4 December - Romanian Journal of European Affairsrjea.ier.gov.ro/wp-content/uploads/revista/RJEA_2016_vol16_no4_web_26.04.2018.pdfEugen Dijmărescu – Deposit Guarantee Fund Romania

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RomanianJournal of European AffairsVol. 16, No. 4, December 2016

European Institute of Romania

Founding Director - Niculae IduDirector - Gabriela DrăganEditor-in-Chief - Oana MocanuAssociate Editors - Mihaela Moncea, Mihai Sebe, Eliza Vaş

Editorial BoardFarhad Analoui – Professor in International Development and Human Resource Management, the Center for International Development, University of Bradford, UKDaniel Dăianu – Professor, National School of Political Studies and Public Administration, Bucharest, former MEP, former Minister of FinanceEugen Dijmărescu – Deposit Guarantee Fund RomaniaGabriela Drăgan – Director General of the European Institute of Romania, Professor, Academy of Economic Studies, BucharestAndras Inotai – Research Professor of the Institute of World Economics, Research Center for Economic and Regional Studies, Hungarian Academy of Sciences Mugur Isărescu – Governor of the National Bank of RomaniaAlan Mayhew – Jean Monnet Professor, Sussex European InstituteCostea Munteanu – Professor, Academy of Economic Studies, BucharestJacques Pelkmans – Jan Tinbergen Chair, Director of the Department of European Economic Studies, College of Europe - Bruges Andrei Pleşu – Rector of New Europe College, Bucharest, former Minister of Foreign Affairs, former Minister of CultureCristian Popa – Former Vice Governor of the National Bank of RomaniaTudorel Postolache – Member of the Romanian AcademyHelen Wallace – Emeritus Professor, European Institute, London School of Economics and Political Science, UK

© European Institute of Romania, 2016

Romanian Journal of European Affairs is published by the European Institute of Romania7-9, Regina Elisabeta Blvd., Bucharest, Code 030016, RomaniaTel: (+4021) 314 26 96, 314 26 97, Fax: (+4021) 314 26 66E-mail: [email protected], Web: http://rjea.ier.ro

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ISSN print: 1582-8271ISSN online: 1841-4273

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Contents

The Lost and Forgotten Lesson of German Reunification and How It Can Relaunch the European Union Project ..................................Florin Bonciu

Migration Drivers, the EU External Migration Policy and Crisis Management ............................................................................Fulvio Attinà

European Union - Asia Pacific Trade Relations: Tentative Bilateralism amidst Competing Plurilateral Initiatives .................................................Beatriz Pérez de las Heras

The Participation of Austria and Hungary in the EU Framework Programmes for Research and Technological Development - A Comparative Analysis ...............................................................................Ágota Dávid

Climate Policy of the European Union: What to Expect from the Paris Agreement? ...............................................................................Wadim Strielkowski, Evgeny Lisin, Inna Gryshova

The article Mass Media Perception of the European Union in Kazakhstan , authors: Bakyt Ospanova et al. was removed from this issue on 26th April 2018, due to suspicion of identity misuse.

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ROMANIAN JOURNAL OF EUROPEAN AFFAIRS Vol. 16, No. 4, December 2016

The Lost and Forgotten Lesson of German Reunification and How It Can Relaunch the European Union Project

Florin Bonciu1

Abstract: The European Union has been confronted, particularly in the past decade, with a diminishing position in the world economy in nominal terms (as percentage of world GDP), a decline of its global competitiveness and an increase in the diversity of the situations that cause troubles to its member states and regions that went far beyond the possibility of being efficiently managed by a single set of rules. Unfortunately, this growing diversity of situations, correlated with the increase of the inequality phenomenon in the developed countries, has been met by the European institutions with a more and more rigid framework that attempted to apply the principle “one size fits all” to a reality fundamentally characterized by diversity. This paper draws a parallel between the European Union’s attempt to assist its member states and regions in reducing development gaps and the German reunification process after 1990 by suggesting a master plan that might relaunch the European Union’s project, with a large support of the European citizens and along with that solving issues like economic growth and unemployment. The proposal starts from the German reunification lesson that was based on a massive financial intervention, correlated with a well-defined master plan that has been implemented with German rigor. At the same time, the proposal takes into account the economic projects that already exist in the European Union (particularly regarding infrastructure), as well as the low cost of money that characterizes the current international situation.

Keywords: European Union existential crisis, European Union relaunch, German reunification lesson

JEL classification: F02, F15, F53, F55

Long and medium term trends manifested within the European Union project

The long term perspective

The European Union has been particularly affected by the economic crisis that began in 2008 but there is to mention that its contribution to growth (world GDP) has been declining for the past 30 years (from almost 30% in 1980 to merely 16.5% in 2016 – Figure 1) even though more countries joined the EU in the meantime. This decline, despite all the limitations of using GDP as an indicator (Coyle, D., 2014) reflects the fact that

1 Florin Bonciu, PhD, is a University Professor with the Romanian-American University in Bucharest and Senior Researcher with the Institute for World Economy in Bucharest. His activity materialized in 16 books and over 100 papers on issues related to international economics, European integration, international investments and international business. E-mail: [email protected].

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European Union could not capitalize its own resources as well as the full potential of globalization. The enlargements, particularly the ones from 2004 and 2007 that involved 10+2 countries, provided a breath of a fresh air consisting in new markets and low labour costs but only caused delays in the decline.

Figure 1. The decline of the share of European Union in world GDP, expressed in PPP terms, in %

Source: Data from IMF World Economic Outlook, April 2016 and IMF data mapper. Figure drawn by Full fact team sourced at page https://fullfact.org/europe/eu-has-shrunk-percentage-world-economy/, retrieved at October 5, 2016. Note: Data for 2015 and 2020 represents forecasts and estimates.

In our opinion this long term decline has been primarily determined by the mechanical extrapolation of some rules and institutions that had made perfect sense in 1957 for the six initial member states (in the sense that those countries were to a large extent comparable and compatible as regards to culture, level of development, traditions and values, etc.), while they were less and less applicable to the next stages of enlargement (with reference to countries like Spain, Portugal, Greece and the more so to the countries belonging to the 2004 and 2007 enlargement waves).

Contrary to what happened during the real life enlargement process, from our point of view, in order to accommodate the diversity of situations and the development gaps, a pragmatic and functional approach for those enlargements could have referred to:a) either requesting the new member states to first become OECD member countries (in

this way securing a comparable level of development at least to a certain extent). Such an approach would have delayed quite considerably several countries in their accession but would have avoided most of the difficulties that manifested after accession in the implementation of the acquis communautaire;

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b) or changing the rules of the game (i.e. the Treaties) and institutions in order to accommodate the diversity of situations and development gaps brought by the new Member States. In this respect, maybe the establishment of a DG for Developing countries in the European Commission would have been appropriated and beneficial. Such a Directorate General could have had the objective to support the new less developed member countries up to the moment they would have reached the average level of development of the European Union expressed in GDP/habitant. In our opinion the combination of an ever increasing diversity of member states and

maintenance of the same rules (and even enforcing stricter ones) has been an efficient recipe for decline and even for the crises that manifest today in the European Union.

The medium term perspective

For the purpose of this paper the medium term perspective refers to the situation that developed in the European Union after the onset of the crisis of 2008 until mid-2016. The crisis affected all member states but in different ways and at different intensities.

Given the differences in the levels of development and historical backgrounds that characterizes the different member states, the crisis has acted as an amplifier in the sense that the differences just grew bigger and bigger and more acute. It is interesting to mention here that the euro zone as a whole performed less (measured by GDP year on year increase) than the European Union average. As a proof of the stricter rules, the results were less satisfactory. A point to be mentioned here is that of the particularly unsatisfactory economic performance of the euro zone, which has two components: a) more and more rigid rules; b) but also the application of such rules to very different situations that may vary from Germany to Greece and from Italy to Portugal.

At the same time, other indicators, particularly unemployment rate (out of which youth employment is of clear concern) differentiated a lot the European Union member countries and had a lot of social and political implications. The same differentiation of the member states situation, amplified by the crisis, could be found in aspects related to budget deficit and external debt. In many cases, a logical and much needed decision for greater efficiency in public spending and functioning of public sectors has been replaced by austerity measures applied in a mechanical manner that only aggravated the economic and social conditions, despite of some improvements in the nominal indicators.

Under these circumstances, while the state of affairs in the member countries and their regions has become more and more diverse, the European Union’s institutions launched the idea of the United States of Europe, by trying to implement stricter rules (like the European Semester) or involving rather abstract and vague concepts (like structural deficit and potential GDP) with very little (if any) immediate use.

