European Commission of 111 million euro European Regional Development

Fund12 investment into the project that will provide a major boost to Europe's research capacity: attracting

hundreds of scientists to Hungary and forging valuable links between business and the scientific world.

What other measures could be taken to ease social tension and ensure equal distribution of intellectual

capital over the EU? What role shall the national governments play in finding a solution to the problem?

Definitions

Four economic freedoms as stipulated by Article 45 of TFEU are the free movement of goods, capital,

services and people.

Key words

Single market, brain-drain in the EU, human capital flight, emigration, academic unemployment, labour

mobility, EURES, Employment package, Youth Employment Initiative

Links http://www.euractiv.com/innovation-enterprise/brain-drain-new-challenge-eurozo-analysis-531938 http://www.theeuropean-magazine.com/daniel-tkatch--4/8242-youth-unemployment-and-europes-brain-drain http://ec.europa.eu/social/main.jsp?langId=en&catId=457 http://europa.eu/rapid/press-release_SPEECH-14-115_en.htm http://www.alpbach.org/alpbuzz/where-the-european-brains-move/ http://europa.eu/rapid/press-release_IP-14-538_en.htm

12 Third pillar of ELI in Hungary gets the go ahead – European Commission

Committee on International Trade (INTA)

Exporting for growth: with small and medium size enterprises (SMEs) building the backbone of the EU

economy, how can the EU further promote the internationalisation of SMEs in order to help them access

international trading markets?

Anna Clara Örtendahl (SE) and Teemu Weckström (FI)

SMEs account for 99 % of all businesses and 85 % of the newly created employments within the EU13. There

is a positive correlation between internationalisation and innovation, as more internationalised companies

tend to have a greater turnover, growth rate and employee increases. The European economy was damage

by the financial crises in 2008, and SME play a key role in rebuilding the economy of the EU. Measures have

been taken on a EU level to promote the internationalisation of SMEs, with some proving to be more fruitful

than others.

Market information

Although the global market offers great prospects for SMEs, only 13 % of EU-based SMEs export to markets

outside the EU1. The SMEs face a lot of difficulties as they try to reach the global market: companies have

knowledge about their home market but lack information about the foreign markets. It is hard for SMEs to

detect the changing supply and demand levels in the international market, and it is therefore hard for them

to identify foreign business opportunities.

Policies and regulation

Even though SMEs could identify foreign business opportunities policies and regulation implemented by the

foreign governments can still hinder SMEs to reach the foreign market. For the purpose of protecting the

domestic market and domestic companies, domestic governments sometimes hinder or complicate EU-

based SME to export their goods by implementing import tariffs and import quotas. The foreign governments

could also complicate the process by implementing regulation, which only would apply to EU-based

companies, in the purpose of hamper the situation for SME on the market towards regional businesses.

13 http://ec.europa.eu/enterprise/policies/sme/regional-sme-policies/documents/no.7_international_en.pdf

Qualified personnel

Foreign companies also could have an advantage on their home markets towards EU-based SMEs regarding

qualified personnel. The personnel of the EU-based SME might be well trained, but lack skills, such as

language skills and knowledge regarding the business culture, which is important to be able to successfully

expand on the new foreign market. The process of finding new suitable personnel and representatives could

be difficult for the SMEs who are expanding their businesses.

Funding

When expanding SMEs need financial support to be able to successfully reach the international market.

SMEs turn more often to the banking sector to seek external finances rather than larger companies. The

European Central Bank (ECB) has decided that grants and loans to SMEs must have a low risk, so to avoid

another financial crisis, such as that of 2008. Due to this, loans and grants to SMEs often involve a lot of risk

SMEs have difficulties to meet the financial requirements of the ECB. However, the SMEs have a key role in

rebuilding the economy and funding is essential for them.

SME is the backbone of the EU economy and actions have been taken on a EU level to promote the

internationalisation of EU-based SMEs, but why have some been more fruitful than others? Should actions

be taken by the EU or at a local level? How should the funding of the SMEs be addressed? Should the local

governments take a more active role?


• The Small Business Act for Europe (SBA)14 was launched in 2008 by the European Commission and holds

ten principles to guide the conception and implementation of policies both at EU and Member State level.

The principles concerns providing education and training for SMEs, helping the funding of SMEs,

internationalisation of SMEs and the fostering of entrepreneurship.

• The Enterprise Europe Network15 was launched in 2008 and brings together close to 600 business and

organisations from over 50 countries, and thereby provides essential information and helps creating

business partners across all Network countries.

