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191. Digital Single Market. SMEs and the Juncker Investment Plan for the European Union

Author:
Juan Antonio Pavón Losada
Publication Date:
04-2015
Content Type:
Working Paper
Institution:
Fundación Alternativas
Abstract:
A few months ago (25/11/2014), the European Commission disclosed the mechanism for its much-heralded €315 billion investment plan, revealing how a a scarce €21 billion of initial public money is intended to lift fifteen times as much in capital. In March 2015, EU finance ministers agreed upon delivering on the commitment they took at the European Councils in October and December 2014, to wind-off Juncker's flagship investment plan. The idea was to create a new European Fund for Strategic Investments (EFSI), with €5 billion coming from the European Investment Bank and an €8 billion guarantee from existing EU funds designed to secure a further contribution of 16 billion Euro from the institutions. The €8 billion guarantee will come over a three-year period from the Connecting Europe Facility (€3.3 billion); Europe’s research programme Horizon 2020 (€2.7 billion) and socalled “budget margin”, or unused funds, worth €2 billion. On the one hand, the EFSI plans to generate investments into the European economy of about €315 billion, by providing guarantees for higher-risk projects which aim at developing telecommunications and transport infrastructure, energy efficiency projects, research, education and innovation activities to finally generating about 240 billion in long-term investments, showing a timid responsiveness for the claims against austerity over the past years. On the other hand, the alternative purpose of the Fund is to provide financing to SMEs to enhance the viability of new venture capital injections, loan guarantees, securitisations and seed financing designed to offer micro-loans to SMEs, to fund start-ups or offer mid-cap companies venture capital, projected to generate €75 billion for those SMEs and mid-cap firms over the period 2015-2017. In addition, the Commission aims to attract private investors to the Fund. Nevertheless, private investors seem sceptical about investing and assuming greater risks when the returns are not guaranteed. In fact, the basis for most longterm infrastructure or energy efficiency projects will most likely remain public funding -his is especially true of the newer EU member states, where the private sector is not strong enough-. In fact, the EU executive believes that more financing can be provided by individual member states. Two ways are being discussed: Capital contributions, which are not limited to the respective Member State and may entail voting rights and a claim on the fund´s return (if any); and that participation in investment platforms that can be restricted to the Member State itself. As an incentive, this amount will be then discounted from the calculations of their deficits within the European Semester. There is a rising concern between Member States that the new fund will turn into a parallel EU budget -where voting rights could be purchased- not subject to enough democratic control, since this is fund is expected to be managed by Commission and the EIB and. In order to prevent such situation, the Commission has announced that the fund will not consider to make investments on the basis of geographical distribution, but rather based on quality and viability. This may convince member states who fear the introduction of a parallel budget, but it might also raise problems of transparency and for those countries who wish to contribute voluntarily to the EFSI. Several alternatives to the current functioning of the EFSI -that still need to pass the European Parliament filter- has been tabled: e.g. the possibility that the EFSI regulation could establish mandatory national contributions in order to increase the credibility of the ratio 1:15; also, transforming the fund into a permanent financing system with legal personality, so it could access financial markets for funding; and that but not least, turning the EIB's contribution to EFSI into a regularly one rather a one-off, as it has been agreed so far. In any case -often accused of relying on leverage private investment unrealistic projections, lacking ambition, means and clear goals- this Juncker's investment plan goes along with several batteries of measures seeking to facilitate a boost in business activity, removing the obstacles hampering private investment in Europe.
Topic:
Infrastructure, Budget, European Union, and Investment
Political Geography:
Europe and Brussels

192. A More European Russia for a More Secure Europe; Proposals for a new European Union strategy towards Russia

Author:
Javier Morales
Publication Date:
06-2015
Content Type:
Working Paper
Institution:
Fundación Alternativas
Abstract:
The conflict in Ukraine, which has caused more damage to relations between the West and Russia than any other event since the end of the Cold War, is a focal point of instability that threatens the wellbeing of the EU. The time has come to renew the Union’s strategy towards Russia, an effort that will entail not only the thorough analysis of long-term European objectives needed to make EU policy more efficient and bring it into line with European interests and values, but also a recognition of diplomatic blunders made at the onset of the Ukrainian crisis. Rather than entering into a new Cold War focused on Russian containment, the EU should accept Moscow as the great power that it is and a potential partner in the construction of a space of shared security. The best way to ensure long-term continental security and stability would be for Russia to increasingly feel and become more a part of Europe and for Europe to make a sincere effort to get to know its Russian neighbour better.
Topic:
Cold War, Diplomacy, Regional Cooperation, and European Union
Political Geography:
Russia, Europe, Ukraine, and Eastern Europe

