A Rise of Anti-Disintegration Moods in EU
The week (February 8-12) got to a running start with anti-disintegration actions. As early as the evening before the start of the work week (Sunday) the leaders of Germany and France met informally in Strasbourg to discuss the future of the EU, whose survival is under threat. This set the tone for the entire week preceding the crucial EU summit of February 18-19 in Brussels, dedicated to the British question, as well as to another large disintegration challenge – the refugee crisis. On Monday, the governors of the central banks of France and Germany came out with a common text in the French Le Monde and the German Süddeutschen Zeitung, titled “Europe at the crossroads”, in which they state that the way ahead is more integration.
According to Bundesbank President Jens Weidmann and Banque de France chief François Villeroy de Galhau, the right solution is to move towards the setting up of new institutions in the euro area, because the “present asymmetry between national sovereignty and common solidarity is a threat to the stability of our monetary union”. The two are offering the creation of a common ministry of finance of the euro area, an independent fiscal union and a strong political body for common decisions, which is to be subject to parliamentary control. “These new institutions would restore the balance between liability and control”, continues the text of the article of the two central bankers. At the same time, they are fully aware that their ideas are unrealisable at this stage, so they are offering the more realistic option of keeping national sovereignty in the euro area at the expense of a lower level of solidarity, which also is a balance between responsibility and control.
The idea for a finance ministry of the euro area was immediately picked up over the next few days. The interview [in Italian] of former Italian PM Enrico Letta for the Italian left-wing daily newspaper La Repubblica was dedicated exactly to that. In the interview, he states that the ministry must surely be of the euro area only, not of all 28 members, because this works towards the remaining of Great Britain in the EU, for it would create a two-speed Europe. The United Kingdom and others, who do not want more integration, can stay in one track, and the euro area will be the other track, with stronger integration. The minister of finance should be a strong figure, one capable of restoring the balance between responsibility and solidarity, or in other words between German and Latin values, thinks Mr Letta.
The current Italian finance minister, Pier Carlo Padoan, also agreed with the proposals of Jens Weidmann and François Villeroy de Galhau, saying in an interview for Politico Europe that the euro area needs its own finance minister and must accelerate the integration of banking and fiscal policies in order to be able to deal with the financial, economic, and migrant crises it faces. “The real question is not whether we like it or not but what do we ask of it. What would be the mandate for a single euro-area finance minister?”, he said.
The idea for a common euro area minister is not new. It started circulating the public domain in the heat of the debt crisis in the euro area and was proposed by the then boss of the ECB Jean-Claude Trichet, as euinside extensively reported. The subject remained at the centre of discussions on the euro area’s future for so long that the then boss of the EC José Manuel Barroso increased the responsibilities of the Commissioner for Economic and Monetary Affairs (the Finn Olli Rehn at the time) in order to prevent the separation of the euro area from the EU. After the repair of the economic governance of the EU and the euro area in particular, however, the conversation on the issue died down, but did not disappear entirely. A similar position is provided for more or less in the five presidents’ report, together with the creation of a form of euro area budget.
In spite of Great Britain – towards an ever closer union!
Integration strains this week did not end with just talking about a common finance minister. There was a meeting of the foreign ministers of the founding countries of the EU – Germany, France, Belgium, Italy, Luxembourg, and the Netherlands – in Rome on February 9th. They did not present any specific plans, for their goal was rather to counteract the disintegration forces. They reminded in a declaration following the meeting of the reasons why they united, laying the foundations of the EU of today – ending armed conflicts, building a space of freedom, democracy, human dignity, rule of law, and solidarity. “We firmly believe that the European Union remains the best answer we have for today's challenges and allows for different paths of integration. We remain resolved to continue the process of creating an ever closer union among the people of Europe”, says in the declaration.
This message is being sent as a counterbalance to Great Britain’s demand that the phrase “towards an ever closer union” be removed from the treaties, a demand which was left unsatisfied in the drafts that are being prepared for the summit next week. The six ministers also announced and reaffirmed their commitment to the European project and invited the rest of the members to also join. The wording by itself is a signal that something important is coming. There were similar expectations back in 2012. At that time, this website wrote, that the time had come to make a choice. As it turns out today, much more than four years ago, this choice is imperative.
Again this week European media, quoted by Open Europe, wrote that Chancellor Merkel and President Hollande are going to present their own plan for the future of the euro area by the end of 2016. Whether this means that the five presidents’ report is no longer valid, or it will lay the foundations for its third remodelling will become evident towards the end of the year, at which point probably the referendum for Great Britain’s EU membership, which is expected in June, will have passed.
