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On the future of #Schengen

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Several options and scenarios are currently being explored by the EU member states in order to (re)-examine the future of Schengen, writes Solon Ardittis.

These include: A status-quo, an option which is still favoured, at least publicly, by large member states such as France, Germany and Italy

A two-year Schengen suspension throughout the current border-free area (after six Schengen member states had already reinstated temporary border checks in 2015 and early 2016)

The exclusion from Schengen of selected member states, most notably Greece.

The establishment, as proposed by the Dutch authorities, of a mini-Schengen bloc consisting of Austria, Belgium, Germany, Luxembourg, the Netherlands and possibly France (a proposal which, to date, has been opposed by Belgium, France and Germany).  To this list one should add Romania’s request to actually join the Schengen area in exchange of more solidarity towards the newly arrived migrants and asylum seekers, and Bulgaria’s and Croatia’s pending Schengen applications.

So, Schengen appears to be key to the future of EU immigration policy and, some would submit, to the future of the Union as a political project overall. Therefore, does any of the above scenarios have the potential to reduce irregular migration and terrorist threats in the foreseeable future? And while the latest biannual report on the functioning of the Schengen area, published in December 2015, has highlighted the staggering increase in the number of irregular border crossings detected in 2015 (1,553,614 compared with 813,044 during the full 2009-2014 period), is the reintroduction of internal borders within the current Schengen area such a potent response to the expanding migrant and terror crises in Europe?

According to those advocating a Schengen suspension, the massive arrivals at the EU’s external borders in 2015 and in the beginning of 2016 have resulted in significant secondary movements within the Schengen area, due largely to the failure of member states of first entry to register the applicants in line with the Dublin norms. The suggestion, therefore, is that the closure of internal borders would at least reduce the levels of such secondary movements in a number of member states in the future.

In addition to such an assumption having never been supported by any convincing evidence, it is also largely discounting the principle of intra-EU solidarity enshrined in the Treaty on the Functioning of the European Union (TFEU).

The position of Greece is a case in point. The draft Schengen Evaluation Report that was issued last week concluded that Greece had seriously neglected its obligations by not identifying and registering irregular migrants effectively and by not checking travel documents systematically and against security databases such as SIS, Interpol and national systems. While these conclusions as such cannot be disputed, what most commentators reacting to this report have largely overlooked is the fact that, despite accounting for only 2% of the EU’s population, 3% of the EU’s territory and less than 1.5% of the EU’s GDP, Greece received in 2015 more than 80% of the over one million irregular migrants and asylum seekers who entered the EU by sea and land.

This is in addition to the fact that, as of 18 January 2016, only 82 migrants out of the 66,400 planned had been relocated from Greece under the EU Relocation Plan, and that many of the Frontex staff, boats and fingerprinting machines that had been promised to Greece to better police its borders have yet to arrive.

The case of Greece is largely emblematic of the current dichotomy between the EU’s growing initiatives in favour of a Union’s strategy in the field of immigration and security and the member states’ thriving distrust of the very concept of power and responsibility sharing in this sector.  A case in point is the proposed revision of the Frontex’s mandate, most notably the proposed establishment of a European Border and Coast Guard.

While such initiatives have been long-awaited with a view to re-establishing some coherence in the EU’s policy approach to border management and security, and therefore to strengthening the Schengen area, the adoption of the new Frontex Regulation continues to face resistance from a number of member states that are simply not prepared to endorse such a transfer of sovereignty in such a sensitive area as border controls.

Similarly, the proposed amendment of the Schengen Border Code, which will ensure that travel documents of persons enjoying the right of free movement under Union law are checked systematically for internal security and public policy reasons against relevant databases, is still pending and exerting little pressure on the Schengen opponents’ resolution.

The EU has further been active in addressing the poor level of removals of irregular migrants ordered to leave the EU (the current rate is less than 40% on average), by tabling an EU action plan on return in September 2015 and by setting up a Frontex Return Office that will enable the Agency to scale up its assistance to the member states in this area (albeit with an allocated budget of only €15 million in 2016). Again, the effect of this initiative on the position of the anti-Schengen member states has been largely unobtrusive.