193. Time for European Politics

Author:
Vaclav Havel Library
Publication Date:
05-2015
Content Type:
Working Paper
Institution:
Vaclav Havel Library
Abstract:
The return of geopolitics to Europe from the East together with the publics‘ reaction to the spectre of immigration from the South has finally dawned on EU’s politicians. It is no longer possible to pretend that the „outside“ and the „inside“ can be kept apart. Europe‘s identity is being questioned with surprising intensity and in unexpected ways. Reactionary East- West political and cultural alliances are being forged, feeding and fed by nationalism, populist radicalism and antiliberal conservatism with Eurasian flavour. At the same time European citizens volunteer to take part in wars abroad, mirrored by and linked to acts of terrorism and violence in European countries. With state, institutions, parties and democratic politics in decline, what are the chances for peace and European democracy? We have to understand what is going on. Europeans inside the Union have to know how they are seen by our neighbours East, Southeast and South. What are their expectations? What do they want to achieve by joining the EU? What are they ready to sacrifice to reach that goal? On the other hand, we need to be clear what defines Europe’s own attitude towards others. Is it trade, economic interests, security or moral values? Can Europe still define its own ways or has it lost the initiative to others? Who can and should take action? The Ukraine crisis is forcing Europe to recognise that its post-Cold War order has reached its limits and needs to contend with harsh facts. Europe has to acknowledge the real world beyond its borders while focusing its energies on consolidating its own political space, which now also includes Ukraine.
Topic:
Civil Society, Regional Cooperation, European Union, and Democracy
Political Geography:
Europe

194. A Changing Global Environment

Author:
Antonio Missiroli and Gerald Stang et al
Publication Date:
12-2014
Content Type:
Working Paper
Institution:
European Union Institute for Security Studies
Abstract:
The last 20 years have brought huge reductions in global poverty, opening economic, political and personal opportunities for hundreds of millions of people and the countries where they live and work. This is changing old power balances, altering how humanity uses the earth’s scarce resources, and democratising – for good and for ill – access to many advanced technologies. Governance institutions are struggling to react to all these changes. And while economic, demographic and technological trends will greatly influence the changing international balance of power, concerns of security and geopolitics will likely retain their own unique rationale. The first section of this Chaillot Paper explores these issues through thematic, and the second through geographic, lenses.
Topic:
Economics, Environment, Poverty, and European Union

195. Eurasian Union: the real, the imaginary and the likely

Author:
Nicu Popescu
Publication Date:
09-2014
Content Type:
Working Paper
Institution:
European Union Institute for Security Studies
Abstract:
The recent history of attempts to reintegrate the post-Soviet space is littered with failed political and economic initiatives. Such initiatives have included the creation of the Union State of Russia and Belarus in the 1990s, the Eurasian Economic Community launched in 2000, and the GUUAM (Georgia, Ukraine, Uzbekistan, Azerbaijan and Moldova) grouping launched in 1997. So far the only project which seems likely to come to fruition is the Customs Union of Russia, Belarus and Kazakhstan which is scheduled to become the Eurasian Economic Union as of 1 January 2015. The Eurasian Union exists already. Its physical headquarters – the Eurasian Economic Commission – is a bureaucratic structure with a staff of 1,000 housed in an eleven-storey glass and steel building on Vivaldi Plaza in a business complex near Paveletsky railway station in Moscow. Its legal basis is the Eurasian Union treaty signed in May 2014
Topic:
European Union and Russia

196. Russia and East Asia in the Context of the Ukrainian Crisis: "No" to Sanctions, "yes" to a New World Order

Author:
V. Petrovsky
Publication Date:
06-2014
Content Type:
Working Paper
Abstract:
The system of international relations and the world order are being “tested by Ukraine,” the situation in which Russia’s relations with East Asia are not an exception but a confirmation of the process and an illustration of it. The U.S. Administration resolved to isolate Russia from the rest of the world urged the EU, the rest of the continent and also the East Asian and APR countries to introduce anti-Russian sanctions. In July 2014, at the height of the scandal around the Malaysian “Boeing” shot down over Eastern Ukraine, Peter Harrell, Deputy Assistant Secretary for Counter Threat Finance and Sanctions, travelled far and wide across the region to persuade top officials and leaders of the business communities to side with the United States.
Topic:
International Relations, Politics, and European Union
Political Geography:
Russia, Ukraine, East Asia, and United States of America

