Archive for the ‘Kosovo’ Category

Reassuring words for an autumn vote in Ireland?

Wednesday, December 10th, 2008

“The way forward is beginning to emerge”. So said Dick Roche,  Ireland’s minister for European affairs, on the eve of the Brussels December summit. It looks like a second Irish referendum for the autumn of 2009.

The Irish Taoiseach Brian Cowen is expected to tell EU colleagues that he will seek a second referendum in the autumn as long as some reassuring protocols can be agreed. These would deal with taxation (where corporate rates have been such a key factor in boosting inward investment), abortion (EU keep out!) and defence (no threat for Irish neutrality).

Putting a fence around Irish taxes may not go down well with those member states which dislike low corporate tax regimes, but reflects the realities of EU policy. On abortion and defence there should be no problem.

The Irish government will also call for the scrapping of Article 17 (5) of the Lisbon EU draft treaty which would reduce the number of commissioners by one third as from 2014, but I see that the Article itself provides that it can be changed by unanimity. My sympathies are with the Irish on Article 17. The Union is distant enough from the citizen as it is. One commissioner per country will certainly be unwieldy in an EU of 30 or more members, but is a price worth paying for smaller states to have someone of their own to engage with in Brussels.

Of course none of this will guarantee an Irish “yes”, but the tide of opinion may well have turned. Ireland has punched well above its economic weight as a financial services centre over the last 30 years, but faced with the credit crunch it is only the country’s eurozone membership and ECB support which have staved off an Icelandic-style financial disaster. The people have taken note.

The credit crisis has transformed the political and economic landscape for everyone. Denmark is now looking increasingly likely to hold its own referendum on adopting the euro to stabilise its economic position. And now we have Iceland desperate to join the EU and the eurozone to rebuild its economy.

So can the UK be far behind? Yes, far behind. Unless, that is, the global economic turbulence gets worse and the Bank of England no longer has adequate resources to bail out the financial services sector. I liked President Barroso’s provocative remarks noting the growing British interest in the euro, especially given his regular meetings with Gordon Brown and the curious spectacle of Sarkozy, Brown and Barroso all getting together in 10 Downing Street to praise each other’s expansionist policies and say, poker-faced, that they had no doubt Germany would join in. Chancellor Merkel is not so convinced.

As well as the Irish question and the financial crisis, EU leaders will be looking at some new dimensions in European defence policy. In one week we have seen the establishment of a naval task force to combat Somali pirates in the Gulf of Aden and the transfer of policing powers in Kosovo from the United Nations to an EU police and justice mission. The European Security and Defence Policy seems to be evolving nicely, with or without Lisbon.

Posted in Defence, Elections, European politics, Finance, Kosovo, Treaty of Lisbon, UK politics | No Comments »

Serbia’s election: elation in Brussels turns to frustration

Tuesday, May 20th, 2008

Elation in Brussels at the unexpected success of Boris Tadic’s pro-European Democratic Party in Serbia’s general election has quickly turned to frustration as the Socialist Party, with 20 seats in the new parliament, decides whether to throw in its lot with the nationalist Radicals led by Vojislav Kostunica. Tadic’s party won the most seats, but not enough to form a government on its own. (Former ambassador to Belgrade, Charles Crawford, has forthright views on Mr Kostunica).

Both the Democratic Party and the Radicals are courting the Socialists. This was the party of Slobodan Milosevic, but it has greatly changed since his days, much as other communist parties of eastern and central Europe have done. Solana has indicated the EU’s acceptance of a socialist party role in a pro-Europe coalition and many members of the party see a commitment to a pro-EU government as a passport to full membership of Europe’s socialist mainstream.

I’ve no doubt there are those in Europe and the US who would dearly like to influence the outcome, but there’s probably little that can be done other than continuing to stress the benefits of integration within the European family.
 
The signing of the Stabilization and Association Agreement (SAA) with Serbia at the end of April was an important step. But presumably a new Radical-Socialist government would renounce the agreement because a majority of EU countries has recognised Kosovo. They would certainly refuse to co-operate in finding and arresting Mladic and Karadzic which itself would block implementation of the SAA.
 
To judge by the exchange of vitriol in the aftermath of the elections, we are in for a period of bitter in-fighting and uncertainty . The prospects of a rapid move towards Serbian EU accession seem to have faded considerably unless a pro-Europe coalition can be formed after all. The outcome will be a watershed in the future of the Balkans
 
It’s not only Serbians who can’t agree. It seems that NATO and the European Union are still unable to talk to one another in Kosovo, although this is quite clearly a joint operation between the two bodies. According to a recent paper from the Centre for European Reform, the Turkish government will not allow a proper relationship to develop. CER have put forward its own ideas for bringing the two organisations together, with the Anglo-French relationship at the heart of its proposals.

