May 22 2015

Are Italian Public Debt Forecasts Too Optimistic?

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By Giuseppe Bianchimani

Italy, a history of large public debt

By Maryb60 [CC BY-SA 3.0], via Wikimedia Commons

By Maryb60 [CC BY-SA 3.0], via Wikimedia Commons

Italy has the third largest stock of public debt in the world, the second in the euro zone next to Greece and the highest debt service ratio in the G7.

The last point is particularly important to understand the difficulties of managing Italian public debt. Japan holds roughly twice of the Italian public debt, but it spends less than one percent of GDP to service its public debt while Italy spends 5.4 percent of GDP.

The burden of interest payments and slow growth have heavily contributed to enhancing the weight of debt, developing a dangerous vicious circle.

However, there are several optimistic forecasts on debt dynamics (IMF, European Commission, OECD). This is the result of the deep efforts which have occurred in recent years, in particular since 2012. Continue reading

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May 18 2015

Eurosceptics at a Junction: Antagonising the EU for the Sake of it is Risky

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By Alessio Colonnelli

By Woodennature (Own work) [CC BY 3.0], via Wikimedia Commons

By Woodennature (Own work) [CC BY 3.0], via Wikimedia Commons

All right-wing parties seem to dabble in anti-EU rhetoric more or less radically: the EU weakens the prerogatives of their nation-states. Germany’s Christian Democratic Union is a conspicuous exception; it sharply antagonises the further-to-the-right Alternative for Germany, an anti-Eurozone outfit enjoying increasing support. Progressive parties are not immune to all this.

EU governance is indeed perceived as intricate, unnecessarily cumbersome and therefore lacking legitimacy. The UK Independence party (UKIP), Marine Le Pen’s National Front, Italy’s Northern League and Five Star Movement, plus several other parties, try their best to turn Europeans’ embitterment even more sour. Continue reading

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May 14 2015

Europe’s Innovations, China’s Capital

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By Terence Tse and Mark Esposito

By Mixabest (Own work) [CC BY-SA 3.0]

By Mixabest (Own work) [CC BY-SA 3.0]

At a recent event held in London, ten start-ups were pitching their ideas for seed funding. This in itself is nothing out of the ordinary, as innumerable pitches by entrepreneurs are made every day across the world, especially these days, when start-ups are the new norm. But what makes this story more special is that these ten companies were showcasing their innovations to a group of Chinese investors. In his opening speech, Sun Wangsong, Deputy Director of China’s Investment Promotion Agency of Ministry of Commerce, mentioned that China is proactively turning itself from the “world’s factory” to a the creator of innovations-driven ideas. While we acknowledge the fact that investment has become a new credo, we find that despite a tremendous amount of capital being poured into R&D, the country has not been getting the results at the pace that it longed for. So, to accelerate this process, China has started to shop for new innovations abroad. Continue reading

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May 7 2015

The Double Death of Europe

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By Adrian Pabst

Introduction: the broken promise of peace and prosperity

Banksy.on.the.thekla.arpThe continual crisis in the Eurozone and in Ukraine poses the most serious danger to Europe since the darkest days of the Cold War. Economic devastation in the south and war in the east cast a long shadow over the European Union and the wider Europe. Arguably the post-1945 promise of peace and prosperity no longer holds. The 28 EU member-states are home to high standards of living for many and the biggest single market with over 550 million consumers, but the 2008 crash exposed the sheer precariousness of the much-vaunted European social models and ways of life. Without a radically different settlement, the Union faces the paradox of a richer economy with poorer people. Amid rising inequality and persistently high youth unemployment, there is a very real prospect that this generation of 18-25 year olds and their children’s generation will be worse off than their parents’ generation.