In the meantime, after 2008, at a global level, new centres of economic power have emerged (for instance some members of the G-20 and particularly China, but also India) and, what is more important, the role of states increased and the realpolitik approach (based on clearly expressed interests and negotiations) re-emerged.

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In this context the idea of “soft power” has declined markedly (Friedman, G., 2015) together with the idea of multilateral institutions (like World Trade Organization) which started being complemented rather than replaced by bilateral and plurilateral approaches. In our opinion, the high dynamics of bilateral trade agreements in the wake of Doha Round failure is another representation of diversity and its acceptance in the international arena.

In other words, nowadays the world economy is growing simultaneously more and more inter-connected, but also more diverse. Real life and real economy manifest themselves anyway for better or for worse and they reclaim the acceptance of diversity and flexibility. At the same time realpolitik means that states and other actors with regional or even global scope of action base their actions and strategies on specific interests and are willing to use “real/hard power” to achieve them.

European Union – where is it in 2016?

As of mid-2016, European Union is confronted with a number of tensions, contradictions and existential questions, among which we can mention:

- the prolonged effects of the economic crisis that started in 2008;- the centrifugal forces that tend to disrupt a number of its member states into regional and historical components (the list here is rather long and includes Belgium with the Flemish and Walloon divisions, Spain with Catalonia’s attempts for independence, Italy with the League of North secessionist ideas and even Venice with the idea to become again a city-state, Great Britain with the failed Scottish referendum of September 2014 and with the Brexit referendum of June 2016);- the world geopolitical reality that is based more and more on real force (including military one as can be noted in Syria) that European Union as an entity is lacking;

Under these circumstances the European Union’s institutions have repeatedly missed the opportunity to use its diversity as an asset rather than a liability and tried instead in vain to impose standard rules to all its member states.

It is quite amazing the fact that confronted with conceptual, structural and even existential issues, European Union officials have always mentioned that there is no other alternative but to strictly stick to the existing rules while the alternative is quite natural, positive and obvious: to assess the situation and to draw new rules and institutions that respond to the current global environment and to the needs of the member states. Therefore, the question for European Union is not at all “To be or not to be”, but rather a more pragmatic and forward looking “How to be”. In this respect, we suggested in another paper the idea of changing the European Union’s motto from “Unity in diversity” to “Diversity in Unity” (Bonciu, F., 2015).

Dialectics as a reasoning method explains historical movement by a spiral that makes similar situations, institutions and systems to come back after some time, but on a different track of the socio-economic framework and with a different intrinsic quality. Apparently, after 1990 European Union has missed this dialectical movement entirely and nowadays it’s fighting, not against the Central European governments that have different

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opinions or the “Leave” campaign of Great Britain, but rather against dialectics itself. This dialectical movement has brought back on a different plane and in a different context the pre-eminence of diversity and flexibility as well as the need to put the prosperity of the European people at the forefront. In this context, it is difficult, if not entirely impossible, to predict the evolutions of such a complex socioeconomic process as the one of European integration and, in this case, one can say that no state or supra-state entity (such as the European Union) can win a fight over dialectics.

The current situation of the European Union is further tangled by the decision of some of its leaders (particularly from Germany) to support migration as a possible solution to a future shortage of labour, with all its presumed positive implications regarding the alleviation of the consequences of the aging of population (among which, but not limited to, the funding of social security and pension funds).

Without going into too much detail, it is interesting to note that, at the same time with the discussion of migrants as a solution to a future labour shortage, apparently in a parallel world, there is a big discussion on the 4th industrial revolution, artificial intelligence, use of robots and the internet of things. Such subjects were important enough to become the key topic of the Davos meeting of 2016 (Schwab, K., 2016). However, it seems that nobody wanted to connect the dots and see that the 4th industrial revolution as a possible solution for clearing up the problem of labour shortage and of any associated costs, therefore leaving aside the need of migrants as a necessary solution. Of course the 4th industrial revolution is not a panacea, it will create issues of its own (such as the need for a new economic paradigm where human labour will be replaced at a scale that cannot be compared in any way with the first industrial revolution), but this is an entirely different subject. It is interesting to mention in this context that Japan, a developed country confronted in a rather acute way with the aging problem, adopted the use of robots as a solution to labour shortage, while Germany, a developed and highly industrialized country, mentions in a very low key the use of robots and artificial intelligence as a solution to a possible future shortage of labour, despite of the serious strategies elaborated on this topic, such as “Industrie 4.0” presented in August 2006 and followed by “High-Tech Strategy 2020” presented in June 2010 (Lydon, B., 2014).

In a few words, the European Union of today, as of late-2016, is confronted with an existential crisis, it needs a new paradigm, new values and a new rapport with the European citizens (by this, meaning the European nations or other consistent socio-cultural significant groups). Up to now, the responses have been rather administrative, trying to preserve the status quo rather than opening the floor for new ideas based on flexibility and diversity. Maybe in this context it would be useful to quote Herbert Spencer’s synthesis of Charles Darwin’s theory on natural selection as “Survival of the fittest” (Spencer, H., 1864) as a universal principle applicable not only to living beings but also to institutions and organization.

The lost and forgotten lesson of German reunification

We want to mention from the very beginning of this part that the purpose of this exercise is not theoretical or just speculative. The purpose is to clearly formulate a proposal for a

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possible and practical way of relaunching the European Union project in a way that may align it with the contemporary global and regional trends and balance of power, while at the same time finding a large popular support in the member countries.

We begin this part of the paper with an explanation of its title. We are going to deal with the German reunification lesson as a conceptual instrument for the relaunch of the European Union project later, but first we shall explain why the lesson was both “lost” and “forgotten”.

The German reunification was a unique historical process that had different stages between May 1989 and September 1990 and, besides other implications for the two German states, it also had an implication for the European Union because it represented an enlargement. After all, the division of Germany, despite its artificial nature as an outcome of the political agreements between the Allies at the end of the WWII, had as a result the establishment of two German states which joined the United Nations on September 18th, 1973 as the 133rd and 134th member states (United Nations Association of Germany, 2013).

The German Democratic Republic existed as a state between October 7, 1949 and October 3, 1990 (New World Encyclopaedia, 2013), it was a member of United Nations (between 1973 – 1990), had a surface of 108,333 sq.km and a population in 1990 of about 16,111,000 people (New World Encyclopaedia, 2013).

Considering all the practical purposes, the reunification of Germany was also an enlargement of the European Union even if there was no classical route for that enlargement involving (as in case of other member states) negotiations by chapters, accession treaties and timetables for full harmonization with the acquis communautaire. The particularity here was the fact that we did not have a new member state to join the Union, but a state (East Germany) that merged with an existing member state of the European Union (Federal Republic of Germany).

In essence, the mechanism of enlargement (the way it was done) is less important than the enlargement itself, which no doubt existed. But if someone checks the official pages of the European Union (belonging to the European Commission or the European Parliament) dealing with the list of enlargements, this one is obviously missing (www.europa.eu, 2016; www.europarl.europa.eu, 2016). This is why we call it here “the lost” lesson, because apparently it has been lost from the historical narrative.

We may speculate here that one of the reasons of this omission is because European Union likes standard situations and procedures. And by all means the German reunification has been a non-standard procedure.

The “forgotten” part of the German reunification lesson represents the core part of our proposal for relaunching the European Union project. In our view, it is a “forgotten” lesson because the lesson is there (the way it was done and what was achieved), it took place here in Europe and not in other parts of the world, but it is just not taken into account, therefore it is a lesson not learnt. And it is our attempt here to bring this lesson to the attention of decision makers and all those interested in the revival and success of the European Union project.

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The German reunification after almost 27 years has represented a success in reducing the initial huge differences between the West and the East, even if there is a lot of research pointing out to the fact that it is not a total success (Connolly, K. 2015). It is true that differences between West and East Germany still exist, but the reduction of gaps is more important and, at the same time, in 2016 Germany, the institutions and legislation are, basically, the same and so are the administrative mechanisms. It is an unfinished business, a near complete success, but a success nonetheless. And there are without any doubt a lot of lessons to be learnt from this success.

The main aspects of this lesson of German reunification consist in our opinion in 3 components:

a) the existence of a model or blueprint represented by the Federal Republic of Germany (as a state and economic model to be implemented in the Eastern part of Germany). This part gave a clear target and yardstick for measuring the progress;

b) a huge financial package that is was estimated at around 2 – 2.5 billion Euros for a yet unfinished business (Roth, T., 2014). The exact amount is not relevant; the magnitude of involvement is.

c) The implementation of a master plan of reunification with clear deadlines and objectives that have been carried out with German rigueur.

