Thursday 29 January 2015

The Juncker fund - if implemented, which projects ?


The new € 315 billion European Fund for Strategic Investments (EFSI) will use € 21 billion EIB/EU money to trigger other public and private contributions. Still the result seems to be only questions.

Will public and private actors contribute as intended ? The signals are  unclear. Germany´s finance minister Schauble said ealier this week that his government is not in favour of national contributions to the fund. However, the German government would contribute through state-owned development bank KfW. No member state has formally announced its intention to contribute to EFSI. If public co-financing will be excluded from calculations of budgetary adjustments, this can make participation a bit more tempting for some of them.

How will the management of the fund be organised ? The Commission proposes that member states  contributing will have a seat at a steering board for the fund. But now several of the finance ministers say that governments should refrain from being represented in the steering board and should not entail voting rights. And why is there need for a steering board, can´t EIB do the job ?

Will the fund be in accordance with the state-aid regulation ? EIB president Hoyer wants more clarity.

Will the fund be of interest for private investors ?  The carrot is that public money work as guarantee, if projects make losses the publicly-funded portion would be first in the line to suffer financial losses.

Will the new fund influence the functioning of the Structural funds and the research programme Horizon 2020 in a negative way ?

And what about the projects ? Will there be enough good proposals ? That is of course a crucial question. The idea is to send project proposals from member countries through a "pipeline" system to EIB. The European Union´s investments task force has already identified 2000 projects waiting for funding across the 28-nation bloc. But how many of them are economically viable and can foster European competitiveness ? Baden-Wuerttemberg´s Minister for Europe, Peter Friedrich, is not impressed. He tells that the nearly 60 projects Germany is pursuing, together meant to boost investments in Germany with € 90 billions, include outdated ideas and dead ends. The list needs a reworking, otherwise regions and others will lose out.


Wednesday 28 January 2015

The Other Europe with Tsipras ?


How will the parliament election and new government in Greece affect EU policy ? Concerning debt and austerity the first statements from EU and Syriza suggests willingness to negotiate, and that is of course no surprise. But beyond a willingness to discuss payment conditions, is the EU open for some creative thinking about debt relief ? It is very hard to say how the negotiation process will proceed, because the member states have different views reflecting their own economic situation. Even if the statements from the most relevant Commissioners have been very cautious so far, the French European Commissioner for Economic and Financial Affairs, Moscovici, sounded perhaps a bit more openminded than Commission President Juncker and others. But the Unions economic recovery policy is so far not very successful, and there might be or occur opportunities for changes. Perhaps Syriza, a coalition of left wing parties in government with a right wing party, has some extraordinary possibilities to form broad alliances across the traditional party constellations ? A symbol of this possible broad backing is an Italian party named L´Altra Europa con Tsipras (The Other Europe with Tsipras), which has 3 MEPs belonging to the same group in the European Parliament as Syrizas 6 MEPs (GUE/NGL) .

There are obiously other policy areas where the new Greek goverment might influence EU politics. For a  Union struggling to develop a more common foreign policy, Syrizas pro Russia attitudes will undoubtedly create challenges. Syrizas pro Palestinian policy will perhaps be more welcome.

It will be interesting to follow the new Greek government.


Tuesday 27 January 2015

The Juncker plan - a supranational try


Unemployment, bailouts, austerity, growing eurosceptisim - EU needs investments to foster growth and economic recovery. But how ? In November last year the Commission presented a new tool they had invented. A € 350 billion investment plan - "The Juncker Plan". Compared to the Cohesion funds the Juncker plan is different in several ways.

Firstly the plan will use EU money as guarantees for risky investments, while the Structural Funds are about project-financing. The European Investment Bank (EIB) will be central to the implementation of the plan, and Werner Hover, President of the EIB, just said the intiative "marks a paradigm shift in the use of limited public resources, away from grants and subsidies, towards loans and guarantees."


The new investment plan will also have a more supranational management than the Structural funds. A steering board will take alle the decisions on the overall direction, the investment guidelines, the risk profile, strategic policies and the distribution of assets of the fund. From the beginning, the board will consist of members from EIB and the Commission - the founders of the fund, and when other contributors appear, they will have votes defined on the basis of their contributions. The decisions will then be taken via simple majority.