Moreover, the ‘peace dividend’ after 1989 was largely squandered. Old divisions between the West and Russia are more entrenched while new conflicts threaten the whole of Europe, starting with the forces of Islamic State who are radicalising European-born Muslims. Both NATO and the EU currently lack the strategic vision to deal with these threats and build a security architecture that can pacify the European space and its wider orbit. Of course, the Brussels-centric process of European integration and enlargement will continue, but the transformative dynamic of uniting the whole of Europe after the end of the Cold War has ground to a halt. Continue reading

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Apr 29 2015

Pussy Riot as a Symptom of Putinism

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By Maria Brock

Pussy Riot’s recent guest appearance on the third season of US hit show House of Cards demonstrates that the arguably most famous faces of the Russian opposition have not lost their international appeal, especially when facing off a sinister Putin-like character – a satisfaction that has so far eluded them in real life. More than a year since their release from a Russian labour colony, this may be a good time to revisit their case and assess its longer-term significance for Russia. With President Putin’s current high approval ratings, have social tensions disappeared, have they been transformed, or were merely redirected? Besides looking at the types of reaction this case inspired in Russia, this involves comparing the political climate at the time of their arrest in 2012 with that of Russia in 2015 in order to examine which fault lines in Russian society the case revealed.
The case in 2012
To recap: in February 2012, 5 members of Russian feminist punk rock group or ‘collective’ Pussy Riot entered the Cathedral of Christ the Saviour in Moscow, crossed themselves in front of the altar and started singing a ‘punk prayer’, invoking the Mother of God to become a feminist, to “chase Putin away” and calling Patriarch Kirill a ‘bitch’. The action was filmed, and later placed on YouTube, underlain with a studio recording of the song performed at the cathedral. In March members Nadezhda Tolokonnikova and Maria Alekhina were arrested, followed by third member Ekaterina Samutsevich shortly after. Prosecutors accused the women of attempting to ‘incite hatred against the Orthodox Church’ and ‘hooliganism’. On July 17 the verdict was announced: 2 years in a penal colony for each of the women- one year less than demanded by prosecution. After an appellate hearing, and on the grounds of her non-participation in the ‘punk prayer’, Ekaterina Samutsevich was released on probation on October 10. 2 weeks later Alekhina and Tolokonnikova were sent to penal colonies in Perm and Mordovia, respectively, where they spent 21 months sowing uniforms for members of the Russian military. Tolokonnikova and Alekhina were released on 23 December 2013 after Vladimir Putin had granted a series of amnesties for political prisoners, including businessman Mikhail Khodorkovsky, to tie in with the Olympic Winter Games in Sochi. Continue reading

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Apr 24 2015

On the Borderlands of Humanity


By Henry Radice

Bahamas - No EntryThe current crisis in the Mediterranean reminds us of what should be an obvious truth, but is too frequently forgotten: the European Union (EU) is a humanitarian space or it is nothing. If there are any criteria according to which Europe as a political project deserves to succeed or fail, they surely lie in upholding the centrality of notions of humanity within politics, not least because the need for the EU stemmed from the ultimate example of inhumane politics three-quarters of a century ago. As such, the EU can congratulate itself on its ability to function today as a humanitarian space for most of its citizens, most of the time, but recognise that a persistent failure of humanity on its borders calls into question that achievement.

The idea of ‘humanitarian space’ comes from the emergency aid world and conventionally refers to a safe operating environment for the delivery of relief, or to the creation of ‘safe areas’ amidst conflict in which vulnerable civilians might find shelter (both enterprises, it should be noted, are fraught with difficulties and tensions). Current events remind us both that Europe cannot isolate itself from the humanitarian crises taking place on its doorstep, and of the ability of the EU to serve as a genuine safe haven for many, at relatively little cost to itself. Continue reading

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Apr 22 2015

Euro-Scepticism Is Here to Stay: Finnish Election Results

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By Outi Keränen

The result of Sunday’s parliamentary elections in Finland reflects the continuing appeal of the Euro-Sceptic Finns Party, but also the more pronounced division of the country’s electorate into urban liberals and rural conservatives.

The elections came at a time when the country’s economy is stagnating and consensus within the Conservative-Social Democratic government on the cure for such malaise and on other major political decisions (most notably, the health and social service reform) has been virtually absent. Both parties saw their popular support declining, as the past year was marked by infighting and lack of trust between the coalition partners. The elections signalled a wider discomfort with the left; alongside SDP, the Left Alliance lost two seats in the parliament and was overtaken by Greens as the most popular small party.

The main opposition party, the Centre Party, has achieved a clear victory. Headed by a popular leader, Juha Sipila, much of the party’s support base is in rural areas and in the north of the country. The Centre Party’s election campaign was based on policy proposals such as cutting public borrowing and promoting economic growth through entrepreneurship.

