European Union

After meeting on the weekend to discuss their reaction to Donald Trump's election, the EU foreign ministers announced stronger cooperation on foreign and defence policy. Trump has announced plans to seek closer cooperation with Moscow. Is this good or bad news? Europe's commentators are at odds.

Immediately after his pro-EU candidate lost Bulgaria's presidential election to opposition candidate Rumen Radev, who is seen as pro-Russian, Prime Minister Boyko Borisov and his government announced that they were stepping down. The Bulgarian media discuss what the prime minister's resignation means for the country.

The list of those withdrawing from the International Criminal Court in The Hague continues to grow. Following in the footsteps of several African states Russia also pulled out of the court on Wednesday, accusing it of "failing to become a genuinely independent organ". What is behind the series of withdrawals?

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French Prime Minister Manuel Valls sounded an alarm during a visit to Berlin on November 17. He said the European Union is in danger of breaking apart unless France and Germany, in particular, work harder to stimulate growth and employment and heed citizens’ concerns.

As reported by the Reuters news agency, Valls said the two countries, for decades the axis around which the EU revolved, had to help refocus the bloc to tackle an immigration crisis, a lack of solidarity between member states, Britain’s looming exit, and terrorism.

“Europe is in danger of falling apart,” Valls said at an event organised by the Sueddeutsche Zeitung newspaper. “So Germany and France have a huge responsibility.”

He said France must continue to open up its economy, not least by cutting corporate taxation, while Germany and the EU as a whole must increase investment that would stimulate growth and job creation, as well as boosting defence.

As Britain seeks to negotiate its post-Brexit relationship with the EU, hoping to restrict immigration from the EU while maintaining as much access as possible to the EU single market, Valls said it must be prevented from cherry-picking.

“If they are able to have all the advantages of Europe without the inconveniences, then we are opening a window for others to leave the European Union,” Valls said.

Addressing politics at home, he said Donald Trump’s victory in the United States has boosted the chances of victory for National Front leader Marine Le Pen during the presidential election next year.

He said France’s election debate was “ignoring the danger posed by the far-right”, adding: “We face a historic moment… perilous for the world, perilous for Europe and perilous for France.”

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Around 100 people are believed to have drowned in the Mediterranean Sea on Thursday, after their dinghy capsized off the Libyan coast.

Their smuggler abandoned them in high seas without a motor.

27 survivors had been rescued by an oil tanker and were later transferred to the Bourbon Argos, a boat of the Médecins Sans Frontières charity (MSF).

Seven bodies were recovered.

A survivor said there were 130 were on board the vessel. Survivors said most of the people tried to stay afloat but most drowned.

On Tuesday another dinghy capsized, drowning almost 100 passengers before a merchant ship rushed to their aid. 15 survivors were taken to the Sicilian port of Catania.

The same evening 298 people were rescued in three operations. Casualties are estimated to little over 4,700 in less than a year according to UNHCR. That is a record.

Migration via Libya is unabated, although the flow from Turkey via Greece has fallen significantly. Over 167,000 have made the perilous journey from North Africa to Italy this year according to the Guardian.

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The European Patent Office in Munich and the Carlsberg company were criticised on November 17 in an open letter by campaigners opposed to the patenting of plants and animals.

No Patents on Seeds, an alliance including Greenpeace, the Catholic charity Misereor, and globally networked small-scale farmers, called on the Danish brewer to voluntarily relinquish three patents it received earlier this year from the European Patent Office.

As reported by Deutsche Welle (DW), Germany’s international broadcaster, documents published by the EPO also list Heineken of the Netherlands as a patent proprietor.

In two patents granted to Carlsberg and Heineken in April, the EPO upheld inventors’ claims that barley mutations provided new enzymes to develop “more distinctive,” flavour-stable beers and also had less dimethyl sulfide (DMS) that can give beer an undesirable ‘cooked sweet corn’ taste.

From their third patent, which was granted in September, the brewers expect major energy savings during malting and kiln-drying by using barley varieties low in linoleic acid, allowing cooler temperatures during the so-called “wort” to remove stale flavours.

Within nine months of publication any person can object formally to the granting of a patent by contacting the EPO and paying an “opposition fee.”

In their open letter, the Munich-based No Patents on Seeds alliance said “there should be no patents on beer and brewing barley. The cultivation of plants and beer brewing stems from a centuries-old tradition.”

According to DW, critics said two of the patents originated from accidental mutations of genetic material in barley or Hordeum vulgare, a cereal grown worldwide.

Carlsberg, in its promotional material, says research and development are part of its legacy, including laboratory work on barley, yeast, ingredients and brewing technology.

 

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The sale of luxury goods in India has reportedly taken a plunge since the start of the year when the government required retailers to record the customer’s tax identification number for cash purchases of more Rs200,000 ($3,000).

As reported by The Financial Times, the impact on Ethos Watches, a luxury watch retail chain with 45 stores, was immediate: sales plunged 60%. Before the new rule, 45% of the company’s sales were of Swiss timepieces worth over 200,000 — often bought with suitcases full of notes.

“People are no longer able to make cash purchases of expensive products without the risk that they will be called by the income tax department inquiring where they got so much cash from,” YashoSaboo, Ethos’s owner, told the Financial Times a few months after the new regulation took effect.

Monitoring large cash payments is part of Indian Prime Minister Narendra Modi’s campaign to crack down on “black money” — cash earned through illegal activities, or earned legally but never declared to tax officials.

The campaign hit its apogee last week, with New Delhi’s surprise ban on the use of Rs500 and Rs1,000 notes — a radical action intended to catch black money hoarders.