Based on this very simplified model we propose the translation of the German reunification lesson to the re-launch of the European Union project. In the following we shall try to draw a parallel of the 3 components mentioned above for the case of German reunification to the situation of the European Union of 2016.

The relaunch of the European Union project based on German reunification lesson

According to this approach, the relaunch of the European Union project should oversee 3 aspects that may re-establish a dynamic equilibrium across the organization and provide a large, public support:

a) to create a solid base for economic growth and employment in all the member states and to secure a position of global competitiveness towards years 2030-2050;

b) to use a process of democratic decision and to provide concrete results in a short period of time for as many European citizens as possible;

c) to use the current international circumstances that allow for access to “cheap” money (that is the availability of money and the very low cost of borrowing, especially for international organizations that benefit of a high credibility).

According to this approach the European Union institutions would play the role of the Federal Republic of Germany. The goal of the process would be to solve 2 issues simultaneously:

a) the existence of substantial development gaps between old and new member states as well as between various regions in all member states;

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b) the inequality issues that left huge parts of European populations outside the benefits of globalization and growth.

The process will consist in identifying projects that are of significant interest for the Single European Market and/or for specific member states or regions from the member states. Special attention can be paid to the projects that are already approved, such as the Ten-T projects regarding the European infrastructure. Other projects may refer to energy, agriculture, research, education, health, and aging population. These projects will lay the foundation for long term sustainable growth.

The lists of already approved projects or projects with a significant impact can be easily put together by a Task Force established by the European Commission. The selection has to be carried out in a short period of time and it can be updated periodically. Further on, in an expedite manner, the Council of the European Union and the Parliament can approve the list.

While the list may include infrastructure (and other) projects from all member states, it may be easier to start with projects from the new member states in Central and Eastern Europe. One obvious reason for this proposal is that there are more development gaps to be solved in that part of European Union.

After the list of projects is approved, they will be implemented under the direct authority of the European Commission (or a special implementing body with this purpose only), with a focus on results, short deadlines and efficiency. The usual delays due to public procurement practices have to be explicitly eliminated by adopting more straightforward procedures. Extraordinary circumstances reclaim extraordinary measures. We cannot solve the existing problems by using obsolete methods.

A particularly sensitive issue is related to transferring the implementation authority for these projects to the European Commission (or a special implementing body with this purpose only). In fact, this would mean to transfer more power to a Community organization. In our opinion the solution is to present the approach to the population directly and not via the political parties in the respective member states. The way in which such a proposal will be presented is crucial for its acceptance. In case the question addressed to the people is formulated as follows: “Would you like to transfer the implementing authority for infrastructure (and other) projects to the European Commission (or other specialized institutions)?” it is very possible that it would not be accepted. We can also expect that the political parties in the respective member states would be reluctant to give up decisions on funding large scale projects.

But if the question addressed to the people would be: “Would you like to have in a short period of time (for instance 1 – 3 years) running water, sewage, roads and highways, schools and hospitals, etc. and create a lot of jobs in the process?”, it is very likely that they will approve.

There are 2 favourable circumstances for this approach:

a) the funding is possible outside the European Union budget by means of borrowing at a very low interest rate to be done directly by the European Union. We can say that it

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is the best time for borrowing money nowadays when we even have negative interest rates for deposits;

b) all the technologies involved in building infrastructure of all sorts are very mature, there is a lot of expertise, technologies are available and, particularly, this type of projects create jobs not only in the countries where the projects are implemented but also in the rest of the European Union member countries where suppliers are located.

By launching such a large scale modernization of the infrastructure across European Union, a virtuous circle can be established. Quickly launched projects would mean jobs and quick results. Quick results in improving infrastructure will require equipment and other inputs that will help European economy as a whole. Quick results and jobs would mean the increase of aggregate demand and better prospects for all European companies. And better and modern infrastructure would allow for a better competitive position of European Union in the global economy in the long run.

A positive side effect in our opinion would be the fact that European people will have a clear, tangible connection between something that improves their life and the European Union. As result we will have a better defined idea of what European citizenship means and why it is useful not as an abstraction, but rather in daily life.

In order to maintain an objective approach, we draw the attention to some weak points or threats of the proposed approach. While all financial and technical aspects can be solved and the projects are already defined and some of them even approved, the difficulty is to have an agreement of all parties involved on the proposed mechanism. As this mechanism cannot be imposed, then the only alternative is to create a true awareness on the critical situation in European Union and the need for a decisive and bold approach.

An advantage of the proposed approach is that it is scalable, it can start small (but visible enough to create an impact and public awareness) and then be extended to regions, countries or whole sectors – like roads or railways.

Conclusions

The European Union is at a certain point in its history when a new approach is required. The world has changed a lot, the socio-economic and cultural environment in the European Union member countries has changed, and the balance of power in Europe and the world has changed.

We may not like the idea of change as it can be unpleasant, difficult and putting us out of our comfort zones, but the moment requires a new approach and our understanding is that either we implement a change ourselves or history and geopolitical environment will do so.

We need to accept the fact that European Union is now much more diverse than in 1957 and that globalization is a phenomenon that permeates all fields of economic, political, social life. At the same time, the consequences of the 2008 crisis are still substantial - we are confronted with a change of generations and millennials are different while the 4th industrial revolution is more and more present in our daily lives.

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Under these circumstances, diversity and flexibility should be assets for the European Union because they are abundant. Diversity and flexibility may lead to resilience and that is the ultimate test for any system be it simple or complex. The European Union is at the same time a useful concept and organization, but its usefulness exists as long as it is alive, flexible, adaptive and dynamic.

References:

• Bonciu, F. - Rethinking the European Union: From Unity in Diversity to Diversity in Unity, Romanian Journal of European Affairs, vol. 15, nr. 3, September 2015;

• Connolly, K. - German reunification 25 years on: how different are east and west really, The Guardian, 2 October, 2015, at page https://www.theguardian.com/world/2015/oct/02/german-reunification-25-years-on-how-different-are-east-and-west-really;

• Coyle, Diane – GDP: A brief and affectionate history, Princeton University Press, 2014;

• Friedman, G. – Flashpoints: The Emerging Crisis in Europe, Random House, January 2015;

• Lydon, B. - Industry 4.0 - Only One-Tenth of Germany’s High-Tech Strategy, April 2014, at page http://www.automation.com/automation-news/article/industry-40-only-one-tenth-of-germanys-high-tech-strategy, retrieved on October 8, 2016;

• Roth, T. - After Fall of Berlin Wall, German Reunification Came With a Big Price Tag, Wall Street Journal, 7 November, 2014, at page http://www.wsj.com/articles/after-fall-of-berlin-wall-german-reunification-came-with-a-big-price-tag-1415362635, retrieved on October 8, 2016;

• Schwab, K. – The Fourth Industrial Revolution, World Economic Forum 2016;

• Spencer, H. - Principles of Biology, vol. 1, p. 444, 1864;

• The decline of the share of European Union in world GDP, at page eu-has-shrunk-percentage-world-economy/, retrieved at October 5, 2016;

• United Nations Association of Germany - 40 Years of German Membership in the United Nations, 2013, at page http://www.dgvn.de/germany-in-the-united-nations/40-years-of-german-membership-in-the-united-nations/;

• New World Encyclopedia - East Germany, 2013, at page http://www.newworldencyclopedia.org/entry/East_Germany;

• Topics of the European Union – Enlargement, at page https://europa.eu/european-union/topics/enlargement_en, retrieved at October 8, 2016;

• European Parliament - 40 years of EU enlargements, at page http://www.europarl.europa.eu/external/html/euenlargement/default_en.htm, retrieved at October 8, 2016.

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Migration Drivers, the EU External Migration Policy and Crisis Management

Fulvio Attinà1

Abstract: The present paper2 is a study of the response of the EU institutions and leaders to the inflow of irregular migrants from 2011 to 2016. The first section is the synthetic presentation of the migration drivers of our times at the global and local level. In section two, the citizens’ perception of the migrants as a threat is briefly discussed, and the border control and immigration policies of the EU are reviewed. In section three, the ‘Trans boundary crisis management’ model opted for analysing the EU migration crisis management is presented. Section four presents the analysis of the four scenarios of the European management of the current migration crisis. In the concluding section, the results of the analysis are summarily discussed. The analysis demonstrates that the EU leaders have been late in detecting the characteristics of the phenomenon and have not conceded to reconcile their conventional view to the features of the current migration. They have been unable to make response decisions well timed and acceptable to all. Lastly, they have been unable to stand firm on those management decisions they agreed on with difficulty and failed to formulate a shared message about the crisis and communicate credible messages to citizens about their ability to manage it.