The issue of the financial implications of non-Schengen also appear to have been underestimated or ignored: a report issued by the French Prime Minister’s office earlier this week, estimated that the reintroduction of internal border controls within the EU would cost €110 billion per year.

Finally, and perhaps more importantly, if Schengen were to be abolished, would the Schengen Information System (SIS), which plays a vital role as a platform for exchanging information on terrorist and serious crime threats among member states have to follow suit? Such an implication would clearly expose the limitations of any initiative favouring a suspension or abolition of the Schengen system.

There is little doubt that the EU’s response to the migrant crisis to date has been largely piecemeal and reactive, and that a comprehensive and sustainable EU vision on the future of immigration and border management remains to be written. However, as the latest ‘State of Play’ on the European Agenda on Migration, published in January 2016, has re-emphasised, ‘no member state can effectively address migration alone. It is clear that we need a new, more European approach. This requires using all policies and tools at our disposal – combining internal and external policies to best effect.

All actors: member states, EU institutions, international organizations, civil society, local authorities and third countries need to work together to make a common European migration policy a reality’.

Solon Ardittis is director of Eurasylum, a European research and consulting organisation specialising in migration and asylum policy on behalf of national public authorities and EU institutions. He is also co-editor of Migration Policy Practice, a bimonthly journal published jointly with the International Organization for Migration (IOM). 

Cancer

Lifestyle choices and beating cancer

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On 21 October, the Kangaroo Group organized an online debate on Europe’s Beating Cancer Plan, Health Commissioner Stella Kyriakides’ flagship initiative. The webinar, chaired by Michael Gahler MEP, President of the Kangaroo Group, involved a presentation by Professor David Nutt of Imperial College London and featured Deirdre Clune, MEP and Tomislav Sokol, MEP.

The event discussed the potential of harm reduction to help EU citizens make healthier lifestyle choices and how that could help prevent cancer.

The following is a summary of the webinar, from Professor Nutt’s presentation, to the contributions by MEPs Clune and Sokol and the Q&A session.

Panel

  • Professor David Nutt, Imperial College London
  • Deirdre Clune, EPP MEP
  • Tomislav Sokol, EPP MEP
  • Michael Gahler, EPP MEP

Introduction

  • Michael Gahler introduced the event, saying that 40% of cancers in Europe can be prevented and incentivising European citizens to choose healthier options can go some way towards helping prevent these cancers, such as the ones caused by alcohol and tobacco.

Professor David Nutt

  • Professor Nutt presented to the webinar on the principles of harm reduction, particularly in relation to alcohol and tobacco.
  • He outlined that preventative measures such as increasing taxation, educating on harms, increasing the age for use of alcohol and tobacco, restricting the locations where they can be bought and the times they can be purchased can all help to reduce the harm caused by alcohol and tobacco.
  • He also said that enabling access to safer alternatives such as snus and e-cigarettes for smokers as approaches that can reduce smoking-induced cancers.
  • On tobacco, Nutt said: “What causes cancer in smokers, is not the nicotine, but the tar.” He presented an analysis of the level of harms associated with different ways of delivering nicotine showing how very different they were, with cigarettes the most harmful compared with snus and vaping.
  • Nutt pointed to Sweden’s experience with snus as an example of how less harmful alternatives to smoking can reduce smoking-induced cancers, saying: “Snus really does reduce cancer.”
  • Nutt pointed out that cigarette use in Norway has fallen while consumption of snus has risen, showing that Norwegians are giving up smoking for snus in increasing numbers.
  • Nutt also pointed out that: “e-cigarettes are extraordinarily low in carcinogens.” He said that “we can say, almost certainly, that e-cigarettes will reduce mouth and lung cancers compared with smoking.”
  • Nutt showed evidence from the USA that tobacco smoking in young people has fallen despite the fact that more are vaping. This, he said, confirms that there is no “gateway effect” from vaping to smoking.
  • Nutt said that in heavy drinkers by reducing your alcohol intake by 25 grams a day could be reducing your risk of oral cavity cancer by a third.
  • Nutt pointed out that alcohol taxation increases are predicted to reduce the prevalence of alcohol induced cancers.

