Monday 26 January 2015

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TTIP confidentiality for the sake of the success

Posted by on 19/01/15

It took a bit to understand that the demystification and reduction of worries on the TTIP passed through a series of initiatives well-structured and aimed to allow a larger audience having access to the subjects being negotiated. Yet, the transparency initiative envisages keeping some documents as restricted and the explanatory lines dropped by Commissioner Malmström try to give ground to this decision. Nevertheless, between the initiatives promoted by the Commission and INTA MEPs’ suggestions, the knotty ISDS issue still pops up to give headache to TTIP negotiators.

New Year, new documents on the TTIP declassified under the initiatives kicked off on 25th November by Commissioner in office for Trade Cecilia Malmström.

The initiative has been perceived as a first step in the right direction, by both group campaigning pro or against the Treaty, while still falling short in fulfilling the aim of several groups in the European Parliament, namely full transparency. More transparent procedures for more transparent Institutions, reckoned as intervenient measures to tackle the ramping wave of Eurosceptism and disaffection of EU citizens towards Brussels’ Eurobubble. Furthermore, the transparency initiative blesses the publication and diffusion of documents to a broader number of MPEs, besides the launch of a readers’ guide to ease the access of the wider public to the declassified documents.

The word “access” here means not only the opportunity to handle materially the documents and having the chance to get through by reading them. More than this, the term gets to put them in a more intelligible form, for those having less than a smattering of legal and/or economic knowledge.

It is the first time the Commission is publishing documents concerning legal framework and inner factors involved in the process while negotiating a commercial agreement.

In her latest public speech, Commissioner Malmström underlined how the objectives fixed when she first stepped into the Berlaymont building are now nailed, or at least partially met.

On January the 7th, the Commission made available online dozen of factsheets related to the on-going TTIP-negotiations on public procurement, rules of origins (ROOs), engineering products, medical devices, chemicals, intellectual property rights (IPRs), services, government-to-government dispute settlement (GGDS) instrument, sanitary and phytosanitary measures, trade on goods and customs duties, labour and environmental sustainable development norms, energy and raw materials, textiles, regulatory cooperation, plant and animals protection and food health, vehicles and automotive sector, cosmetics and pharmaceutical, Small and Medium enterprises (SMEs).

Seen the abovementioned long-, although still incomplete, list of items under negotiation the dint is that the treaty is indeed foreseeably to influence most aspects of consumers’ everyday life, whether it comes legally true. Anyway, the date for the signature seems to be postponed further and further, day by day provided with the technicalities and criticism coupling with the negotiations.

Ideally, negotiators indicate the end of the year as the conclusion of the negotiations and the craved signature-day, or under a more realistic lens prior of the end of Obama’s presidency. But before even thinking about how close we are to conclusion of negotiations, the Commission must question itself on how abide by the EU transparency and practices including its citizens’ takes.

Demystify, Clarify, Show, Explain before signing, sealing and delivering the TTIP text

This haiku-form manifesto may symbolize the four actions that Commissioner Malmström has envisioned to accomplish the crusade against the lack of transparency in the EU practices initiated by civil society movements both by Ms O’Reilly, EU Ombudsman in office. For this purpose, the Commission gauges that the progressive declassification of the documents would give evidence to MEPs and civil society whilst gaining political approval. The whole process involves four key measures that on the medium-run would make available the documents in the very wake of the negotiation rounds for the Council, Member States and a wider number of MEPs than the sole 28 sitting in the International Trade (INTA) committee and outside the reading rooms of the EP building. Apparently the key word of the initiative is more: more documents, more availability and published on a more regular basis for a more aware and acknowledged public.

Obviously, consultations and negotiations will not be held in public but of course not secret and still access to a number of documents will be restricted for the sake of achieving negotiations, tactical reasons against third parts and to preserve from external market spill-overs’ factors to interfere with the current talks. “When entering into a game, no-one starts by revealing his entire strategy to his counterpart from the outset: this is also the case for the EU” (1).

Transparency is not merely about publishing; documents were online since the very beginning thanks to the leak initiative carried out by Green MEPs. It must be evident how stakeholders heard in consultation prior to opening of new rounds are selected. It is required to know what is involved and what not in the TTIP negotiations, wrapping up a clear list of the issues at stake. It must be acknowledgeable why the diffusion of documents is limited to some categories and it is so difficult to overcome the practice of limiting the diffusion to reading rooms in the EP. It is required to notice if these standards are going to be set and steadily being applicable to future negotiations and setting new rules, as the EU should do where exercising its normative power. It is utmost important to explain and deconstruct arguments and myths, if any, so to let people understand and expose concerns and appraisals, if any.

Although, it takes two to tango, the Commission, indeed, can publish only its papers and proposals, while falling short in swaying the US counterpart to do the same. On the same page, Ombudsman O’Reilly warmly invited European negotiators not to fall victims of the US resistance to publish consolidate EU-US negotiating texts and to progress on its walk towards transparency.

Can you try to explain the TTIP to the man in the street?

As mentioned before, the availability of the documents tends to be a fake-aim, a sort of cover, if the negotiating texts are not clarified and explained to “mere” citizens. The utmost pressure of targeting EU citizens’ comprehension follows the growing buzz diffusely showed by the civil society and the petitioners widely subscribing campaigns and submitting questions to the European Commission.

Commenting the attention catalysed by the TTIP amidst the wider public, Commissioner Malmström said of finding herself astonished after the number of “men in street”, not even acquainted with legal or economic notions, though willing to understand the real bulk at stake.

Granting high levels of transparency and integrity, the Commission automatically will improve trust and confidence in the way the EU works in negotiating and “an agreement that responds to European consumers’ needs and concerns”, as Malmström had to say in front of the EP in November. Furthermore, the EU refers to the transparency booklet when negotiating in trade, prevising and encouraging democratic scrutiny and public involvement at all stages of talks.