197. Monetary Disunion: The Domestic Politics of Euroland

Author:
W. Streeck and L. Elsässer
Publication Date:
10-2014
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
Regional disparities within the European Union have always been perceived as an impediment to monetary integration. This is why discussions on a joint currency, from their very beginning, were linked to compensatory payments in the form of regional policy payments. Structural assistance to poor regions and member states increased sharply at the end of the 1980s. Today, however, fiscal support has to be shared with the new member states in the East. Moreover, due to the financial crisis, the cheap credit that poor EMU member countries enjoyed as a result of interest rate convergence is no longer available. We predict that in the future, some sort of financial aid will have to be provided by rich member countries to poor ones, if only to prevent a further increase in economic disparities and related political instability. We also expect long-lasting distributional conflict between payer and recipient countries far beyond current rescue packages, together with disagreement on the extent of aid required and the political control to be conceded by receiving countries to giving countries. We illustrate the dimension of the distributional conflict by comparing income gaps and relative population size between the center and the periphery of Europe on the one hand and on the other, between rich and poor regions in two European nation-states characterized by large regional disparities, Germany and Italy. While income gaps and population structures are similar in the two countries to those between Northern Europe and the Mediterranean periphery, regional redistribution is much more extensive in the two nation-states. We conclude that this presages a difficult future for the domestic politics of Euroland.
Topic:
Economics, Politics, Financial Crisis, and European Union
Political Geography:
Europe

198. Building EU-UN Coherence in Mission Planning & Mandate Design

Author:
Richard Gowan and Thierry Tardy
Publication Date:
11-2014
Content Type:
Working Paper
Institution:
Center on International Cooperation
Abstract:
Just over five years ago, relations between the EU and UN were strained due to the difficulties of planning and implementing coordinated missions in Chad and Kosovo. Today, relations are considerably more cordial, but there is still room to improve the two organizations’ joint planning procedures. This paper aims to assess what has been achieved in the field of planning coordination and what the remaining challenges are; it also makes some suggestions for further action.
Topic:
United Nations and European Union
Political Geography:
Europe

199. Rapid Reaction Capability of the European Union

Author:
Matthew McCray
Publication Date:
12-2014
Content Type:
Working Paper
Institution:
George C. Marshall European Center for Security Studies
Abstract:
The formation of an Army of Europe has been discussed almost since the end of World War II, but has yet to be realized. After reading through the numerous and varied proposals over the past sixty years, the observer invariably arrives at the conclusion that all concerned parties agree: the European Union (EU) should have its own military. The Union today, taken as a whole, is an economic and cultural superpower. Its leading nations seem to be willing to pursue the status of a humanitarian superpower and leader in conflict prevention, as well as to defend the Europe’s perceived collective interests in the world.
Topic:
International Cooperation, Regional Cooperation, Military Strategy, and European Union
Political Geography:
Europe, Central Europe, and Western Europe

200. European Narratives on the "Arab Spring" – From Democracy to Security

Author:
Peter Seeberg and Musa Shteiwi
Publication Date:
02-2014
Content Type:
Working Paper
Institution:
Center for Strategic Studies (CSS)
Abstract:
Peter Seeberg & Musa Shteiwi wrote an article on the "European Narratives on the "Arab Spring" – From Democracy to Security". The article discusses the EU’s reaction to the developments in the MENA-region in the period 2011-14. Initially relatively optimistic metaphors like ‘the Arab Spring’ or ‘the Democratic Tsunami’ were part of the media-comments from Western leaders, but three years. later the situation in the region seems to have changed significantly and consequently the narrative in the EU has switched from a predominantly pro-‘Arab Spring’ discourse to a focus on security aspects in a broad sense and, especially concerning the situation in Syria (to some degree also Lebanon and Libya), a focus on counter-terrorism. The article are concluding remarks by Peter Seeberg and Musa Shteiwi from a workshop on EU-Middle Eastern relations held at the Center for Strategic Studies in Amman in May 2013. Dr. Musa Shteiwi is the director of the Center for Strategic Studies, University of Jordan. Peter Seeberg is the director of the Center for Contemporary Middle East Studies in the University of Southern Denmark.
Topic:
Security, European Union, Counter-terrorism, Democracy, and Arab Spring
Political Geography:
Europe, Middle East, Libya, North Africa, Lebanon, Syria, and Jordan