14 http://ec.europa.eu/enterprise/policies/sme/small-business-act/index_en.htm 15 http://een.ec.europa.eu

Definitions

SMEs: Micro, small and medium sized enterprises are small companies, with limited amount of staff and

which have annual turnover less than €50 million.

Micro-enterprises: Fewer than 10 employees

Small enterprises: Fewer than 50 employees

Medium-sized enterprises: Fewer than 250 employees

Internationalisation: All activities that put SMEs into a meaningful business relationship with a foreign

partner: exports, imports, foreign direct investment (FDI — relocation or outsourcing), international

subcontracting and international technical cooperation. It can take place at cross-border level, at

transnational level inside the EU or at international level beyond the EU.

Market analysis: Studies the attractiveness and the dynamics of a special market within a special industry,

the demand and supply on that specific market.

Key Words

Protectionism, Small and medium size enterprises (SMEs), Internationalisation of European SMEs, The

Small Business Act for Europe, Funding Gap, Business Angel, Line of Credit, Venture Capital,

Entrepreneurship, Growth.

Links

European Commission, Small and medium-sized enterprises (SMEs)

http://ec.europa.eu/enterprise/policies/sme/index_en.htm

Supporting the Internationalisation of SMEs. A guidebooks series by European Commission (2014)

http://ec.europa.eu/enterprise/policies/sme/regional-sme-policies/documents/no.7_international_en.pdf

Study on the level of internationalisation of European SMEs. (Commission, 2009)

http://ec.europa.eu/enterprise/policies/sme/market-

access/files/internationalisation_of_european_smes_final_en.pdf

More statistics

Speech by Benoît Cœuré, Member of the Executive Board of the ECB on SME financing, market innovation

and regulation

http://www.ecb.europa.eu/press/key/date/2013/html/sp130411.en.html

European Commission, Promoting international activities of SME

http://ec.europa.eu/enterprise/policies/sme/market-access/internationalisation/index_en.htm

European Commission, Small Business Act for Europe

http://ec.europa.eu/enterprise/policies/sme/small-business-act/index_en.htm

Committee on Industry, Research and Energy (ITRE)

Creating a greener future: Following the failure of many EU Member States to meet the targets for

renewable energy set out in 2001 and 2003, and building upon the European Commission's proposed 2030

climate and energy framework, how should the EU proceed to reduce its reliance upon fossil fuels?

Yaprak Damla Yıldırım (TR) and Lauri Lahtinen (FI)

At a Glance/ Executive Summary

For almost a decade now, the European Union has promoted sustainable energy solutions and led the

struggle against global warming and energy crises. However, its Member States are running out of their

natural resources and becoming increasingly dependent on non-renewable energy imports, while EU's

ambitious targets face the threat of being mere rhetoric. Perhaps most alarmingly conflicts both inside and

outside of EU threaten to move things back to square one.

Problem

Since the anticipated shift from fossil fuels to renewable energy sources has been postponed again and

again, European States remain excessively dependent on the usage of fossil fuels. Facing the reality of

some Member States having a very limited number of years of reserve of fossil fuels remaining16, as well as

implications of international conflicts with a major supplier country17, today's Europe is in a position where

the deadline for the long-awaited switch can no longer be put off.

To tackle this problem, the European Commission has put forward ambitious targets in the form of the 2020

policy framework, followed by the proposed 2030 framework and the 2050 Roadmap. While progress is

being made towards achieving these, several Member States did not manage to meet the previous targets

set out in 2001 and 2003, which were not binding. Failures like this do not convince investors or scientists

worrying about global warming. How can the EU ensure the targets will be met this time, while respecting

the sovereignty of its Member States?

16 http://www.google.com/url?q=http%3A%2F%2Fwww.theverge.com%2F2014%2F5%2F16%2F5723880%2Ffrance-uk-run-out-of-fossil-fuels-next-five-years&sa=D&sntz=1&usg=AFQjCNGrijz9Qm6RdCjAYQoZHeRDn-n36w 17 http://www.bbc.com/news/business-26679452

Actors, Interests and Conflicts

• The European Commission has put out and amended legislation concerning this issue. It continues

to be the sole European institution with legislative powers.

• The Association of European Renewable Energy Research Centres (EUREC): consisting of

Research and Development (R&D) groups and representing research centres and university

departments, EUREC’s purpose is to promote and support the development of technologies and

human resources enabling a transition to a sustainable energy system.

