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#Coronavirus - Now more than ever, international co-operation is necessary

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Watching the headlines these days, it seems that the coronavirus outbreak may not have hit the world at the most convenient time. For years, the Sirens of deglobalisation have invoked the return to selective economic, political and social isolationism where states are relatively closed systems and enjoy unrestrained decision-making autonomy. In this context, the coronavirus offers indeed a convenient excuse for a growing anti-China sentiment and a rationale for attacking both economic liberalism and multilateralism, write Arvea Marieni and Corrado Clini.

Trade and travel are the main mechanisms by which local viral outbreaks potentially become pandemics. Whilst many infectious diseases have emerged and re-emerged within Africa during the 21st Century they have not spread around the world. African countries generally have low levels of integration within global value chains and intraregional networks of physical (and virtual) infrastructures are limited. China, on the other hand, is a global manufacturing powerhouse at the centre of, what Parag Khanna calls, an emerging global network civilisation. Superficially, it is easy to arrive at conclusions and sing the praises of retrenchment.

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However, looking carefully, exactly the opposite is true. The looming health crisis illustrates how interdependent we have become when faced with potential global threats. Solutions lie in global cooperation and coordination, establishment of common sanitary protocols, knowledge exchange and joint efforts and investments on materials, laboratories and research activities. In todays’ world helping others, China in this case, means to help oneself.

Since the second world war, globalisation has been a driving force behind world development. Making the world’s economies more interconnected and more inter-dependent than ever before, globalisation has increased levels of consumption in the West, lifted hundreds of millions in poor countries out of poverty, helped maintain peace among state-actors and created the premises for a rule-based system of governance for international relations. By synchronising and integrating mass production and mass consumption cycles, globalisation has made possible unprecedented access to goods and services at low prices.

The downside is that constant pressure on prices has resulted in reduced wages, lower environmental, health and safety standards in parts of the world and devastating damage to the environment. It has led to growing competition between production locations and at the worker level. The middle-classes of the West, who were initially persuaded to trade greater consumer access with lower wages and protections, are now awakening to the painful impacts on their living standards. The root cause of these distortions has been a strong belief in unregulated laissez-faire, at the core of free-market fundamentalism. It is not multilateralism.

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As “The Guardian” reminded us today, globalisation is not unavoidable. In fact, deglobalisation has happened before, notably between 1914 and 1945. It has to be noted that this period of thirty years coincides with the most tremendous calamity humanity has ever faced and the bloodshed of two world wars.

The Root-Cause of the Crises

Continuously reducing prices has failed to address appropriate worker compensation, environmental externalities and the costs of remediation. In short, the linear economic thinking that has dominated the world’s economy since the Third Industrial Revolution has ignored natural constraints and avoided to take into account – let alone tackle - the reality of resource scarcity and climate and environmental degradation.

As the environmental and climate crises are evidencing, absolute national sovereignty is fundamentally hampered by shared access to limited planetary resources, ecological boundaries and by the actual balance of power among state and non-state actors within the international community.

Potentially irreversible changes in the climate and eco-systems of the planet are well under way that no single state can stop. We are close to, if we have not already exceeded, tipping points that pose “an existential threat to civilisation”. Within this context, melting glaciers and thawing permafrost could release ancient viruses which have been locked away for hundreds of thousands of years. The coronavirus crisis would pale by comparison.

Now more than ever, international cooperation is necessary. Only coordinated action by all the actors within the international community can ensure sharing and implementation of the interventions needed to meet novel, largely unpredictable existential threats. If we want to succeed, the highest representatives of governments, international financial institutions, large energy multinationals and other strategic industrial sectors must jointly take responsibility for a global agenda for the economy and geopolitics of climate change, the environment and global public health.

Globalisation, intended as a system of multilateral governance and global sharing of responsibility, is part of the solution and not the root cause of the problem. In this regard, the backlash against globalisation weakens the very architecture of global institutions on which the world’s ability to react to current existential threats depend.