Deirdre Clune, MEP

  • Clune stated that the European Parliament’s Special Committee on Beating Cancer (BECA) recognises that “people have habits, their way of life and their lifestyle,” and that the committee will focus on all areas of cancer, across prevention, early diagnoses, treatment and care
  • She stressed that a coordinated approach is needed, with BECA focusing on prevention as a key area as 40% of cancers are preventable.
  • Clune pointed out the example of snus in Sweden as something that BECA could “hold on to.” She said that smokers most often start smoking when they’re young, and it is very rare for smokers to take it up later in life.
  • Clune said that people need to understand that smoking is an addiction and that safer alternatives can be a way forward. She pointed out that most people associate smoking just with lung cancer, while it in fact causes many others.
  • She pointed out a similar fact with alcohol and liver cancer. She recognised that restricting the sale of alcohol can be effective and that the sale of alcohol for young people should be looked at.
  • Clune pointed to restrictions on alcohol advertising and particularly restrictions on advertising on television and in sports as having changed changed lifestyle behaviours.
  • She said she hopes BECA’s report will be ambitious and recommend action on alcohol and tobacco. She recognises that BECA has a lot to do, and input from experts like Nutt will help them in their work. She stressed that prevention is certainly an area where BECA hope to play a role.

Tomislav Sokol, MEP

  • Said Nutt’s presentation was interesting, in terms of the evidence presented. Sokol said that decisions need to be made strictly on the available evidence and that something that is lacking. He pointed out that conversations with academics and researchers is extremely important to the Parliament.
  • Sokol referenced the previous court ruling in Europe on snus. He said that often, the European courts rely on impact assessments made by the Commission, as the courts themselves are not equipped in these areas to decide by themselves.
  • Sokol stressed the importance of harmonised rules across the EU and said evidence must be fed into the Commission.
  • Sokol pointed out that people can often decide for themselves on healthy lifestyle choices, but they need to get the most information possible to do so, and said this is one area where the EU can play an important role.
  • He said he hopes that BECA’s report that will be sent to the Commission will be ambitious and evidence based.

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Croatia

As Croatia moves into the eurozone, corruption and banking issues remain unaddressed

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Croatia is now approaching the endgame for its entry into the Eurozone. Last month, the European Central Bank (ECB) put out a list of five Bulgarian and eight Croatian banks that it would be directly supervising starting on October 1st, including the Croatian subsidiaries of Unicredit, Erste, Intesa, Raiffeisen, Sberbank, and Addiko, writes Colin Stevens.

The announcement followed Croatia’s official admittance to the Eurozone’s exchange rate mechanism (ERM II) in July, and fulfils ECB regulatory requirements that all of Croatia’s major banks be placed under its supervision. To move forward and officially join the eurozone, Croatia will now need to take part in ERM II “for at least two years without severe tensions,” and especially without devaluing its current currency, the kuna, against the Euro.

Of course, this being 2020, severe fiscal tensions have become a fact of life for European governments.

Trouble on multiple fronts

According to the World Bank, Croatia’s overall GDP is now expected to plummet by 8.1% this year, admittedly an improvement over the 9.3% annual drop the Bank had predicted in June. Croatia’s economy, heavily reliant as it is on tourism, has been buffeted by the ongoing pandemic. Worse still, the country’s attempt to make up for lost ground with a post-lockdown rush of summer holidaymakers has seen it blamed for jumpstarting the surge in Covid-19 cases in several other European countries.

Nor is the Covid-driven downturn the only economic issue facing prime minister Andrej Plenković, whose Croatian Democratic Union (HDZ) held onto power in the country’s July elections, and the independent finance minister Zdravko Marić, who has been in his post since before Plenković took office.

