Saturday, 23 September 2017

Brexit negotiations after Florence speech

Friday 22 September 2017, the think tank CEPS started a new series of Future of Europe meetings with a talk by Martin Selmayr, the head of president Juncker’s Cabinet. The evening before, the president of the European Council (EUCO) Donald Tusk had invited the heads of state or government to discuss how to organise their work regarding the substance, method and objectives of EU reform and the future of Europe, when the EU27 leaders dine ahead of the Tallinn Digital Summit.  

However, despite the daily chores, plus the EU reform and future of Europe agenda, the EU27 face the prolonged UK withdrawal process since the EU referendum 23 June 2016.

Florence speech  

People dependent on English media saw little else concerning the European Union than the Florence speech, where the UK prime minister Theresa May asked for a two-year extension of parts of membership after 29 March 2019 - thus ending before the next general election 5 May 2022 - and a “creative” new EU partnership excluding membership of the customs union, the single market and the European Economic Area (EEA), as well as skirting the Comprehensive Economic and Trade Agreement (CETA) with Canada as a model. - To pay one’s dues (also during an extension) is hardly a new opening, but an obvious obligation.

Orderly withdrawal?
The day before the Florence speech, the EU27 chief negotiator Michel Barnier had spoken  about an orderly withdrawal and the expectation of clear commitments from the United Kingdom on the initial issues - EU citizens, financial settlement and Ireland - before moving on to a possible transition period as part of a potential  withdrawal agreement SPEECH/17/3404.  

Soon after May’s speech, which offered little clarity on the requested issues, Barnier published a statement repeating the demands ahead of the fourth round of Brexit negotiations STATEMENT/17/3427.
Monday 25 September, after the other agenda items, the General Affairs Council (EU27) has an opportunity to take stock of the Article 50 TEU Brexit negotiations and the implications for the European Council meeting 19-20 October 2017.

Come Tuesday, EUCO president Tusk is going to meet prime minister May in London.

Florence speech reactions

Any deal requires agreement by the EU27 member states and the European Parliament. Instead of the UK-centric debate, it may be more important to sample reactions to the Florence speech from the point of view of the 450 million people set to remain in the single market (EEA) after Brexit, all too easily forgotten by British media and politicians.

Many in the EU are disappointed. May seems to have spoken primarily to her own people and party, Welt N24 assessed, also reporting that Moody’s had downgraded the UK’s credit rating.
The German press reactions Focus has compiled are hardly impressed.

Europeans greeted May’s conciliatory tone, but were left hungry, is the summary of RFI.

The haziness persists. The silences are going to be studied more closely in the chancelleries than the promises, Le Point concludes.

All talk and no action, commented Roberto Castaldi in Il Tirreno.  

Among Brussels based media, Politico Europe summed up the EU verdict as good, but not nearly enough.
The quick analysis from Fabian Zuleeg (EPC) about the insufficiency of May’s Florence speech is worth reading.

Ralf Grahn

Friday, 22 September 2017

State of the Union: legislative worries

The European Commission’s English only State of the Union 2017 web page does not offer any updates this morning, but it only means that we have to look elsewhere for important developments.

Digital tax and Tallinn summit
Yesterday the Commission outlined a path towards fair taxation in the digital economy: press release IP/17/3305, questions and answers MEMO/17/3341 and vice-president Valdis Dombrovskis SPEECH/17/3402.

The exploratory communication is already available on the EU’s legal portal Eur-Lex, but at this time only in English:

A Fair and Efficient Tax System in the European Union for the Digital Single Market; Brussels, 21.9.2017 COM(2017) 547 final

The upcoming, 29 September 2017 Tallinn Digital Summit, arranged by the Estonian presidency of the Council of the European Union, offers the heads of state or government an opportunity to ponder the role of taxation as part of Europe’s digital future and the emerging digital single market.  For more detailed information, check the digital summit background paper and the state of play of the digital single market.

Naturally, it is economically important, especially for important American corporations, that the EU-US privacy shield fiction has received a clean bill of health: STATEMENT/17/3342.

Legislative worries
The next section in the State of the Union 2017 brochure (108 pages) is called the Policy Implementation Report (from page 79).

Against the backdrop of the blog post State of the Union: better regulation and enforcement and the corresponding brochure sections, the Policy Implementation Report offers a summary of the situation (page 80):  

Legislative Priorities: State of Play
On 13 December 2016, the European Parliament, the Council and the European Commission agreed on a Joint Declaration on the EU’s legislative priorities for 2017. They highlighted 58 initiatives for which a priority treatment in the legislative process was needed to help address the biggest of the European Union’s economic, environmental and societal challenges. The three institutions committed to ensure substantial progress and, where possible, delivery before the end of 2017. Of these 58 Commission proposals, 11 have already been agreed by the European Parliament and the Council and have therefore been delivered. If there is political will from the co-legislators, 19 initiatives are likely to be agreed by the end of 2017. For the remaining 28 proposals, agreement or substantial progress is unlikely to occur in 2017. For these outstanding proposals, the European Parliament and Council do not always move at the same pace, with one or the other accelerating or slowing progress. Strong political commitment from all EU Institutions will be required to complete these proposals in 2018.

