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Thinking Big: Universal Basic Income

  • May 2019
  • Daniela Floris

Thinking Big: Universal Basic Income

Utopia or Revolution? A conversation with François Denuit, PhD.

François Denuit.  Photo: Joseph Cochran

 

Economic inequality. Unemployment. Automation. The Universal Basic Income (UBI) promises to tackle some of the industrialized world’s most compelling issues in a unique way: guaranteeing every citizen a basic living stipend, with no upfront evaluation of their current employment status or willingness to find a future job. Regarded as a radical policy proposal, UBI has divided the public for decades. Its critics see it as a utopia that will rise inflation and deter individuals from seeking an occupation. Its supporters, on the other hand, see it as a revolutionary scheme that would redistribute wealth, leading towards a fairer labour market and simplified welfare state.

Until today, no country has ever fully implemented UBI, except for a two years pilot project in Finland:  2000 randomly selected applicants, aged 25 to 58, received a monthly allowance of 560 Euros, from January 2017 to December 2018. The experiment’s results, published by the Finnish Social Security Authority showed that the measure did not directly increase the participants’ employment level. However, it succeeded in improving their well-being, with the beneficiaries claiming lower degrees of stress and anxiety.

The 2018 World Wealth Report issued by Credit Suisse shows not only that the assets of the richest 1% account for 47% of the global wealth, but also that the financial share of the wealthiest, which has fallen during 2000-08, rose again to pre-financial crisis levels in 2016, allowing the rich to become even richer. In contrast, medium and low-income workers’ conditions have progressively become more precarious due to the spread of gig work and contingent employment contracts. Furthermore, some analysts estimate that 40% of blue collar jobs could soon disappear to be replaced by A.I.

In this scenario, is the Universal Basic Income a feasible option to relieve wealth inequality? We posed this question to François Denuit, PhD in Political and Social Sciences (University of Warwick and Université Libre de Bruxelles-ULB), who earned his Doctorate with a thesis titled “Fighting Poverty in the European Union. An assessment of the prospects for a European basic income (EUBI)”. Denuit was one of one the speakers at the “Universal Basic Income – Dream or Nightmare?” debate at the Pint of Science Festival:  an international initiative that brings scientists and researchers to local pubs to deliver talks on a broad range of topics, from robotics to the human brain, the universe, society and much more.

 

Centre for European Progression: The UBI is not a new idea. Over the years,  several countries have been experimenting with similar ideas for decades, either through redistributive programs or subsidized welfare. However, none of them fully adheres to the principles of UBI. Although it was never implemented, in 1969 Richard Nixon proposed an annual income of 1600$ for families below the poverty line. Also, we have witnessed recent attempts to rebrand UBI: Italy has just approved a scheme of subsidies and job placement to address unemployment, whereas Kenya‘s basic income project is actually promoted by an NGO on a very small scale. It seems there is a resurgence of interest in UBI, but also a lot of confusion. In a few, simple words, what is the Universal Basic Income?

 François Denuit:  The UBI is an income that is distributed in cash on a regular basis to all members of a political community, on an individual basis regardless of household composition. It is universal as it is granted to all, no matter the level of financial resources and is unconditional because it is distributed regardless of people’s willingness to work. The cases you mentioned use the label of Basic Income but only in part relate to it, or not at all like in the case of Italy: it approved something closer to a conditional minimum income scheme. Nixon’s proposal is a case of (household-based rather than individual-centered)  Negative Income Tax (NIT) that could be seen as a way to deliver a basic income but it is operationalized in a very different way.  At the end of a fiscal period, if a household’s revenues are below a certain threshold, it will receive a cash transfer; it will not receive any, if the household’s resources reach the break-even point and it will have to contribute itself to the welfare system, if it actually generates income higher than the break-even threshold. The main difference is that NIT is not an upfront payment like UBI which is given on a regular basis (generally every month) and thus provides a sense of security, but is a tax transfer calibrated on the household’s revenue for each fiscal period.

 

CfEP: Recently, a similar NIT experiment was made in Ontario, Canada, but it was shut down after only one year of trial when the new governor took office. Why is there still so much resistance? After all, the Finnish UBI trial showed significant improvements in terms of mental health and quality of life. Isn’t it what Welfare should ultimately be about?