The most important story of the election is, however, the success of the Finns Party (formerly known as True Finns). The Euro-sceptic Finns Party made significant gains already in the previous 2011 elections on the back of the Euro zone bailout packages. At that time, their support increased by 15%, making them the third most popular faction in the country. If one doubted whether the their popularity was merely a short-term fad given the lower than expected vote share the 2014 EU elections, Sunday’s elections proved doubters wrong. With 38 seats in the parliament and 17.6 % of the vote, the Finns Party became the second biggest in the country. The Finns Party have successfully transformed themselves into a key player within the Finnish political architecture. Continue reading

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Apr 16 2015

Time for a New Western Strategy in Ukraine


By Robert W. Murray

To date, the western strategy towards the ongoing war in Ukraine has been a failure. Not only has there been no cessation of violence, but the violence in certain areas of Eastern Ukraine is actually worsening, and the world is no closer to any diplomatic solution. Rather, it seems Russian policy-makers have continued to escalate, thus placing the future of Ukraine, and all of Eastern Europe, into doubt.

Recent focus has been on whether or not it is time for western states to arm Ukraine. This debate is raging most vociferously in the United States, where opponents of the Obama Administration’s handling of the crisis are calling for a change in tactics. This debate is, however, not isolated to the United States, and it is high time for all western states to question why, not if, their approach to the crisis in Ukraine has been such an abysmal failure.

For starters, it is obvious that Western states misread Putin’s intentions from the start. Such misperception existed long before Russia invaded Ukraine, but the West was content to believe that the end of the Cold War had somehow crippled Russia for good and that the integration of former Soviet satellite states into the west’s sphere of influence would prevent Russia from rising again in a manner that resembled its old Soviet character. The world even went so far as to reward the Putin regime with the Sochi Olympics in the hopes this would prove once and for all Russia had accepted that the liberal world order that emerged in the wake of the Cold War had prevailed.

Now, western states are confronted with the reality that not only did they get it wrong when it came to the annexation of Crimea, but they are continually misperceiving Russia’s next steps and relying on false assumptions about conflict and Russia’s motives to guide policy decisions. Naturally diplomacy would be the ideal outcome, but Putin is not interested in finding a diplomatic solution to a conflict he is winning. Not only is he successfully extending his sphere of influence, he is casting doubt on the effectiveness and closeness of the NATO alliance, and putting increased strain on the Obama Administration, whose reluctance to deal with any foreign policy issue with a firm hand was unfortunately reaffirmed in last week’s national security statement that preached “strategic patience”.

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Apr 8 2015

After Syriza: What’s next for Spain?

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By Marina Prentoulis and Lasse Thomassen

The significance of Syriza’s electoral victory for anti-austerity parties and politics across Europe is slowly, but steadily sinking in. The next showdown will be in Spain where local and regional elections are due on 24 May, and a general election will be held before the end of the year. An electoral victory of Podemos will signal that the hard line neo-liberal block opposing anti-austerity policies in the Eurozone has not succeeded in silencing the voices of the people. Even without an electoral victory though, Podemos have won: they have already changed the political terrain in Spain and beyond.

Europe has been divided along an invisible, transnational frontier. Two camps, for and against austerity, rally their forces across national borders. Before, during and after the recent Greek elections, Spanish politicians went to Greece to rally support for their friends there, in the hope that this would in return help their own electoral prospects at home. The Spanish Prime Minister, the conservative Mariano Rajoy, went to Athens in support of his conservative counterpart, the now former Prime Minister Antonis Samaras. It is no coincidence that, after the Greek elections and during the negotiations with the Eurogroup, Rajoy and the Portuguese PM, Pedro Passos Coelho, have both tried their best to block any favourable agreement for Greece.

The same gathering of forces is taking place on the opposite camp. Both the leader of Podemos, Pablo Iglesias, and the leader of Izquierda Unida, Cayo Lara, took the trip to Athens in support of Syriza before the election. Although they all agreed that ‘Spain is different’, they also tried to articulate the Greek election in a way that would play into their own hands at home.

After the Greek elections, Pablo Iglesias did not waste the opportunity to remind Rajoy that the clock is ticking down towards the end of his government: ‘Tick, tock, tick, tock’. Given the size of the country, a Podemos victory in Spain would have a much bigger impact on the future of the EU than Syriza’s victory in Greece.

