Loading...

BLOG

What goes around

  • April 2019
  • Otto Ilveskero

What goes around

 

Circular economy takes the centre stage in European climate action

 

Source: Pixabay

 

Two weeks ago, a washed-up carcass of a whale was found on the coast Sardinia, Italy with 22 kilograms of plastic waste in its stomach. The gruesome discovery was yet another indicator for why tackling plastic waste has taken the centre stage of the EU’s environmental action, with the new single-use plastic legislation coming into force soon. The plastic plan is one of the central elements of the Commission’s wider circular economy strategy, which can – if successfully completed – decrease the EU’s carbon emissions by more than a half.

 

‘The Council urges that the main policy foundations for a sustainable future include a decisive transition towards a circular economy.’ Conclusions of the General Affairs Council meeting on 9 April push for the EU to become a “trailblazer” for sustainable development by striving for climate neutrality and promoting safe low carbon energy. The Council recognises sustainability of innovation and health of citizens as the enablers of globally competitive economy and calls for the European Commission to use the relevant funding tools to support the implementation of the 2030 Agenda for Sustainable Development. In addition, the conclusions highlight the need for a strong involvement of civil society organisations and the private sector stakeholders in achieving climate action goals.

 

Circular economy proposals have featured particularly heavily in the current legislative cycle with of many of the measures still needing to be implemented under the supervision of the next Commission configuration. Launch with an action plan in 2015, the EU’s circular economy strategy plays a crucial role in the bloc’s efforts to achieve the UN sustainable development goals and has so far resulted in 54 actions being either completed or under implementation in the member states. Over the 2016-2020 period the EU has pledged over €10 billion to support managed transition to a circular economy with a priority status given to the transition within the EU development and cohesion funds in the new 2021-2027 multiannual financial framework proposal. In March, negotiators between EU institutions reached an agreement to ringfence 35% of the proposed €100 billion research budget in 2021-2027 for climate-friendly technologies.

 

The most visible of these measures has been the highly popular proposal to ban and phase out single-use plastic within the EU. With the Council expected to grant its final approval to the legislation soon, the member states will have two years to fully implement the new targets of 90% collection target for bottles and new labels to help consumers to correctly dispose products. The measures also include the banning of certain plastic cutlery and cotton buds with plastic. Supported by the “Blue Planet effect”, the single-plastic use legislation has moved from the drafting stage to being in force within a year – a miracle in the EU, where the decision-making process is often measured in dog years.

 

The EU has set a 50% plastic recycling target by 2025, while some member states, such as the Netherlands and France, have more ambitious national plans in place. The Dutch plan, for example, aims to ensure that 70% of all single-use plastic packaging is recycled by 2025. Currently around 30% of the 26 million tonnes of annual plastic waste in the EU is collected for recycling, of which only about a third is actually converted into reusable material. As a result, producers converting plastics do not at the moment have a stable enough supply of suitable waste. One reason for this is the low local collection rates of plastic. Another is the lack of investment to technology that is capable of converting composites into consistent quality secondary materials. Improving these rates to the target level will require enhanced cooperation between public and private sector stakeholders in the member states supported by the EU.

 

Alongside plastic, a 2018 study by Material Economics, showed that by strengthening the sustainable circulation of also steel, aluminium, and cement, the EU could reduce its carbon footprint by a whopping 56% – or around 300 megatons of CO2 per annum. Globally, the UN has called for greater reuse of materials and recently published a study showing that extraction and primary processing of metals account for 26% of all carbon emissions.

 

Curbing the negative environmental impact of extraction with recycled content would significantly help the common European effort to reach the net-zero emissions target by 2050. Thankfully, significant progress has been made in many sectors. For example, around 83% of the almost 3 million tonnes of stainless steel produced annually by Outokumpu, Europe’s largest steel manufacturer, is made from recycled materials (the current European average stands at around 60%). Ovako, a Swedish engineered steel manufacturer specialising in effective scrap management, currently recycles around 800,000 metric tons of scrap metal each year. Both are signatories to Worldsteel’s Sustainable Development Charter, committing the industry to meet the UN 2030 sustainable development goals.

 

Cement, on the other hand, is in need of concrete alternatives. Since 1970, the global extraction of sand and gravel for concrete production has increased from 9 billion tonnes to 44 billion tonnes – a number that has only continued to soar as concrete has grown to become the second most consumed product in the world after water. Currently the second most polluting European industry after steelmaking, cement manufacturing contains high process emissions, is highly localised, and lacks obvious replacement materials. Nonetheless, alternative fuels and improved energy efficiency of manufacturing plants are readily available options for the industry to improve its environmental impact.