FD: Yes, a major argument in favor of UBI is about having the certainty and the security of a fixed monthly income. A way to frame this, revolves around reducing the tax imposed on the mental bandwidth one faces when living with few financial resources; some studies in behavioral economics show that when people struggle financially they have less chances to take good long term decisions, not because they are less intelligent but because they live in a “survival mode”. UBI would grant individuals a sense of security, allowing them to project themselves on a long term perspective.

Another negative income tax (NIT) experiment, the Manitoba Basic Annual Income Experiment (Mincome) in Dauphin, Manitoba (Canada) realized in the 1970’s, also provides interesting insights since it involved an entire area, and not just randomly selected samples. The outcome showed important health effects: overall hospitalization rates fell by 8,5% with an important decrease in hospital check-ins for to accidents, injuries and mental health diagnoses. It also showed positive effects on the social fabric as a whole since its effects were much larger than expected, considering the number of families eligible for income support (a third of the families in Dauphin were below the break-even point). With everyone involved in the experiment, social interaction seems to have influenced social attitudes and individual behavior even among those who did not qualify, thereby reinforcing the direct effects of the guaranteed annual income. In fact, these UBI-related experiments that involve the whole population of a certain area – what we call a “saturation site” – provide greater insight on the potential benefits of a full implementation of the UBI. In short, an individual-centered device like the UBI may have strong community effects, proving that the overall benefit is larger than the sum of its parts.

 

CfEP: In the U.S, Andrew Yang, tech entrepreneur and Democrat candidate for the 2020 presidential elections is a staunch advocate for Universal Basic Income.  Some critics have pointed out how the UBI has attracted support from Silicon Valley tycoons, whose alleged real goal is to boost consumer capitalism rather than addressing inequality. What’s your opinion on that?

FD: There are different views on UBI. Criticism towards Big Tech’s endorsement of UBI is based on the fact that these large corporations’ main interest is to maintain the capitalist status quo; they fear a decrease in consumers’ purchasing power or the disappearance of employment opportunities for everyone, a basic income may guarantee sufficient means to live a decent life and maintain consumption levels. I am not sure whether everyone in the Silicon Valley is pushing for this specific agenda, but there are other ways to look at the idea. One can endorse UBI as an instrument that provides an allowance for a basic living, perpetrating the consumeristic model or we can see it as a concrete instrument to fight inequality and provide more emancipatory power to all. My opinion is that we can see UBI as an emancipatory policy only within the context of tackling inequality rather than just poverty. It thus needs to go hand in hand with fiscal reforms that address the growing gap between the rich and the poor, and together with further developing universal public services. In short, the UBI is not a panacea, it needs to be an integral part of the welfare state, and not a substitution for it. If well calibrated, the UBI is a form of social dividend that may then have positive effects in many different areas, from our reconsideration of the place of work in our daily lives to fighting inequalities.

 

CfEP: On a European level, what’s the state of art of the discussion on measures to tackle poverty and inequality? Let’s take the EU unemployment rate, for instance: it was at 6.4% in March 2019, the lowest on record since 2000. Yet, the North-South gap is remains wide, especially in terms of youth unemployment in Mediterranean Europe (namely, Greece, Spain and Italy).

FD: We are facing different realities in terms of welfare systems’ performances throughout the whole monetary union and these socio-economic imbalances between Member States are widening.  Currently, the ongoing debate concerns the establishment of a European unemployment benefit scheme (EUBS), in the form of an inter-state reinsurance mechanism to support national stabilization capacities in times of crisis and avoid the risk of contagion to other member states. The idea is that if a certain member state reaches a given unemployment threshold, the EU would kick-in and support the unemployment benefit system of the specific country. This means, in essence, that we would create some form of solidarity fund at EU level.

In my doctoral thesis, I worked on the idea of a European universal basic income (EUBI): a modest basic income (about 200-300 euros in average and varying according to the national cost of living) given to all residents of the EU as a top up to other sources of revenues, whether coming from work or national social benefits, and funded at EU level. I showed that it may have positive effects at individual level as a measure to fight poverty and social exclusion, at member state level as a instrument of macroeconomic stabilization, and at EU level as a way to support the legitimacy of the European project.