Posted in Elections, European politics, International, Kosovo, Russia, Serbia | No Comments »

European Union to build a new country: Kosovo.

Wednesday, February 20th, 2008

So Kosovo has effectively become a protectorate of the European Union. This is surely a watershed in the history of the EU and a major test of whether it can make a reality of the European Security and Defence Policy.
  
A decision by the Council of Ministers, published the day before the province’s February 17 declaration of independence, was to establish a Rule of Law Mission consisting of more than 1,800 police, judicial and customs officials who will move into Kosovo over the coming months to join the 16,000 NATO troops which are already there.
 
No beating about the bush: their task will be to create a new country.
 
It’s a daunting prospect, for both political and economic reasons, but of course you can’t separate the two. Kosovo is landlocked, dependent on its neighbours for transport, energy and communications and in the end looking to an effective EU operation to develop into a viable European state.
 
In the years since 1999, when NATO forced Serbia to relinquish control of the province following Milosevic’s catastrophic attack on Kosovo’s ethnic Albanians and the loss of more than 10,000 lives, the Union has exerted increasing influence, working closely with Kosovo’s elected leaders and endorsing the conclusions of the UN Special  Envoy Martti Ahtisaari who proposed supervised independence.
 
Although Russia vetoed the Ahtisaari plan in the Security Council, most EU countries regarded independence as inevitable. Britain, France, Germany, Italy and the United States have now recognised the new country. Russia, Spain, Greece and Slovakia, among others, have refused. It seems as if rather more than half of EU countries will give recognition.
 
What I find fascinating is the way in which all 27 member states have approved the Rule of Law Mission despite the deep reservations about independence expressed by some like Spain and Greece.  The Council of Ministers’ communiqué of February 17 stressed that Kosovo constituted a sui generis case which did not call into question” the principles of the UN Charter such as sovereignty and territorial integrity”, although the Serbs and Russians would argue the exact opposite.

The description of Kosovo as Land of the Living Past could not be more apt. Most Serbians still regard Kosovo as an integral part of Serbia and the monastery of Kosovo, site of the defeat by the Ottomans in 1389, as their holiest place, but it is worth remembering that it was only in 1912 that Serbia reoccupied the province and encouraged Serbians to settle there. Like so much of the Balkans, this is ever-shifting territory.

The challenge for the EU remains highly complex, but so far it seems to be well managed.  Belgrade has been encouraged on the path to EU membership, a policy which was rewarded by the electoral success of the pro-EU Boris Tadic in Serbia’s recent presidential elections. Tadic is committed to a diplomatic approach. He demands a United Nations resolution denouncing the declaration of Kosovo independence, but has made it clear that his absolute priority is progress towards EU membership and although the Serbian ambassador to Washington was recalled following the Kosovo declaration, the mission to Brussels was apparently not affected.
 
Building a peaceful and economically viable Kosovo over the coming years is the greatest test yet for the EU’s combination of  “soft power” and political will, we hope the final step in stabilising a most unstable region.  It is evident that the European Union provides the only framework with a chance of achieving a peaceful outcome.

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Commission tackles major policy challenge on climate change.

Tuesday, February 5th, 2008

Never underestimate the intensity of the battles which can rage inside the European Commission as different policy interests and personalities clash over new EU proposals. There was no doubt some bitter argument and tough bargaining in the Commission’s Berlaymont headquarters when January’s climate change package was being threshed out.

And quite right too, because rarely has the Commission faced so difficult a policy challenge, with such far-reaching implications for Europe’s future.

Just think of the Commission portfolios involved. You can imagine the tensions between Verheugen, worried about global competition and Dimas defending the Bali commitments, between Pielbalgs, Dimas and Fischer-Boel over biofuels, with Kroes concerned about state aid, Mandelson fighting off the threat to penalise imports from countries refusing to act on climate change and Potočnik pushing for a strong research component.

President Barroso seems to have managed the storm effectively, no doubt with strong support from Catherine Day, Commission Secretary General and key co-ordinator of Commission policy.

Barroso presented the Commission’s proposals to the European Parliament on January 23. The MEPs’ response seems to have been rather muted, although as Mark Mardell reported in his blog, the UK Independence Party member Graham Booth poured cold water on the whole idea of global warming and spoke of the inevitable ice age to come. I guess he sees the whole thing as a conspiracy to hoodwink the gullible – just as he does the EU itself.