 

As things currently stand, available solutions can help Europe reach 75% of the cuts required to become climate neutral, according to the European Climate Foundation’s ‘Net Zero by 2050: From Whether to How’ report. Innovative technologies and approaches are needed, however, in order to reach the remaining 25%, which will require improved cooperation and increased investment from both the public and private sectors. It is essential for the next European legislative cycle to both encourage the widespread implementation of the 75% and support the research into the remaining 25%.

Expanding the EU Green Card

  • April 2019
  • Otto Ilveskero

Expanding the EU Green Card

 

Taking steps towards European migration reform

 

 

There is no more migrant crisis. The number of sea arrivals to the EU is down 90% from the 2015 peak levels, but the crisis mode stubbornly lingers in European political rhetoric. As a result, the subsequent political crisis has significantly obstructed Europe’s ability not only to solve the pressing issues relating to refugees already within the EU’s borders but also to re-think its rules on regular migration. Europe is reliant on workers from outside the EU, which is why the bloc must facilitate both more coherent legal migration routes and the freedom for established migrants to better utilise the opportunities of the single market.

 

Beyond the politics of fear: decoupling regular and irregular migration

 

In order to tap into the politically potent feeling of lack of control experienced by many voters, European leaders have attempted to stoke the negative perceptions associated with “otherness” for personal political gain. Immigration has been successfully framed through the lens of security in European political discourse, which has significantly reduced the success of arguments based on human rights, the economy, and demographic effects of immigration. Importantly, as a result of this securitisation of migration, European policy-makers have been unable to separate the different approaches needed for managing regular and irregular migration.

 

Even the Swedish Prime Minister Stefan Löfven in his contribution to the Debate on the Future of Europe at the European Parliament on 3 April indicated that security is on the top of his immigration agenda. Stating that the “EU must never again lose control like it did during the refugee crisis”, Löfven highlighted strong cooperation, strengthened control of external borders, and fair distribution of migrants as the three key pillars of a common European response to migration. His focus was almost solely on irregular migration and threat mitigation.

 

Despite the securitisation rhetoric and loud anti-immigration narratives, however, European voters are looking elsewhere ahead of the European Parliament Elections. A recently published European Council on Foreign Relations (ECFR) study, for example, shows that many domestic policy concerns, from corruption and unemployment to housing and living standards, have overtaken immigration as key issues for the European electorate. Thus, despite the statements from Viktor Orbán, Steve Bannon, and Matteo Salvini, these elections will not be the European referendum on immigration. In fact, voters in Salvini’s Italy are more concerned about people leaving the country than coming in, according to the study. The European immigration debate must now move beyond the politics of fear.

 

Foundations of a European migration reform

 

The decline of immigration on the valence scale should provide an opening for those decision-makers and civil society organisation hoping to bring some much-needed nuance to the debate. From the perspective of self-interest, Europe needs immigration for its labour market, to cover skill gaps in many sectors, and to counter decreasing birth rates. Yet, in 2016 75% of highly skilled migrants to OECD countries choose a non-EU destination such as the United States or Australia. The current skill gaps in technology industry, for example, have been a prominent feature of European and national conversations on competitiveness and digitalisation in recent years. Speaking on the topic at an event hosted by the Center for Data Innovation in April, the representatives of Lithuania, Finland, and the European Commission all highlighted the importance of attracting tech workers to Europe and growing European startups as part of their respective strategies. Europe, however, has struggled to even keep its homegrown talent from leaving for the Silicon Valley or Shenzhen.

 

Another development that brings the need to reform the EU’s legal migration rules to the fore is, of course, Brexit. The approximately 1.3 million British citizens living in the EU27 countries are currently at risk of losing their European citizenship rights. The prolonged uncertainty of Brexit has kept these people in an unbearable limbo for over 2 years, even though the European Parliament (EP) committed back in December 2017 to guarantee the future free movement of Britons ‘across the whole EU’. There is a policy promise to be kept.

 

“They have to find a solution, and we are not going to let them off the hook,” said the New Europeans founder Roger Casale when asked for a comment, “the Green Card would be a way to do it”. The New Europeans’ Green Card for Europe proposal, which would maintain the rights of British citizens currently in the EU and EU27 citizens in the UK, promises a practical policy solution to the issue of long-term residents’ rights within the context of Brexit. Well-received in many member states, the EU Green Card would ensure that Britons with permanent residency rights in any EU member state would not lose the rights they currently enjoy as an EU citizen living in an another EU member state, including the right to free movement and the right to vote in local elections.