Keywords: migration, crisis management, border control, immigration policy, European Union

The Mediterranean migration flows are not unexpected to migration experts. The upward trend of migration in all the corners of the world was predicted more than two decades ago (Castle and Miller, 1993). Demographers further warned about the flow from Africa because of the high fertility rate, the very low income levels and almost no job opportunities in the continent. Students of economic development invariably claimed that a huge reform process was necessary to shrink the structured unemployment gap between the developed and developing world. With such knowledge in mind, one can say that European policy-makers have either been deaf to such warnings, or they underestimated the alerts. But the political leaders say the magnitude of the current flow across the Mediterranean is exceptional and unexpected as it derives from the fortuitous overlap of a well-known demographic and economic change process and uncontrolled conditions existing in local theatres like civil wars and the population uprising against Arab regimes.

1 Fulvio Attinà is a Professor of Political Science and International Relations, and Jean Monnet Chair Ad Personam at the University of Catania. E-mail: [email protected]. 2 This paper is part of the TransCrisis research project, funded by the Horizon2020 programme of the European Union under grant number 649484.

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The unforeseeable conjunction of these circumstances caused the simultaneous and sudden surge of different flows of migrants, the so-called mixed migration. Traditionally, this term has been used to indicate refugees, asylum seekers and economic migrants together. Today, ‘mixed migration’ is used to refer generally to people that experience survival needs and escape due to different conditions and problems such as droughts and famines, wars and persecution, poverty and lack of resources for life. Surely, the more the natural and other causes of the migrant flows across the borders of Europe are not the object of shared recognition by the European population and leaders, the more the policy-makers face serious problems in deciding how to manage the crisis with appropriate collective means.

The present paper is a study of the response of the European Union (EU) institutions and leaders to the inflow of irregular migrants from the time this inflow was recognized as a European crisis, namely from 2011. The analysis of the decisions and actions to manage the crisis shows the succession of four scenarios of crisis management from 2011 up to the present time. They are (1) the scenario of the conventional response that started in 2011 when the fall of the Gaddafi regime in Libya let the flow of irregular migrants blow up in the Central Mediterranean and the Commission published the Communication on Global Approach to Migration and Mobility (or GAMM) that was approved by the Council as the cornerstone of the EU’s strategy towards migration in the 21st century; (2) the November 2013-October 2014 scenario created by the decision of the Italian government to run its own humanitarian Operation Mare Nostrum in front of the apathy and disguise of the EU partners and institutions towards the deadly sinking of migrant boats in the Mediterranean; (3) the November 2014-September 2015 scenario created by the EU’s recognition of the double nature (humanitarian and migratory) of the crisis and the consequent decisions to launch a comprehensive approach towards the migration problem; and (4) the current scenario created after the new massive inflow of migrants and refugees through the Western Balkans route and the European Council decisions to secure the EU’s borders against the unwanted migrants and refugees.

The plan of this paper is as follows. The first section is the synthetic presentation of the migration drivers of our times, i.e. the causes and factors that, at the global and local level, incentivise large number of persons to leave the country of origin. In most of the cases, migration is the response of individuals and groups to the crisis in their society and state that has been triggered by domestic conditions linked to the global ones. Since the government is unable, or unwilling, to respond to the breakdown of the life-sustaining systems of the country, people choose to escape the crisis and leave for a foreign country. At the same time, the citizens of the countries of destination may perceive the immigrants as a threat to their values and life-sustaining systems, and oppose to their admission. As this occurs, a crisis erupts also in the destination countries. On this account, in section two, the reaction of the citizens of destination countries and their perception of the migrants as a threat are shortly discussed having in mind the European case. In this section, also the border control and immigration policies of the EU are briefly reviewed. This part of the paper reminds us that the difficulty of stepping forward the policy of the EU towards third country nationals in the MSs is clue to understanding the difficulty of cutting the common management of the European migratory crisis, i.e. the failure to find a breakthrough to normalcy in front of the

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massive inflow of migrants. In section three, the model opted for analysing and building knowledge about the crisis management is presented. In order to build knowledge about the response to a crisis that affects the states across their borders and that concerns the control of the border of the MSs and the Union, a specific model of crisis management is needed. The analysis presented in this paper opted for the transboundary crisis model that has been developed at the University of Leiden and is tested by a network of researchers that came into existence with the H2020 TransCrisis project. Section four presents the analysis of the European management of the current migration crisis that has gone through the aforementioned scenarios. In the concluding section, the results of the analysis are shortly discussed. The present analysis demonstrates that the EU leaders have been late in detecting the characteristics of the phenomenon and have not conceded to reconcile their conventional view to the current features of migration. Consequent to this and to not sharing the same sense of the phenomenon, they have been unable to make response decisions well timed and acceptable to all of them, consonant with the expectations of the citizens and as well with the gravity and nature of the drivers of contemporary migration. Last, they have been unable to stand firm on those management decisions they agreed on with difficulty; consequently, they also failed to formulate a shared message about the crisis and to communicate to citizens credible messages about their ability to manage it.

Migration drivers

The European publics and the EU leaders are inclined to see the current migration flows as the product of events and conditions of local range that occur at the borders of Europe. Bad governance, violence and civil wars in North Africa, the Middle East and other parts of the Arab world, and the stateless status of large areas of Africa push people to leave their country in search of better life conditions. The significance of local conditions notwithstanding, such understanding needs to be refined by including the drivers of migration that are operative in all the world areas. Such long-term conditions and global trends that drive the present rise of people’s movements across borders are disclosed in the studies of migration produced by researchers of different theories and schools. These conditions and trends are rooted in the intertwined economy, technology, society and political sectors of the global system. Accounting for the place of the local conditions within the long-term trends of the global system is important to policy-makers to choose the appropriate measures of management of the current migration crisis. The global and local conditions and the links among them that make migration grow in size are represented in Figure 1 (please see at the end of the article).

The growing shortage of employment opportunities and the consequent human poverty of the population of many countries are the product of the global market structure and the consequent policies of international trade and capital investment. The employment gap existing between the wealthy and the poor economies of the world push people to move from one area to another. In migration studies, this economic explanation is extensively accepted. It is summarised by the socio-economic push and pull factors that exist respectively in the areas of origin and destination. Fast transportation means and instant communication tools are incentives to the movement of people. These technologies

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inflate migration not just because they make movement easier and offer swift information to potential migrants about the work and welfare opportunities around the world, but provide information about the routes available to cross national borders with no entry permit as well. They also give migrants the chance of staying in continuous relations with their distant family and their society of origin. They encourage migration by tempering the human costs that come from breaking ties with society and culture of origin, enabling migrants to keep their identity in the host country, and by fostering transnationalism (Castles, 2004; Vertovec, 2004). In other terms, they support the personal linkages that the network theory of migration indicates as the determinant of the decision to migrate and reach the country where relatives and national peers are settled. The inflow of culture-diverse people in mono-cultural countries should promote multiculturalism, but in most cases it turns out to be the cause of serious conflicts as many citizens of the destination country refuse to change what has to be changed in their state to open it to multiculturalism (Vertovec and Wessendorf, 2010). Nevertheless, such social and cultural process will come to terms following the difference of the rate of population growth in Africa, Central-Southern America, and South-Western Asia, and in Europe, Australia and North America (Guillen and Ontiveros, 2012). Last, the actions and programmes of the world institutions that protect and promote human values and the rights of the human beings to better life influence the growth and transformation of migration in current times. The United Nations agencies and the international and non-governmental organisations of human rights have a double role in this field: they promote migration as a human right and, concomitantly, feed transnationalism, multi-centrism, cultural interaction, and multiculturalism. On the other side of the fence, the governments of the states that have signed the human rights treaties should not oppose the human right of migration in normal and exceptional circumstances. They have to meet the challenge of exceptional migration waves since the treaties they have signed have been conceived also for responding to such circumstances.

The four sectors are present also at the level of the local conditions that foment migration today. In brief, in almost all the peripheral countries of the world economy, the shortage of financial and industrial resources existing at the time of the rebuilding of the world economic regimes after the Second World War has not changed and is aggravated today by severe natural conditions and the lack of protection from climate change. Additionally, ethnic and cultural differences that have not been taken into consideration at the time of the state building, and the diffusion of bad governance, corruption, client practices, and state crimes condemn the population of these countries.