Even as Croatia receives a coveted endorsement from the other economies of the Eurozone, the country continues to be rocked by corruption scandals – the most recent being the salacious revelations of a secret club in Zagreb frequented the country’s political and business elites, including multiple ministers. While the rest of the population endured strict confinement measures, many of Croatia’s most powerful people flouted lockdown rules, exchanged bribes, and even enjoyed the company of escorts brought in from Serbia.

There is also the ongoing matter of how Croatia’s government in 2015 forced banks to retroactively convert loans from Swiss francs to euros and pay out over €1.1 billion in reimbursements to customers it had lent money too. The issue continues to roil Zagreb’s relationships with its own banking sector and with the European financial industry more broadly, with Hungary’s OTP Bank filing suit against Croatia at the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) this month to recoup approximately 224 million Kuna (€29.58 million) in losses.

Croatia’s endemic corruption problem

Much like its counterparts in other parts of the former Yugoslavia, corruption has become an endemic issue in Croatia, with even the gains made after the country acceded to the EU now at risk of being lost.

Much of the blame for the country’s perceived backsliding lies at the feet of the HDZ, in no small part on account of the ongoing legal saga surrounding former premier and HDZ party boss Ivo Sanader. Whereas Sanader’s 2010 arrest was taken as a sign of the country’s commitment to uprooting corruption as it worked to join the EU, the country’s Constitutional Court nullified the sentence in 2015. Today, only one of the cases against him – for war profiteering – has officially been concluded.

The inability to effectively prosecute past wrongdoing has driven Croatia down Transparency International’s rankings, with the country how earning just 47 of 100 points in the group’s “perceived corruption” index. With civil society leaders such as Oriana Ivkovic Novokmet pointing to corruption cases that languish in the courts or never get brought at all, the decline is hardly surprising.

Instead of turning a corner, the current members of the HDZ government face allegations of their own. The Zagreb speakeasy frequented by Croatian leaders included transportation minister Oleg Butković, labour minister Josip Aladrović, and economic minister Tomislav Ćorić amongst its clientele. Andrej Plenkovic himself is currently locked in a war of words over the country’s anticorruption efforts with his chief political opponent, Croatian president Zoran Milanović. The former leader of the rival Social Democratic Party and Plenkovic’s predecessor as prime minister, Milanović was also a club patron.

Zdravko Marić between a rock and a banking crisis

Finance minister (and deputy PM) Zdravko Marić, despite operating outside the established political groupings, has been dogged by questions of potential misconduct as well. Earlier in his term, Marić faced the prospect of an investigation into his ties with food group Agrokor, Croatia’s largest private company, on conflict of interest grounds. Despite being a former employee of Argokor himself, Marić nonetheless undertook secret negotiations with his former company and its creditors (primarily the Russian state-owned bank Sberbank) that exploded into the local press in March 2017.

Weeks later, Agrokor was put under state administration on account of its crippling debt load. By 2019, the company had been wound down and its operations rebranded. Marić himself ultimately survived the Agrokor scandal, with his fellow minister Martina Dalić (who headed the economy ministry) forced out of office instead.

Agrokor, however, has not been the only business crisis undermining Plenkovic’s government. Going into Croatia’s 2015 elections, in which Zoran Milanović’s Social Democrats lost power to the HDZ, Milanović undertook a number of populist economic measures in a bid to shore up his own electoral position. They included a debt cancellation scheme for poor Croatians who owed money to the government or municipal utilities, but also sweeping legislation that converted billions of dollars in loans made by banks to Croatian customers from Swiss francs to euros, with retroactive effect. Milanović’s government forced the banks themselves to bear the costs of this sudden shift, prompting years of legal action by the affected lenders.

Of course, having lost the election, these populist moves ultimately turned into a poisoned chalice for Milanović’s successors in government. The loan conversion issue has plagued the HDZ since 2016, when the first suit against Croatia was filed by Unicredit. At the time, Marić argued in favour of an agreement with the banks to avoid the substantial costs of arbitration, especially with the country under pressure from the European Commission to change course. Four years later, the issue instead remains an albatross around the government’s neck.