Currently, citizens’ comprehension is backed also by a news document issued by the Commission, namely a Readers’ guide structured around three main pillars of the Treaty: market access, regulatory co-operation, trade rules (2). In the ultimate attempt to square the circle of a balanced formula blending confidentiality and transparency in the negotiations, the decision to put out a “TTIP 101 for dummies” is doubtlessly a good move to clinch together EU engaged public opinion and the Institutions. After all, good administrations must be accessible to vast public and carry out their tasks plainly and clearly, in a single word: transparently.

Besides, registering these bold steps towards transparency and positive reactions of MEPs assigned to the committee INTA, primarily by its chair Bernd Lange (S&D) and one of the most active appointed member, Marietje Schaake (ALDE). The first week of working session in 2015 has seen the relentless drafting activity of the INTA committee in view of preparing the draft report on Parliament’s recommendations on TTIP to be delivered to EU’s negotiators (3).

Looking at the point 4.3.2 of the INTA working paper on the investment liberalization and protection, the “chicken” comes home to roost. The ISDS, the Investor-State dispute settlement instrument, still turns out being the most controversial issue in the debate, more than worries related to consumers’ health and introduction of allegedly toxic goods on European high-standards’ market. Being thorny and entangled to be put in plain words, the ISDS issue has not yet been enclosed in the explanatory note for readers, either it is said to be included in the final version of the TTIP. Actually the arbitration to settle potential disputes between investors and State is still at its embryonic form as it magnetized most of the critics, till being considered a redundant clause in the treaty being the Transatlantic partners provided with high-level reliable judicial system.

Given that democratic governments respect rights of their citizens and companies, an arbitration investors-government is needed whereas the respect of these rights is not openly or appropriately envisioned for foreigner investors likewise. Being the latter case-scenario far from depicting the EU-US situation, chances are that the enhancement of the investment protection clause in the TTIP would play the balancing role of regulating and protecting investors’ interests while enabling governments to rule and pursue their public policy objectives. The proposed EU approach to the ISDS has been included also in a public consultation launched by the Commission in 2014 (4). In its report following the conclusion of the consultation, the Commission has registered a widespread opposition to the mechanism coupling with the INTA MEPs recommendation to wipe out the ISDS issue from the TTIP, for the sake of success and transparency of course.


(Anita Nappo)


Pour en savoir plus

  • EP Committee INTA working document preparing the draft report on Parliament’s recommendations to the Commission on the negotiations for the TTIP

  • Online public consultation on investment protection and ISDS in the TTIP

Further suggested readings:

- EU publishes initial TTIP Position Papers

- European commission lifts lid on TTIP negotiations

- TTIP and arbitration: Juncker’s birthday headache

- EU publishes confidential papers to defend U.S. trade deal

Classé dans:CITOYENNETE EUROPEENNE, Questions institutionnelles, Relations avec les pays-tiers

What ISIS Offers Young Western Europeans, Which Europe Doesn’t

Posted by on 19/01/15

On September 26, 2014, BBC News published a story titled, “Islamic State crisis: ‘3,000 European jihadists join fight.’” Many more reports appeared in Western media outlets at the time, asking why ISIS was so appealing to young Western Europeans. Did these young men and women leave for the Middle East because they had suddenly developed murderous intentions toward their own people? It doesn’t make sense.

Two stories that were published just recently about young people who admire ISIS may give us a clearer picture into the mindset of our younger generation. Just a few days after the horrific murders at Charlie Hebdo and the kosher deli, CNN’s Arwa Damon interviewed an ordinary looking French girl in “Skinny Jeans and flowing hair,” as Damon described her. The girl described her admiration for ISIS, and her desire to leave the amenities of Western life for the simplicity and honesty of a devout Muslim.

On the same day when Damon’s story was released, The New York Times published a story titled, “The Jihadist in Our Family,” about a quiet, Malaysian Muslim man who was devoted to his family, to his young students at the mosque, and to Allah. His faith had led him to believe that life was meaningless unless you used it to grow closer to God. And the way to grow closer, he believed, was to become a shahid, a martyr for Allah. He went to Syria and succeeded in his mission. In mid September of last year, he died in a Syrian Air Force strike in Hama, Syria.

These glimpses into the hearts of young ISIS recruits reveal the secret of its appeal. ISIS is offering a purpose in life: become a saint, and win God’s favor and eternal glory. In a world where people measure one another by the brands they wear, the gadgets they show off, and their credit in the bank, extreme religion offers what they perceive as a more meaningful purpose for existence. To many young Europeans, it is a far better offer than the latest model of iPhone.

After decades of consumerism, the emptiness in people’s hearts has grown so unbearable that they feel compelled to fill it at any cost. So they turn to the extremes. The extreme right is also gaining ground among them, but it cannot offer the antiquity, the sense of authenticity, and the promise of eternity that religion can. And so religion wins.

So what can we do to stop our kids from going that way?

First, we need to understand that the war against ISIS cannot be won on the virtual battleground. We cannot stop our kids from searching on the internet. Instead, we have to offer them what they are really looking for, a purpose, so they will not need to search for it on the internet.

If we want to find the answer to ISIS, we have to look within us, not without. Human spirit wins wars, not armed forces. The glam of Western culture has dimmed for our younger generation, so they are looking elsewhere.

Therefore, against the divisive message of extreme Islam, we must offer a message of unity and acceptance above all differences—religious, racial, cultural, and national. Such unity offers a sense of warmth, solidarity, and mutual responsibility. It is inherent in our nature to socialize, but we are taught to socialize and unite against others, to win or to subdue our rivals.