• The fossil fuel, nuclear and renewable energy industries each have their strong interests that

clash with one another.

• Member States are not on the same line regarding the energy transition and thus have their own

interests. They are also able to plan their national energy strategies.


• The 2020 Climate and Energy Package: a set of legislation aiming to ensure the EU meets its

climate and energy targets for 2020 (a.k.a. the 20-20-20 targets).

• 2030 framework for climate and energy policies: building upon the 20-20-20 targets, this proposed

framework sets out ambitious targets, aiming to ensure a coordinated approach among Member

States.

• Roadmap for moving to a low-carbon economy in 2050 is a long-term policy plan by the

Commission. Building upon previous energy targets, its aim is to achieve even deeper cuts to

emissions by 2050.

• The EU Emission trading system (ETS): a ‘cap and trade’ system that aims at flexible and cost-

effective reduction of emissions.

Perspectives

A pilot project called Internal Energy Market 2014 has kicked off this year, aiming to deepen the integration

of European energy markets. Meanwhile the Commission is preparing a regulation that would make market

coupling binding in the entire EU.

However, the dissolution of the European Renewable Energy Council (EREC), an umbrella organisation for

the European renewables industry, in early 2014 threatens to leave the renewable energy sector without a

voice and a strong sense of collaboration. What measures can the EU take to ensure the renewables sector

does not lose ground to competing fossil fuel and nuclear energy industries? Moreover, with currently most

of its energy produced using non-renewable sources, how can the EU ensure a smooth transition towards a

sustainable energy system is made? Also noting that the Commission has received criticism for not setting

its climate targets in line with scientific data, are its current measures fast and effective enough?

Definitions

• Biofuels are renewable liquid fuels from a non-fossil biological origin.

• Carbon leakage is a term used when referring to the phenomenon of companies transferring

production to third countries in order to avoid constraints on greenhouse gas emissions.

• Co-generation or combined heat and power (CHP) describes the simultaneous production of both

useful heat and electricity in a single process or unit. Energy intensity measures the energy

consumption of an economy and its energy efficiency.

• Fossil fuels are non-renewable natural energy sources such as coal, natural gas and oil.

Key Words

Renewable energy, greenhouse gas emissions, energy efficiency, emissions trading, low-carbon economy

Links

A detailed article on energy consumption in the EU

http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Consumption_of_energy

The 'infographs' here are easy to grasp

http://www.eusew.eu/press-corner/editorial-material

Official press release from EREC announcing its dissolution

http://www.erec.org/fileadmin/erec_docs/Documents/Press_Releases/EREC_Press_Release_EREC_forced

_into_liquidation.pdf

A short video explaining the EU-ETS

https://www.youtube.com/watch?v=yfNgsKrPKsg

A Q&A on the 2030 framework

http://www.eusew.eu/images/QandA.pdf

The 2050 roadmap explained

http://ec.europa.eu/clima/policies/roadmap/index_en.htm

The 2020 framework explained

http://ec.europa.eu/clima/policies/package/index_en.htm

Statistics

Greenhouse gas emissions in EU 1990-2012

Energy intensity of the EU economy, 2002 and 2012 (kg of oil equivalent per EUR 1000 of GDP)

Final energy consumption in EU-28, % of total, 2012

Committee on Civil Liberties, Justice and Home Affairs

(LIBE)

Human trafficking causes several hundred thousand victims in the EU annually and is amongst the most

profitable criminal activities. How can the EU effectively combat human trafficking in Europe and preserve

the Schengen agreement?

Overview by: Konstantinos Andronikis (GR) & Cecilia Axelsson (SE)

Chairperson: Jeroen de Marteau

Executive Summary: Could the Increase of Human Trafficking be Averted?

Human trafficking, often referred to as modern day slavery, is a serious violation of human rights.

Vulnerable individuals are often deceived into this exploitative business and forced to leave their home

country.

While work is being done on different levels in society each day, human trafficking is still increasing.

Between 2008 and 2010, the number of identified and presumed victims increased by 18% in the EU.

Problem: Exploitation of Vulnerable Individuals Occurs Across EU Borders

The number of confirmed victims amounts to almost 10,000 within the EU annually. Yet the estimated

number of unreported cases is substantially higher, reinforced by the silence of the victims and the difficulty

to prosecute traffickers.

Human trafficking occurs in different forms:

• Sexual exploitation: Over 60% of cases with more than 90% of the victims being women or children.

