The Brussels Report
- Monday, 30 April 2018
EU expansion: Are the Balkans ready to join?
The European Commission president, Jean Claude Juncker, visited the Western Balkan countries – Serbia, Bosnia Herzegovina, Macedonia, Albania, Montenegro and Kosovo – at the end of February, and once again spoke of a further expansion of the European Union. According to Juncker, Western Europe is “tired” of any talk of more expansion and the previously foreseen date of 2025 “is not a promise” because certain accession parameters have yet to be fulfilled by the Balkan states. One very tricky obstacle is the ongoing territorial disputes between Balkan states, and Juncker specified: “these countries must resolve their territorial disputes before they join the EU”. But in spite of all the problems, the rapprochement between the Balkan countries and the European Union continues. According to Juncker, the only reasonable choice for aspiring new members among Russia, Turkey and the EU is the latter, and given the progress of cases like Serbia and Montenegro, the EU “has to help them out”.
Vote: 6 to encourage the Balkan countries in the hope that they overcome their border disputes and join the Union in 2025.
Brexit: the Irish border and the customs conundrum
According to Theresa May, the United Kingdom will leave the Single Market. But at the same time, the EU and the UK have committed to avoiding the return of a physical border between Ireland (Eire) and Northern Ireland. The United Kingdom doesn’t want any “internal” borders between Northern Ireland and the rest of its lands. Hence the problem: how can the free circulation of goods, capital and people between EU territories (Ireland) and non-EU countries (Northern Ireland) be avoided without customs? The issue has negotiators in a bind. For now, outside of referring the unravelling of this issue to further negotiations, a solution to fall back on (a “backstop”) has been found in case negotiations fail: the rules of the Single Market will continue to apply to Ireland and Northern Ireland. It will then be London’s problem to seal the border between Northern Ireland and the rest of the UK.
Vote: 5 to the negotiators. The prospected solution seems very jumbled, and damaging for everyone.
Europe could find itself in the crossfire of a new trade war
The president of the United States, Donald Trump, has announced new tariffs on $60 billion (€48.7bn) worth of imports from abroad beginning at the end of March. The new tariffs will apply to 1,300 products, including electronics and clothing. The European Union immediately opposed Trump’s protectionist policy, and was exempted from the new tariffs on steel and aluminium after many demonstrations and further negotiations. China, meanwhile, is preparing to fight back by targeting American products. Many fear that we are witnessing the start of a new trade war. Though it’s clear where and why this process has begun, no one knows where it will lead. Even the EU risks being involved and forced to choose sides. It can’t seem to avoid falling between two stools. American sanctions might be levied against the EU in the future if it doesn't take an approach approved by Washington on the tariffs against China. And even if the EU is exempted from them, it could still risk being “overrun” by foreign products which, because they can no longer access the American market, would probably end up pouring into Europe. But the US’s attempt at blackmail is a double-edged sword. At a time when economic protectionism viewed unfavourably by most developed countries, Washington’s attitude could trigger a backlash that could lead to its isolation and economic weakening. Last March, for example, 11 Pacific area countries signed a new version of the TPP (Trans Pacific Partnership) that did not include the US.
Vote: 3 to Trump. He has taken the wrong decision, even in terms of America’s own interests.
The “Norwegian option” doesn’t guarantee border control
British Prime Minister Theresa May has stated: “Staying in the Single Market based on the Norwegian model would mean automatically adopting EU legislation in its entirety, and would also mean continuing to accept freedom of movement”. That is true: Norway, Liechtenstein and Iceland are partners with EU countries of the European Economic Area (EEA). They must therefore adapt their legislation to that set by the EU for the Single Market and ensure that EEA (and therefore also EU) citizens are entitled to freedom of movement.
Growth and employment: solid EU figures
EU Commission president, Jean Claude Juncker, stated last February: “Every economy in our Union is now growing healthily. Employment is at an all-time high, unemployment at a nine-year low”. It’s true: in 2017, all EU states recorded a growth in GDP greater than 1%. Employment in the EU has now improved beyond pre-crisis levels and unemployment stands at 7.6%, the best figures since 2008.
Greece's deficit has now become a surplus
The president of the Eurogroup, Mario Centeno from Portugal, stated on March 6: “Greece’s deficit has been reduced from 15% in 2009 to the current surplus”. It’s true: in 2009, the deficit to GDP ratio in Athens was -15.1%. In 2016, the country had instead posted a surplus (+0.5%).