Author Archives: Centre for European Reform
Hoe Hollande Merkel moet bewerken
Dezer dagen onderhandelen Francois Hollande en Angela Merkel over aanpassing van de crisismaatregelen. Hollande moet geen Keynesiaans pad kiezen, maar duidelijk maken dat voor sommige landen een uitzondering moet gelden. En dat Duitsland zelf beter zijn best moet doen, betoogt, Charles Grant, director of the Centre for European Reform.
The election of François Hollande as French president has excited some of those who blame Germany’s emphasis on fiscal austerity for many of the eurozone’s ills. Hollande has promised to refocus EU policies on growth and employment. Countries such as Greece, Portugal, Spain and Italy – their recessions aggravated by the EU’s insistence that they shrink their budget deficits – would welcome a new approach. Even Marios Draghi and Monti, respectively president of the European Central Bank and prime minister of Italy, and both economically conservative, have called for growth initiatives. But can Hollande – as he prepares for his first ever meeting with Chancellor Angela Merkel – really make a difference? He might, but only if he handles Merkel with great diplomatic dexterity.
Many commentators have interpreted Hollande’s victory on May 6th, alongside the defeat of the established parties in Greece on the same day, as part of a Europe-wide revolt against austerity. However, France has not yet experienced painful austerity. And Hollande has promised to match President Nicolas Sarkozy’s target of bringing the budget deficit down to 3 per cent of GDP next year, and also to balance the budget by 2017, a year later than Sarkozy had promised. (meer…)
De ‘reset’ tussen de VS en Rusland is voorbij
Nu het Russische presidentschap weer naar Putin gaat, is de dooi tussen de VS en Rusland – de zogenoemde reset – vermoedelijk ook weer voorbij, stelt Charles Grant, directeur van het Centre for European Reform.
Can the ‘reset’ between Washington and Moscow survive Vladimir Putin’s return to the Russian presidency in May? That is a question I posed to many people on a recent trip to Moscow. Opinions differed, but some of the best-informed analysts and officials expected the reset to fade away.
Vice-President Joe Biden first used the term at the Munich Security Conference in February 2009, when he said that it was time to press the reset button in the US-Russia relationship. Barack Obama and Dmitri Medvedev, both recently elected as presidents of their respective countries, took up the challenge, and the climate between Moscow and Washington improved.
The reset brought considerable benefits to both sides. (meer…)
Prioriteit voor Europa: jeugdwerkloosheid
Ondanks de crisis zullen Europese overheden flink moeten investeren in jongeren. Een verloren generatie dreigt en de investering betaalt zich dubbel en dwars terug, stelt John Springford, research fellow at the Centre for European Reform.
A fifth of young people in the EU are not in employment, education or training – a measure tagged with the ungainly acronym ‘NEET’. The problem is not confined to the usual suspects, like Spain (49 per cent) or Italy (29 per cent). Nearly a quarter of people under 25 are jobless or not in education in France, Sweden and the UK. Politicians are sounding the alarm. The EU’s Employment Commissioner, László Andor, recently stated that “without decisive action at EU and national level” we will create a “lost generation”. French president Nicolas Sarkozy condemns a “vicious cycle” of worklessness and deteriorating skills.
Are governments’ fears justified? The ‘NEET’ measure is not very accurate. It lumps together recent graduates, who face much shorter periods of unemployment than the low-skilled, with those who leave school at 16 with no qualifications and who may struggle to find work for the rest of their lives. Overall, young workers tend to be unemployed for shorter periods than older ones. And on average they have more family resources to rely upon than older unemployed people: many can live at home, and be bankrolled by their parents.
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Europese economie: vooral aanbod, geen vraag
To say that Europe has a growth problem is an understatement. Almost four years since the outbreak of the global financial crisis, only a handful of EU countries (Austria, Belgium, Germany, Slovakia, Sweden and Poland) have seen their economic output return above pre-crisis levels. In all the others, output is still below its peak in 2008 – in some cases dramatically so. Greece, Ireland and Latvia have endured catastrophic declines. But even in Italy, Spain and the UK, where the downturns have been less dramatic, output has already taken longer to return to pre-crisis levels than it did during the Great Depression of the 1930s. If this were not bad enough, many economies contracted in the final quarter of 2011 and will fall back into recession in 2012. How to explain this debacle?
Ask European policy-makers what their growth strategy for the region is, and chances are they will identify two ingredients. First, they will say, countries across the EU must push through structural reforms to improve the supply-side performance of their economies. (meer…)
‘EU moet Victor Orban niet isoleren’
De Hongaarse premier Victor Orban is weinig geliefd in Europa. Hij zou ondemocratisch zijn. Toch moet de EU ervoor waken hem en zijn partij teveel te isoleren, betoogt Balázs Jarábik, directeur van het Kiev office of Pact, Inc., een NGO voor de ontwikkeling van media en civil society in Oost-Europa.
Viktor Orban`s FIDESZ party won a constitutional majority in the Hungarian parliament two years ago on a promise of purging the country’s politics of the remnants of communism. The prime minister had a point: unlike neighbouring Central European states, Hungary had moved from communism through compromise, not revolution, so many of the old system’s worst traits including rampant tax evasion and addiction to debt have been preserved or worsened. When Orban promised to “complete regime change”, he had the backing of most Hungarians, even if many suspected the prime minister’s political instincts, and worried that he lacked a clear programme and a team with the expertise to reform the country. (meer…)
Rusland zit er niet helemaal naast in Syrië
Rusland ligt onder vuur wegens haar blijvende steun aan Syrië, maar is de opstelling van Rusland echt zo vreemd? De Russen opereren slimmer dan de Westerse landen, die met lege handen aan de zijlijn staan, betoogt Edward Burke, research fellow bij het Centre for European Reform.
