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261. Brexit on the Backburner: Citizens’ Rights and the Implementation of the Withdrawal Agreement in a Pandemic

Author:
Aliyyah Ahad and Monica Andriescu
Publication Date:
09-2020
Content Type:
Policy Brief
Institution:
Migration Policy Institute (MPI)
Abstract:
Just weeks after the United Kingdom’s formal departure from the European Union on January 31, 2020, the COVID-19 pandemic hit Europe with full force. The outbreak drew public and political attention away from the implementation of the withdrawal agreement, while also straining many public administrations, including agencies responsible for residency applications. With the clock ticking down on the transition period, set to end on December 31, 2020, many EU countries have yet to announce the details of the systems that will govern the future status and rights of their UK-national residents. The United Kingdom is further along, having rolled out its pilot EU Settlement Scheme to resident EU nationals in 2019. But of the 26 EU countries with responsibilities for citizens’ rights, only Italy, Malta, and the Netherlands had launched registration schemes before the pandemic began. And even where implementation had begun, many systems faced setbacks as in-person government services were suspended by lockdown measures. This has created considerable uncertainty for UK nationals in EU countries, and EU nationals in the United Kingdom—as well as their families—who will have six months after the transition period ends to acquire a new post-Brexit status. As this policy brief details, the pandemic has put some in an even more precarious position, including families with third-country-national members that have been separated by travel restrictions, and the newly unemployed, who may no longer meet the conditions of the EU Free Movement Directive (the foundation of the withdrawal agreement). This brief sets out steps governments on both sides of the Channel can take in the coming months to “pandemic-proof” their implementation plans. These include: investing in smart outreach to would-be applicants, streamlining status-adjustment processes, and supporting civil-society groups that can help applicants through the process.
Topic:
Treaties and Agreements, European Union, Economy, Brexit, Pandemic, and COVID-19
Political Geography:
United Kingdom and Europe

262. Special Commentary: After COVID-19: American Landpower in Transatlantic Context

Author:
John R. Deni
Publication Date:
05-2020
Content Type:
Commentary and Analysis
Institution:
The Strategic Studies Institute of the U.S. Army War College
Abstract:
Over the last month, an array of analysts and experts has attempted to ascertain what the post-pandemic world might look like from strategic, policy, or institutional perspectives. Several of these assessments feature dramatic predictions of a new world unlike what existed just months ago. It’s reasonable to expect change following a global crisis, but the near breathlessness detectable in some of these analyses evinces a lack of nuance or an appreciation for stasis. Moreover, few of these or other analyses have addressed the implications in a transatlantic context, or suggested specific mitigation steps. This brief essay reflects a more balanced attempt to fill these gaps, identifying recommendations for the US Army and Department of Defense to leverage the crisis and mitigate the damage across the transatlantic community.
Topic:
Armed Forces, Transatlantic Relations, and COVID-19
Political Geography:
Europe and United States of America