The term globalisation is semantically ambiguous. In common parlance, globalisation has come to signify two distinct phenomena: (i) economic liberalism - often in the sense of “free-market fundamentalism”; and (ii) international multilateralism, which is a cooperative model of governance of international relations.

To successfully face the challenges ahead, we must reverse current economic logic and transform the energy and economic matrix of the world.  2020 will be a watershed year. The decisions that will be taken at the September EU-China Summit in Germany and at the COP26 in Glasgow will shape the destiny of the world’s economy - either making or breaking our chances to tackle the threats of climate change and environmental degradation.

A lack of multilateral alignment on energy, industrial and trade policies has led, until now, to the failure of the COP models – thus marking the “structural” limits of the traditional format for climate negotiations. Cross sectoral strategic planning and tight monitoring mechanisms are needed to ensure the mainstreaming of climate policy. Integrating specific targets of reduction of greenhouse gas emissions into all key sectoral policies would form part of this agenda. To this end, a multilateral designed common platform of policies and measures will be key in the transition towards “ecological economics”, challenging traditional economic and social architectures. A new economic consensus is beginning to emerge which incorporates environmental variables as having an important role within the development of a sustainable economy.

Economic decarbonisation would cost, over the next twenty-five years, between 20% and 60% of the total investments that the IEA envisages would still be destined for traditional energy sectors. We're talking about $68 trillion. This amount only covers the investments necessary to change the energy matrix of the planet, i.e. expenditure on critical infrastructures and new technologies. It does not include the so-called adaptation costs. According to World Bank estimates, between 2020 and 2050, 70 to 100 billion dollars a year will be needed for damage remediation and adaptation to the changing environmental conditions. This is true if the most optimistic scenario is taken into account whereby the temperature rises by "only" two degrees. Costs grow exponentially as ever worse events occur resulting from our inaction. The good news is that technologies are largely available, and effective deployment is possible within the frame of shared, collective efforts.

The EU Green (New) Deal is a positive signal in this direction. If implemented it will lead to a system change. The EU plan is a comprehensive operational model of integration of innovative sectoral policies and financial measures. It promises to bring about urgent, system-wide reorganisation towards a zero-carbon, resource efficient, sustainable society. Designed to fit within the context of the European Union, it offers a systemic approach broadly consistent with Chinese policies addressing the energy transition and establishment of an “ecological civilisation”.

The EU-China Partnership - open to all other international actors - can be a first, flexible decision making and implementation framework targeting effective decarbonisation. This could provide mutual benefits in terms of development, confidence-building and employment creation. Enhanced cooperation between two global economic actors would strengthen a law-based approach to international relations, offering a concrete and effective response to the crisis of multilateralism whilst, at the same time, incorporating environmental and social standards in trade agreements and market control mechanisms.

Will next September’s EU-China Climate Summit deliver a much needed breakthrough ahead of the COP26 in Glasgow and provide hope for shared efforts towards a more balanced model of development?

Arvea Marieni  is Strategic Advisor and Innovation Consultant, specialising in Sino-European environmental cooperation

Corrado Clini is a veteran climate change negotiator and former Minister for Environment of Italy.

 

 

Economy

Issuance of green bonds will strengthen the international role of the euro

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Eurogroup ministers discussed the international role of the euro (15 February), following the publication of the European Commission's communication of (19 January), ‘The European economic and financial system: fostering strength and resilience’.

President of the Eurogroup, Paschal Donohoe said: “The aim is to reduce our dependence on other currencies, and to strengthen our autonomy in various situations. At the same time, increased international use of our currency also implies potential trade-offs, which we will continue to monitor. During the discussion, ministers emphasized the potential of green bond issuance to enhance the use of the euro by the markets while also contributing to achieving our climate transition objective.”