True unity doesn’t require an adversary. True unity embraces diversity, and channels it to our collective benefit. When we unite, we contribute our skills to the good of society, and in return, we benefit from the skills of all the people who have joined our unity. This way we gain so much that we stop feeling we have given anything. In fact, in such an atmosphere, giving becomes a joy even if you’re not naturally inclined to it.

And besides the gifts that we are showered by our connected society, we discover that unity contains a hidden bonanza: When you are truly connected, you feel your friends just like a mother often feels her child. Unity creates an “entity” all on its own, made of your joints efforts, and which can exist only as long as you all maintain your unity. This “entity” consists of your collective selves, as though a society of connected people creates an organism that consists of all its members. Much like cells in the body feel the entire body, whether it is cold or hot, or just right, connected people feel their unity as oneness, and gain depth of perception that is otherwise impossible to achieve.

It is this kind of society that we should offer to our children, one that fosters compassion, mutual support, warmth, and profound connectedness. If we succeed in our efforts, we will soon see a very different Europe.


Michael Laitman was featured in Corriere Del Ticino this week.


Michael Laitman is a Professor of Ontology, a PhD in Philosophy and Kabbalah, and an MSc in Medical Bio-Cybernetics. He was the prime disciple of Kabbalist, Rav Baruch Ashlag (the RABASH). Prof. Laitman has written over 40 books, translated into dozens of languages; he is the founder and president of the ARI Institute, and a sought after speaker. His latest book, Like A Bundle of Reeds: why unity and mutual guarantee are today’s call of the hour, explains the root, cause and solution to anti-Semitism. He can be reached through:

Twitter: @laitman

Iohannis of Romania/Luxembourg

Posted by on 19/01/15
Romania has surprised Europe by electing Klaus Iohannis, an ethnic German, as president of the country. There has been much speculation about an imminent powerful link of Romania to Berlin. It seems that Mr. Iohannis is also perfect in relating with the European Commission. Jean Claude Juncker, the ex-Luxembourg prime minister, has recently said that [...]

New tool for EU experts – EurActory: What is it for?

Posted by on 19/01/15

EU Community will launch the beta version of its first, free service EurActory on 29 January at the European Parliament. But first, we explain the idea one ‘frequently asked question’ at a time.

FAQ1 – What is EurActory for?

In an earlier post, I discussed EU Community’s first application in development: EurActory. EurActory is tailored to the people working on EU policy, whether they are in Brussels, in national capitals or work in organisations spread across Europe.

The service aims to gather the public information that is out there about the relevant experts and policy makers, to share this knowledge with this community and to allow members of this community to contribute their own expertise.

EurActory can tell you which experts to go to for input on a directive or policy you are working on. You can find the right person for a keynote speech at an event you’re organising. Or you can search for the latest updates on a contact you’re meeting in five minutes.

Want to know more? Tomorrow, we’ll let you know who has a profile on EurActory…


EU Community on Twitter * LinkedIn * Facebook

Je suis Volnovakha

Posted by on 18/01/15
By Tyszecki Paris, January 11: one million of people out on the streets in memory of victims of the act of terrorism against Charlie Hebdo. Kiev, January 18: one million of people out on the Maidan to express their solidarity and indignation because of murder of Ukrainian civilians.

European Central Bank’s room for manoeuvre provisionally confirmed

Posted by on 18/01/15

Last week saw a confirmation of the powers of the European Central Bank (ECB) to address the crisis with the delivery of the (non-binding) Opinion in a case before the Court of Justice of the European Union (CJEU, or European Court).

By René Smits

The Advocate General (AG) confirmed the wide discretion, which the ECB has when taking unconventional monetary policy measures. At the same time, the AG suggested the Court that the ECB be required, when implementing such measures, to be fully transparent in the reasons behind them (motivation requirement) and to respect the proportionality principle (the measures are to remain well within the limits of the necessary to obtain the stated goal). He warned that the ECB’s involvement in economic policy setting and monitoring should end in respect of Member States whose bonds the ECB would buy under such unconventional measures: an end to the troika (troixit). The AG addressed the relationship between the CJEU and the highest court of the largest Member State, which had referred the question to be decided by the European Court. The AG opinion should be seen against the background of a battle for supremacy of the law (Union versus State law), and a battle for the public’s mind in Germany on the need of unconventional measures, as well as their role in preserving the euro and the composition of the currency union. The Opinion will support the ECB in deciding on further unconventional monetary policy measures, and underlines the primacy of EU law.


AG Opinion: another step in legal battle on ECB crisis powers

The ECB’s response to the euro area debt crisis came under attack from Germany, with several measures being challenged before in court. The present case concerns the ECB’s ‘bazooka’ response to the crisis. Mario Draghi’s announced, in the summer of 2012: “Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough.” The translation of this announcement in the ECB’s decision to engage in so-called Outright Monetary Transactions (OMT) was challenged by citizens, academics and a fraction in the Bundestag (the German Parliament’s Lower House) before the German Constitutional Court (GCC). For the first time ever, the GCC requested the CJEU on a preliminary ruling on the validity of the ECB’s announced OMT. On Wednesday 14 January 2015, AG Pedro Cruz Villalón outlined how the Court should, in his view, respond.


