Nov 15 2016

European Union’s Key Figures

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by Lucas Juan Manuel Alonso Alonso

With the objective to draw some conclusions about macroeconomic stability and economic structure, this article examines for the 28 Member States of the European Union, the following aspects: GDP and AIC per capita, General Government Gross Debt, Labour Productivity (monetary units and percentages), Average Annual Wages, Annual Hours Worked, Jobless and Average Hourly labour Costs. To develop this analysis, Member States have been divided into three blocks by the number of inhabitants: less than 6 million, between 6 and 17 million and more than 17 million.

 

Macroeconomic Stability and Economic Structure
european-central-bankAs a result of Brexit, the EU is going to face increasing socio-economic uncertainty. The day after the British referendum result, we have seen sharp falls in European equity markets, particularly of banking shares. In my view, this sharp fall is going to undermine consumer and business confidence and, consequently, and it is very likely to drag down economic growth— this situation is not unique and unusual but we are going to face a turbulent period in financial markets for several months—. Additionally, there is the Syrian refugees’ humanitarian crisis as well as serious social conflicts in many member states. Furthermore the advantage deriving from lower oil price was negated by the abrupt depreciation of the Euro against the U.S. dollar — indeed QE (Quantitative Easing) was a high priority when the exchange rate was about USD 1.5858 in July 2008 straining the socio-economic situation in the Euro area(one may wonder: why does nobody question it?). Now it is of little help to exports because these have already reached the maximum level, while leading to more expensive imports needed to support the domestic economy.

Despite the painful austerity measures, in 2015, general government gross debt (gross public debt as a percentage of the GDP) ratios in the EU-28 remain at a very high level—in Spain, Portugal, Greece is around 100%, Italy has the second highest debt load at 132.7% and in France and Ireland is between 85 and 95 percent. Concerning the volume index of GDP (Gross Domestic Product) per capita in PPS (Purchasing Parity Standards) we find a remarkable dispersion among the EU countries, such as Luxembourg, founder member with a population of 562,958 people, has the highest GDP per capita, 171% higher than the EU-28 average, while Bulgaria, state member since 2007 with a population of 7,202,198 people, records the lowest level of this index, 54% lower than the EU-28 average, but it is important to stress that it showed a steady GDP per capita growth, however still lower than the EU-28 average, from 65% in 2004. We now turn to carefully examine these facts.

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Oct 27 2016

The EU-Turkey Deal: Ambiguities and Future Scenarios

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By Pınar Dinç and Irem Aydemir 

The Arab Spring started the fire in 2011, and ever since the whole MENA region has been turkey-syria-refugeesin turmoil. The civil war in Syria has quickly become a global one with the ongoing war against the Islamic State (ISIL)–a terror organization and a self-proclaimed state at the same time— on the one hand, and the refugee crisis, on the other. The war against ISIL largely continues in the global sphere, with the involvement of the United States, Russia, Iran, the Gulf States, and Israel with geopolitical aims in the region. The refugee crisis, meanwhile, is a major issue to tackle primarily for neighboring countries like Turkey, Lebanon, and Jordan, as well as European countries.

The number of Syrian refugees in Turkey has increased from an estimated 25,000 in 2011 to nearly  3 million in 2016. The number of asylum applications from Syrians in European countries was 25,665 in 2012, and this number increased to 104,300 for 2016. At the end of June 2016, there were almost 1.1 million pending applications for asylum protection in the EU member states. Between March 2011 and March 2016, 250,000 people died in the Syrian war. So far in 2016, 414 people have lost their lives as they were trying to cross the Aegean Sea, 366 of them before the Turkey-EU deal. The living conditions for those who made it to Turkey or Greece are also worrying.

turkey-merkelOne year ago German Chancellor Angela Merkel appeared on TV show Anne Will and announced her plan for the refugee issue, which depended not only on Germany but also on Turkey. Merkel’s plan originally belonged to the European Stability Initiative (ESI) and its founding chairman Gerald Knaus. This initial plan included asylum grants for some 500,000 Syrian refugees in one year. It suggested that not only Germany but also other European states should accept claims for asylum directly from Turkey to avoid unsafe routes, Turkey should take back immigrants who made it to Greece in order to discourage people to cross the Aegean via smugglers, and that Germany should help Turkey to achieve visa liberalization.