 

Expanding the Green Card for Europe

 

Combining the EU’s immigration needs and the precedent set by the EU Green Card, the proposed policy instrument could in the future be applied more widely to all third country nationals with permanent residency within the EU. In fact, this possibility was already brought up by the Chair of the European Parliament’s Constitutional Committee (AFCO), Danuta Hübner MEP during a hearing on 18 March. Responding to the Green Card proposal for British citizens, Ms Hübner said that the solution “can have a much broader importance” within the EU beyond its Brexit origins.

 

As the EU Blue Card scheme remains firmly stuck in the negotiations between the Council and the EP, the expanded Green Card would provide non-EU nationals with greater rights without diminishing the member states’ status as the gatekeepers of migration. Because the criteria for obtaining the Green Card would be the possession of a permanent residency permit, it does not interfere with the member states’ competence to determine who can enter their country and who can stay. Unlike for British citizens in the EU, the scheme could even be rolled out in the member states on an opt-in basis for third country nationals – in a similar manner to the Schengen Agreement.

 

After gaining a long-term status in a member state, third country nationals would under the scheme be free to reside and work everywhere in the EU much like EU nationals – be it for work, family, or any other reason. It would make it easier for non-EU citizens to expand a business, launch a startup, or move within a transnational company between EU countries. It would also simplify the bureaucratic process for non-EU nationals with a permanent residency to look for opportunities, move within the European job market, and fill the skill gaps and labour shortages that vary from member state to member state. Simply put, it would reward those from outside the EU who have contributed to the European society for years without them having to potentially sacrifice their passports in member states that do not allow dual citizenships.

 

This is obviously not a blanket solution to the issue of attracting skilled migrants to Europe, as that is mostly dependent on the immigration rules of each individual member state. That would require increased EU investment on legal migration routes. Commission-funded voluntary projects to cover labour shortages in the member states, tying legal migrations routes to Europe with returns of those entering the EU illegally (e.g. Spain and Morocco), and the so-called “Global Skill Partnerships”, are all viable options. Ultimately, the purpose of the expanded EU Green Card scheme is to ensure that the EU can grant the best possible opportunities for long-term migrants in a managed and cooperative manner.

 

This article was featured on the New Europeans on 5 April and on the EFF – European Future Forum on 8 April.

Looking for a common strategy

  • March 2019
  • Otto Ilveskero

Looking for a common strategy

 

EU struggles with a united vision on China ahead of bilateral summit

 

Source: Wikimedia Commons

 

The EU is struggling to maintain a united front towards China ahead of the 21st bilateral EU–China summit on 9 April. After the Commission labelled China a “systemic rival” for the first time, France has stepped up the calls for a common EU strategy and an alignment of vision towards China.

 

But while President Macron staged a “mini-summit” with Angela Merkel, Jean-Claude Juncker to Paris and China’s Xi Jinping on Tuesday (26 April), the Italian government was busy signing a bilateral investment deal as a part of the global power’s controversial Belt and Road Initiative (BRI). The EU’s slow departure from its usual soft stance towards Beijing is a welcomed step despite having so far gained limited attention beyond the Franco-German axis. Alongside Italy, 12 other EU members have signed a memorandum of understanding with China on BRI.

 

China’s growing interest in Europe comes with risks attached

 

Chinese foreign direct investment (FDI) in Europe has risen rapidly over the past decade. Last year Chinese companies completed FDI transactions worth over eight times the 2010 numbers (from €2.1 billion to €17.3 billion). During the record year of 2016, Chinese firms completed investments worth €37.2 billion in the EU. This year, China’s trade conflict with the United States has already prompted growing Chinese interests towards Europe, as highlighted by Xi’s European tour. China’s recent €2.5 billion memorandum of understanding with Italy, which marks the first time a G7 economy has signed up to the BRI, could grow to €20 billion in value in the future. These investments to the struggling Italian economy cover ports, satellites, agriculture, and media, among other sectors. In addition, China has also set aside a provisional €15 billion in the train tunnel development plan between Helsinki and Tallinn earlier this year. Chinese technology company Huawei’s investments and sponsorships in Europe worth billions of euros are also well-documented.