263. Europe’s Quest for Technology Sovereignty: Opportunities and Pitfalls

Author:
Fredrik Erixon and Matthias Bauer
Publication Date:
05-2020
Content Type:
Research Paper
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
Covid-19 and its broader implications have highlighted the importance of Europe’s digital transformation to ensure Europeans’ social and economic well-being. It provides important new learnings about Europe’s quest for “technology sovereignty”. While the debate about technology sovereignty is timely, the precise meaning of sovereignty or autonomy in the realm of technologies remains ambiguous. It should be noted that the political discussions about European technology sovereignty emerged far before the outbreak of the Coronavirus. The European Commission’s recently updated industrial and digital policy strategies “institutionalised” different notions of sovereignty, reflecting perceptions that more EU action is needed to defend perceived European values and to secure Europe’s industrial competitiveness. Often the political rhetoric reflected perceptions that Europe is losing global economic clout and geopolitical influence. It was said that dependency on technological solutions, often originating abroad, would require a European industrial and regulatory response. Against this background, the Corona crisis provides two important lessons for EU technology policymaking. Firstly, during the crisis digital technologies and solutions made European citizens stronger. Technology kept Europe open for business despite the lock-down by enabling Europeans to work from home, receive essential home deliveries, home schooling, online deliveries and to use online payments, etc. In addition, Europe’s citizens became more sovereign with respect to accessing information and data that helped track and contain the spread of the virus. Secondly, the crisis tested Europe’s resilience and perceived dependency on (foreign) technology solutions. Early developments indicate that Member States’ homemade solutions did not fare better than existing European and international solutions. A few national and EU IT solutions failed while existing European and global solutions, from cloud infrastructure to communications, payments to streaming services, all continued to work well. Politically, however, the crisis could be used to justify more EU or national government interference in Europe’s digital transformation. Indeed, for some the debate about European technology sovereignty is largely about designing prescriptive policies, which paradoxically risk reducing Europeans’ access to the innovative technologies, products and services that helped Europe through the crisis. Policies taken into consideration include new subsidies to politically picked companies, or new rules and obligations for certain online business models. Policy-makers advocating for such policies tend to ignore critical insights from the Covid-19 crisis and failed industrial policy initiatives, including sunk public investments and protracted subsidies for industrial laggards. In a time of economic hardship, the EU and national governments should be wary of spending even more taxpayer money to replicate existing world-class technology solutions, that in most cases are used in combination with local technologies, with “Made in EU” services of inferior quality and reliability. Moreover, due to different levels of economic development and differences in regulatory cultures, prescriptive technology policies would exclude many Member States from utilising existing and new opportunities that arise from digitalisation, slowing down economic renewal and convergence. The EU cannot be considered a monolithic block that thrives on a unique set of prescriptive technology policies. Before the Corona pandemic, initiatives towards European technology sovereignty were mainly pushed by France and Germany, fed by concerns over their companies’ industrial strength in times of growing economic and geopolitical competition. Industrial and technology policies favoured by the EU’s two largest countries will have a disproportionately negative impact on Europe’s smaller open economies, whose companies and citizens could be deprived from cutting-edge technologies, new economic opportunities and partnerships on global markets, undermining these economies’ development and international competitiveness. Any EU-imposed technology protectionism along the lines suggested by some policy-makers in large EU Member States would leave the entire EU worse off. It would disproportionately hurt countries in Europe’s northern, eastern and southern countries more than the large countries whose economies are generally more diverse than Europe’s smaller Member States. It would, however, make sense for the EU to agree on a shared definition of “technology sovereignty”. Different interpretations could cause serious policy inconsistencies, undermining the effectiveness of EU and national economic policies. Anchored in technological openness, technology sovereignty can indeed be a useful ambition to let Europe’s highly diverse economies leapfrog by using existing technologies. To become more sovereign in a global economy, Europeans need to focus on becoming global leaders in economic innovation – not just in regulation. If anchored in mercantilist or protectionist ideas, technological sovereignty would make it harder for many Member States to access modern technologies, adopt new business models and attract foreign investment – with adverse implications on future global competitiveness, economic renewal and economic convergence. Policymaking towards a European technology sovereignty that benefits the greatest number of Europeans – not just a few politically selected “winners” – should aim for a regulatory environment in which technology companies and technology adopters can thrive across EU Member States’ national borders. The European Single Market has deteriorated in recent years and significantly during the crisis. The new von der Leyen Commission has now repeatedly called for a strengthening of the Single Market. Becoming a world leader in innovation requires a real Single Market in which companies can scale up, with as few hurdles as possible, and then compete globally. It should be supplemented by pro-competitive policies and incentives for research and investment. Brussels cannot set the global standards in technology policymaking alone. Europe’s policy-makers should aim for closer market integration and regulatory cooperation with trustworthy international partners such as the G7 or the larger group of the OECD countries. It is in the EU’s self-interest to advocate for a rules-based international order with open markets. International cooperation should be extended beyond trade to include cooperation on technology policies, e.g. artificial intelligence. Regulatory cooperation with allies such as the USA is essential to jointly set global standards that are based on shared values. Both the EU and the US have much more to gain if they prioritise such alignment, to advance a shared vision for a revamped open international trading system, in a world increasingly influenced by regimes with fundamentally different views on state intervention and human rights. Anchored in technological openness, the EU and the US can promote technology sovereignty that allows for development and renewal elsewhere in the world.
Topic:
Industrial Policy, International Political Economy, Science and Technology, Sovereignty, European Union, and COVID-19
Political Geography:
United States, Europe, and Global Focus

264. COVID-Induced Sovereign Risk in the Euro Area: When Did the ECB Stop the Contagion?

Author:
Aymeric Ortmans and Fabien Tripier
Publication Date:
10-2020
Content Type:
Working Paper
Institution:
Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:
This paper studies how the announcement of the ECB’s monetary policies stopped the spread of the COVID-19 pandemic to the European sovereign debt market. We show that up to March 9, the occurrence of new cases in euro area countries had a sizeable and persistent effect on 10-year sovereign bond spreads relative to Germany: 10 new confirmed cases per million people were accompanied by an immediate spread increase of 0.03 percentage points (ppt) that lasted 5 days, for a total increase of 0.35 ppt. For periods afterwards,the effect falls to near zero and is not significant. We interpret this change as an indicator of the success of the ECB’s March 12 press conference, despite the “we are not here to close spreads” controversy. Our results hold for the stock market, providing further evidence of the effectiveness of the ECB’s March 12 announcements in stopping the financial turmoil. A counterfactual analysis shows that without the shift in the sensitivity of sovereign bond markets to COVID-19, spreads would have surged to 4.2% in France, 12.5% in Spain, and 19.5% in Italy by March 18, when the ECB’s Pandemic Emergency Purchase Programme was finally announced.
Topic:
Debt, Economics, International Political Economy, Markets, Central Bank, COVID-19, and Banking
Political Geography:
Europe