Migrants as threat and the EU border control and external migration policies

The EU institutions, especially the Commission and the Council Presidency, work hard to build responses fitting the expectations of all the MSs, but have not yet achieved such a goal. The EU governments are divided about the mechanisms and strategies of the collective management of the migration flows. Some contend Europe is facing a humanitarian crisis and speak out about the abuse of the humanitarian principles by foreign people driven by disguised interests and irrational expectations. Many concede we are in front of a huge humanitarian crisis but argue that Europe cannot open the door to all the victims. Financial

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assistance to migrants in camps placed out of Europe is the choice most preferred by the European heads of governments but the Italian and Greek ones do not oppose hosting migrants and want the other MSs to share the burden of this hospitality.

In general, since the migrant influx in Europe through the Mediterranean Sea routes started to grow, the European governments have not argued with their citizens but have rather acquiesced due to the plausibility of protests. Generally, citizens complained about ‘too many immigrants’. In many countries, the protesters cried out against the migrants as individuals assaulting their welfare and personal security and as well the cultural and social integrity of the country. Opposition to immigrants is not unknown to the world. The most common explanation of the opposition is the rational motive, i.e. the citizens take into account the costs of the presence of the immigrants in their country. The immigrants alter the job market, overburden the national welfare system, bring troubles to the education system, and cause security problems like the growth of crime in the streets, the infiltration of organised crime networks, and the intrusion of terrorist groups. The collective refusal to share life with the ‘diverse’ and the ‘other’ is also an explanation of the anti-immigrant protest. This refusal is rooted in the social norms and innate culture of a people. The perception of irreconcilable differences of religion also plays a role in such explanation. Last, personality traits and prejudices against all foreigners or certain people and nations are explanations for anti-immigration feelings at the individual level. At the same time, many people assess the threat perception of the immigrants to be exaggerated, and argue that benevolent reception, non-discriminatory behaviour, and integration facilities remove all the problems of reception.

As time went on and the crisis urged the European leaders to respond appropriately, they have shown uncertainty in making decisions for the management of the crisis, and restraint in shifting from appeasing their citizens’ fears to arguing about apt response measures. However, in 2014 the EU institutions and almost all the MSs’ leaders came, half-heartedly in some cases, to the view that the mass flow to Europe is a mixed migration flow. Accordingly, they spelled out that sharing responses and furthering joint management measures towards asylum-seekers and non-refugee migrants is better than going it alone. Yet differences about how to give protection to the refugees and block the entry of those not fitting the conventional refugee status did not stop. These issues concern the external border control system, which is based on the surveillance and defence systems of the MSs with the support of the Union if requested by the state authorities, and as well the intra-EU border system that is based on the free circulation of people and the Schengen system. The reception and settlement of the migrants that fits the international protection norms impose on the leaders also to ask the consent of the citizens to integrate in the country a number, potentially enlargeable, of asylum seekers, and at the EU level the reform of the existing asylum legislation and Dublin Convention.

In the EU constitution, the shared competence power regime regulates how to make the common response to these issues. In practice, the EU and state institutions decide together as far as the national governments acknowledge that the individual state cannot manage well the problems at stake. However, when a trans boundary problem arises and turns into a crisis, it is the political convenience of all the parties involved to determine which of

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the following solutions is better, (a) coordinating the national actions of management, (b) creating ad hoc measures of co-management, (c) adopting EU shared competence power in the policy area of the crisis, and (d) transferring the policy area to the Union. From the first to the last option, transboundary crisis management passes from the usual type of international and intergovernmental management to the Community and the supranational type of management. On such premises, knowledge about the border control policy and immigration policy of the EU is of importance to understand the EU’s management of the current migration crisis.

The EU has no power on border control, neither the external nor internal border. This power belongs to the MSs. But, the EU does have a border control policy and plays two main roles in this field. The first one is the role of standard setter and rule maker on selected issues. The second one is the role of assistance provider and enabler of the coordination and convergence of the actions and operations of the agencies of the MSs in this area. Both roles have been put in place progressively, especially since the Schengen agreement on the free circulation of persons was moved into the EU Treaty. In the past years, the EU created a European border control regime by playing standard setting and rule making. This regime sets the criteria the MSs apply to the foreigners that want permits to reside on their territory. Another standard the EU dumped into the MSs is founding the entry permit on security criteria that are defined in an extensive way. Terrorists, criminals and migrants have to pass through security checks as they put at risk one or more values like political order, material and economic property, physical integrity, and the societal values of the countries and their citizens. The EU regime of border control aims also at developing digital technologies and networked datasets in view of expanding the use of smart and de-localised mechanisms of border control (Takle, 2012).

As far as the assistance provider and coordination/convergence enabler role is concerned, the EU acts through three agencies that support the MSs in running border control against security threats and irregular immigration. The FRONTEX agency, created in 2004, coordinates operational cooperation between the MSs in the management of external borders. EASO, created in 2011, provides relevant information to the EU institutions and the MSs Governments about the management of migration problems. EUROSUR, created in 2013, aims at upgrading the surveillance system of the European external borders.

Though the EU plays roles in shaping the common control of the external border crossing by third country nationals, and this is made also to comply with the Lisbon Treaty articles about the EU power to legislate about foreigners’ entry and residence and about return and readmission, the states retain the power of legislating the integration of foreign workers within their society. This is understood by reminding the aforementioned extended security model of controlling the crossing of European borders by foreign nationals. However, it is acknowledged that the EU as an institution promotes the principle of the free movement for labour in the name of economic efficiency while, generally speaking, the MSs seek to bring down the standard of migrant rights protection to respond to domestic interests. Nevertheless, the EU enlightened directives that protect migrant rights have a chance of success thanks to the domestic institutional protections existing in the MSs such as a strong court system, legal aid for immigrants, and state funding for pro migrant NGOs (Ludtke, 2011).

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The principle of promoting economic efficiency is of great significance in shaping the EU immigration policy as well the EU’s response to the irregular migration flows of these past few years. This is demonstrated by GAMM, the Global Approach to Migration and Mobility. This document was prepared and published by the Commission and approved by the Council in 2011. They were aware of the need to have a common strategy to meet the challenge of the blowing up migratory flows in the world and regions around Europe. GAMM updated the 2005 Commission’s Communication titled ‘Global Approach to Migration’. Complementing Migration with Mobility was a meaningful act of the Commission. It manifested the preference of the EU leaders towards the short stay of the migrants in the EU since mobility, i.e. the stay of foreign worker in Europe as long as s/he has a job, is a condition of the economic efficiency of migration.

In GAMM, the Commission highlighted also the economic appropriateness of the EU’s external migration policy, i.e. the policy aimed at managing the migratory flows beyond the borders of the EU as well as managing the influx of migrants in the EU. To achieve the latter goal the Commission wants to develop the mechanisms for permitting foreign nationals to work and stay temporarily in the EU, be they skilled migrants or workers that will relieve the European population’s aging problem. Accordingly, there is no concern in the integration of the migrants as full residents in the European Union, which is a matter of state power recognized also by the Lisbon Treaty. However, GAMM pledges for respecting all international obligations towards the human rights of the migrants and the protection of the refugees.

The strategy of the Commission and the Council to manage the incoming migration flows from abroad to the EU consists in enlarging the network of the bilateral cooperation agreements with the countries of origin and transit, and the regional fora and dialogues that increase the synergies of the initiatives for managing migration in the areas of origin3. But serious conditions hinder the effectiveness of such instruments. Stemming the outflow of migrants is not always in the economic and political interest of the outflow countries. The governments of these countries frequently are unable to accomplish the tasks defined in the mobility partnership agreements since inefficiency and corruption are widespread in the public service. Lastly, these agreements are not legally binding, do not have provisions about assessing accomplishment by the partner country, and do not bind the EU governments that have not signed the documents4.

In conclusion, GAMM shows the EU’s understanding of migration and the response to the growing migratory flows as follows. (A) Migration is principally an economic phenomenon. Persons migrate from countries and areas of no or very low economic growth and job opportunities to countries and areas of prosperous economies and many job opportunities. (B) Migrants bring economic growth to the receiving countries and

3 The EU bilateral cooperation consists in the Mobility Partnerships and the Common Agendas for Migration and Mobility. They address mobility issues and the measures to facilitate return and readmission of irregular migrants. The Partnerships, in contrast to the Agendas, include the negotiation of visa facilitation and readmission agreements. The regional dialogues are as different as the EU Neighbourhood, the EU-Africa Strategic Partnership, the Prague Process, and the Rabat Process. 4 As of February 2016, Tunisia, Morocco, Cape Verde, Moldova, Georgia, Armenia, and Azerbaijan have signed mobility partnership documents. Ethiopia and Nigeria have signed Common agendas.