The latest opinion poll from the CIS research centre shows Podemos at 24%, only three points behind the ruling conservative party, PP, and two points ahead of PSOE. In the latest Metroscopia opinion poll, published in El País, Podemmos and PSOE are tied at a little over 20%, with PP and the new kid on the block, the centre-right Ciudadanos, a few points behind. The results of the local and regional elections depend more on local particularities. Podemos will not run candidates everywhere, and, in some cases, a separate electoral alliance connected with Podemos, called Ganemos, will attempt to challenge the duopoly of PP and PSOE. The peculiarities of local elections were last witnessed in the regional election in Andalusia on 22 March were PSOE did relatively well (Andalusia is an old PSOE stronghold) and Podemos scored only 15%.

If we are to believe the opinion polls, it is clear that the anti-establishment politics of Podemos might well win the elections. Although they are unlikely to win an outright majority, they have galvanised the opposition to the conservative government, while simultaneously challenging the parties of the old left.

Although they have not yet fallen to the same depths, PSOE is in a situation similar to that of PASOK in Greece a few years ago. The party changed leader after the EU elections last May, but the position of the new leader, Pedro Sánchez, is precarious, and the person to watch is Susana Díaz, the head of the regional government in Andalusia, a PSOE stronghold. A poor showing in the local and regional elections on 24 May, and Sánchez is likely to be able to call himself ex-leader.

PSOE is caught in a catch-22, damned if they do, and damned if they don’t. Through many years in government and collaborating with PP, they have come to be seen as part of the system – the caste, in Podemos’s discourse. The only way for PSOE to save themselves from the fate of PASOK is to stop being PSOE. But when trying a more populist appeal, they just reinforce the impression that Podemos is the real thing, and that they – PSOE – are merely a poor imitation. This is best exemplified when Sánchez took to sporting an open shirt and a small rucksack, and spent his first months as leader doing the rounds on the TV talk shows – while criticising Podemos for being populist.

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Apr 3 2015

The Ukrainian Crisis: A Year On

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By Roberto Orsi

More than a year has gone by since the overthrowal of Viktor Yanukovich, the starting point of a severe international crisis between Moscow and the West, successively escalated by Russia’s annexation of Crimea, and the outbreak of a separatist war in the Donbass. While any talk about “winners” and “losers” in such crisis would be superficial and over-simplistic, the unfolding strategic situation, especially since the ceasefire agreement of February 11, deserves some attention.

Considering Russia’s interests in the region, particularly if those are to be understood according to the Russian geopolitical and strategic vantage point, Moscow has managed to protect some of its vital interests, succeeding in three main dimensions.

Firstly, the non-violent takeover of Crimea, albeit clearly illegal under international law, has secured the country’s access to the Mediterranean and to the Middle East, eliminating a serious point of contention with the Ukraine, and a lethal threat to Russia’s projection capabilities. The move also subtracted the peninsula from NATO’s encroachment, allowing instead a significantly more secure Russian hold in the Black sea region.

Secondly, Russia has effectively avoided international and diplomatic isolation. Despite Beijing’s endorsement of traditional conceptions of sovereignty and territorial integrity, China has de facto sided with Russia, going to the extent of signing a $400 billion worth gas deal during the crucial weeks of the Crimean crisis when the US and the EU launched their sanctions, in a clear political gesture towards Washington and the rest of the world. India, Brazil, Turkey, Iran, Israel, Korea and numerous other nations have been taking little if no action against Russia in the wake of the crisis.

Thirdly and perhaps most importantly, the secessionist conflict in the Donbass has provided a sure way for Russia to heavily intervene, practically for an indefinite future, in Ukrainian affairs.

There is no indisputable evidence that President Vladimir Putin is trying to expand the borders of the Russian state by means of re-unifying or annex parts of the former Soviet Union, but several elements, both ideological and geostrategic, point to that direction. If so, it would appear that Russian actions in the Ukraine aim at the disintegration of such state at least in three regions (the fourth, Crimea, is already in Russian hands): the West (Galicia), the Centre (Malorossiya), and the East and South (Novorossiya). Ideally from the Kremlin’s perspective, the Ukraine should become some sort of federation, from which the various autonomous regions would gradually secede and shift towards East, with the exception of Galicia, for which Russia has no interest.

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