265. Covid 19: a new challenge for the EMU

Author:
Anne-Laure Delatte and Alexis Guillaume
Publication Date:
07-2020
Content Type:
Working Paper
Institution:
Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:
Although the pandemic was an exogenous shock, it triggered portfolio rebalancing in the Euro Area (EA) implying a divergence of sovereign risk premia in the first phase of the crisis eventually followed by a narrowing of the spreads. We estimate the determinants of sovereign bond spreads in the EA during the pandemic from January 2 2020 to May 25 2020. We find that: 1) the countries’ resilience to the COVID shock depended on healthcare capacity, the strength of the banking sector and the fiscal outlook; 2) during the crisis, ECB speeches were a game changer and made a much greater contribution than securities purchase programs; 3) coordination by the European Council also helped to reduce the spreads but the effect was partly offset by loan-based financial assistance programs.
Topic:
Debt, Monetary Policy, European Union, Finance, COVID-19, Bonds, and European Monetary Union
Political Geography:
Europe

266. Study and Reports on the VAT Gap in the EU-28 Member States: 2020 Final Report

Author:
Adam Śmietanka, Grzegorz Poniatowski, and Mikhail Bonch-Osmolovsky
Publication Date:
10-2020
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
This Study contains Value Added Tax (VAT) Gap estimates for 2018, fast estimates using a simplified methodology for 2019, the year immediately preceding the analysis, and includes revised estimates for 2014-2017. It also includes the updated and extended results of the econometric analysis of VAT Gap determinants initiated and initially reported in the 2018 Report (Poniatowski et al., 2018). As a novelty, the econometric analysis to forecast potential impacts of the coronavirus crisis and resulting recession on the evolution of the VAT Gap in 2020 is reported. In 2018, most European Union (EU) Member States (MS) saw a slight decrease in the pace of gross domestic product (GDP) growth, but the economic conditions for increasing tax compliance remained favourable. We estimate that the VAT total tax liability (VTTL) in 2018 increased by 3.6 percent whereas VAT revenue increased by 4.2 percent, leading to a decline in the VAT Gap in both relative and nominal terms. In relative terms, the EU-wide Gap dropped to 11 percent and EUR 140 billion. Fast estimates show that the VAT Gap will likely continue to decline in 2019. Of the EU-28, the smallest Gaps were observed in Sweden (0.7 percent), Croatia (3.5 percent), and Finland (3.6 percent), the largest – in Romania (33.8 percent), Greece (30.1 percent), and Lithuania (25.9 percent). Overall, half of the EU-28 MS recorded a Gap above 9.2 percent. In nominal terms, the largest Gaps were recorded in Italy (EUR 35.4 billion), the United Kingdom (EUR 23.5 billion), and Germany (EUR 22 billion). The Policy Gap and its components remained stable. For the EU overall, the average Policy Gap level was 44.24 percent. Of this, in 2018, 10.07 percentage points were due to the application of various reduced and super-reduced rates (the Rate Gap) and 34.17 were due to the application of exemptions without the right to deduct. The results of the econometric analysis show that the VAT Gap is influenced by a group of factors relating to the current economic conditions, institutional environment, and economic structure as well as to the measures and actions of tax administrations. Out of a broad set of tested variables, GDP growth and general government balance appeared to explain a substantial set of VAT Gap variation across time and countries. Within the control of tax administrations, share of IT expenditure proved to have the highest statistical significance in explaining the size of the VAT Gap. In addition, the VAT Gap appeared to be inter-related with the values of risky imports of goods, indicating the role of fraud in driving the overall share of the VAT Gap. Since the COVID-19 recession will likely have a dire impact on the EU economies, the VAT Gap in 2020 is forecasted to increase. If the EU economy contracts by 7.4 percent in 2020 and the general government deficit jumps as forecasted in the Spring Forecast of the European Commission, the Gap could increase by 4.1 percentage points year-over year up to 13.7 percent and EUR 164 billion in 2020. The hike in 2020 could be more pronounced than the gradual decrease of the Gap observed over the three preceding years. Moreover, a return to the VAT Gap levels observed in 2018 and 2019 will take time and require significant action from tax administrations. This Report has been written for the European Commission, DG TAXUD, for the project TAXUD/2019/AO-14, “Study and Reports on the VAT Gap in the EU-28 Member States”, and is a follow-up to the seven reports published between 2013 and 2019.
Topic:
European Union, Fiscal Policy, VAT, and COVID-19
Political Geography:
Europe and Global Focus