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economic development to the countries of origin as long as the former need manpower for their growing job markets, and the latter benefits from the financial resources the migrants’ remittances provide to the local economy. (C) Such benefits are achieved on condition that migration is well managed by the political authorities of the sending and receiving countries. This objective is achieved by negotiating and sturdily implementing agreements on the return of the migrant to the sending country when jobs are no more available in the hosting country, and on development ventures in the receiving country funded by the financial remittances of the migrants. (D) Therefore, irregular migration impedes the well-established management of migration and must be confronted and stopped. The country of entry has to return the irregular migrants to the country of origin. To this end, bilateral readmission agreements and regional agreements on migration, mobility and border control are negotiated by the sending and receiving countries and jointly implemented. (E) In managing migration, the human rights of the migrant are to be respected throughout the migration process. International protection is given to refugees according to the existing international rules5.

The TC model of analysis of transboundary crisis management

One can say that the huge number of people fleeing to Europe in the last decade has overcome the EU’s capability of managing the crisis by means of the well-managed migration approach and external migration policy outlined in GAMM. But the EU leaders and institutions maintain that this is not the case. The analysis presented in the next section shows that the EU leaders opted for the GAMM response in the early years of the present decade, and resumed it after a short interruption in the course of the current crisis. After the Italian Operation Mare Nostrum, they moved towards a different option, the comprehensive approach, but in a year’s time they turned back to it and, in particular, to international cooperation on migration with third countries. However, the EU is far from having firmly gone down a definite management strategy and has not yet minimised the effects of the crisis as expected by the leaders and citizens. This section presents the analytical model adopted here for researching the European migration crisis. This is the aforementioned transboundary crisis management model. It provides the conceptual and methodological tools for organising the in-depth analysis of the crisis and building useful knowledge to assess the effectiveness and legitimacy of the EU leaders’ management of the crisis.

A crisis is defined as the condition in which it exists “a perceived threat to the core values or life-sustaining systems of a society that must be urgently addressed under conditions of deep uncertainty” (Boin, Ekengren and Rhinard, 2013: 6). In the migration crisis, the values of the European states that are perceived as being under threat are primarily the welfare and security of the citizens of the European states and also the integrity of the states and societies. In light of the current and future size of the inflows of immigrants, action is urgently needed to respond to the threat. The state leaders and EU policy-makers, however,

5 The GAMM external migration policy has been further confirmed in February 2014 when the Commission released to the other EU institutions the Communication reporting on the implementation of the Global Approach to Migration and Mobility 2012-2013 (Com (2014) 96 final).

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have different views and preferences about the proper response actions. Consequently, uncertainty arises about what management strategy to adopt in order to respond to the threat in a collective mode. Furthermore, the individual governments are inclined to give their own responses to the crisis and minimise the coordination of their actions with those of the others. Migrants place the values of the European states under threat by crossing the EU external borders and moving across the internal borders. Consequently, the individual state is hardly able to respond effectively to a crisis that is inherently a transboundary crisis. Furthermore, migration is a human action that cuts across many issue areas, policy sectors and goals. The current migration phenomenon involves humanitarian issues and goals (the protection of the lives of migrants), economic issues (the market structures and available resources of the receiving state) and cultural issues and goals (the identity diversity of the migrants and citizens and the integration of the immigrants in the country of destination). Last, responding to the migration crisis effectively means assembling measures of different policy areas like the job, welfare, culture, education, and security policy areas to say the least.

Managing a crisis means accomplishing a set of tasks that are known to be effective for responding to the threat, and re-establishing at least a perceived normalcy. In a transboundary crisis, the management tasks are the responsibility of the leaders and policy authorities of a group of countries. Accordingly, co-decision, shared procedures and collective instruments are necessary to fill out the tasks of transboundary crisis management. The following set of management tasks is relevant to the analysis and assessment of the effectiveness and legitimacy of the response of the political leaders to a transboundary crisis. Detection: the timely recognition of an emerging threat. Sense-making, the collecting, analysing and sharing of critical information that helps to generate a shared picture of the situation. Decision-making: the selection of strategic decisions, joint decision-making, and the formulation of an effective strategy to implement the key decisions. Coordination: identifying key partners and facilitating collaboration between these partners. Meaning-making: formulating a key message that offers an explanation of the threat, actionable advice, and a sense that leaders are in control of the situation. Communication: effective delivery of the core message to selected audiences (e.g. victims, citizens, stakeholders, voters, media representatives, etc.). Accountability: rendering an explanation in a public forum of relevant decisions and strategies that were initiated before, during and after the crisis.

The goal of the present analysis is not theory testing and theory building about crisis management but the deepening of knowledge about transboundary crisis management in the European Union with a focus on the ability of the EU and MS political leaders to make effective and legitimate actions to manage the crisis created by the mass flows to Europe in the last five years. Therefore, the research work is policy-oriented and aims at producing knowledge directly transferable to policy-making and politics. The management tasks are analysed to know whether they are effective and produce the results expected by the leaders and the citizens, i.e. minimizing the effects of the crisis and its causes as they are defined by the researcher on the basis of the existing scientific knowledge. Regarding the political side of the analysis, instead, the execution of the management tasks by the political leaders is analysed to know the legitimacy of the management. In other words, to

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know whether the leaders acted as they were expected to act by making the appropriate use of the available political tools, respecting the existing decision-making rules and procedures, and getting the people approval for the management and implementation of the responses to the crisis.

In general terms, successful, i.e. effective and legitimate, crisis management is the course of actions decided and led by the political leaders for the sake of minimizing the negative impact of any problem that is perceived as posing serious threats to the normalcy and values of the state and society. The more the crisis management reduces the negative impact, the more it is assessed as a successful one. In brief and specific terms, since global trends and local conditions existing outside Europe are the drivers and root causes of the current migration flows, and these flows are perceived by the Europeans as a serious threat to normalcy, the assessment of the leaders’ actions and decisions for the management of the European migration crisis will be a judgment about the appropriateness of the decisions and actions to reduce the impact on Europe of the global trends and the local conditions abroad. Such decisions and actions will be targeted to (a) minimise the impact of the drivers of the current migration and/or (b) reduce the size of the flows of the migrants and/or (c) protect the normalcy of the state and society and/or (d) respond to, and eventually change, the expectations of the citizens about the threats. In the first case, the causes can be either structural or contingent but in the global trends the two types of causes are in place and intersect one another. The change of the structural causes requires a collective and long-time response much more important than the change of the contingent ones. The second target is addressed by border control measures and the cooperation with the countries of transit and origin. The protection or reestablishment of normalcy is achieved by the management measures and also specific internal measures. The citizens’ perceptions and expectations are addressed by communication and political dialogue.

Another point to make about the methodology is that the analysis has to take into account that each of the above targets of the management actions may weaken and disappear with the passing of the time and the effect of exogenous factors that either are independent from or add to the actions of the crisis managers. The following exogenous factors are of concern: (i) exhaustion and self-defeating process of the causes of the crisis; (ii) the counter-effect of factors that annul the effects of the drivers and root causes; and (iii) the intended actions of third players like international organisations and governments that act with no coordination with the crisis managers under study. These exogenous factors may differently combine to one another, influence the management, and also change the nature of the crisis. The researchers can only make known that various combinations are possible and have an impact on the course and output of the management.

In the following section, the management tasks the EU leaders accomplished in the past five years are analysed, but the communication and accountability tasks need to be further researched. The analysis distinguishes four successive scenarios of the EU crisis management to explain the conditions that have been created by, and the effects that have followed to, the EU leaders’ decisions and actions in the past five years.