The crisis response by governments and central banks: bail-out and conditionality

A word of background on the crisis response is due. Policy makers and central bankers responded to the Euro area debt crisis by adopting unconventional measures. Governments established financial assistance schemes (‘bail-out funds’) for Member States that found themselves unable to borrow for on-going public expenditure. Central banks infused massive liquidity into the financial system, acted as lenders of last resort to banks in distress, extended credit to commercial banks on the basis of ever wider collateral, and instituted programs to kick-start the economy when their traditional major weapon (interest rate reductions) had lost its effectiveness with rates at, or below, zero. Interest rates are also central to understanding what happened to government funding. Rates on bonds of ‘peripheral’ Member States spiked, making it impossible for the governments of Greece, Ireland, Portugal and Cyprus to finance their budget deficits on financial markets. Without recourse to markets, governments needed to be financed by fellow governments, and by the International Monetary Fund (IMF). Special arrangements were put in place. The European Financial Stability Fund (EFSF) and the European Financial Stability Mechanism (EFSM) were followed by the European Stability Mechanism (ESM). The legality of these arrangements were tested before courts. The GCC had to rule on challenges by citizens, as had other national courts, notably the Supreme Court of Ireland, whose reference to the CJEU on the ESM lead to the Pringle judgment in 2012. In Pringle, the Court made a distinction between monetary policy and economic policy. It interpreted the no bail-out clause of the Treaty on the Functioning of the European Union (TFEU) in such a manner that the ESM Treaty was considered compatible with EU law. Lending by the IMF and the EFSF/EFSM/ESM was effected on the basis of strict adherence to ‘conditionality’: rafts of incisive economic policy measures and budget cuts to address the weaknesses undermining the competitiveness of the ‘peripheral’ economies and to restore budgetary soundness. The drafting and monitoring of this conditionality falls on the European Commission, the IMF and the ECB. The three form the ‘troika’.


European Central Bank’s response: unconventional measures, including OMT

As its cross-Channel and cross-Atlantic counterparts, the ECB responded by adopting unconventional measures. There was a specific European issue to address: trust in the single currency, and the unity of financial markets through which the ECB’s policy response normally translates to the real economy. The extremely high level of interest rates in ‘peripheral’ States thwarted the transmission of the ECB’s monetary policy: interest rates reductions didn’t any more translate across the Euro Area. Investors were not only weary of buying or holding public debt, they also openly speculated on States leaving the currency union, and on the demise of the euro. The mere announcement of the ECB’s willingness to defend the euro, and of OMT, calmed the markets and led to sharp reductions of interest rates.


AG’s core reasoning: OMT constitute a valid unconventional measure but implementation requires heeding legal parameters (reasoning, end of troika role, proportionality)

The OMT are lawful. The ECB has a wide discretion to act and a broad margin of assessment of what is appropriate in the circumstances.  The AG says:


“The Courts, when reviewing the ECB’s activity, must therefore avoid the risk of supplanting the Bank, by venturing into a highly technical terrain in which it is necessary to have an expertise and experience which, according to the Treaties, devolves solely upon the ECB.”


Note the plural used here (‘Courts’), unmistakeably a hint to the referring German court. During the oral hearings, Portugal and Poland had empathically argued that there should be no ‘judicialisation’ of monetary policy and the Court should not take upon it to decide in such highly technical matters for which an independent expert organ has been given responsibility.

Nevertheless, when adopting unconventional monetary policy measures, which the ECB is competent to do, it should abide by legal parameters. This concerns, first, the motivation of the OMT which the AG sees wanting when looking at the September 2012 press release alone. There should be extensive reasoning for their activation. Secondly, the ‘dual role’ which the leftist party in the German Parliament saw as incompatible with the ECB’s monetary policy mandate, should be reconsidered once OMT become operational. The ECB is then to withdraw from its deep involvement in economic policy prescription and monitoring, at least in respect of the Member States whose bonds the ECB would start to buy. While he acknowledges that limiting OMT to Member States with an EFSF/ESM programme may be necessary to avoid moral hazard and accepts a regular role for the ECB in these programmes, the AG thinks that activation of OMT should end the ECB’s troika role. Thirdly, the AG extensively discusses the need for the OMT, when operational, to comply with the proportionality requirement to which acts by all EU institutions are subject (Article 5(4) TEU). OMT should serve to re-establish the transmission mechanism of monetary policy but may not become a source of cheap government financing. The latter would also run counter to the prohibition of monetary financing, laid down in Article 123(1) TFEU. This basic provision of EMU bars central banks from extending credit to the public sector, and from buying public sector bonds on the primary market. Such transactions are an essential element of central bank operations. The AG’s analysis concludes that the ECB should heed the underlying concerns behind the prohibition of monetary financing and the ‘no bail-out’ clause (Article 125 TFEU).


Market issues: preferential status, default risk, holding until maturity, selectivity

Addressing the GCC’s concerns with OMT, the AG relies on a draft decision and a draft guideline on OMT which have not yet been adopted or published but which the ECB submitted to the CJEU. These draft legal acts make clear that the ECB would observe a ‘lock-in period’ (‘embargo period’ in AG parlance) between the issuance of public debt and its purchases on the secondary market, thus allaying the first of the GCC’s nine fears, on the timing of the purchase and the price formation. The AG notes that central bank operations always entail risk so that (2) default risk cannot be excluded. But he considers this not such as to render the OMT program contrary to the prohibition of monetary financing. On the related issue (3) of preferential treatment, the ECB’s stated intention to oppose any restructuring proposals that may be made under the terms of the bond is considered sufficient. Collective action clauses (CACs) inserted in bond documentation provide for a (super-) majority of bondholders to decide on possible write-downs. The ECB, ranking pari passu with other creditors of a sovereign, may become subject to restructuring. Just these past days, ECB Board member Bernard Coeuré has reaffirmed, on two occasions, that the ECB would vote against any restructuring proposals; a write-off would implicate the ECB in granting credit to a Member State contrary to Article 123 TFEU. The GCC’s further fear (4) of market distortions resulting from the ECB holding bonds until maturity is allayed as well: the ECB has stated its intention not to do so, its practice under the Securities Markets Program (SMP) has also been to sell bonds before their maturity date, and the maturity band indicated by the ECB (1-3 years) implies that there will be no prolonged ownership of public debt. For strategic reasons, the ECB will not pre-announce any quantitative limits on the program of bond buying (5) when activating OMT: this would lead to speculation and undermine the effectiveness of the OMT. But there will be limits in practice so that this <dubious> aspect of OMT no longer raises proportionality issues. The GCC’s concern (6) that OMT encourage Member States to undertake even more debt would not materialize in the AG’s view as there will be no pre-announcement of OMT. But, the AG adds, this concern necessitates that OMT should be proportional to the aim the measure is seeking and not go any further. The AG accepts (7) selectivity as inherent in a program seeking to remedy the blocking of monetary policy transmission in specific Member States. He addresses the GCC’s issues with the (8) conditionality (OMTs will only be effected in bonds of States that are in a program with the ESM) and the (9) parallelism between the ECB acting in the same manner as the ESM in the context of the distinction between monetary and economic policy.