Another difference from the Structural funds is that the Juncker fund will not have earmarking for certain sectors or regions. The selection-criteria are still not ready, but will be created together with investments guidelines for approval of projects when the fund is established.

Bulgarian "InEurope" has a good review of the new fund by Adelina Marini.

Friday 23 January 2015

EFSI-consequenses for Regional policy


Juncker´s investmentplan (EFSI) has an unusual mildness concerning member states co-financing of projects, in that co-financing of EFSI-projects will be excluded from calculations of budgetary adjustments under the Stability and Growth Pact. This can be perceived as a sort of debt relief for countries with an austerity scheme, and there is also a question of consequences for Regional policy projects - where there is no such mildness concerning co-financing. EurActiv writes that this certainly gives the Juncker plan a competitive advantage over the Cohesion Policy when it comes to attracting money from the member states.

Commissoner for Regional Policy, Corina Cretu, talked to the Committee of Regions 5 December 2014, and said that the Juncker plan funding would complement the Cohesion Policy, without eating away structural funds. She said that "during the discussions, some representatives expressed concerns that the Investment Plan for Europe could divert money away from the EU's existing cohesion policies and I want to resolutely dispel these concerns: there is no overlap between the new European Fund for Strategic Investments and the European Structural and Investment Fund".

There seems to be uncertainties on how the complementarities between EFSI and Regional policy will function. It is not entirely inconceivable that to counteract collateral damage also co-financing of Regional policy projects will be excluded from calculations of budgetary adjustments. 


Wednesday 21 January 2015

Adapting Copyright to a Global Internet


While the Internet is a global way of communication, the copyright rules are still not very harmonized. Within the EU each of the 28 member states have their own implementation of the  2001 Directive on the harmonisation of certain aspects of copyright and related rights in the information society (the "InfoSoc Directive"). The European Commission held a public consultation on the topic in 2014 with over 9 500 replies received, and a copyright overhaul is in the Commissions workprogramme for 2015. Commissioner Oettinger is expected to present a paper or proposal later this year.

The European Parliament, Committee on Legal Affairs, has now presented a draft own-initiative report on the implementation of the InfoSoc Directive. Rapporteur MEP Julia Reda, Pirate Party member of the Greens/European Free Alliance, tells that the draft preparation meant she (also) had to speak to lobbyists for collective right agencies, sometimes leading to "an awkward situation". "Some lobby organisations have written to the Greens and the Social Demcrats urging them to present another candidate", Reda told EUobserver. Reda stressed that she is not proposing “getting rid of copyright and staging a revolution” but “adapting” copyright rules.

Reda writes in her blog that the report calls for the harmonization of copyright terms and exceptions across Europe, new exceptions for emerging use cases like audio-visual quotation, e-lending and text and data mining, as well as the adoption of an open norm to “allow for the adaptation to unanticipated new forms of cultural expression”. It recommends “exempting works produced by the public sector […] from copyright protection” and demands that “exercise of exceptions or limitations […] should not be hindered by technological measures”.

It is interesting that IPR is now also discussed within the framework of the Transatlantic Trade and Investment Partnership (TTIP), a proposed free trade agreement between EU and USA. Harmonization at this level seems to be a challenge. For example wrote the The Library Copyright Alliance, consisting of three major American library associations, back in 2013 that because the EU generally provides higher levels of protection for copyright and related rights, including features that probably violate the U.S. Constitution,  TTIP should not address intellectual property. So far IPR is not excluded, and sooner or later Internet will push forward a harmonization at the global level.




Friday 16 January 2015

Juncker-miracle with Horizon 2020 money ?


In November 2014 the European Commission unveiled a € 315 billion investment plan where € 21 billion EU-money hopefully will trigger other public and private contributions and in total provide 15 times as much capital. The new European Fund for Strategic Investments (EFSI) will serve as a credit protection for several new activities administrered by the European Investment Bank (EIB). The EU money will consist of € 5 billion from the EIB and a € 8 billion guarantee from existing EU funds designed to secure a contribution of € 16 billion from the insitutions.

The € 8 billion guarantee will come over a three years period 2015-2015 from the Connecting Europe Facility programme  € 3.3 billion, from the Horizon 2020 programme € 2.7 billion and from unused funds € 2 billion.