Victims are often trafficked to countries with a high demand for prostitution..

• Forced labour: 25% of cases with the majority of victims being male. Those are particularly

vulnerable due to economic exclusion and poverty.

The majority of European victims involved come from Romania, Hungary and Bulgaria, which all suffer from

high poverty and unemployment.

While human trafficking occurs on a regional and national level, it is very often international. Due to the free

movement across the borders within the Schengen area, surveillance of potential trafficking is difficult.

Also, Member States focus differently on combating human trafficking as not all of them have the means to

efficiently deal with the issue, while attitudes towards the severity of the problem also vary. For instance, not

all Member States have yet implemented the EU’s Directive on trafficking in human beings. Due to these

differences in procedures and legislation, victims often lack basic knowledge of their rights and available

help, which complicates the prosecution of traffickers, as victims do not denounce them.

Actors

EU: The EU institutions and its bodies combat trafficking through legislation and Europol, their law

enforcement agency, and the Anti-trafficking coordinator. In the EU, the number of convictions for trafficking

in human beings decreased by 13% between 2008 and 2010.

Traffickers: People and groups that commit the crime of human trafficking, which is the second biggest illicit

profit for criminals. In the EU, the number of suspected traffickers fell by 17% between 2008 and 2010.

Non-Governmental Organisations (NGOs): NGOs play an important role in the efforts against human

trafficking. They provide support for victims and work both preventative as well as with follow-up work, e.g.

through hotlines. Some of these organisations are the Anti-Slavery International, the Abbie's Intermission

and the Not For Sale Organisation.

EU Member States: They still have varying legislation on human trafficking, as well as prostitution, and only

20 out of 28 States have incorporated the Directive 2011/36/EU into law on time.

Victims: Their number within the EU is increasing. While human trafficking is an issue affecting men and

women, 68% of the victims are female, 17% are male and the remainder are children.

Current Legislation and Political Framework

Article 5 of the Charter of Fundamental Rights of the European Union, the UN Protocol of Trafficking in

Persons and the Council of Europe’s European Convention on Action Against Trafficking in Human Beings

specifically prohibit human trafficking.

In 2011, the EU introduced the Directive 2011/36/EU, which sets out minimum standards to be applied

throughout the EU in preventing and combating human trafficking and protecting victims.

Perspectives: Balancing Victims’ Support and Combatting Traffickers

Better implementation of already existing measures might lead to traffickers being punished more severely.

However, a concern is that too many resources spent on combatting criminals can lead to the victims not

receiving the required support. Yet, the vicious circle cannot be broken if resources are spent solely on

supporting the victims. Decreasing the number of abductions, and thus the demand for help, is imperative as

well.

Another aspect is the varying legislation amongst Member States. More harmonised legislation has been

suggested, although the perception of the problem is too different across the EU, making greater

harmonisation hard to implement.

How can the EU decrease human trafficking occurring across borders without breaking the Schengen

agreement, while better applying the already existing legislation to combat human trafficking in the Member

States?

What can the EU do to prevent European citizens being trafficked and how can Member States cooperate to

achieve this goal?

How can the EU help the victims of human trafficking reintegrate into society?

Can cooperation between non-governmental organisations and the EU be used as a more efficient tool to

help victims of trafficking?

Key words

Combat Human Trafficking

Strategy of the EU on Human Trafficking

Directive 2011/36/EU

Charter of the Fundamental Rights of the EU

Slavery of the modern age

Sexual exploitation

Schengen agreement

Links

Eurostat

http://ec.europa.eu/dgs/home-affairs/what-is-

new/news/news/2013/docs/20130415_thb_stats_report_en.pdf

http://ec.europa.eu/anti-

trafficking/download.action?nodePath=%2FPublications%2FTrafficking+in+Human+beings+-+DGHome-

Eurostat_EN.pdf&fileName=Trafficking+in+Human+beings+-+DGHome-Eurostat_EN.pdf&fileType=pdf

EU Strategy

http://ec.europa.eu/home-affairs/doc_centre/crime/docs/trafficking_in_human_beings_eradication-