The difference between the EUBS and the EUBI, is that the former kicks in only in times of economic crisis and involves redistribution between states, whereas the latter aims to be a permanent policy organizing solidarity between individuals throughout the EU. The EUBI might have a lower stabilizing power in terms of counteracting an economic downturn but would still have a greater social impact in fighting poverty on a long term prospective. In fact, the two measures need not be mutually exclusive and it is true that the EUBS (or another similar mechanism of fiscal transfers) is urgently needed. Overall, the basic income is starting to get more traction at EU level as political parties like the European Greens and pan-European movements such as Volt and DiEM25 have enclosed UBI proposals in their electoral programs.

 

CfEP: We are in front of times of big change: how can we achieve a better and more equal Europe?

FD: We need to make social rights such as the right to a decent level of resources binding in order to re-equilibrate the economic and social dimensions of European integration. The tools are available as these rights are already proclaimed by the EU Charter of Fundamental Rights and reasserted by the European pillar of social rights. Then, it is about redistribution: enabling a redistributive mechanism within the EU will benefit all Members States, including those who are net contributors, as it would provide greater macroeconomic stability. We need to think about a systemic model, whether we look at a pan-European UBI or unemployment insurance scheme.

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Montenegro Calling

  • May 2019
  • Daniela Floris

Montenegro Calling

The Balkan country’s ambitious road towards the EU

Ana Đurnić

 

Montenegro is a country of  wild beauty:  crystalline shores, majestic mountains and flourishing valleys. It is no surprise that tourism is Montenegro’s leading industry, directly accounting for more than 23% of its GDP. After a referendum declaring independence from Serbia in 2006, the Western Balkan country, home of roughly 700.000 people,  joined the WTO in 2012 and NATO in 2017.  Montenegro’s ambition to join the European Union, however, faces serious hurdles.  Since the launch of the accession process in 2012, 32 negotiating chapters out of 33 have remained open, questioning the feasibility of a full integration by 2025, as the European Commission initially indicated.

 

Montenegro has been shaken by corruption  scandals, cases of bribery in public procurement and (alleged) electoral frauds. Ongoing protests highlight the country’s political gridlock, centered around the figure of  President Milo Đukanović , who has de facto ruled for over 27 years, leading Montenegro’s transition from a  former Yugoslav republic  to independence. Đukanović’s party, the DPS (Democratic Party of Socialists) is omnipresent in society. Party members have better chances for securing a job in the public sector, which is by far the largest employer in the country. Despite the establishment of agencies against corruption and organized crime, NGO activists, civil society organizations , grassroots movements and opposition parties denounce the ‘captured state’ of Montenegro, in which the rule of law is subjugated to major political interference.

 

The Centre for European Progression has met with Ana Đurnić, Public Policy researcher at the Institut Alternativa, an independent think-tank based in the capital Podgorica, to discuss about the state of play of Montenegro’s prospected membership to the EU. The setting was the panel discussion “Frontrunner in a slow race? Montenegro’s EU integration path” organized by the European Policy Centre (EPC) and the Center for monitoring and research (CeMI) in Brussels. Along with Đurnić, the speakers’ list included Thomas Hagleitner, the European Commission’s Head of Montenegro Unit, Nikoleta Đukanović, CeMI’s Executive Director, Bojan Šarkić, Ambassador of the Republic of Montenegro to the EU and Corina Stratulat, Senior Policy Analyst at EPC.

 

CfEP: What is your take on Montenegro’s position as frontrunner for EU membership in the Western-Balkans? Can Montenegro still be considered as such, taking into account the 32 open chapters?

Ana Đurnić: To use a metaphor, Montenegro is the best in a classroom of bad students. The government has partially fulfilled some of the EU conditions but the implementation of the Action Plans concerning the several remaining chapters require constant monitoring. Montenegro’s government has a longstanding record of concealing data and information from the public, keeping citizens uniformed about the current status of the integration process. Chapters 23 (Judiciary and Fundamental Rights) and 24 (Justice, Freedom and Security) are definitely the most difficult to ‘close’. These chapters are crucial as they oversee the work of the anti-corruption agency, the special prosecutor’s office, public procurement and civil rights. Right now, we can only see a backslide in all of these areas, particularly in public procurement, media freedom and access to information.

 

CfEP: Montenegro ranks 104th in the RSF- 2019 World Press Freedom Index. In 2018, Olivera Lakić, an investigative journalist  was shot and wounded outside her apartment. This and several other accounts depict a grim picture of intimidation and indirect censorship of independent media outlets. What’s the current climate for journalists and reporters in the country?