Other issues and outlook

Although, as the AG notes, monetary policy forms part of wider economic policies, in the context of the attribution of powers in the EU, it is necessary to distinguish between the two. Monetary policy is an exclusive Union competence, for the Member States that have adopted the euro (Article 3 (1) (c) and Article 127(2), 1st indent, TFEU). Economic policy remains largely with the Member States (Article 5 TFEU), subject to certain principles, prohibitions and procedures (Articles 119-127, 136 TFEU) and a limited own competence for the Union to act (Article 122(1) TFEU). For the ECB to act in a manner which may resemble an economic policy measure (selectively buying government bonds) may seem to be overstepping the dividing line between monetary policy, for which it is exclusively competent, and economic policy, which rests with the States and with other Union institutions. The AG considers  that both the objectives (as the Court held in Pringle) and the instruments define a policy as either ‘monetary’ or ‘economic’ in Treaty terms whilst any policy should adhere to the fundamentals of EMU. Among these: the prohibition of monetary financing and the absence of shared fiscal liability (‘no bail-out’). Emphasis on these fundamentals meets the request by Germany which, during the hearing, requested the CJEU to emphasize the ‘stability nature’ of EMU in response to the concerns of the GCC.

The general relationship between the Luxembourg and Karlsruhe courts forms the background to the OMT referral. This blog can only note in passing the discommode vis-à-vis the CJEU’s supremacy felt by supreme judicial instances of several Member States. The AG clearly finds the reference by the GCC to be subject to a reserve. The GCC has made clear that it will decide ultimately on the acceptability of the ECB’s OMT under German law. Conspicuous by its absence, in the AG’s Opinion, is a reference to the supremacy of EU law which the European Court has declared on numerous occasions to be an essential element of the Treaties. It is to be hoped that, in its judgment, the Court will re-affirm its case-law since Costa/ENEL (Case 6/64).

The European Court may be expected to give a final ruling in the coming months. Barring an unexpected surprise (the CJEU is not bound by this week’s AG Opinion), the ECB’s Governing Council knows, when deciding to engage in QE later this month, that it is likely to be given ample discretion to adopt unconventional measures. The requirements of transparency (reasoning) and proportionality that apply to the activities of any EU institution must be heeded; troixit is imminent.


René Smits holds a chair in the law of economic and monetary union at the Amsterdam Centre for European Law and Governance, and is an alternate member of the Administrative Board of Review (ABoR) of the European Central Bank. His website can be accessed here.

The Real Value of Arctic Resources

Posted by on 18/01/15

By Nina Jensen, Secretary General of WWF-Norway

As the annual Arctic Frontiers meeting starts in Tromso Norway, much of the talk and media coverage will once again be centred on Arctic resources. This is usually code for oil and gas development in the Arctic, and the potential geopolitical conflict over the exploitation of these resources. This focus is entirely misguided.

The Arctic’s most significant renewable resources are ice and snow. The ice and snow in the Arctic reflect significant amounts of the sun’s energy. As we lose that reflective shield, the Arctic absorbs more solar energy. A warming Arctic warms the entire planet, causing billions of dollars’ worth of avoidable damage, displacing millions of people, and throwing natural systems into disarray. We continually undervalue the critical role of the Arctic is shielding us from wrenching change. Instead, we ironically look to it as a source of the very hydrocarbons that are melting away the Arctic shield.

Apart from the question of whether we should be developing hydrocarbon resources anywhere in the world, let us look at the question of specifically developing them in the Arctic, which in many cases means the offshore Arctic, under the ocean.

We know there are no proven effective methods of cleaning up oil spills in ice, especially in mobile ice. Even without ice, the effects of a spill in Arctic conditions will linger for decades. Oil from the Exxon Valdez spill in Alaska still pollutes beaches, more than 25 years later. We know that drilling for oil in the offshore Arctic is extremely risky – just look at the mishaps that Shell has encountered in the last couple of years in its attempts to drill off the Alaskan Coast. So there is a high risk of mishap, and no proven effective method of cleaning up after such a mishap. No matter what the price of oil, $50 or $200 a barrel, is it worth the risk?

We do not need to make the same mistakes in the Arctic as we have made elsewhere. We can instead use the Arctic as a proving ground for greener, cleaner technologies. Tidal power, wind power, hydro power, all have potential in the Arctic. The Arctic, with its smaller population centres is ideal for smaller scale technologies to produce such renewable power.  Such local power generation can create local jobs, and make Arctic communities more self-sufficient, able to withstand the fluctuations in price of petroleum-based fuels that will eventually bankrupt them.

This message is not just coming from WWF. If you look at the US government plans for its chair of the Arctic Council starting later this year, it also recognizes the value of replacing fossil fuels with community-based renewable power sources – it also just put the valuable fishery of Bristol Bay off limits to oil and gas development. So it’s not just NGOs and Arctic peoples who are questioning the value of fossil fuels in the Arctic, versus the real value of the Arctic to the world – as a regulator of our global climate.