The reactions to the proposal have been varied. The League of European Research Universities regrets "that money from Horizon 2020, the EU's successful research and innovation programme, will be diverted to the European Fund for Strategic Investment (within the European Investment Bank), for a vague and highly uncertain project ...". But the Commission argues that thanks to the new fund, the impact of Connecting Europe Facility and Horizon 2020 on the real economy will be multiplied. As a reference the Commission refers to the EU programme Cosme, where every EUR 1 bn of funding under the current Loan Guarantee Facility for SMEs results in at least EUR 20 bn capital for SMEs, the equivalent of a multiplier effect of 1:20.

The European Council approved the broad outline of Junckers plan in December 2014, but will wait for the details before committing national funds.

Thursday 15 January 2015

Immigration referendum disrupts Switzerlands EU- programme participation



Almost a year ago the Swiss voted to restrict immigration from EU. The EU Commission said quotas would contradict EU-Swiss agreements on freedom of movement, and suspended Switzerlands participation in two EU-programmes - Horizon 2020 and Ersamus - which are linked to the agreement.

Since then EU and Switzerland have made an agreement which allows Switzerland to participate in parts of Horizon 2020, Euratom and ITER until 31December 2016. In all other parts of Horizon 2020 Switzerland will remain a non-associated third country participant. Switzerland is still excluded from Erasmus, and the Swiss federal government has launched an interim solution to allow continued student exchange by giving funds directly to Swiss students who want to study abroad and foreign students whishing to come to Switzerland.

EurActiv now reports that the Swiss government is exploring the possibilty of implementing restrictons on immigration by introducing a "safeguard clause", that would let Switzerland cap immigration from EU once certain levels are hit. Curbs would be imposed when immigration tops a number that is linked to average immigration in the European Union. Foreigners made up almost 24% of the Swiss population at the end of 2013, one of the highest proportions in the Western economy, up from below 15% 30 years ago. Net immigration is about 1% a year, about twice that of Germany.

According to EurActiv the proposal wil be hard to sell to the Swiss Peoples Party (SVP), which launched the referendum. The EU said it would not take a view until it received an official proposal. Two diplomats familiar with the matter said it would be very hard for the bloc, currently dealing with its own pressures to limit internal migration, to stomach the safegurad clause.

The Swiss government has three years from the referendum date to decide how it will proceed with the introduction of as-yet unspecified quotas on immigraton. Any normalization of Swiss participation in EU-programmes will depend on EU acceptance of the quota-implementation.

Monday 12 January 2015

Something positive about Russia



During the Ukrainian conflict western media have given an almost completely negative picture of Russia. News which might distort this one-sidedness do not appear often.

A Norwegian journalist who stayed in Moscow some years in the 90s has now returned for a new work period. In a correspondent letter he has just reported a country in great change - for the better. Among the positive changes he mentions from Moscow are a great upgrading of the Sheremetyevo airport, aeroexpress trains in combination with metro, more easy taxi booking, free WiFi on the metro and in many restaurants, bike paths and lots of good restaurants. He promises to look into the much critized developments in Russian democracy later.

The correspondent letter seems unlikely to herald a more balanced western reporting about Russia.



Friday 9 January 2015

Rebuilding the European house ?


The residents in the European house do not agree on their lifestyle quality. In the Parliament election last year most of them said they were quite satisfied, but a huge and growing group wanted to leave. Or rebuild the house - making it smaller, not encompassing policymaking which can be better handled at the national level. The development will of course reflect the distribution of powers within and between the European institutions. Most likely the integration towards "an ever closer union" will continue and the house be expanded accordingly. But unpredictable events might influence the decision processes.

If the Greek Parliament election on 25 January 2015 brings the SYRIZA party to power, no one knows what will happen. People in Greece do not like to be in the EUs debt prison, and a Greek Euro exit is possible. Their bailout package might also be renegotiated. Both of these scenarios will effect the Euro system and the Union.

Another unpredictable event is the general election in UK on 7 May 2015. Prime minister Cameron has promised to renegotiate the UKs membership terms if he wins the election, followed by an in-out referendum before the end of 2017. He has lately said he could hold the referendum sooner if possible. The anti EU sentiments in UK are strong, so a majority vote for exit can not be ruled out. If that happens, the architecture for a necessary rebuilding of the  European house will probably be put on the agenda.