2012_2016_en.pdf

EC

http://ec.europa.eu/dgs/home-affairs/what-we-do/policies/organized-crime-and-human-

trafficking/trafficking-in-human-beings/index_en.htm

Infographic and statistics on human trafficking within the EU

http://ec.europa.eu/dgs/home-affairs/e-

library/multimedia/infographics/index_en.htm#0801262488c18d4a/c_

Glossary

http://ec.europa.eu/anti-trafficking/Citizens%27+corner/Glossary/

Europol

https://www.europol.europa.eu/content/page/about-europol-17

EU webpage on anti-trafficking

http://ec.europa.eu/anti-trafficking/index.action?breadCrumbReset=true

Not For Sale Organisation

http://notforsalecampaign.org/

Anti-Slavery International

http://www.antislavery.org/

Articles:

http://www.theguardian.com/law/2013/oct/20/people-trafficking-europe-italy-anti-mafia

http://www.dw.de/human-trafficking-the-eus-dirty-secret/a-17412036

http://euobserver.com/justice/122953

Committee on Security and Defence (SEDE)

East versus West: With increased Russian activity on its borders and NATO's fear for the safety of its

members, tensions between Russia and Western countries are at their highest since the Cold War. How

should European states respond to Russia’s growing threat on post-Soviet states and what role should the

EU play in striving to uphold a diplomatic resolve to the situation?

by Juuso Kurokallio (FI) & Cassie Tingen (NL)

At a Glance

Russian activity in eastern Europe has alarmed the EU and NATO. Sanctions have been made on both

diplomatic and economic sectors, still keeping in mind the dependency on Russia for natural energy

sources. Post-Soviet countries such as Estonia, Lithuania and Latvia are vulnerable to Russian influence due

to many ethnic Russians living within their borders. These countries are also most dependent on Russia’s

resources due to being geographically close to Russia.

Problem

Rising threat on the eastern European countries has impelled the EU to take actions. Because Russia is the

third biggest trading partner of the EU18, the sanctions, which target the finance, energy and defence

sectors, are not easy to carry out. In the energy, sector the sanctions carried out by the EU focus on oil.

Russia is the biggest supplier of oil and natural gas to the EU, bearing in mind the need for Russia's oil and

natural gas, how can the EU prevent Russia from violating its borders and work to decrease tensions

between such an important trading partner, whilst protecting the eastern European countries?

Actors

1. Russia: having activity in eastern Europe. The EU is Russia’s biggest trading partner. After the deal

between the EU and Ukraine regarding gas pipelines in Ukraine, Russia threatened to review its

relations with the EU.

18 http://eeas.europa.eu/russia/index_en.htm

2. North Atlantic Treaty Organisation (NATO): alarmed by the threats to the security of its member

countries in eastern Europe19.

3. European Union (EU): worried about the rising threat of Russia in its eastern borders. Security of

European people in eastern European countries is threatened by Russia. Russia is the third largest

trading partner of the EU and the EU is dependent of Russia’s natural resources especially oil.

4. The UN: supports the eastern European countries, especially eastern Ukraine, by providing aid

packages for the threatened areas.

5. International Court of Justice (ICJ or the Court): the principal judicial organ of the United Nations

(UN). Its role is to settle legal disputes submitted to it by states in accordance with the international

law and to give advisory opinions on legal questions referred to it by authorised UN organs and

specialised agencies.


Common Security and Defence Policy (CSDP): All members of the EU have committed to the CSDP which

aims to strengthen the EU’s ability to act through the development of civilian and military capabilities in the

prevention of conflict and in crisis management. Within the CSDP the EU has designed a pack of economic

and diplomatic sanctions to be applied when international law or human rights are violated. The sanctions

may also be applied when policies disrespectful of human rights or democratic principles are issued.

1994 Partnership and Cooperation Agreement (PCA): This partnership and cooperation agreement between

the EU and Russia came into force in 1997, setting the basis for several aims regarding the relations

between Russia and the EU. The main aims are: “provide a suitable framework for political dialogue; to

support the efforts made by the countries to strengthen their democracies and develop their economies;

accompany their transition to a market economy and encourage trade and investment”.20

EU-Russia strategic partnership: Discussion for a new EU-Russia partnership agreement was launched in

2008, finalising the negotiations in 2010. The strategic partnership was initiated to replace the PCA. The New

Agreement should provide a comprehensive framework for EU-Russia relations, and include substantive,

legally binding commitments in all areas of the partnership, including economic cooperation issues, as well

as provisions on trade, investment and energy.