Russia imposes a new leadership in the Republic of Moldova

Posted by on 18/01/15

Moldova turned its back to Europe after Russia succeeded to impose a puppet government.

Even if the three-partied Pro-European Alliance won the elections, two parties changed sides and chose to cooperate with the Putin-backed Communist Party.

This is no big surprise because DP (Democrat Party) and LDPM (Liberal Democrat Party of Moldova) have both appeared after a split from CPM (Communist Party of Moldova). Nevertheless, the presidents of the two parties have both been members of Voronin´s government. Voronin, ex-president of Republic of Moldova, is Putin´s number one politician in Moldova.

LP(The Liberal Party), the only truly pro-European party, has been excluded from negotiations after conditioning the forming of the new government by a politically – independent judicial system. Such a demand appears very dangerous for the political class, as it is widely – known the fact that Vlad Filat and Vlad Plahotniuc, the leaders of DP and LDPM, obtained huge fortunes by illegal means. In this political struggle the stake is the control over justice and this is a huge draw-back on the European path.

It seems that Russia has regained control over the Republic of Moldova just by making use of its impossibility to achieve European Union´s standards of good-governance.

The European Union reacted quickly to sanction Moldova. The President of Romania, Klaus Johannis, has cancelled his visit to Chisinau, whereas Poland blocked a credit of 100 million euros.

Recent evolutions in Moldova appear as a great concern for Ukraine, whose European path is threatened by a new Moscow-loyal neighbour.


France’s excessive laïcité

Posted by on 18/01/15

In the wake of the tragic massacre of cartoonists from Paris on the 7th of January, most major news services around the Western world, from The New York Times to The Guardian and Deutsche Welle, have highlighted in editorials the dire living conditions in which many French Muslims are forced to live.


To be sure, poverty, exclusion, lack of employment prospects or the harshness of ghetto life in the suburbs surrounding major French cities cannot excuse the killings that have taken place, nor any other terrorist action for that matter. They do, however, help explain them and at the same time they highlight the decades-old neglect displayed by French officials when dealing with the plight of citizens of Arab origin.


A closely related issue is that of intolerant secularism, which over the last few years has prompted actions such as legislative measures directed against the Islamic dress code and has condoned – through the Charlie Hebdo cartoons –  repeated attacks against core Islamic religious values or symbols. Alas, the Catholic foe had been vanquished at horrendous human cost during the French Revolution: the republicans’ search for new religious scapegoats should relent before it is going to be too late.


NATO membership goes against the interests of Montenegrin citizens

Posted by on 18/01/15

“Montenegro should be a force for peace and solidarity in the world, and not a small cog in the machine of the new Crusades”.

In an interview with the Montenegrin National News Agency (MINA), published 10 January 2015, the Chairman of the Movement for Neutrality of Montenegro (MNMNE), Professor Filip Kovacevic, stated that, in the first part of 2014, many government officials and their “Atlanticist mentors and highly-paid lobbyists” claimed that Montenegro would get an invitation to join NATO at the organization’s summit in Wales last September.

“At the same time, I publicly stated that this would not happen. Now it is easy to see who was right. Getting the invitation depends on the overall geopolitical dynamic in Europe,” said Kovacevic, asserting that we would see more and more skepticism toward the policies of Washington, especially given the open confrontation with Russia, which came about as a result of US imposition of its Atlanticist, neoliberal priorities on the European Union, which caused a great deal of economic damage.

According to Kovacevic, this means that NATO’s influence, whose only reason for existing is “the military occupation and intelligence surveillance of Europe by the Anglo-American, imperial centers of power”, will gradually weaken.

“In line with this trend, NATO will not have enough strength to expand further and it will find it more and more difficult to keep even the present member states together,” said Kovacevic.

He pointed out the example of Turkey which does not follow the aggressive NATO politics of sanctions against Russia, but instead has negotiated long-term economic projects worth billions of dollars.

Kovacevic expected the same tendency to manifest within other NATO member states as well, especially those whose historical tradition encompasses very close relations with Russia.

“Those who conceptualize and implement Anglo-American foreign policy, it seems, bit off more than they could chew, and now what will happen is that they will be unpleasantly awakened from their dream of global domination by the coordinated activities of BRICS (Brazil, Russia, India, China, South Africa),” warned Kovacevic.

According to him, if Montenegro enters NATO, it will be due to no fault of its citizens, but due entirely to “the corrupt dealings of the regime of the prime minister, Milo Djukanovic” that the country finds itself on “the losing side of history”.

This, asserted Kovacevic, would have dangerous repercussions for the citizens of Montenegro, and is also absolutely unacceptable from the perspective of the Montenegrin anti-hegemonic, libertarian historical tradition.

He claimed that during the six and a half decades of its existence, NATO intelligence services have done numerous things, of which there is much evidence, to subvert democracy and human rights in the member states under the directives of Washington and London.

“It is enough to mention only the criminal, anti-democratic ‘Operation Gladio’ in Italy, and there were similar operations in other European countries as well. That is why NATO’s tutoring Montenegro on its ‘lack of the rule of law’ should be taken as a insult to the historical truth, and to the hundreds of innocent victims of such operations,” noted Kovacevic.

Commenting on NATO demands for the reform of Montenegrin Agency for National Security (ANB), Kovacevic stated that those demands articulated NATO’s wish to fill the Agency with its own puppets and spies.

“This does not mean that citizens will be under less invasive and humiliating surveillance because the priority of NATO has never been to curtail the abuses of its member states’ secret services. At the same time, this could lead to dangerous consequences because these NATO-controlled individuals could, against the national interest of the Montenegrin citizens, involve Montenegro in conflicts with NATO’s enemies, which are becoming more and more numerous,” added Kovacevic.