 

But dealing with state-owned companies that use Chinese governmental subsidies to their advantage will inevitably come with potential risk factors. Estonia’s Prime Minister Jüri Ratas, for instance, has called for a security review of the FinEst Bay Area project. Moreover, during his recent visit to Central Europe and Brussels, US Secretary of State Mike Pompeo sounded alarm on EU member states conducting business with Huawei on the company’s 5G technology in particular, which the US administration has identified as a security risk. Washington has suspected the Chinese government could use Huawei technology for spying, although it has so far not provided public evidence to support the claim. Like Germany earlier this month, the European Commission resisted the calls to issue a blanket ban on Huawei in its new Cybersecurity Recommendation published on Tuesday 26 March. Instead, the European agenda-setter decided to ask the national capitals to run risk assessments on 5G network technology and to collaborate on common EU-wide measures before auctioning spectrum bands. Many member states – notably France, Italy, and the UK, are yet to update their 5G security requirements.

 

China’s ‘debtbook diplomacy’ and strategic investments in Europe

 

China’s strategic investments around Europe may in the long-term constitute an unsustainable burden on weaker European economies. This so-called ‘debtbook diplomacy’ allows China to use economic leverage to politically coerce vulnerable countries to achieve its strategic aims. For example, the EU has raised concerns over China’s investments in Central and Eastern Europe as a part of its 16+1 Initiative. Similarly, due to concerns over the autonomy and sovereignty of Italy, the EU’s budget commissioner Günther Oettinger recently called for the EU to veto the member state’s participation in Chinese infrastructure projects. “[I]nfrastructure of strategic importance like power networks, rapid rail lines or harbours are no longer in European but in Chinese hands”, the commissioner added.

 

Equally important to China are the strategic investments made over the past decade which have led to its state-owned enterprises controlling around 10% of European cargo port capacity – most recently signing deals to manage Italy’s largest port in Genoa as well as the port of Trieste. On a continent where 70% of all goods crossing its borders travel by sea, this is certainly not insignificant. In addition, as a result of its carefully planned ‘science diplomacy’ and investments through the ‘Polar Silk Road’, China has been able to carve a foothold in strategically valuable locations in the Arctic. This has provided China with the opportunity to better observe air traffic and monitor naval activity in Europe’s High North, as well as tighten its grip on the global rare earth materials market. There is always a possibility these acquisitions will be used for non-civilian purposes later on.

 

EU needs a coherent common China strategy

 

The EU is in need of an updated common China strategy. (This applies equally to NATO, as pointed out here by Carnegie Endowment’s Erik Brattberg.) Although the nature of rhetoric has shifted since the EU’s 2016 Elements for a new EU strategy on China, the continent remains divided on its attitudes towards Beijing. For example, the southern member states have been critical of Brussels and the northern member states’ complaints about the scale of Chinese investment, given that many of them were pushed to sell prime asset during the height of the eurozone crisis. The combined impact of slow economic growth and the EU’s failure to maintain economic solidarity has also resulted in a situation where member states such as Italy are considering selling debt to China. This has understandably raised concerns in Brussels regarding the possibility for China to establish political leverage over Rome.

 

Calling for China to deliver on World Trade Organization (WTO) reforms regarding subsidies and technology transfers is not enough, when the EU cannot do it as one voice. Effective implementation of common screening regulation for FDI is one thing, but the EU must also improve its own practices on strategic investment to support many areas that now feel the need to turn to China due to lack of investment. Increasing EU investment on infrastructure and industry is important also from the perspective of sustainable development.

 

This is, however, not to say that the EU should become adversarial towards China or ban Chinese investments as a security risk altogether. It is to support what the Commission has already stated: ‘Neither the EU nor any of its Member States can effectively achieve their aims with China without full unity.’ It is highly important that member states ensure their bilateral relations with China comply with EU law and policies, while the EU aims to deliver a more balanced and reciprocal overall trade relationship with Beijing. A united EU can expect to wield some leverage in trade negotiations as China’s largest trading partner, but this should not be overestimated. China is adept at pitting Europeans against each other (not to say Europeans would not be good at it on their own). Thus, without a common strategy, the EU simply cannot push for the reciprocity in economic ties and advances in human rights it so desires.

Piece by piece

  • March 2019
  • Otto Ilveskero

Piece by piece

 

Solving the challenges hindering EU–US trade talks

 

Source: Security & Defence Agenda | Flickr

 

The EU–US trade negotiations could be revitalised “within some weeks”, according to the EU Commissioner for Trade Cecilia Malmström. The Council is expected to approve the negotiating mandates during its currently on-going Summit in Brussels. The prospects of any transatlantic trade talks have faced numerous challenges since the Transatlantic Trade and Investment Partnership (TTIP) negotiations stalled, but the two sides sound ready to return to the table.