The spirit of federalism reached its peak on Wednesday, when Commissioner for Migration Dimitris Avramopoulos (Greece, EPP) announced after the regular meeting of the College of Commissioners that he was a Eurofederalist and hoped that one day the EU had its own defence system. He said this answering a question whether it was appropriate that NATO engaged in humanitarian operations in the Aegean for saving of refugees’ lives. “Personally, I can tell, being a federalist myself, [I] always believed that the moment would come that Europe has its own defence system” were the exact words of the Greek commissioner, who once again accused member states of not performing on their commitments. Actually no, he specifically asked that we do not use the word “accusations”, for it is the EC’s job to ensure European law is observed, ergo the member states’ commitments are observed.
In banking union we trust
Over the last few months there has been a lot of talk about the current refugee crisis and the Brexit being much larger challenges to the survival of the European project than the euro area debt crisis was. Now is the time when an opportunity comes to test whether it is so. The nervousness of financial markets reached the debt markets this week. This time the most affected country is Portugal, whose 10-year benchmark debt bonds reached their highest level since 2014. The prices of Spanish and Italian debt also jumped up. Investors started running towards safe havens. In the EU, at the moment, these again are the German bund and the English debt securities in the company of American debt, which also is a safe haven to investors at the moment.
The news about market turbulence brought out the ghost of the euro area debt crisis of 2009 right before the beginning of the regular meeting of the Eurogroup (the finance ministers of the euro area). Most of the ministers, however, spoke as one – there are no problems, we trust in the banking union, you should too, was their message. Only Slovak Finance Minister Peter Kažimír admitted to the problem by pointing out that the nervousness of the market was a problem for countries, which have fiscal rules difficulties. Eurogroup boss Jeroen Dijsselbloem (The Netherlands, Socialists and Democrats) stated that in structural aspect the euro area is currently much better equipped, compared to 2009. Now we have the banking union, he said. The same opinion was expressed by the finance ministers of Finland, Germany, and Spain.
Before the meeting everyone claimed that market volatility would not be a topic, but it turned out it was, and one of the leading ones at that. Jeroen Dijsselbloem started the Thursday evening press conference exactly with this topic, repeating once again that currently the euro area is structurally in a much better position. He did state, however, that global risks should not be underestimated. His recipe is continuing with reforms to boost growth and following the fiscal rules, as well as the common rules of the banking union. Mr Dijsselbloem admitted it was possible that part of the markets’ unease could be due to the bail-in rules that came into force at the start of the new year, but the boss of the euro area’s permanent bailout fund Klaus Regling reminded that volatility is not just in the European market, but in all global markets, which means that the new Bank Recovery and Resolution Directive (BRRD), which contains these rules, is not the investor’s sole worry.
Poland vs. the BBC
Poland’s problems, which started with the New Year when the EC triggered for the first time the rule of law procedure, continued this week as well. The Law and Justice government is already engaged in turf warfare with anyone who hints that there is something rotten in the state of Poland. The ministry of foreign affairs distributed a thorough and quite critical analysis of a BBC film, aired in the end of January in the old and very popular investigative journalism show Newsnight. The short film is titled “Is Poland being 'Putinised'?” and depicts the atmosphere in the country after the elections and the government’s measures against the Constitutional Court and the media. The film contains interviews with a MP of the ruling majority, journalists from independent media, and citizens.
The letter of the Polish MFA criticises the contents of the film, calling on the BBC standards for unbiased journalism. According to the ministry, the very first words, frames, and music of the film instill the feelings of worry and fear in the audience. Standards are quoted point by point, the problems in the film are presented minute by minute. It says that the film is inaccurate, emotionally engaged, omits an “important perspective”, and makes unjustified conclusions. The cherry on the cake, however, is the conclusion, that there is a conflict of interests in the film. The problem is that Maya Rostowski, the producer of the film, is the daughter of former Polish Finance Minister Jan Vincent-Rostowski, who reacted sharply to the letter on Twitter, calling Polish foreign policy not just kneeling, but standing upside-down, balancing on its tongue. Mr Rostowski’s criticism was exhausted with finding 17 language mistakes in the English text of the letter.
A spokesperson for the BBC, quoted by The Guardian defended the aired material calling it “a legitimate, well-sourced story that gave a fair and impartial examination of the situation in Poland”. It is also said that sufficient amount of time was given before the airing for the government’s position, but it is also stated that there is readiness for an opportunity to be given for a more thorough reaction by a “senior Polish minister”. This sounds like a hint that the government did not respond to the BBC’s interview invitations, so the film only includes a MP from the Law and Justice party.