He said that under NATO’s urgent pressure and insistence, the government of Montenegro founded another intelligence agency: the Military Intelligence Agency. “There is very little that is written about this secretive Agency, whose activities are just as much a threat to the democratization of Montenegro as the activities of the ANB.”

Kovacevic stated that it was not surprising that public support for NATO membership was low, and he interpreted it as indicative of the ‘geopolitical sophistication’ of ordinary citizens in Montenegro.

“Montenegrin citizens do not want to participate in imperialistic attacks on nations whose only fault is that they do not want to have their natural and economic resources under the control of Anglo-American financial centers. Montenegro should be a force for peace and solidarity in the world, and not a small cog in the machine of the new Crusades,” he said.

Asked whether the Movement for Neutrality (MNMNE) plans any activities which advocate holding a referendum on Montenegro’s NATO membership, Kovacevic stated that everything the organization did was geared toward making the referendum inevitable.

“Regardless of the opinion of corrupt members of the Montenegrin Parliament and their NATO lobbyists, membership of any international organization, let alone an organization such as NATO, limits the country’s sovereignty. This is why the only politically legitimate route is to directly ask citizens their opinion. Any other way is equivalent to a coup d’etat,” he warned.

Answering the question as to what MNMNE’s activities would be in case of an invitation to NATO membership, Kovacevic said that MNMNE is a new geopolitical force in Montenegro which will only get stronger in the coming period and acquire even more allies in the world.

“The members of our International Advisory Board are world-famous intellectuals, noted for their fight for global justice. We also received strong support from former US Congressman Dennis Kucinich and other influential international figures,” he noted.

According to Kovacevic, the progressive international community recognizes the dedication of MNMNE to just relations between peoples and nations, as well as “our desire to turn Montenegro into a favorite destination for all people of good will.”

“We will work on a new conception of Montenegrin foreign policy, which will enable it to host the headquarters of certain international organizations, for instance the BRICS bank. This will lead to the significant investment in local infrastructure and a lot of new job openings,” he pointed out.

Kovacevic reiterated that the examples of other militarily neutral countries in Europe and beyond show that it is not true that neutrality would cost more than NATO membership.

“NATO member states will have to spend at least 2 percept of GDP on defense, whereas all neutral states spend considerably less. Claims about the costs of neutrality offered by the Government are not to be believed because corrupt officials do not want to consider in a rational and calm manner any alternatives to NATO membership.”

Kovacevic stated that it has been a while since he had publicly called for the Minister of Defense, Milica Pejanovic-Djurisic, to resign due to the continued participation of Montenegro in the “expensive and useless” NATO mission in Afghanistan, which did not fulfil any of its stated goals.

“To throw away millions of euros in the deserts of Afghanistan while more and more citizens of Montenegro lose their jobs and fall below the poverty line is the height of alienation and arrogance. In this, as in many other areas of activity, the Ministry of Defense is a textbook example of irresponsibility to citizens, superciliousness towards its employees, and servility towards the imperial centers of power,” he underlined.

Kovacevic said that this was the reason why he approached the Ministry’s statements with a great deal of skepticism. “And anyway, their projections last only until they get another phone call from NATO headquarters in Brussels.”

Asked if he was satisfied with the way political parties that are against NATO membership present their views to the public, and whether MNMNE would intensify cooperation with them, he replied that MNMNE cooperates with everyone who believes that Montenegro has a mission to fulfil in the world, a mission which consists of building bridges of trust among different nations, cultures, and civilizations.

“With all, including political parties and non-governmental organizations, MNMNE cherishes the culture of dialogue, and we believe that we will continue to play a constitutive role in a new and different Montenegrin foreign policy,” concluded Kovacevic.

Translated by Filip Kovacevic

Born in a European capital…

Posted by on 16/01/15
Many have asked me if the title of “European Youth Capital 2015” is important to Cluj (Romania). Concrete benefits can still be seen from the period in which Sibiu (also in Romania) carried the title of “Cultural Capital” in 2007, but what matters is the great European symbolism for Cluj. Although I live in the [...]

Je Suis Charlie: A Message under Threat

Posted by on 15/01/15

The terrorist attack against the satire magazine “Charlie Hebdo” and subsequent hostage situations in Paris have prompted a tremendous wave of compassion throughout Europe. Surprisingly large demonstrations in European cities have revealed an unprecedented level of solidarity with the French. At the same time, the specific nature of this solidarity appears to be rather fragmented and ambiguous. “Je suis Charlie” means different things to different people. For some, it may mean “I support free speech”, for others, it means “I support intercultural tolerance”, and for Viktor Orban, it means “Let’s restrict immigration”. The only common denominator is the rejection of violence in the name of Islam, which is a limited, but powerful message – but one that is being threatened by prejudice.

The images of millions of people coming together to denounce violence against civilians for religious reasons is a call for civility that directly challenges the legitimacy of terrorist organizations like the Islamic State. However, these images can also be misinterpreted as a massive rally of support for insulting Islam. In the battle to win over the minds of young Muslims in danger of being radicalized, this distinction is extremely important to stress. Most mainstream European leaders have been careful to avoid alienating Muslims, but ordinary citizens have been less cautious, and right-wing populists have been quick to use divisive rhetoric.

In the aftermath of the attacks, there has been a string of anti-Muslim incidents across Europe. These “counter-attacks” are the tip of an iceberg of contempt and distrust which poisons society and only serve to radicalize more people. Populist politicians and right-wing movements like the “Pegida” movement in Germany are in a position to exacerbate these emotions and create more tensions in society at a time when Europe needs right the opposite. In this moment of exceptional solidarity, the powerful message of peace that the Paris attacks have produced, risk being tainted with bigotry.