The brochure then summarises progress for each of these 58 priority proposals in a convenient way; you can see the situation almost at a glance.

The presentation is technically beautiful, but the situation is worrying: 28 out of 58 legislative initiatives are stuck in the European Parliament or the EU Council, or both.

For more detailed views you can consult European Parliamentary Research Service EPRS publication The European Commission at mid-term and European Parliaments legislative train schedule (updated to the end of June).

Remaining sections

The sections of the State of the Union 2017 brochure still to cover are:
The European Solidarity Corps: One Year on
Visits to national Parliaments
Citizens’ Dialogues
Letter on the Roadmap for a More United, Stronger and a More Democratic Union  

Ralf Grahn

Thursday, 21 September 2017

State of the Union: economic progress

The State of the Union 2017 web page of the European Commission offers us materials and some updates concerning policy initiatives relating to the Commission Work Programme (CWP) 2018. In addition, a few novelties on the economic front are worth mentioning. Yesterday the Commission vice-president Valdis Dombrovskis spoke about a proposal for a stronger and more integrated financial supervision for the Capital Markets Union (CMU) SPEECH/17/3365, complemented by a press release IP/17/3308, questions and answers MEMO/17/3322 and a brief CMU and supervision factsheet.

Today, Thursday 21 September 2017, the Comprehensive Economic and Trade Agreement (CETA) between the EU and Canada entered into force provisionally IP/17/3121.

The European Commission also launched a “Border Focal Point”, a hub of EU experts IP/17/3270 and MEMO/17/3271, to help border regions - 40% of the EU territory and 150 million inhabitants - break down barriers to jobs and investments.

We can take note of the European Labour Authority president Juncker initiated in his SOTEU address, with a view to mobile workers and commuters.

Economic progress
The State of the Union 2017 brochure (108 pages), still only in English, continues with the section Progress in the economic situation (from page 74), in practice four pages of useful graphs for interested readers: faster economic growth, economic sentiment picking up, investment growth, job creation, decreasing unemployment, rising employment rate, shrinking public deficit, decreasing government debt, more robust banks, plus a table with numbers at country level in addition to aggregate figures.

A recent press release from Eurostat tells us that employment increased by 1.6% in the euro area and 1.5% in the EU28 compared with the second quarter last year.
Economic reform issues are on the agenda of the ECOFIN ministers, as told by Commission vice-president Valdis Dombrovskis SPEECH/17/3281, and the Eurogroup, as told by its president Jeroen Dijsselbloem after the latest meeting.  

Ralf Grahn

State of the Union and EU reform compilation

The blog post Hopkok om EU:s framtid directly or indirectly referred to 31 blog posts at Eurooppaoikeus (FI), Grahnblawg (SV) and Grahnlaw (EN), about the social market economy, the European social pillar, the future of Europe and EU reform.

Since then, president Jean-Claude Juncker’s State of the Union 2017 (SOTEU) address has been the point of departure for ten more blog articles - almost all in English - so this could be a good time to publish a new compilation for future reference:

State of the Union 2017 web page

The European Commission’s State of the Union 2017 web page is worth checking for possible updates and new language versions. Among other things, we find the useful  State of the Union 2017 brochure (108 pages), still only in English. There are sections we have not discussed yet:

Progress in the Economic Situation
Policy Implementation Report
The European Solidarity Corps: One Year on
Visits to national Parliaments
Citizens’ Dialogues
Letter on the Roadmap for a More United, Stronger and a More Democratic Union   

On Twitter you can follow the latest on #SOTEU, #EUreform and #FutureOfEurope for occasional gems.

Ralf Grahn

Wednesday, 20 September 2017

State of the Union: public opinion

After checking the European Commission’s State of the Union 2017 web page, we turn to the State of the Union 2017 brochure, where the next section is called The state of public opinion in the EU (from page 69).

The UK’s Brexit mess, terrorist attacks, economic progress, together with election results in member states and abroad have contributed to stronger feelings about the need for the European Union among citizens.

Eurobarometer 87
The SOTEU 2017 brochure presents five graphs based on the latest Eurobarometer survey, but those interested can go to further downloadable reading: Standard Eurobarometer 87 - Spring 2017 (EB87; the field work was done in May and the first results were published in August 2017).

Terrorism and immigration

Terrorism has passed immigration as the greatest European level concern among EU citizens, both worries well ahead of the economic situation, the public finances of the respondent’s own country and unemployment (when each respondent named two).

At national level unemployment, immigration, health and social security, plus terrorism are the four main concerns, but here as on other issues those interested can study the differences between member states.

EU support and reform

More than half of the population (56%) is now optimistic about the future of the European Union (EB87 page 21). There is support for EU action and reform (page 31):

EU citizens support the EU priorities and common policies tested in the survey. Though varying in intensity from one statement to another, more than half of Europeans approve of all these policies, with the exception of further enlargement of the EU.