Subject to Council and Parliament approval, the Commission proposals will shape the direction of the European economy and the conditions of modern living in Europe out to 2020 and beyond. And let’s bear in mind the long-term aim: for Europe to lead the way to a halving of the world’s CO2 emissions by 2050 in order to combat global warming.

You can see the compromises in the final package: 20 per cent cut instead of 30 per cent unless there is a global agreement, which the green groups see as a climb-down;  emphasis on sustainability for biofuels, outlawing the use of land with “high biodiversity value” such as natural forest;  a commitment to respect WTO rules, which Barroso included in his Parliament speech, so providing “clarification” of his more threatening remarks about imports the previous week; and special provisions for industries forced to relocate outside Europe (“carbon leakage”) because of competition from countries which do not constrain emissions. Steel and aluminium spring to mind.

Most EU countries seem to accept the broad outlines of the package, which do after all reflect commitments made last March by Europe’s leaders. Sweden and Denmark complain that all the progress they’ve achieved up to now has been quite ignored in the share-out of emissions cuts.

Perhaps the most significant feature of the whole package is its timescale. Can you imagine an individual European government setting a comprehensive climate change programme for the next twelve years, in the face of all the domestic pressures which can derail policy? Action at a European level sets the policy at one remove from domestic political demands and so takes the pressure off national politicians.

Technological development will be a key factor in what can be achieved within this timescale and it will be intriguing to see how different national policies evolve, because the spin-off benefits for jobs and economic growth should be considerable.

I see that Germany, for instance, is using the feed-in tariff to stimulate renewables and is being rewarded by a remarkable expansion in solar panel production in former East Germany. The firms which have clustered around Frankfurt (Oder) are confident that the costs of solar power will be dramatically reduced in the coming years, so making it an increasingly viable alternative energy source. The impact on local employment is already impressive.

The Commission’s climate change proposals give the Slovenian presidency a good routine policy issue to get its teeth into. Infinitely more difficult for them to handle is the future of Kosovo. Washington is reported to be putting pressure on Slovenia to accelerate EU recognition of an independent Kosovo, while the Kosovar leadership talks of declaring independence “within days”, which was taken to mean after the February 3 Serbian Presidency election run-off between incumbent Tadic and the more pro-Russian Nikolic. The election was narrowly won by the moderate Tadic by a margin of 50.5 per cent, increasing chances of Serbia’s further involvment with the EU, although the recent decision to send an EU mission to Kosovo remains a serious issue for Prime Minister Vojislav Koštunica’s Democratic Party of Serbia (DSS) . Intense diplomatic activity will continue with Commissioner Olli Rehn struggling to keep the EU show on the road.

Another election in the region holds a special interest: the February 17 Greek Cypriot presidential. The independent International Crisis Group believes that 2008 will offer a final window of opportunity to prevent complete partition of the island and the end of any hopes for a negotiated solution. The last attempt at unification was thwarted by the Greek Cypriots before EU entry.

Let’s hope that there is sufficient political will to settle the issue at last, so removing this poisoned thorn from Europe’s side. I do wonder what would have happened if the British (ex-colonial power with a sovereign base on the island) had intervened in 1974 when the Greek junta triggered a coup against President Makarios and gave Turkey a justification for invasion.

The Slovenian presidency is hoping to see more national ratifications of the Lisbon Treaty during its six-month term. Hungary is there first and you can track the progress on this map.

Portugal has decided not to go for a referendum, while in the UK the parliamentary process has begun. Nick Clegg, the new leader of the 62 Liberal Democrat MPs, has made clear that his party will not vote in favour of a referendum, which makes it most unlikely that the Treaty will be put to the electorate in the UK. This leaves Ireland as the only EU country to hold a referendum and, whilst confidence remains high, there is the risk of a repeat performance of the 2001 Nice treaty campaign, which was quashed by a conservative populist alliance.  

I see that the European Parliament wants more visibility for all the decisions adopted in advance of the end-game of conciliation. Apparently 64 per cent of co-decision dossiers are agreed with the Council in first reading and many more in early second reading, so Dagmar Roth Behrendt’s working party is proposing signing ceremonies and press releases to mark these approvals. Some may say the Parliament wants more profile before the 2009 elections – and why not?
 

Posted in Climate change, Kosovo, Treaty of Lisbon | No Comments »

How dangerous is the credit crisis for the world economy?

Thursday, December 20th, 2007

So just how dangerous is the credit crisis for the world economy?

The eye-watering sums which the major central banks have transferred into the banking sector in recent weeks suggest that there’s a massive threat out there.