19 http://www.politico.com/magazine/story/2014/07/how-‐to-‐prevent-‐war-‐with-‐russia-‐109596.html#.VDbDzvl_tHU 20http://europa.eu/legislation_summaries/external_relations/relations_with_third_countries/eastern_europe_and_central_asia/r17002_en.htm

EU Common Foreign and Security Policy (CFSP): The EU has set some important aims regarding

peacekeeping and the prevention of violent conflicts in the world. The main aims are: “early identification of

the risk of violent conflict and closing the gap to early action; improved understanding of conflict situations

(root causes, actors and dynamics); enhanced identification of the range of options for EU action and

conflict-sensitive programming of external assistance.”21

Perspectives

Relations between the Member States of the EU and Russia have been of historical significance. Mutual

trade in goods and energy has been in the centre of the debate regarding these relations. Because the

tensions between the EU and Russia are at its highest since the Cold War, questions about whether the EU

should stay largely dependent on Russia have risen. Keeping in mind the aims of the EU for peace and

security, some argue that actions need to be undertaken to resolve the tensions between the EU and Russia.

Up until now, diplomatic and economic sanctions seem to have been the EU’s main solution to the problem.

These sanctions can put effective diplomatic pressure on Russia to decrease its threats on the post-Soviet

countries. But have these sanctions been effective enough?

Although Russia is the EU’s direct neighbour, there are other institutions and states concerned about the

issue. Institutions as the NATO and the UN, and states as The USA play significant roles in the matter as

well. Some say cooperation between the institutions and states could increase the pressure on Russia to

decrease the threats on the post-Soviet states. But are these institutions and states willing to cooperate, as

their relation to Russia might differ from that of the EU? Also, the question arises whether the diplomatic

and economic sanctions imposed by the EU carry enough weight to decrease the tension between Russia

and the EU. Some argue that the sanctions imposed increase the tensions, as they could come across as

hostile.

Should the EU continue the course it is following now and adhere to imposing sanctions on Russia? Or

should the EU look at other possible steps that can be taken to decrease the tension between Russia and the

western countries?

Key Words

• NATO

21 http://eeas.europa.eu/cfsp/conflict_prevention/index_en.htm

• Russia - EU relations

• EU diplomacy

• EU sanctions on Russia

• UN peacekeeping

• International Court of Justice (ICJ)

• Post-Soviet states

• Russia - western world

• diplomatic resolution

Links

http://eeas.europa.eu/russia/index_en.htm This link gives a brief overview of the relations between the EU

and Russia on the matter of policy and agreements.

http://www.eeas.europa.eu/csdp/ Site explaining the European Common Security and Defence policy

http://europa.eu/legislation_summaries/foreign_and_security_policy/cfsp_and_esdp_implementation/index

_en.htm Implementation and actions of the CSDP and ESDP

http://www.eeas.europa.eu/cfsp/conflict_prevention/index_en.htm European Union External Action (EUEA)

conflict prevention, peacebuilding and mediation

http://europa.eu/rapid/press-release_SPEECH-13-249_en.htm Speech by President Barroso at the Russia-

European Union – Potential for Partnership conference: "Moving into a Partnership of Choice"

https://www.youtube.com/watch?v=U78zTvQGiPM Ukraine 2014 | Ukraine-Russia Ties, Explained | The New

York Times

http://www.youtube.com/watch?v=3XOlt4QN71Q Panel discussion Leiden University on EU-Russia Relations

http://www.newrepublic.com/article/117440/which-former-soviet-state-could-be-next-ukraine Post-Soviet

countries - Russia

Statistics

The EU and Russia are largely dependent on each other regarding the trade of goods and services. Some

facts about the trade between the EU and Russia22

● Mutual trade between the two reached record levels in 2012;

● The EU mainly imports raw materials, in particular crude and refined oil and gas from Russia;

● the EU is Russia’s main investor. Up to 75% of Foreign Direct Investment23 stocks in Russia come

from the EU Member States, including Russia.

24

22http://ec.europa.eu/trade/policy/countries-‐and-‐regions/countries/russia/

23 Foreign Direct Investment (FDI): An investment made by a company or entity based in one country, into a company or entity based in another country. Entities making direct investments typically have a significant degree of influence and control over the company into which the investment is made. 24 http://daskapital.nl/2014/03/economische_sancties_werkt_dat.html

Direction of trade Goods Services FDI Total

EU to Russia €105 billion €18 billion €17 billion € 140 billion

European Youth Parliament Finland – EYP-Finland ry Uudenmaankatu 15 A 5, 00120 Helsinki

www.eypfinland.org [email protected]

Savonlinna 2014 – Regional Session of EYP Finland is supported by

Preparation kit for delegates – Savonlinna 2014

Documents

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