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Finland ahead of the Council presidency

  • April 2019
  • Otto Ilveskero

Finland ahead of the Council presidency

 

Increased political fragmentation at the core of recent election results

 

Credit: Otto Ilveskero

 

Disappointment. Injustice. The bittersweet taste of joy that lingers in your tears as the victory you thought was yours gets snatched from your hands at the last possible moment. The proud nation of Finland was violently shaken on Sunday (14 April) when the country’s ice hockey team lost the IIHF Women’s World Championships final to the United States after having had their overtime goal disallowed by the referees. So momentous was the occasion, that the national broadcasting service YLE decided to set up a split screen during its election coverage to also show the last moments of the match. In Finland, we take hockey seriously.

 

In many ways, the hollowness left behind by the events on ice reflected the results of the Finnish parliamentary elections, leaving most parties in a situation where they can be satisfied with their overall performance but not really happy. The Social Democrats (SDP), for example, ended the night as the largest party in the Finnish parliament for the first time since 1999, but became the first party ever to win the elections with under 20% of the vote. The centre-right National Coalition party can be content with their one seat gain considering that their governing partner, the Centre Party, lost 18 seats and obtained the party’s worst election result since 1917 (and that the Blue Reform, a 2017 offshoot from the Finns Party, with 5 ministerial positions and 17 seats managed to lose everything in their first contested elections). Yet, the National Coalition party was also left in the third place just one seat and 0.5% behind the Finns Party, which in turn would have needed only 6,000 votes more to overtake the SDP and win the elections.

 

Fragmented, young, and equal – the new Eduskunta

 

The glass is both half full and half empty – except for the Greens and the aforementioned Centre Party. The former have now doubled their support since 2011 and become only the third European Green party to obtain over 10% of the vote share in national parliamentary elections. As a whole, the left of the party spectrum, consisting of the SDP, Greens and Left Alliance, secured 76 seats (up by 15 from 2015) to the 200-member Eduskunta in Helsinki.

 

Although on paper the Finns Party improved their result by only one seat compared to 2015 (from 38 to 39), in practice their gains were a serious improvement for the increasingly nativist populist party, which was left with 18 MPs in parliament after a dramatic split in 2017. From early on, it was clear that voters were not going to follow the 20 representatives who split off from the Finns to form the Blue Reform as a protest to the election of Jussi Halla-aho as the new party leader. In fact, Halla-aho was the 2019 election’s biggest individual winner with over 30,000 personal votes under the Finnish open-list electoral system.

 

Nonetheless, the most impressive development of the evening was provided by women and young candidates. Almost half (47.0%) of all the candidates elected on Sunday are women – a record number in Finnish parliamentary elections and second only to Sweden within the EU member states. In addition, almost one fifth (19%) of the elected candidates are under 35 years old, while two thirds (62.5%) of the representatives are aged 50 or under. Only 4% of representatives in the next parliament will be over the age of 65. Ultimately, the most important story that emerged on 14 April is how youthful and equal the next Finnish Eduskunta will be. We should also be very happy with the turnout at 72% – the highest in Finnish parliamentary elections since 1991.

 

The overarching message from the elections was one of increased fragmentation, which is bound to make the upcoming coalition negotiations increasingly unstable. The elections were the closest in 60 years with the three largest parties separated by just 0.7% of the votes and both the right and left flanks making gains at the centre’s expense. The people have spoken, now we just have to figure out what they said.

 

A pro-European coalition expected ahead of the Finnish Council presidency

 

From the European perspective, these elections carry particular importance as Finland prepares to assume the Council’s next six-month presidency on 1 July. If the SDP and National Coalition can form the basis of a new government with perhaps the Greens and the Swedish People’s Party of Finland (SFP), then Finland would have a fragile (108 out of 200 -majority) but pro-European government in place for the crucial presidency overseeing the elections for the new European Council and Commission presidents as well as the ongoing negotiations of the 2021-2027 Multiannual Financial Framework (MFF). The next government will of course also be responsible for the nomination of the Finnish commissioner to the EU’s agenda-setting institution.

 

The aforementioned parties have indicated willingness in their election manifestos to support deeper EU integration in the form of swiftly completing the European banking union for stronger supervision of EU banks, for example. The Greens would also like to see the elevation of the European Stability Mechanism (ESM) into a European monetary fund (EMF) to provide better financial assistance to member states in need, as well as to increase the EU’s own funding through increased member state contributions and climate-friendly taxes. On climate action, the parties share a common vision of increased and more ambitious EU cooperation. The National Coalition, for instance, specifically mentions lifting the EU’s 2030 emission reduction target to 55% from the current 40% to keep the bloc on course to climate neutrality by 2050.

 

Furthermore, the likely prime minister party SDP has become more openly pro-EU since their previous manifesto four years ago. From a previously more ambiguous position, the party’s current election programme wants to place Finland ‘in the frontline of deepening European cooperation’ and raise the Pillar of Social Rights as an equal to the economic principles of the EU. The centre-left group is also promising to support the creation of common EU migration policy and enforcement of a migrant quota system, as well as to strengthen the EU’s external border controls. The goals are shared by the EPP-affiliated National Coalition party in their election manifesto. The prospective governing partners also agree on deepening European defence and security cooperation.

 

The coalition could potentially be strengthened with the ALDE-affiliated Centre Party, despite the election beating. Much of this depends now on the replacement to the outgoing prime minister Juha Sipilä, who announced his resignation as the party’s leader two days after the elections. This would give the new government a healthy 132-seat majority, but most likely also slow down the decision-making of politically already thinly spread coalition.

 

Certain uncertainties: will the populist right take over after all?

 

In a scenario where the future coalition government would feature the Finns Party, Finland’s contributions in the Council would obviously stem from a much less integrationist source. Despite the nativist party’s expressed willingness to govern, however, it seems at the moment highly unlikely that the SDP in particular would be open to the idea of sharing governmental duties with the populists.

 

Yet, as political opportunism raises its ugly head and the realities of coalition negotiations emerge to the fore, it becomes increasingly more difficult to predict what will happen. Earlier this month, for instance, a right-wing populist coalition blocked the Reform Party leader Kaja Kallas from becoming Estonia’s first female prime minister, despite her party winning the elections. But what will almost certainly prove to be a damaging, short-termist move to the career of Prime Minister Jüri Ratas across the Gulf of Finland could be even worse for the centre-right in Helsinki given the size of the Finns Party. Nonetheless, this has not stopped the National Coalition leader Petteri Orpo from declaring that his party would be open to negotiating governing arrangements also with the right-wing populists.

 

Ultimately, the uncertain coalition talks are likely to consume much-needed media attention from the European Elections in five weeks’ time. The last time the two elections coincided in Finland was in 1999, resulting in the worst Finnish turnout on the European level (31.4%). In the worst-case scenario, Finland does not even have a government in place before its Council presidency term begins in July.

 

What is certain, however, is that the new Finnish government should under any configuration oppose the ratification of any future trade deal with the United States that does not include handing the Ice Hockey Women’s World Championship gold medals to their rightful owners.

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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%.

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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.

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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.

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