D: Although the government does not own any news organization, political pressure on independent media  is tangible. Public procurement tenders are advertised only on pro-government media, while critical reporters are systematically smeared, name-called and publicly discredited. Investigations of physical threats and attacks against journalists are often obstructed. In Montenegro the space for dissent is shrinking: in theory, the Freedom of Information (FOI) law  allows every citizen to access public information; in practice,  greater political interference  is very often exercised towards newsrooms’ editorial choices, preventing the publication of a broad range of “sensitive information”. There is, in fact, an attempt to censor and silence non-aligned voices.

 

CfEP: Public protests are ongoing since the last general elections in 2016. What is your outlook on the opposition movement’s media coverage ?

D: Independent media are keeping an  eye on the protests, whereas the public media, funded with taxpayers’ money, is reluctant to report on dissident movements in order not to lose governmental support. Several movements took the streets over the past three years: the most recent is the “resist” movement, supported by several NGOs and grassroots groups. Protests are also endorsed by the  opposition parties that have been boycotting the parliamentary activities since the 2016 elections.

 

CfEP: Russia has traditionally retained major influence in the Balkans, but now China is the “new kid on the block” . The most ambitious project since Montenegro’s independence, the Bar-Bojare highway, is the result of a controversial partnership between Chinese investors and Montenegro’s government. The project costs 890 million Euros and, according to various sources, tax-free construction materials and two thirds of the workers come from China. Is the infrastructure a debt trap or a real chance for development? 

 D: Analyzing the statements of Montenegro’s high officials, our key allies change from time to time. For a while, Brussels has been our privileged partner for economic development.  But whenever the EU assumes a slightly critical position towards Montenegro’s executive, the tone shifts in favor of alternative partners, namely Russia and China. It is true that a part of the population still holds an emotional connection with Russia, although Beijing has been investing heavily in our economy. However, Chinese investments do not come as a present but as a loan that we will have to pay back. The new highway could be an opportunity, but the key issue is the project’s overall lack of transparency: most of the documents and reports concerning the infrastructure are kept away from the public eye.

 

CfEP: Thank you,  we would like to get a closing statement from you. In a few words, what’s the greatest contribution Montenegro could give to the EU in the future? 

 D: Montenegro is naturally a part of Europe. Thereby, it can definitely be part of the EU too. The biggest contribution would be our human capital: lots of young and creative people that could help not only Montenegro, but the whole Union to improve.

 

 

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Create, Connect, Engage: Digital Campaigning & Cybersecurity

  • May 2019
  • Daniela Floris

Create, Connect, Engage: Digital Campaigning & Cybersecurity

More than ever before, social media and digital tools will impact the 2019 EP elections.

David Timis, on the left, and William Echikson, on the right, with a participant. Photo: Joseph Cochran

 

As the European Parliamentary Elections are approaching, candidates and political strategists have less than a month left to engage with citizens, mobilize their base and appeal to swing voters.Internet hacks and disinformation represent concrete threats to electoral runs-up, with “fake news” seen as a problem for democracy by 83% of Europeans.

In fact, according to the Parliament’s latest Eurobarometer survey, one third of Europeans of voting age are are reported not planning to vote, believing that their vote “won’t change anything”. Much of Institutional and political communication tend to be run on social media, but turning online interaction into active participation remains challenging. Initiatives to mobilize voters, such as #ThisTimeImVoting and #EUandMe, launched by the European Parliament to present information on the election process and to promote the achievements of the EU, have been received positively by users and more traditional media. However, we will have to wait until ballots are cast for an impact assessment on the voter turnout, which was only 42,6% in 2014.

How to run a successful digital election campaign was the subject of a training session organized by the Centre for European Policy Studies (CEPS), a Brussels-based think tank for EU affairs. The main speaker was David Timis, Google’s EU civic outreach fellow, and co-founder of European Heroes, a platform for the civic engagement of young Europeans. The event was moderated by William Echikson, CEPS’ Head of Digital Forum, Europe’s correspondent for the Wall Street Journal for decades, and former Senior Manager at Google. During the workshop, Timis shared a few but precious tips on how to establish a digital audience and counter cyberattacks.In fact, according to Timis, effective digital media campaigns are able to build a strong brand with clear-cut messages, an attractive storytelling of the actors involved and a straightforward mission statement. The goal is not only to attract views, but to connect with potential voters or activists and, ultimately, call for action.