Clearly, Merkel saw Turkey as a key partner in dealing with this refugee crisis, but she had to convince her European counterparts, too. Despite the ESI’s insistance “to move quickly” in implementing their plan, “the European leaders handed over responsibility to the notoriously slow-moving and less influential European Commission.” Merkel convinced the EU to take joint action in solving the refugee crisis. The Turkey-EU Deal was finally formulated almost half a year later when Merkel announced her version of the plan on March 18, 2016. But the main trick was in the implementation of this plan. In their policy brief in June 2016, Toygür and Benvenuti were already hinting at major problems and a potential Plan B in dealing with the refugee crisis. Continue reading

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Oct 20 2016

Democracy Between Compromise and Control

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By Henry Radice

The slogan ‘take back control’ was widely credited as a key factor in the UK’s vote to leave the EU on June 23rd.  That vote revealed many cleavages in how we understand our democracy. One significant one lies between understandings of democracy as the control of power by the majority, and a more subtle notion of democracy as the art of compromise. This latter understanding appears to be in retreat throughout the liberal democratic parts of the world, to say nothing of more fragile political environments.

2016619_174727The contrast between control and compromise is important, and the lesson it yields sobering. In an ‘interdependent, globalised world’, to recycle the cliché – more-or-less accurate as it happens – the notion of control intervenes as a comforting delusion. It soothes the angst of those who would stop the world in order to get off. But it also appeals to the individual scale, and evokes domestic analogies in which control is seen as something achievable.

Indeed, the use of domestic analogies has become both widespread and problematic in both national and international political discourse. Witness the success in the UK of the frequent comparisons between the UK economy and a putatively overstretched, finite household budget. ‘Taking back control’ evokes a world in which borders can be as solid and straightforward as the walls of a house, where an Englishman’s home is his castle and it is his right to raise the drawbridge when feeling besieged (though he would be wise in such circumstances to have an adequate stock of provisions, or, in other words, a plan…). Continue reading

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Oct 14 2016

The Rise of Populism Could Persist as Western society and its Academic Institutions Fail to Promote Critical Thought

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By Athanasios Gkoutzioulis

On the 4th of May, Donald Trump became the Republican presidential nominee while on the 23rd of June, Nigel Farage’s (and Arron Bank’s) campaign largely contributed to Brexit to the surprise of international public opinion. Trump’s or Farage’s triumph does not necessarily reflect the rise of populism or demagogy – the spectre of this has always lurked within societies to a greater or a lesser extent. It simply shows how Trump and Farage capitalized on the absence of critical thinking and the uncritical digestion  of their electoral campaign messages.

Donald Trump in Manchester NH February 8, 2016 Cropped This can strongly influence our fast moving world, where the media ‘rule’ and information is not carefully assessed. This lack of critical thinking can also threaten democracy since voters can be lured to adopt misleading approaches to politics and vote without scrutinizing complex political issues.

Academia cannot sufficiently help to protect democracy or insulate society from the shortcomings emerging from the absence of critical thought. Universities today accommodate a rich curriculum. Nevertheless, lately they appear to put more emphasis on improving their facilities and their student’s employment prospects, neglecting the enrichment of their students’ critical skills.

Critical thought, however, can be very important in today’s world in two ways: Continue reading

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Oct 4 2016

The Great Stagnation

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By Marion Labouré and Juergen Braunstein

The recent Brexit vote, as well as high uncertainty around a number of upcoming elections (e.g., the 2016 US and 2017 French presidential elections), are only symptoms of a larger underlying problem. Voting for populist and extremist campaigns is a mean of expressing discontent with the status quo, but with far reaching implications. We believe there is a critical urgency to refocus the debate back to the structural drivers behind this international phenomenon.

Day 3 Occupy Wall Street 2011 Shankbone 5For a large part of the population in Western countries the current economic situation is characterized by increasing inequality, job-insecurity, and income disparity. This stands in strong contrast to what our parents and grandparents have experienced. Few decades ago, the majorities of citizens’ residents in advanced economies thought that their children will be wealthier and better off than themselves. Until the financial crisis, the majority of households in Western countries had benefited from strong economic growth and sustained employment. Specifically, the baby boomer generation had not only benefited from increasing revenue but also from social benefits.