It isn’t necessary for Europeans to agree on every definition of “Je suis Charlie” in order for their message to be interpreted correctly. They only need to agree to make the bottom line, the rejection of terrorism, their main message, and make it very clear that Europeans are not against Islam, but those who abuse it.

By Marco Funk

Après Charlie, quelle réponse européenne ?

Posted by on 15/01/15
Emmanuel Morucci La semaine que nous venons de vivre a été éprouvante. Une horrible manière de commencer l’année en fait. Et puis il y a eu cet élan qui, au-delà de la nation a permis l’expression des valeurs fondamentales qui font la France et l’Union européenne. Elles se nomment Démocratie, justice, citoyenneté, liberté, paix et solidarité.

New EU Commission work programme a thumb in the eye for Euroscepticism

Posted by on 15/01/15

Research Executive Elias Papadopoulos offers a reaction to the publication of the EU Commission’s new work programme.

To read Elias’ article, please click here.

The Whitehouse Consultancy is one of Europe’s leading public affairs and communications agencies.

What’s up with the oil market?

Posted by on 15/01/15

The summer of 2008 saw the price of Brent crude rise to its record high, reaching more than $144 per barrel on July 3rd, and some speculated it would continue growing. However, the price fell to below $40 in late 2008, having shrank 77 per cent over just six months. Last year on June 19th, a barrel of Brent crude cost $115. This year on January 13th, it traded on the London commodity exchange for little more than $45 – the price had sunk 60 per cent over seven months. What is happening on the oil market?

Adjustment of expectations

Demand and supply in the oil industry are characteristically slow to react to price signals, lagging one or more quarters behind. As a result, anticipated demand and supply are more important than current prices, as it is these expectations that shape future prices, which can be secured using forward transactions.

Early last year, the global demand for crude oil in 2014 was projected to climb to 1.6 million barrels a day (mbd) and supply to 1.7 mbd. Prices were expected to decline marginally in these conditions. As it turned out half a year later, the echoes of the economic sanctions imposed on Russia reverberated more strongly across the Eurozone than originally anticipated. Worrying economic signs could also be seen in China, resulting in global growth forecasts being cut in the second half of the year and oil demand projections being revised downward as well. According to the most recent estimates, the demand for crude was up by a mere 0.7 mbd in 2014.

A different kind of surprise came mid-year, when Libya-sourced oil returned to the market and Iraq’s production prospects improved, prompting oil supply projections to be adjusted upward. As a result, there was 1.9 mbd more oil on the market than a year earlier, instead of the 1.7 mbd anticipated in early 2014.

With oil supply suddenly outstripping demand by 1 mbd, projections had to be revised and prices cut. There can be no doubt about the unexpected oversupply and the price slump. The question we should answer, however, is whether the low prices are a temporary phenomenon or maybe we are seeing a structural change bringing a permanent reduction of oil prices in the future.

I believe that the upstream sector’s technological revolution behind the US shale boom has caused a material adjustment of the oil pricing mechanism so that oil prices will now be more dependent on production costs rather than the budget needs of OPEC members. Since the marginal cost of producing a barrel of oil for which there is demand on the market is below the price needed to balance the budgets of most OPEC members (and Russia), the current market developments are a downward revision of future price trajectories in respect of projections made half a year earlier. In other words, the change looks permanent. We must bear in mind, however, that neither the technological revolution nor the shale boom will protect the world against geopolitical upheaval, which may drive up the price of oil. That being said, in the present circumstances the effects of any such events on the oil market will be less profound.

Flexible production

The OPEC cartel adheres to a policy of limited oil production (maintaining substantial reserves), which aims to keep oil prices at a level balancing the budget needs of key OPEC members (USD 100 per barrel on average). This level is substantially higher than the marginal cost of producing oil or tapping oil reserves in Saudi Arabia. It is also higher than the cost of tight oil production in the US, allowing the production to grow dynamically.

The process of extracting oil from unconventional deposits is characterised by a significantly diffused production potential. Several dozen thousand new wells are drilled in the US each year by thousands of small and large companies. Drilling enough new wells is critical to sustaining production, as 80% of oil will come within the first two years of production from a well. It should also be remembered that the cost of individual wells may differ, as may their productivity. Some yield below 100 barrels a day, others 800 and more. It is estimated that more than 70% of a typical well’s cost is financed using credit facilities, which is why future production has to be insured against the risk of falling oil prices. Because of this diverse structure and organisation of unconventional oil production in the US, the cost of producing a barrel of oil oscillates widely and the production business is highly sensitive to changes in crude oil prices (the process of change is virtually unbroken). When the price of oil slumps significantly, oil producers are not only pushed up against the profitability barrier, but they also face the limits of their ability to obtain external financing. As a result, fewer wells are drilled and production falters.

When on February 27th OPEC resolved not to slash production in order to buoy prices, the decision was taken with the specific character of the American oil production market, where production potential reacts rapidly to changing oil prices, in mind. What stood in the way was the divergence of interests within OPEC – the countries making a comeback to the market (Libya, Iraq and Iran) want to sell their growing output for an appropriately high price, while Saudi Arabia, sitting on top of crude oil reserves, hopes that low oil prices, which are bound to rise one day, will only do so after killing costly production projects (including some of American production), which gives an advantage to Saudi Arabia, affording it a larger share of the global oil supply pie.

Although the low oil prices (less than $50 per barrel) we are seeing today are not sustainable over the medium term, they may last for some time (one or two years), because the current oversupply (which has overtaken the anticipated annual demand growth) will not be absorbed immediately and the negative consequences of limiting investment in production will likely not become apparent earlier than after a year. Therefore, it is difficult to predict today how the prices will change over the long term, but they can be expected to be lower than we thought just six months before.