 

Mobile Friendliness

Surfing the internet while on the move is a consolidated habit for the most of us. A Eurostat poll show that 65% of Europeans aged 16-75 use mobile devices to access the internet, proving that TV is no longer the main medium for audiovisual material. YouTube, the video streaming platform acquired by Google in 2006 for USD 1.65 billion, has over 1.8 billion monthly users . Streaming and sharing videos have become increasingly popular, with extensions like “live” and “stories” incorporated in various social networking platforms. Establishing a YouTube channel is now recommended for businesses and organizations, especially if they wish to attract a young viewership.

Contrary to popular belief, Timis pointed out, producing viral videos does not necessarily require a big budget: filming with a smartphone gives the public a glimpse of spontaneity and casualness. Accordingly, fast paced storylines and visual close-ups mimic real time human interaction, instilling audiences with the perception of being participants rather than just viewers. Successful campaigns, such as the one of Alexandria Ocasio-Cortez, now a Member of the House of Representatives in the US, prove that a multimillion-dollar funding is not indispensable: support from a tech-savvy team with a sharp social media strategy can lead to outstanding results. Charisma, creativity and a deep understanding of your target of reference all pay back in terms of popularity.

Other formats, including “behind the scenes” content, videos featuring supporters or volunteers and being endorsed by influencers are also important in the communication strategy.

 

Cybersecurity

As the distribution of media has become more and more related to the internet, the likelihood of sabotage through cyberattacks has increased. Political Campaigns are particularly exposed to such threats, with the Brexit referendum and the 2016 U.S Presidential Election being the most notorious cases. Attempts of hacking and “phishing” (the fraudulent attempt to steal information posing as a trustworthy entity) have become the most common attacks, but, according to Timis, they can be prevented.. The Cybersecurity Campaign Playbook , published by the Harvard Kennedy School, and quoted by Timis, suggests that raising awareness is paramount to counter malicious attacks. Simple measures, such as using long and different passwords for different accounts, storing sensitive information in web clouds and communicating through encrypted apps could make the difference. Other risk management tools include using a password manager and two-factor authentication (2FA), in which the second step of log-in relies on dedicated apps, safer than text messaging, or on security keys. Several of these tools are free or low-cost, making media literacy a fundamental asset for campaigners and social media managers to disallow data leaks and privacy breaching.

 

A digital future

When asked what the next big thing for the digitalization of Europe was going to be, Timis had no doubt: “They are already here: mobile and video have taken over the way we communicate and connect to each other, bringing parties, organizations and movements closer to the people they interact with.”, William Echikson, on the other hand, in virtue of his decades-long experience in reporting on EU affairs and policy research was more cautious: “for 30 years the Internet has had a sort of free pass. Recent scandals have shown that a more organic approach to regulations and policymaking needs to be implemented. It is a long way to go and it won’t be easy, but we are getting there”.

 

 

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Partnership Announcement: Greek Energy Forum

  • November 2016
  • Panagiotis Loules

gef

Centre for European Progression (CFEP) is delighted to announce its partnership with Greek Energy Forum (GEF)

The Greek Energy Forum (Ελληνικό Ενεργειακό Forum) – founded and headquartered in London since 2013 and currently featuring branch offices in Brussels, Athens, Nicosia, Dubai and Washington DC – is an international energy think tank consisting of Greek energy professionals holding international corporate posts, and sharing a common interest in the broader energy industry in Greece and Southeastern Europe. The members of the Greek Energy Forum hold international corporate posts and their expertise spans across the energy industry spectrum, benefiting the Greek Energy Forum with a multi-disciplinary skill-set and a holistic approach to its field.

We are an independent NGO based in Brussels focusing on the young generation. Our concept is to provide constructive atmosphere for discussion about the future of Europe in an informal, well-balanced and open way. We share common values with GEF and for that reason we pledge our continued commitment to enabling GEF’s success. CFEP is very keen on the prospect of working closely with GEF in event promotion/organisation as well as a deeper exchange of ideas and practices and working together in identifying and bidding for EU funding opportunities.

Please find more information about GEF here

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