Russia has been roundly criticised for vetoing a draft UN Security Council resolution aimed at stopping the violence in Syria and ousting President Bashar al-Assad. Moscow is reluctant to give up on the al-Assad regime for the moment: it has a direct interest in the survival of the regime, which buys its arms and provides a naval base; it is strongly opposed to Western-led interventions, on principle; it believes that Arab revolutions are likely to lead to takeovers by Islamic fundamentalists; and it is still fuming that, after it refrained from vetoing UN Security Council resolution 1973 on Libya – about the protection of civilians – the West abused the resolution by using it to justify regime change.
However, Russian diplomats concede that change is inevitable if the violence in Syria is to be contained. Russia wants a managed transition that preserves its influence. The draft UNSC resolution called for the confinement of the Syrian army to barracks and endorsed the Arab League plan for al-Assad to hand over power to his vice president prior to the holding of elections. Russian diplomats are right to say that such a resolution would have been unenforceable and, if implemented, would have led to the sudden collapse of the Syrian government without a credible alternative to take its place. Anarchy could have ensued. The Kremlin may be playing realpolitik and taking pride in blocking the West, but it has a point. (meer…)
Het echte probleem van Griekenland
Het echte probleem van Griekenland is niet economisch. Het is de onmogelijkheid om te hervormen. Het stroprige en opgeblazen staatsbestel maakt iedere poging tot verandering een Herculische taak en maakt iedere politieke belofte bij voorbaat een loze, stelt
Katinka Barysch, deputy director van het Centre for European Reform.
The German idea of sending Athens a ‘budget commissioner’ was daft. Berlin itself could not tolerate such interference in its fiscal sovereignty (the constitutional court would never allow it). But to restrict such budgetary oversight to Greece alone would be disdainful and a political non-starter. The idea predictably caused outrage in Greece. Chancellor Angela Merkel has quietly dropped the proposal but the underlying problem persists: Greece’s donors – not only Germany but also other EU governments and the IMF, no longer trust Greek politicians to turn their country around.
Greece desperately needs a deal on a new bail-out package before March 20th when €14.4 billion in debt repayments are due. The IMF and eurozone governments insist that new money will only be forthcoming if there is a realistic prospect of Greek debt becoming sustainable in the foreseeable future. The IMF says that ‘sustainable’ would mean a debt level of 120 per cent of GDP by 2020 – although most economists think that 60-80 per cent is the most that a weak economy like Greece could cope with. (meer…)
Weinig bereikt op eurotop
De eurotop lijkt succesvol, ondanks het machteloze gestamp van Engeland. Toch zijn de echte problemen nog steeds niet aangepakt, denkt onderzoeker Simon Tilford. Misschien zijn de problemen juist vergroot door nog meer politieke instabiliteit te veroorzaken.
The UK’s decision to marginalise itself by vetoing a new EU-27 treaty has dominated the post-summit media coverage. And for good reason – it could prove a big step towards UK withdrawal from the EU. However, the bigger question is whether the agreement reached at the summit will do anything to address the fundamentals of the euro crisis.
Unfortunately, the news on this point is just as bad. This summit will go down as yet another missed opportunity. Despite rhetoric to the contrary, the summit suggests that policy-makers have not yet taken on board the seriousness of the eurozone’s predicament. There was no agreement to close any of the institutional gaps in the eurozone, such as the lack of either a real fiscal union or a pan-eurozone backstop to the banking sector. There was no agreement to boost the firepower of the European Financial Stability Fund (EFSF), while the move to beef up the IMF’s finances fall far short of what is needed. As a result, there is little to prevent a further deepening of the crisis.
What has been agreed falls far short of a ‘fiscal union’. (meer…)
Engeland zet zichzelf buitenspel
Het dwarsliggen van Engeland op de eurotop kan het land nog wel eens duur komen te staan, denkt Charles Grant, onderzoeker bij het Centre for European Reform.
The outcome of the Brussels summit on December 8th and 9th is a disaster for the UK and also threatens the integrity of the single market. For more than 50 years, a fundamental principle of Britain’s foreign policy has been to be present when EU bodies take decisions, so that it can influence the outcome. David Cameron, the prime minister, has abandoned that policy. Britain will not take part in a new fiscal compact that most other EU countries will join.
France and Germany have persuaded the other eurozone countries that treaty changes are needed to enshrine stricter budget policies and closer economic policy co-ordination. The new procedures would apply only to countries in the euro. Most member-states wanted to enact those reforms through amending the existing EU treaties. That would ensure that countries in the euro, and those outside, would be subject to a single set of rules and institutions.
But Britain blocked that deal, pushing France, Germany and most other member-states to proceed with a new treaty, to sit alongside the EU treaties. (meer…)
Er tikt een tijdbom onder de wereldeconomie
Terwijl alle ogen gericht zijn op de kapitaalposities van banken en overheden, missen we een belangrijk gevaar voor de wereldeconomie: verstoorde handelsbalansen tussen landen. Die zullen een toenemend protectionisme uitlokken, met mogelijk desastreuze gevolgen, betoogt Simon Tilford, chief economist at the Centre for European Reform.
The developed world’s slide into recession threatens an outbreak of protectionism. Unlike in 2008, governments now have few tools with which to combat a renewed economic downturn, which raises the likelihood of it developing into a slump. If so, protectionist pressure is certain to build. The country that moves first to erect trade barriers will no doubt take the blame for the resulting damage to the trading system. But the real villains will be the countries that skew their exchange policies, tax systems and industrial structures to gain export advantage. The irony is that the countries that are most dependent on free trade – those that produce more than they consume – are the biggest obstacle to a sustained recovery in the global economy. They need to change course before it is too late: all will suffer if countries move to erect new trade barriers, but the surplus economies will suffer most. (meer…)