267. The impact of COVID-19 on organised crime in the Western Balkans

Author:
International Institute for Strategic Studies
Publication Date:
12-2020
Content Type:
Working Paper
Institution:
International Institute for Strategic Studies
Abstract:
The fourth in a series analysing the ways COVID-19 is affecting stability across the world, this paper explores the impact on organised crime in the Western Balkans of the health and economic crisis brought about by the pandemic. Criminal organisations active in the Western Balkans have proved very apt at exploiting the evolution of the pandemic and related government responses to expand their activities regionally and globally. The key role played by the European Union in recent times to promote the rule of law and institutional reforms against organised crime in the region is at risk of setback given its limited economic firepower post-COVID-19 and China’s increasing influence through its economic and investment diplomacy. Law-enforcement agencies will struggle to prevent criminal groups from further infiltrating the region’s economies amid increasing budgetary constraints. Western Balkans governments should use the current challenging circumstances as an opportunity to redefine medium- and long-term priorities in their efforts against organised crime. However, for these efforts to be successful, the sustained political and operational support of other countries will be needed, given the expanding international reach of regional criminal groups.
Topic:
Political stability, Public Health, Pandemic, COVID-19, and Organized Crime
Political Geography:
China, Europe, Asia, and Balkans

268. Promoting and Projecting Stability: Challenges and Perspectives

Author:
Amanda Lapo, Bastain Giegerich, and James Hackett
Publication Date:
12-2020
Content Type:
Working Paper
Institution:
International Institute for Strategic Studies
Abstract:
The ambition to promote stability and foster peace in an increasingly volatile security environment is an established element of EU and NATO policy. There is a risk that the coronavirus pandemic will increase the demand for stabilisation measures while at the same time complicating their supply. This paper focuses on the role that military and security actors can play in supporting stabilisation efforts. The ambition to promote stability and foster peace in an increasingly volatile security environment is an established element of European Union and NATO policy. This ambition is also reflected in many of their member states’ national-level policy and strategy documents. The direction and implementation of these policies are influenced by a range of motivations including security worries, humanitarian concerns and historical ties. Stability is a challenging endeavour at the best of times, and there is a risk that the coronavirus pandemic will increase the demand for it while at the same time complicating its supply.
Topic:
Foreign Policy, NATO, Regional Cooperation, Military Strategy, European Union, Political stability, Public Health, Pandemic, and COVID-19
Political Geography:
Europe, North Atlantic, and North America

269. “The Political Striptease Show Amid the Coronavirus Pandemic Is Unattractive, Off-Putting”

Author:
Sergey Ryabkov
Publication Date:
01-2020
Content Type:
Journal Article
Journal:
International Affairs: A Russian Journal of World Politics, Diplomacy and International Relations
Institution:
East View Information Services
Abstract:
Interview with Sergey Ryabkov, Deputy Foreign Minister of the Russian Federation
Topic:
Foreign Policy, Diplomacy, World Health Organization, Public Health, Pandemic, and COVID-19
Political Geography:
Russia and Europe

270. China-U.K. Relations Grow More Strained Over Huawei and Hong Kong

Author:
Taylor Butch
Publication Date:
08-2020
Content Type:
Policy Brief
Institution:
The Jamestown Foundation
Abstract:
In October 2015, People’s Republic of China (PRC) President Xi Jinping visited the United Kingdom at the request of Queen Elizabeth II, marking the first time that the PRC head of state had done so in ten years. In the lead-up to the visit, both Chinese and British officials had publicly acknowledged the significance of this meeting, calling it a “golden era” in relations between the two countries. Five years on, U.K.-China relations remains steady, but there are increasing signs of tension in the relationship. Rising controversies over Huawei’s role in 5G infrastructure, and Beijing’s actions to suppress opposition in Hong Kong—as well as tensions over the origins of the coronavirus pandemic—lie at the heart of this downturn in relations.
Topic:
International Relations, Science and Technology, Communications, Infrastructure, COVID-19, and 5G
Political Geography:
China, United Kingdom, Europe, Asia, and Hong Kong