 

As is often the case in trade talks conducted by the EU, however, the agriculture sector has constituted a significant problem moving forward. In the specific case of revitalising the EU–US trade negotiations, there have been significant disagreements on whether to include agriculture products within the scope of the agreement. Despite the joint declaration made by Presidents Juncker and Trump in the White House Rose Garden in July 2018 to reduce trade barriers and strengthen strategic cooperation, trust between the transatlantic partners has only eroded further. From the EU’s perspective, President Trump’s zero-sum perception of trade negotiations, steel tariffs, and threats to impose measures against European car imports have reinforced the view that his administration is not willing to follow the rules on which the transatlantic relationship has traditionally been based.

 

“Agriculture is out! That is crystal clear.” Speaking at a European Liberal Forum global trade event on Thursday (21 March), Trade Commissioner Malmström was more than certain that the Council would never grant her a mandate to negotiate trade with the United States that would include agriculture products. She stated that there is no appetite on the EU side to open negotiations for a full 30-chapter free trade agreement. Instead, the bloc would be looking to conclude a smaller agreement, as President Juncker already indicated during his July 2018 visit to the White House. According to the Commission’s draft mandates released this January, the EU would be open to negotiating a trade agreement strictly focused on removing tariffs on industrial goods (such as steel) and another agreement on regulatory conformity intended to remove non-tariff barriers.

 

Speaking also on the topic of trade on Thursday, the US Ambassador to the EU Gordon Sondland told an American Chamber of Commerce to the EU (AmChamEU) transatlantic conference that “the mandate that is being circulated falls far short of what even President Juncker and President Trump discussed in July”. He continued that the talks will need to include “all aspects of our relationship” and repeated the US administration’s demand that agriculture is included in the deal. Last week, US Trade Representative Robert Lighthizer told Congress that the EU-U.S. Executive Working Group had reached a “complete stalemate” as a result of the disagreements over agriculture.

 

The situation is not this simple, of course. Washington has also consistently refused the EU’s demands to include public procurement and geographical indications in the negotiations, as Commissioner Malmström explained on Thursday. In addition, car tariffs have been another point of contention, as Brussels has insisted that vehicles should be included in the negotiations. This is obviously in the EU’s interest in order to avoid higher import tariffs on European cars to the US as per President Trump’s threats to do so. However, the 2018 joint declaration – on which the current efforts to establish a dialogue are based – explicitly refers to “non-auto industrial goods” in its wording.

 

What is there to be done then? First of all, both Commissioner Malmström and Ambassador Sondland agreed in their speeches that the EU and US could build up agreements, moving through the issues one by one. Dealing with each issue on its separate track would allow addressing problems at their own pace. Successfully concluding a smaller trade deal could also be used as a platform to build trust between the transatlantic partners and to pave the way for more comprehensive talks in the future. According to Malmström, seeking a positive platform for these talks could start, for example, from the work already done on some regulatory cooperation and standard alignment matters during the TTIP negotiations. From the EU’s perspective, focusing also on aligning car safety regulations could possibly strengthen its hand in arguing that the US cannot impose tariffs on the basis of national security.

 

Furthermore, the EU and US should use the talks to set a common agenda on their shared concerns on global trade, namely reforming the WTO rulebook and challenging China on its unfair practices.

 

There are also risks that the transatlantic negotiation would backfire, eroding the already strained relationship even further. The EU might, for example, fail to enter the talks as one voice. The European Parliament’s recent vote failing to issue recommendations on the US trade negotiations highlights the existing divisions between European policy-makers on the topic. President Trump’s own ‘tough guy’ act and the possibility that his administration would impose punitive tariffs before the talks have been concluded – in which case the EU would most likely suspend the negotiations – also pose risks to re-building the partnership. For example, carefully avoiding any reconciliatory tones in a speech to the US governors this February, Donald Trump called the EU “in certain ways, tougher than China” on trade and said that he would “tariff the hell out of [the EU]” if the bloc would not agree to include agriculture products in the trade negotiations.

 

Yet, perhaps the future opportunity to use the EU–US trade negotiations as an example of President Trump’s deal-making skills ahead of the 2020 US presidential race will eventually be enough to convince Washington of the benefits of a smaller trade agreement. Commissioner Malmström, at least, expects the talks to be concluded by the end of the current Commission’s mandate on 31 October.

<< Previous - Next >>
Close
loading...