More than eight in ten Europeans support “the free movement of EU citizens who can live, work, study and do business anywhere in the EU” (81%, unchanged since autumn 2016). Three-quarters support “a common defence and security policy among EU Member States” (75%, unchanged), and 72% are for “a common energy policy among EU Member States” (72%, -1 percentage point). Around two-thirds of Europeans support “a common European policy on migration“ (68%, -1) and “a common foreign policy of the 28 Member States of the EU” (66%, unchanged). Around six Europeans in ten are in favour of “a digital single market within the EU” (61%, +2) and “a European economic and monetary union with one single currency, the euro” (60%, +2). More than half of respondents support “a free trade and investment agreement between the EU and the USA” (54%, +1). “Further
enlargement of the EU to include other countries in future years” is the single statement that is supported by only a minority of respondents: 40% are “for” (+1), while 49% are “against” (-2).

Even if they approve of current policies and potentially support more unitary policies, except for EU enlargement, sadly these Eurobarometer questions are too blunt to show how receptive citizens are to more detailed proposals for real EU reform.

Free movement of EU citizens

The EU27 and Michel Barnier get backing, by the overwhelming support for the free movement of people (EU citizens). Brexit tabloids and crusaders have something to think about, or do the British support free movement only for themselves? See EB87 page 32:

A large majority of Europeans in all 28 EU Member States continue to support “the free movement of EU citizens who can live, work, study and do business anywhere in the EU” (81%, unchanged since autumn 2016); majorities support free movement in proportions varying from 94% in the three Baltic States, Latvia, Estonia and Lithuania, to 69% in Italy and 70% in the United Kingdom. Opposition to the free movement of EU citizens remains limited: it reaches or exceeds 20% in four countries: Austria (22%), Italy (22%), the United Kingdom (21%) and Denmark (20%).

Euro area

Creating a real economic and monetary union (EMU) is on the EU reform agenda, as is the invitation to non-euro countries to join the euro area. The common currency is becoming more attractive in the euro countries, but people in the countries outside are still reticent (page 33):

In the euro area, close to three-quarters of respondents support the euro (73%, +3 percentage points, vs. 22%, -3), which has reached its highest score since autumn 2004. Outside the euro area, a majority of respondents continue to oppose the single currency (58% “against”, -1, vs. 33% “for”, unchanged).

Six in ten EU citizens are in favour of  “a European economic and monetary union with one single currency, the euro” (60% “for”, +2 percentage points since autumn 2016), whereas 34% say they are against (-2). This is the first time since autumn 2009 that support for the euro has reached the 60% threshold in the whole European Union.

Designing Europe’s future

The title of the Special Eurobarometer 461 ‘Designing Europe’s future’ sounds promising, but how much wiser do we get regarding the EU reform agenda, if we read the three reports reflecting field work in April 2017?

The first report, which included questions on trust in various institutions, opinions about globalisation and its impact, and opinions about support for the euro, free-trade and solidarity, did not seem to ask or get clear responses about support for EU reform, but perhaps for existing policies with or without a demand for reform.

The second report, on security and defence, is perhaps somewhat clearer. Even if the EU supposedly has a common foreign and security policy and a common security and defence policy, the support for an EU army clearly goes beyond the current treaties (text picked from page 21):

Almost two-thirds of Europeans continue to support a common foreign policy of the 28 EU Member States. In all countries except Sweden, at least half of respondents are for a common foreign policy of the 28 EU Member states of the EU.

Three-quarters of EU citizens are for a common defence and security policy among EU Member States, and this proportion has remained above the 70% threshold since 2004. A clear majority of respondents in all EU Member States support a common defence and security policy among EU Member States.

More than half of Europeans are in favour of creating an EU army; conversely, almost four in ten are opposed to it. In 23 Member States, a majority of respondents are in favour of the creation of an EU army. The exceptions are the United Kingdom, Sweden, Finland, Austria and Ireland.

Logically, an EU army presupposes a unitary foreign, security and defence policy, which in turn require democratic government according to European values.

The third report, about the EU budget, could be said to be an extremely early bird for the EU citizens to design the future of the union. The Monti report on the EU budget (own resources) was new and far from widely known, and the Commission’s reflection paper on the future of EU finances was still about two and a half months into the future.

The Special Eurobarometer 461 survey shows that a growing proportion wants to increase the EU budget (by now, as many as those against), but the respondents know little about how EU resources are spent. They want to spend more in areas where the EU lacks real powers. Since respondents do not know even the basics about the EU budget, the opinion poll demonstrates a clear need for civic education.


Better and more enlightening political leadership is needed for a higher level of public discussion about the EU reform agenda, but where would that come from?

Ownership is probably the best teacher. Since 68% of Europeans already feel they are citizens of the EU, how about giving them full political rights as part of the EU reform agenda?

Ralf Grahn