The Eurogroup has discussed the issue several times in recent years since the December 2018 Euro Summit. Klaus Regling, the managing director of the European Stability Mechanism said that overreliance on the dollar contained risks, giving Latin America and the Asian crisis of the 90s as examples. He also referred obliquely to “more recent episodes” where the dollar’s dominance meant that EU companies could not continue to work with Iran in the face of US sanctions. Regling believes that the international monetary system is slowly moving towards a multi-polar system where three or four currencies will be important, including the dollar, euro and renminbi. 

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European Commissioner for the Economy, Paolo Gentiloni, agreed that the euro’s role could be strengthened through the issuance of green bonds enhancing the use of the euro by the markets while also contributing to achieving our climate objectives of the Next Generation EU funds.

Ministers agreed that broad action to support the international role of the euro, encompassing progress on amongst other things, Economic and Monetary Union, Banking Union and Capital Markets Union were needed to secure the euros international role.

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EU

European human rights court backs Germany over Kunduz airstrike case

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An investigation by Germany into a deadly 2009 airstrike near the Afghan city of Kunduz that was ordered by a German commander complied with its right-to-life obligations, the European Court of Human Rights ruled on Tuesday (16 February), writes .

The ruling by the Strasbourg-based court rejects a complaint by Afghan citizen Abdul Hanan, who lost two sons in the attack, that Germany did not fulfil its obligation to effectively investigate the incident.

In September 2009, the German commander of NATO troops in Kunduz called in a U.S. fighter jet to strike two fuel trucks near the city which NATO believed had been hijacked by Taliban insurgents.

The Afghan government said at the time 99 people, including 30 civilians, were killed. Independent rights groups estimated between 60 and 70 civilians were killed.

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The death toll shocked Germans and ultimately forced its defence minister to resign over accusations of covering up the number of civilian casualties in the run-up to Germany’s 2009 election.

Germany’s federal prosecutor general had found that the commander did not incur criminal liability, mainly because he was convinced when he ordered the airstrike that no civilians were present.

For him to be liable under international law, he would have had to be found to have acted with intent to cause excessive civilian casualties.

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The European Court of Human Rights considered the effectiveness of Germany’s investigation, including whether it established a justification for lethal use of force. It did not consider the legality of the airstrike.

Of 9,600 NATO troops in Afghanistan, Germany has the second-largest contingent behind the United States.

A 2020 peace agreement between the Taliban and Washington calls for foreign troops to withdraw by May 1, but U.S. President Joe Biden’s administration is reviewing the deal after a deterioration in the security situation in Afghanistan.

Germany is preparing to extend the mandate for its military mission in Afghanistan from March 31 until the end of this year, with troop levels remaining at up to 1,300, according to a draft document seen by Reuters.

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EU

Digitalization of EU justice systems: Commission launches public consultation on cross-border judicial co-operation

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On 16 February, the European Commission launched a public consultation on the modernization of EU justice systems. The EU aims to support member states in their efforts to adapt their justice systems to the digital age and improve EU cross-border judicial co-operation. Justice Commissioner Didier Reynders (pictured) said: “The COVID-19 pandemic has further highlighted the importance of digitalization, including in the field of justice. Judges and lawyers need digital tools to be able to work together faster and more efficiently.

At the same time, citizens and businesses need online tools for an easier and more transparent access to justice at a lower cost. The Commission strives to push this process forward and support member states in their efforts, including as regards facilitating their cooperation in cross-border judicial procedures by using digital channels.” In December 2020, the Commission adopted a communication outlining the actions and initiatives intended to advance the digitalization of justice systems across the EU.

The public consultation will gather views on the digitalization of EU cross-border civil, commercial and criminal procedures. The results of the public consultation, in which a broad range of groups and individuals can participate and which is available here until 8 May 2021, will feed into an initiative on digitalisation of cross-border judicial cooperation expected at the end of this year as announced in the 2021 Commission's Work Programme.

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