Over the last decade, the income of the middle class, which represents the largest share of the population in developed countries, has stagnated or declined. The financial crisis has been global and the current political environment does not seem to suggest a significant improvement. Other structural factors have put additional pressure on these developments including demographic and labor market pressures, combined with fiscal problems.
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Sep 9 2016

Fantastic Mr President: The Hyperrealities of Putin and Trump

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By Maria Brock

Vladmir_Putin_fishing_toplessIn July 2016 – more than 15 years into his time in office – Vladimir Vladimirovich Putin’s approval rating was at 82%, a figure made all the more remarkable by the fact that the country is experiencing a palpable and lengthy economic downturn. Some commentators have favoured an explanation that treats this as proof that a larger-than-life president is more in line with ‘what Russians want’, as Putin “satisfied a yearning for a strong leader who could make the Russian family proud”. However, concretising a Russian ‘national desire’ is less than helpful if we seek to understand the reasons behind Putin’s continued popularity. Equating a historical past with an inherent propensity to follow strong-men is an exercise in oversimplification, as it treats nations and groups as essentially static, prone to repeat the same historical patterns over and over again. Similarly, a focus on the more overt parallels with the earlier ‘Cults of Personality’ neglects the fact that the underlying ‘conditions of possibility’ that produced the two phenomena are different. Such comparisons also fail to explain the appeal of similarly larger-than-life politicians in countries with a longer democratic tradition. Clearly, an emphasis on national psychological propensities is not productive. Instead, an analysis of the appeal of such leader figures that taps into less conscious mechanisms is worthwhile. By simultaneously looking at the phenomenon of Donald Trump’s remarkable rise, a number of parallels pertaining to the creation of their public personae become apparent. In fact, such an analysis can serve to illuminate overarching principles structuring the successful creation of their outsized public personae. Continue reading

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Aug 25 2016

Monsters in the Mist: The Elusive Quest for Financial Security in Scotland post-Brexit

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By Faye Donnelly and William Vlcek

 

Image credit: First Minister of Scotland (CC-BY-SA-2.0)

Image credit: First Minister of Scotland (CC-BY-SA-2.0)

It is easy to become disillusioned, confused and even fanciful when trying to envision Scotland’s financial security in the aftermath of the Brexit vote. With a leap of imagination it is possible to conceive that there is now a higher probability of seeing the Loch Ness monster than there is of seeing any constructive resolution to the decisive vote emerging on the horizon. At first glance this assertion sounds like a fictitious rumination. Yet analysing the different stories that have surfaced about where Brexit leaves Scotland one quickly finds that they are rife with mystery. This blog argues that the complex discursive performances enacted since 23 June 2016 take on a particularly elusive quest when it comes to what financial security means for Scotland going forward. Akin to the Loch Ness monster, different actors have reported sightings. These vary from plots of the SNP canvassing for a second independence referendum to audacious acclaims of Scotland fighting to retain their membership in the European Union (EU). Let’s take a closer look at the ability of Scotland to synchronise these competing agendas.

With Scotland voting 62-38% to remain in the EU, the resurrection of independence as a political agenda certainly appears to have taken on a new lease of life with calls for ‘indyref2’. Speaking on 27 June 2016, First Minister of Scotland, Nicola Sturgeon, emphasised, “a second independence referendum is clearly an option that requires to be on the table and is very much on the table.” Stepping up efforts to ensure that Scotland’s interests are defended amidst post-Brexit negotiations the SNP party leader characterised Theresa May’s assurance that “Brexit means Brexit” as “a soundbite that masks a lack of any clear sense of direction”. At the same time, Sturgeon has indicated a willingness to participate in ‘engaged talks’ with the new elected UK Prime Minister. An easy explanation behind this discursive oscillation is that Scotland will need permission from Westminster to hold another referendum. What is also plain is that there must be public confidence in the prospect of an independent Scotland being financially secure, something that the latest YouGov polls figures have called into question. Elsewhere opponents to ‘indyref2’ are highlighting that the economic goals for an independent Scotland that appeared possible in 2014 (with oil at $100/barrel) have vanished (with oil hovering just below $50/barrel). Consequently, the projected political economy for an independent Scotland today forecasts either tax rises in order to maintain current public services or a reduction in the provision of those services. Faced with this reality Sturgeon has stopped short of demanding another independence referendum, in part because it is not clear that financial security lays at the end of that path.