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The scenarios of the EU migration crisis management

The overthrow of Gaddafi in 2011 removed the 2008 Italian-Libyan treaty obstacle to the migrant crossing of the Mediterranean Sea. The influx of the irregular migrants in Europe grew in size while the dreadful accidents of the migrant boats increased in number. The EU institutions restated the principle of no entry of the third country nationals lacking regular authorization, and recalled to the MSs the responsibility of controlling the external borders also to safeguard the Schengen free circulation system. In October 2013, the scenario changed and the arrival of the migrants through Libya and the central Mediterranean route turned into the European transboundary crisis. This occurred because the Italian government launched the Operation Mare Nostrum and abandoned the EU official position that consisted in censuring the migrants for illegal entry and the EU Mediterranean countries (Italy, Greece, and Spain at that time) for inefficient border control. Both of them were destroying the two pillars of GAMM, the well-managed migration and the external migration policy. However, a year after Mare Nostrum opened up, a new scenario came into play. The EU leaders recognized that humanitarian rescue tasks were awaiting Europe and gave Frontex’s Operation Triton the mandate to carry on the Mare Nostrum’s rescue and border control mission. Soon after, the Council decided to deploy a CSDP military operation to oppose the migrant smuggling criminal groups; the Commission proposed two relocation plans for moving the persons eligible for international protection from Italy and Greece to all the Member countries; the Council and the Commission negotiated with neighbouring countries the measures to block the migrants and refugees outside of Europe. But in the late summer 2015, the situation turned bleak again. The MSs’ governments questioned the Commission humanitarian actions, did not implement the relocation plans, did not agree on reshaping the existing migration and asylum policy, and were tactful on building the common control of the external borders. The circumstances were ripe for the next scenario that came into play in autumn. The Commission, in agreement with the European Council, reinstated the GAMM policies as the main response to the crisis. Securing the EU borders against the arrival of any migrants became the goal of the common management strategy.

The main documents released by the EU institutions and leaders in the four scenarios are placed in the first column of Table 1 (at the end of the article). The actions that correspond to the seven management tasks of the transboundary crisis model are listed in the remaining columns of the Table (see at the end of the article).

In the following part, the effectiveness of the decisions and actions of the EU leaders in the four scenarios is briefly checked and assessed.

2011 – 2013: the ‘conventional response’ scenario. Border control and surveillance tools and the bilateral and regional cooperation with third countries to curb irregular flows are the customary instruments of the EU for managing the problem of the irregular crossing of common external borders by foreign nationals. The use of these instruments was decided again at the beginning of this decade. Greece, Italy and Spain were blamed for the loose control of their borders and the lenient behaviour towards the irregular migrants. The official strategy of the EU towards the world migration, the GAMM, fully endorsed such a response to the Mediterranean migration. The growing number of people

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that put their life at risk to cross the Mediterranean was not a phenomenon to respond to with specific actions. Therefore, neither the EU institutions nor the MSs responded to the upsurge of the migratory flows in the Mediterranean by facilitating ways for migrants to move safely crossing the seawaters. The European people, on their side, did not object to such a response. The indignation of some sectors was countered by the indifference of others and by the vociferous protest of the anti-foreigner and anti-immigrant groups. The difficult economic condition of the MSs bitten by the 2008 financial crisis is a reasonable explanation of the indifference of the Europeans towards the tragedies of the irregular migrants in the Mediterranean. In brief, people argued that receiving immigrants was a mistake in the presence of the economic crisis and high unemployment rate. The economic decline and the reduction of the welfare system stimulated protests and the rise of anti-EU movements and parties that blamed the Euro and the Maastricht criteria as well as the free circulation and common market regulations for obstructing the national strategies of exit from the economic crisis. Consequently, populism, as well as compliant political leaders from government parties, hit political life in many MSs and fed the Europeans’ anti-immigration tendency, which the leaders did not oppose.

October 2013 - October 2014: the ‘Italy alone goes humanitarian’ scenario. The opposition of the EU institutions and the governments of the MSs to changing the policy towards irregular migrants did not change in front of the decision of the Italian government to prioritize the humanitarian dimension and respond to the tragedies of the Mediterranean migrants. Due to the unfriendly reaction of the other states and the vague response of the Commission that recognised the complex nature of the crisis but refrained from starting any initiative, the EU did not activate the solidarity the Italian government asked from it. At the national level, the government set the mission as an ordinary public order operation and avoided discussing the initiative in the national Parliament and to expand the conflict with the rightist, protest parties. But the government met intense disapproval for taking the rescued migrants to reception and identification centres that were poorly organised and working. Many migrants left the centres soon, and managed their lives on their own. Mostly, they travelled towards Germany and other Northern countries with no impediments by the Italian police and justice agencies.

November 2014–September 2015: the ‘EU-Turn’ scenario. A year after the launch of Mare Nostrum, the European governments and the Commission decided to respond to the humanitarian side of the crisis and turn towards a comprehensive approach. Officially, the EU recognized the mixed nature of the migratory flows and the need to take care of the humanitarian dimension by saving people in distress at the sea and giving international protection to refugees. The frontline states were recognized as eligible for assistance from the Union on condition they effectively identified all the migrants, checked the international protection requisites, and returned the unauthorized migrants to their country of origin. The new approach was harshly contended by the British and Central European governments, and elusively accepted by the others. The European governments’ inclination to downplay humanitarian duties, the unwillingness to bear the burden of receiving foreign nationals in need of aid, and the will to unload it on their neighbours disrupted the attempt to run the crisis management on the double (humanitarian and migratory) dimension.

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October 2015 – 2016: the ‘Fencing Europe’ scenario. On account of the poor implementation of the humanitarian measures, the relentless arrival of migrants and refugees through the Balkan route, and the differences among the MSs, the governments and the Commission turned to fencing Europe and reasserted the importance of controlling the external borders effectively. They also called on the countries of transit to gather refugees and migrants in camps in their own territories, and the countries of origin to tighten up border control measures to block the exit of potential migrants. To minimise the crisis, the EU governments and the Commission wanted potential migrants to remain in their own country no matter what drove them to leave. In public discourses, the Council President, Donald Tusk, repeatedly invited the migrants not to ‘dream’ about Europe. But fencing the EU with no change in the visa, asylum, and immigration policies did not discourage the migrants from seeking illegal paths into the EU.

Conclusions

Migration experts and international agencies do not let anyone doubt about the pressure of migration in the future years. Effective management strategies are tremendously needed. Geographical proximity to the areas of outflow puts the burden and leadership of the response strategies on the European states. In the past five years, the EU and the MSs have passed from the representation of the phenomenon as an irrational case of irregular migration to the official recognition of its double face (humanitarian and migratory) and the need to launch a comprehensive approach, to the edgy reaction of passing one another the reception burden and accusing each other of double-dealing, and finally to the resolve of blocking the borders to all migrants. In short, they have been late in detecting the characteristics of the phenomenon and preparing the shared response to the threats perceived by the European citizens, and did not stand firm on the common management measures they had agreed upon with difficulty. Additionally, important management measures decided by the EU leaders depend on the governments of third countries that elusively share the management strategy of the EU and hardly comply with it in full. Last, after so long a time of the MSs retrenchment into the nation-state political and economic interests, the EU is not able to intervene with the robust diplomacy and security power necessary to contain the conflicts that fuel migration, and bring into play the economic power that is needed to address the unemployment problems of the poor countries.

Smart border control tools and soft border programmes (Mostov, 2008) are the response to the increased movement of persons in the contemporary world. The European leaders have to tell the citizens they have to meet the challenge of the demographic change, population mobility, and lack of economic opportunities to a huge number of persons. They have to make new policies for matching domestic normalcy with the costs of receiving third country nationals. This is neither an easy nor an impossible mission, and is in line with the global trends. Should the number of migrants continue to be in each of the next five years as large as it has been in 2015, namely one million, it would be just 1% of the EU population.

28

Fulvio Attinà

References• Boin Arjen, Ekengren Magnus, and Rhinard Mark. The European Union as crisis

manager: Patterns and prospects (Cambridge University Press 2013).• Castles Stephen (2004), The Factors That Make and Unmake Migration Policies, in

International Migration Review, 38, 3, 852-884. • Castles Stephen and Miller Mark J. (1993), The age of migration. International population

movements in the modern world, Macmillan. • Guillen Mauro and Emilio Ontiveros (2012)‚ Global Turning Points, Cambridge

University Press. • Luedtke Adam (2011), Uncovering European Union Immigration Legislation: Policy

Dynamics and Outcomes, in International Migration, 49, 2.• Mostov Julie (2008), Soft borders. Rethinking sovereignty and democracy, Palgrave.• Takle Marianne (2012). The Treaty of Lisbon and the European Border Control Regime,

Journal of Contemporary European Research. 8 (3), pp. 280-299. • Vertovec Steven (2004), Migrant Transnationalism and Modes of Transformation, in

“International Migration Review”, 38,3, 970-1001. • Vertovec Steven and Susanne Wessendorf eds. (2010), The multiculturalism backlash:

European discourses, policies and practices, London, Routledge.