The European Central Bank’s decision to pump €350bn into the market in the week before Christmas at relatively low interest rates was part of a co-ordinated move with the US Federal Reserve, the Bank of England and the Swiss and Canadian central banks to unfreeze inter-bank lending and bring down the rates which banks charge one another.

There was evidently an immediate problem as banks anticipated closing their books on December 31, but also a sense that nobody knows what’s yet to crawl out of the woodwork. ECB President Jean-Claude Trichet spoke of “uncertainties surrounding the financial health and liquidity needs of financial institutions” in his speech to the European Parliament’s Economic and Monetary Affairs Committee on December 19.

Trichet’s speech touched on many aspects of the ECB’s role, but I especially liked this section: “More than ever, in these periods of tensions, lucidity in the diagnosis, rapidity in the decision, and absence of complacency are of the essence. This absence of complacency is particularly necessary as regards financial stability”.

I must say, the ECB has displayed an impressive “absence of complacency” and appears to have handled the credit crisis more effectively than the Brits over the last five months, although the ECB was not faced with a crisis such as the run on Northern Rock Bank. This has sorely tested the relationships between the UK government, the financial regulator and the Bank of England.

At least the Commission was quick to approve the rescue package, giving the British government until March 17 to present a long-term solution for Northern Rock.

While the British Government has been sucked deeply into the Northern Rock imbroglio, eurozone governments have been bystanders as the ECB takes action.

The credit crisis rated just one paragraph in the presidency conclusions to the Brussels summit on December 14, including a reference – as did Trichet’s speech – to the role of credit agencies, which are beginning to look like the fall guys for the politicians.

It was just before the Brussels summit that 26 European leaders gathered in Portugal for the ceremonial signing of the Lisbon Treaty.

The 27th, Gordon Brown, was just a bit late because of a prior engagement in the House of Commons – a fine-tuned gesture to downplay the whole process, keep the Treaty off the political agenda and add a touch of Brownite disdain to the proceedings. Commissioner Peter Mandelson was not amused.

Climate change was a major item on the December summit agenda. The European Union seems to have emerged with some credit from the UN Climate Change conference in Bali. The really tough negotiations will now begin, aiming towards a global agreement by the end of 2009, when a new American administration will be in office.

European negotiators decided to play hardball during the negotiations, threatening to boycott President Bush’s January meeting in Hawaii unless the Americans agreed to some target figures, but this threat evaporated as the roadmap for negotiations was agreed, albeit without the detailed targets that the EU and others wanted.

The pace of change does seem to be accelerating as the climate change message sinks in. The US position continues to shift, helped no doubt by Al Gore’s campaign and the initiatives by individual states like California. Business too is becoming a strong advocate of action – see for instance the message to Bali by the Prince of Wales’ Corporate Leaders Group on Climate Change, representing more than 150 global companies.

Words must be translated into action, and action is bound to cause some pain. I note that the motor industry is resisting the European Commission’s proposals for cutting average CO2 emissions to 120g per km by 2012, with fines for manufacturers who fail to meet the standards.

The motor industry has always pressed for an agreed approach to emission standards, whereby industry’s investment timescales can be reflected in the setting of EU standards, but the manufacturers’ hopes are always dashed, if not in the Commission then on the rocks of the European Parliament. Looks as if it’s all happening again, and one has to ask whether the impressive reduction in European vehicle emissions of the last 20 years would ever have happened under voluntary agreements.

The EU seems to be holding its nerve over Kosovo. None of the member states has yet broken ranks despite the passing of the December 11 deadline, although we can expect a declaration of independence shortly. The Brussels summit in effect recognised that independence was inevitable, saying that the status quo was unsustainable, while seeking to exercise control over events and stressing that the status of Kosovo “constitutes a sui generis case that does not set any precedent”. Softly, softly is the watchword.

Every effort is being made to set the whole crisis in the EU context, with encouragement for Serbia to speed its path to membership, the dispatch of 1,800 peacekeepers to the region and an active role for NATO’s 16,000 troops in maintaining peace. When Slovenia takes over the EU presidency on January 1 the Kosovo crisis and the broader Balkans situation will be top of its agenda.

See Michael’s mid-November posting for background and the lead up to the Kosovo decision deadline.

Michael now observes EU affairs from more of a distance and has been invited by Fleishman-Hillard to contribute an occasional commentary on current developments – in other words to do some blogging.

Posted in Climate change, Finance, Kosovo, Treaty of Lisbon | No Comments »

The Kosovo crisis will test Europe’s capabilities.