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Aug 23 2016

What 7.5m tweets taught us about the Brexit campaign

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By Stefan Bauchowitz and Max Hänska

How did Eurosceptic (leave) and pro-European (remain) activity compare on social media in the run-up to the EU referendum, and was there a relationship between social media users and votes? To find out how leave and remain compared, we collected more than 7.5 million Brexit related tweets during the 23 days leading up to the referendum through twitter’s streaming API. We used a support vector machine to identify which tweets clearly supported the leave or remain camp (and manually coded a random sub-sample of those to ensure our allocation was reliable). Given the polarity of the issue this worked well, and the model correctly identified most tweets. We used the result of this exercise to assign each user in our sample to one of the two camps.

We collected tweets containing the terms ‘Brexit’, ‘EUref’ and ‘EU Referendum’, which were all frequently used to refer to the referendum. While the term Brexit has great currency across both camps, it was used more often by users who wanted to leave the EU as it lends itself more easily to positive slogans (e.g. “Can’t wait for #Brexit to win!” or “Brexit to save Europe”, also echoed by “Brexit means Brexit”). Even though EURef and EU Referendum are more neutral terms, in both sub-samples we find that support for leaving, measured by number of tweets, outstripped support for remaining by a factor of 2.3 and 1.75 respectively. The margins confirm a slight bias in the term ‘brexit’ where the strength of leave over remain was more pronounced. Overall it is clear that the army of leave users was larger in numbers and more active in tweeting their cause (see Figure 1).

level of tweet activity by keyword.

level of tweet activity by keyword.

 

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Aug 11 2016

How reliant is Britain on EU migrant workers?

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By Catherine Harris

2452304492_49aeff09dc_oBrexit – the UK vote to leave the European Union – has caused uncertainty in a number of areas. One of which is the impact that potentially reduced immigration will have on the British economy, particularly in industries which have a high proportion of migrant workers from the EU.

Workers from the EU are allowed to continue to work in the UK for the two years of Brexit negotiations, after which their future is uncertain. But the the UK’s new prime minister, Theresa May, has warned that the status of EU migrants is up for negotiation.

This could have a significant impact on the UK economy. Research has long shown that it will be worse off without its immigrant workers. Indeed, ratings agency Fitch has already downgraded the UK’s credit rating to AA from AA+ with a negative outlook, hinting that further downgrades might follow. It cited reduced immigration as one of the reasons for the UK’s weaker economy. Meanwhile, the National Institute of Economic and Social Research has said that reducing immigration by two-thirds will see the UK economy shrink 9% by 2065.

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Jul 28 2016

The EU’s lack of unity and strategy is being felt in Azerbaijan

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By Robert Ledger

The EU’s values-lite pragmatism towards its periphery is undermining its legitimacy in the South Caucasus. The violence that erupted in Nagorno-Karabakh in April 2016 exposed the weakness of the EU’s Eastern Partnership initiative in the region, as well as its “more-for-more” policy of promoting economic reform, democracy and human rights.

The EU’s relationship with Azerbaijan is one that has been consistently criticised for ignoring authoritarianism in return for access to Caspian Sea energy. Interviews with recently released Azerbaijani political prisoners reveal how EU policy in the South Caucasus, as well as other developments such as the refugee crisis, is damaging its prestige and its attraction to countries in its periphery.

Troubled policy 

The EU is a relatively new entrant to the complicated politics of the South Caucasus. Co-operation with Azerbaijan increased at the turn of the century due to the country’s significant energy repositories and became more formalised with the EU’s Eastern Partnership initiative, launched in 2009 along with Armenia, Belarus, Georgia, Moldova and Ukraine. Here, the EU’s “more-for-more” approach would — in return for internalising the acquis communautaire — grant benefits such as visa-free travel and privileged trade agreements.

The relationship between Azerbaijan and the EU, however, has grown more strained as both sides have failed to grasp what the other seeks from the arrangement. Anar Mammadli, a prominent human rights activist, election monitor and political prisoner from 2013-2016, believes the EU sees Azerbaijan primarily as an energy corridor, while Armenia and Azerbaijan hoped the EU would assist in resolving the Nagorno-Karabakh conflict.

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