The scrapped currency — together worth more than $220bn, or 86% of India’s circulating cash — is no longer legal tender and is not supposed to be used for any transactions, except buying fuel at state petrol pumps or in government hospitals.

Until December 30, the notes, worth $7.50 and $15 respectively, can be deposited in bank accounts or exchanged in very small quantities over the counter for new currency. But income tax officials will be alerted to any deposit of more than Rs250,000, a sign of the widening campaign against corruption and tax evasion, reported The Financial Times.

The cash ban, which was announced on November 8, shocked India.

“I know the forces up against me,” Modi said in a speech this week. “They may not let me live. They may ruin me because their loot of 70 years is in trouble.”

According to The Financial Times, the stealth decision to abruptly cancel and replace most of India’s currency is a radical economic experiment, and political gamble, with few precedents.

“No country has done this kind of shock therapy,” Jahangir Aziz, global emerging markets analyst at JPMorgan, was quoted as saying. “We don’t have any precedents of doing anything of this sort. We are flying by the seat of our pants.”

Swapan Dasgupta, a member of India’s upper house of parliament, says the move is intended as a radical shake-up of Indian society, where corruption and tax evasion, by businesses and affluent individuals, is a way of life.

“It’s motivated by a philosophy which is that if you want India to be a meaningful player on the world economic stage, you’ve got to take tough measures,” says Dasgupta, who has close ties to Modi’s ruling Bharatiya Janata party. “Otherwise you can plod on.”

“There is not a soul in India who has not paid black money,” says Surjit Bhalla, senior India analyst for the New York-based Observatory Group, an economic consultancy. Bhalla admits he caved in to pressure in the 1990s to pay Rs300,000 to a Delhi city official who withheld permission for him to build a house for two years. “We have created an environment in which everybody is forced to be corrupt,” he says.

Meanwhile, economists agree that the sudden cash crunch will be a painful blow to the economy initially. Analysts estimate that the ban on the notes will shave about 1% from GDP growth in the current financial year, which ends in March.

According to Deutsche Bank, fast-moving consumer goods sales have dropped by 30% in some regions, while consumer durables in small towns are at a standstill. Much of India’s trucking fleet, which relies on cash for tolls and taxes, are stranded on the highways.

Property prices have also been hard hit, with implications for the employment-intensive construction sector.

According to The Financial Times, the full impact of the negative shock will depend on how fast the government can roll out the replacement cash. So far, the process has been agonisingly slow, as each ATM needs physical recalibration to handle the new notes, which are slightly smaller in size than the old ones.

In a separate report, MINT online noted that India’s demonetisation bid has been widely reported in China. Chinese official media commented that Modi’s “masterstroke” to demonetise Rs500 and Rs1,000 notes could be reduced to a “nasty partisan conspiracy” or a “costly political joke” if it fails to deliver on its high-sounding promises.

“While it takes political courage to launch such a trailblazing and massive campaign; it actually takes far more wisdom to give it a happy ending,” an article in the state-run Global Times said on November 17.

“Given the fact that people have to pay an absurdly high price for the expected reform, if BJP fails to deliver its high-sounding rhetoric and promises, then Modi’s much-lauded ‘masterstroke’ or ‘big bang reform’ will likely be reduced to ‘nasty partisan conspiracy’ and even a ‘costly political joke’,” it said.

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Thursday 24 November 2016
EU-Ukraine Summit
11:00 Arrival of President Petro Poroshenko (photo opportunity)
11:05 Leaders' meeting
12:10 Working lunch
13:40 Press conference 

The Finnish Defense Minister, Jussi Niinistö (PS) wrote on Thursday that the EU would advance the project of a European Defense Community.

In December, the European Council is expected to vote by a simple majority vote on the creation of a European Defense Community with its own HQ. Given that this vote will take place before President-elect Donald Trump comes to power, the momentum is with the Italian-German-French initiative.

The article by the Finnish Defense Minister comes against the ...

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An audit conducted by the European Parliament has reportedly revealed that the Alliance for Direct Democracy in Europe – a political vehicle dominated by UK Independence Party (UKIP) – misspent EU funding on party workers and national election campaigns.

As reported by The Guardian, which saw the audit report, the Alliance for Direct Democracy in Europe (ADDE) will be asked to repay €173,000 in misspent funds and denied a further €501,000 in EU grants for breaking European rules that ban spen...

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Visa-free travel for Ukrainian citizens for stays up to 90 days has been approved by the 28 European Union member states. The new visa arrangement must now be approved by the European Parliament.

As reported by Deutsche Welle (DW), Germany’s international broadcaster, visa liberalisation had long been sought by Kyiv, especially since Russia’s annexation of the Crimean peninsula and its ongoing support of rebels in eastern Ukraine.

The prospect of visa-free travel was introduced as part of an EU-Ukraine partnership accord signed in 2014. In return for closer overall cooperation with Ukraine, the EU stipulated that the country had to commit to a number of civil society reforms, largely aimed at combating corruption.

“Credible reform is the right path and should be encouraged,” Peter Javorcik, Slovak ambassador to the EU said in a statement. Slovakia currently holds the bloc’s six-month rotating presidency.

“I am also delighted that our decision is able to send a positive message in the run up to the EU-Ukraine Summit on 24 November,” Javorcik added.

Ina separate report, the Reuters news agency noted that many difficulties to progress remain, not least Ukraine’s sluggish fight against endemic corruption and the EU’s caution on immigration after the arrival of about 1.3 million refugees and migrants in 2015, mainly from the Middle East and North Africa.

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