Again this week, work on the draft resolution of the European Parliament on the freedom of expression in the EU got started, inspired by the situation in Poland. Author of the draft is Italian MEP Aldo Patriciello from the party of former PM Silvio Berlusconi Forza Italia. In it, he insists that the Commission implements as soon as possible an automatic mechanism for levying fines, when a threat emerges to the founding values of the EU.
Serbia and the Hague Tribunal in a verbal clash
While the euro area is attempting to counteract the disintegration pressure, there was a serious stir along the Western Balkan periphery of the Union. Serbia, which finally ended the long wait for the opening of the first negotiation chapters, went into a serious battle with the war crimes tribunal in former Yugoslavia after the tribunal sent a final warning to authorities in Belgrade to hand over to the court “without delay” three members of the Serbian Radical Party of Vojislav Šešelj. Judge Alphons Orie threatened that if Serbia did not send the three accused to the Hague, the UN Security Council, which was alerted by the tribunal that Serbia was not cooperating, will take measures. Instead of cooperation, however, a sharp letter arrived from Belgrade, asking to show Serbia some respect.
The letter protests the “inconsiderate behaviour towards Serbia” and reminds that the Hague uses double standards, for it is not allowed to Serbia that some cases be tried in national courts, while the same is allowed to other states. “Gentlemen, Mr Orie, and all in the Hague tribunal, learn to respect the Republic of Serbia! Only then could we continue the talks, in line with Serbian law”, says the letter, as the Serbian Blic claims [in Serbian]. It also says in it that the life of Zdravko Tolimir, who died this week, is much more important than all the tribunal’s requests. “This is the important issue, not whether someone is putting pressure on witnesses”. Zdravko Tolimir died on February 8th in the tribunal’s arrest in Scheveningen. He was convicted of genocide, crimes against humanity, conspiracy to commit genocide, and violations of the laws or customs of war. The tribunal refused to release him for health reasons, as it did with Vojislav Šešelj.
Bosnia is starting towards Europe
Meanwhile, on February 10th, in neighbouring Bosnia and Herzegovina PM Denis Zvizdić presented [in Bosnian] the long awaited mechanism for coordination of the European integration. This mechanism, as well as the adaptation of the Stabilisation and Association Agreement to Croatia’s membership are two of the most important conditions for Bosnia and Herzegovina to be able to file a membership application, which could be seen as “credible”. Sarajevo is aiming at filing the application next week (February 15). The presentation of the mechanism, however, caused a serious scandal because it is said that it was made up secretly, with no consultations with everyone down the chain of the country’s complex government. Republika Srpska denounced it on these very grounds.
The battle against the Ustaša in Croatia peaked
The sins of Croatian Minister of Culture Zlatko Hasanbegović must be much lesser than the ones of his colleague Mijo Crnoja, considering he got away with just a public chastising, instead of resignation. The army veterans’ minister Crnoja was forced to resign because of the violent public reaction against the fact that he was avoiding taxes by claiming to live in the countryside, while actually residing in Zagreb. There is only a shack at his permanent address, because the ex-minister did not use according to purpose the subsidised loan that he received for building a house. Despite the violent public reaction against the minister of culture for writing scientific papers defending the Ustaša movement (a Croatian form of Fascism) in his youth, the fact he appears on photos wearing Ustaša symbols, and him having dubious statements about anti-Fascism, Zlatko Hasanbegović survived.
Following the government meeting on Thursday he made a statement to media, in which he stood against any form of totalitarianism and any criminal regimes. He refused to answer any journalists’ questions, however, which led to an incident with the cameraman of Croatian RTL and to the non-clarification of many more questions around his biography.
The week was very volatile in Croatia. It ended with a demonstration of independence by the coalition partner MOST. They voted contrary to their partners of the Patriotic coalition at the election of a chair of the internal affairs committee in the Sabor (Croatian parliament). Although, if you ask the Social-Democrats, Most did not vote against the Patriotic coalition, but rather with the left-liberal coalition “Croatia is Growing”. This shows that the troubles for the government, headed by the non-partisan Canadian migrant Tihomir Orešković, are yet to become more serious. The Croatian week ended with a strong debut of the new finance minister, Zdravko Marić, at the Economic and Financial Affairs Council (ECOFIN), where he outlined his country’s position on the EC’s package for fighting tax avoidance. Further details on what is happening in Croatia these days you can read here.
Next week (February 15-19) will pass in the shadow of the Brexit and the refugees.
Translated by Stanimir Stoev