Stakes for the Euro

Neither Croatia’s corruption issues nor its conflicts with the banking sector have been enough to derail the country’s Eurozone ambitions, but to successfully see this process through to its conclusion, Zagreb will need to a commit to a level of fiscal discipline and reform that it has not yet demonstrated. Needed reforms include reduced budget deficits, strengthened measures against money laundering, and improved corporate governance in state-owned companies.

If Croatia succeeds, the potential benefits include lower interest rates, higher investor confidence, and closer links to the rest of the single market. As is so often the case with European integration, though, the most important gains are the improvements made at home along the way.

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coronavirus

Lockdown part two: Resilience is key

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As lockdowns and travel restrictions are reintroduced around the world, it is essential that businesses, governments and charities work in close co-operation to ensure the protection of the most vulnerable. COVID-19 and its consequences will clearly be with us for some time to come, so building our long-term resilience is fundamental. These measures must be formed in a calm, reasoned manner and with the long-term implications in mind, writes Yerkin Tatishev, founding chairman of Kusto Group.

My generation in the former Soviet countries went through a similar experience of massive economic and social shock in the 1990s when the USSR collapsed. Having grown through those difficult years, we perhaps have a better sense of perspective now. We know that in order to survive a crisis and flourish afterwards, patience and a plan for the future is required.

Quick wins are always in demand, often without any real consideration for their long-term impact. One can see this in business and politics across all societies, only exacerbated in times of crisis. Amid the general panic, the idea that “something must be done, this is something, therefore we must do it” often takes hold.

At Kusto Group, we already had established a charitable foundation #KustoHelp, which enabled us to deliver $2,4 million of aid to at-risk populations during the pandemic. That we had this structure in place was due to long-term thinking and the recognition that our company has a social responsibility to help those less fortunate.

In business you learn that when you have steady processes already ingrained - you have all systems in place, the right leaders, the right specialists, local competencies - you can adapt far better to a disaster or disruption. If anything, a crisis is a perfect moment to remove all unnecessary procedures, meetings, layers and bottlenecks. In other words, companies that have effective structures in good times, are in a much better position to handle the bad times. In many markets I see divisions of Kusto Group, such as agriculture and construction materials, continue to perform well for this very reason.

The same can be applied to governments and public administration. While no country or company has handled the pandemic perfectly, it has been easy to see that those with good governance have come out much stronger than those without. This learning is a perfect illustration of the need to reform structures if we are to be resilient in the long term.

The World Bank’s chief economist warned two weeks ago that countries would have to take on additional debt to help fight the economic impact of the coronavirus. As undesirable as this normally is for public finances, supporting our industries is an essential investment in the long term. Businesses take years to build up, involving massive investments of time, money and effort. The cost of letting them collapse is far greater than supporting them through the crisis. They also of course have a responsibility to support their workforce, local communities and partners through these difficult times.

Helping businesses survive the crisis is one element, but for the longer term we also have to look at areas that provide future resilience. Education and digitalisation are key to this. Young people and their education are key to a society’s fortunes, but it’s always one of the first places that cutbacks are made when the going gets tough.

With schooling and university now largely being held online, poverty has become a greater predictor than ever of success, as good access to the Internet becomes a necessity. The rapid digitalisation of our economies likewise means that those countries, businesses, and workers with poor connectivity will struggle to keep up. Investment in both these areas will be absolutely essential to a durable recovery. With the Yerzhan Tatishev Foundation, focusing on tech and innovation, and the High Tech Academy I have tried to make my own modest contribution to this effort.

This pandemic is a crisis of a scale not seen in recent memory. Mitigating its impact will require an equally unprecedented level of cooperation between stakeholders across our society. Beyond providing vital support to businesses, we have to look to our long-term resilience and growth, through education and digitalization. This pandemic will be with us for some time now. There will be other crises ahead. Are we ready for them?

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