Friday, November 16th, 2007

Europe is once again facing an external crisis which will require the most skilful handling. It concerns the future of Kosovo, seedbed of the Balkan wars some 15 years ago. On November 17 a general election in the province reinforced the demand for independence – unilateral if necessary. December 10 is the deadline for the international community to take a decision on the province’s future.

The conflicts of the early 1990s in the wake of Yugoslavia’s collapse remain an awful memory, an indictment of Europe’s inability to deal with a major crisis on its own doorstep. Some 100,000 people were killed and millions displaced. Those TV reports from Mostar, Sarajevo and Srebrenica will stay long in the memory. How could we let it all happen, and be so impotent?

It was only the intervention of the United States which ultimately brought a kind of peace to the region, culminating in the NATO action against Milosevic for his programme of ethnic cleansing of the Kosovar Albanians.

Europe has responded to the challenge. I believe that the EU can take much of the credit for bringing stability to the region over last 10 years. It has deployed its economic and peace-making capabilities effectively, has shepherded Macedonia (sorry, FYROM) through threats of civil war and has used the prospect of partnership and ultimately EU membership to bring about political and social change across the region.

But the forces which drive politics in the Balkans are dark and deep. Serbs will tell you that Kosovo is to them what Jerusalem is to the Jews. For them any prospect of Kosovo independence brings talk of war, while in Kosovo itself there are threats that the guns will come out if independence is not granted.

The US favours independence, while the Russians are fiercely defending the Serb position and demand a UN solution (where they have a veto). Can the Europeans stand together in their positioning? They have made a commitment to do so, but clearly there are differences of opinion. The Brits and French may recognise an independent Kosovo, but others are worried about what their own ethnic minorities might be tempted to do. How about the Turks in Cyprus, the Albanians in Greece or the Basques?

A proposal from the EU envoy for Kosovo, Wolfgang Ischinger, that a decision on the status of Kosovo should be shelved, has received short shrift from both sides.

It seems that the Commission is playing the partnership/membership card as strongly as it can. Commissioner Olli Rehn signed a Stabilisation and Association Agreement with Serbia on November 7, with its promise of financial assistance and closer links with EU on the path to membership. This could be ratified by member countries in January, but one can imagine certain delays if the Serbian government kicks up rough over Kosovo.

Russian President Putin is the hero of many Serbs, who see him as their champion over the Kosovo issue, some even hoping that the Russians would consider military intervention on their behalf. As Putin increases the rhetoric and employs gestures such as the stand-off on over-flying of Siberia to demonstrate that Russia is a great power again, Balkans policy will be a here-and-now indicator of his real thinking.

I must say, the future of energy supply is an escalating issue in EU-Russia relations, especially in light of the reciprocity provisions in the latest energy proposals. The Commission reckons that half of Europe’s gas will come from Russia by 2030 – double the current proportion, while state-owned Gazprom is looking for partners like Eon to strengthen its position in the European market. A fascinating study by Capgemini warns of trouble ahead.

We talk as if Russia holds all the cards on energy supply, but I was struck by estimates indicating that without massive new investment Russian oil production would begin to decline as from about 2015 while domestic demand is continuing to grow. So where is the investment to come from? This will surely be a key factor in the future of EU-Russia relations.

Kosovo is NOW. Turkish membership is a much longer game. I must say, the Commission’s autumn report on Turkey’s progress to membership is more positive than we had been led to expect. There is recognition of the way in which the Turkish army’s threatened intervention had been handled and the integrity of the July elections, as well as the continued growth of the economy, which has been so impressive.

The Commission is playing a difficult hand, trying the keep the show on the road while acknowledging the political reluctance in many member states to see Turkey as an EU member.

Olli Rehn is forthright in defending membership. Quite right too. Turkey has transformed itself over many decades in preparing for EU membership, while for the EU having an Islamic state as a member will be of profound importance in relating to the rest of the Moslem world and a rejection of the Clash of Civilisations postulated by Huntingdon.

A big concern for the Commission is that the Turks themselves will turn against membership, frustrated by the negative messages from those like President Sarkozy, who is now proposing a group of Wise Men to map the way ahead for Europe. See this interview with Turkish Secretary General for EU Affairs Mustafa Oguz Demiralp for more.

Just a word on the 2004 enlargement, which was a key justification for the revision of the treaties because it was assumed that an EU of 27 would require new mechanisms to work efficiently. But maybe not: Helen Wallace’s recent analysis of the impact of enlargement on EU policy-making indicates that the Nice formula has worked rather well since 2004. Far from creating gridlock, she says, it has been business as usual.

Posted in Energy, Integration, Kosovo, Russia | No Comments »