Figure 1: Global and local migration drivers

29


Tabl

e 1:

Lis

t of t

he tr

ansb

ound

ary

cris

is m

anag

emen

t tas

ks a

ccom

plis

hed

by th

e EU

lead

ers

from

201

1 –

2016

, Feb

ruar

y.

Tran

s bou

ndar

y cr

isis m

anag

emen

t ta

sks

Scen

ario

s &

mai

n de

cisio

n do

cum

ents

Det

ectio

n

The

timel

y re

cogn

ition

of

the

emer

ging

th

reat

Sens

e-m

akin

g

The

colle

ctin

g, a

naly

sing

an

d sh

arin

g of

crit

ical

in

form

atio

n th

at h

elps

to

gene

rate

a s

hare

d pi

ctur

e of

th

e si

tuat

ion

Dec

ision

-mak

ing

The

sele

ctio

n of

st

rate

gic

deci

sion

s,

join

t dec

isio

n-m

akin

g, a

nd

form

ulat

ing

an

effe

ctiv

e st

rate

gy to

im

plem

ent t

he k

ey

deci

sion

s

Coo

rdin

atio

n

Iden

tifyi

ng k

ey p

artn

ers

in th

e re

spon

se a

nd

faci

litat

ing

colla

bora

tion

betw

een

thes

e pa

rtner

s

Mea

ning

-m

akin

g

Form

ulat

ing

a ke

y m

essa

ge

that

offe

rs a

n ex

plan

atio

n of

the

thre

at,

actio

nabl

e ad

vice

, and

a

sens

e th

at

lead

ers

are

in

cont

rol o

f the

si

tuat

ion

Com

mun

icat

ion

Effe

ctiv

e de

liver

y of

th

e co

re m

essa

ge

to s

elec

ted

audi

ence

s (e

.g.

vict

ims,

citi

zens

, st

akeh

olde

rs,

vote

rs, m

edia

re

pres

enta

tives

, etc

.)

Acc

ount

abili

ty

Rend

erin

g an

ex

plan

atio

n in

a

publ

ic fo

rum

of

rele

vant

de

cisi

ons

and

stra

tegi

es th

at

wer

e in

itiat

ed

befo

re, d

urin

g an

d af

ter t

he

cris

is

Con

vent

iona

lRe

spon

se

2011

-201

3

- 201

1,

Com

mis

sion

’s

Com

mun

icat

ion

‘Glo

bal A

ppro

ach

to M

igra

tion

and

Mob

ility

’- C

oncl

usio

ns

of th

e Eu

rope

an

Cou

ncil

mee

tings

he

ld o

n 11

Mar

ch

and

23-2

4 Ju

ne

2011

- Mis

perc

eptio

n of

mou

ntin

g m

igra

tion

flow

s as

the

occu

rren

ce

of m

assi

ve

econ

omic

an

d irr

egul

ar

mig

ratio

n.

- The

ent

ry o

f irr

egul

ar

mig

rant

s (a

) pre

judi

ces

the

appr

oach

to m

obili

ty a

nd

wel

l-man

aged

mig

ratio

n,

and

(b) p

uts

at ri

sk th

e fre

e ci

rcul

atio

n of

the

Sche

ngen

sy

stem

.

- The

mig

rant

s th

at

reac

hed

Italy

and

G

reec

e, a

ppar

ently

w

ithou

t opp

ositi

on

by th

e bo

rder

po

lice,

hav

e to

be

retu

rned

to th

e ho

me

coun

try.

- Im

mig

ratio

n co

ntro

l is

the

duty

of

all

the

MSs

.- C

usto

mar

y bo

rder

co

ntro

l by

MSs

su

pple

men

ted

by

the

EU s

uppo

rt (F

ront

ex, E

ASO

, EU

ROSU

R).

- Ext

erna

l mig

ratio

n po

licy:

coo

pera

tion

with

cou

ntrie

s of

or

igin

and

tran

sit

and

with

regi

onal

fo

ra.

- Coo

pera

te w

ith th

e go

vern

men

ts o

f the

sta

tes

of tr

ansi

t and

orig

in to

cu

rb ir

regu

lar f

low

s an

d ac

cept

read

mis

sion

of

irreg

ular

mig

rant

s.- F

ront

ex c

oord

inat

es

the

actio

n of

the

stat

es to

de

tect

and

bre

ak ir

regu

lar

bord

er c

ross

ings

.

- Wel

l-man

aged

(e

cono

mic

) m

igra

tion

turn

s in

to b

enef

its

for s

endi

ng

and

rece

ivin

g co

untri

es.

- The

sta

tes

on

the

Sout

hern

Eu

rope

an

bord

ers

are

resp

onsi

ble

for

not b

lock

ing

irreg

ular

m

igra

nts

and

jeop

ardi

zing

Sc

heng

en fr

ee-

circ

ulat

ion.

30

Fulvio Attinà

Italy

alo

ne g

oes

hum

anita

rian

Oct

. 201

3-O

ct.

2014

Con

clus

ions

of

the

23-2

4 O

ctob

er

2013

Eur

opea

n C

ounc

il m

eetin

g

- Hum

an

trage

dies

an

d de

adly

ac

cide

nts

in th

e M

edite

rran

ean

Sea

rega

rded

as

unsu

stai

nabl

e by

the

Italia

n go

vern

men

t.

- Abi

ding

by

SaR

inte

rnat

iona

l law

nor

ms

and

the

hum

anita

rian

duty

of

help

ing

peop

le a

re a

ccep

ted

by th

e Ita

lian

gove

rnm

ent

and

refu

sed

by th

e EU

in

stitu

tions

and

the

othe

r M

Ss b

ut G

reec

e.

- 13

Oct

ober

201

3:

Italia

n go

vern

men

t la

unch

es M

are

Nos

trum

for

resc

uing

the

pers

ons

in

dist

ress

at s

ea,

cont

rolli

ng th

e na

tiona

l bor

ders

, an

d fig

htin

g th

e m

igra

nt s

mug

glin

g or

gani

satio

ns.

- No

coor

dina

tion

prop

osal

to It

aly

for d

ispl

ayin

g th

e hu

man

itaria

n m

issi

on.

- Ren

ewed

cal

l on

the

stat

es to

mak

e ef

fect

ive

bord

er c

ontro

l and

retu

rn

irreg

ular

mig

rant

s to

the

coun

tries

of o

rigin

.- T

he T

ask

Forc

e fo

r the

M

edite

rran

ean

(cre

ated

by

JHA

Co.

, 8 O

ctob

er

2013

) pro

pose

s sh

ort-

term

prio

rity

actio

ns,

rest

ates

the

impo

rtanc

e of

coo

pera

tion

with

third

co

untri

es.

- EU

CO

: de

term

ined

ac

tion

shou

ld

be ta

ken

in

orde

r to

prev

ent

the

loss

of l

ives

at

sea

and

to

avoi

d th

at su

ch

hum

an tr

aged

ies

happ

en a

gain

.’

Reso

lve

to

man

age

the

mig

ratio

n is

sues

by

bord

er c

ontro

l m

easu

res

and

coop

erat

ion

with

third

co

untri

es

rest

ated

.

- The

Ital

ian

gove

rnm

ent s

ets

the

mis

sion

as

an

ordi

nary

pub

lic

orde

r ope

ratio

n an

d av

oids

the

auth

oriz

atio

n of

the

Parli

amen

t as

wel

l as

the

conf

lict w

ith

the

right

ist,

prot

est

parti

es.

- Deb

ate

in th

e Ita

lian

parli

amen

t on

ly d

urin

g th

e O

pera

tion.

EU-tu

rn

Nov

. 201

4-Se

pt.

2015

- Pre

side

ncy

stat

emen

t co

nclu

ding

the

18 A

pril

2015

Eu

rope

an C

ounc

il m

eetin

g.- 1

3 M

ay

Com

mun

icat

ion

of

the

Com

mis

sion

‘E

urop

ean

Age

nda

for M

igra

tion’

.- 2

2 Se

ptem

ber

deci

sion

of t

he

Cou

ncil.

- Rec

ogni

tion

of th

e ne

ed

for i

mm

edia

te

actio

ns to

sa

ve h

uman

liv

es a

t the

M

edite

rran

ean

seaw

ater

s- R

ecog

nitio

n of

mix

ed

mig

ratio

n an

d th

e ne

ed to

giv

e in

tern

atio

nal

prot

ectio

n to

re

fuge

es.

- A C

ompr

ehen

sive

A

ppro

ach

as th

e ob

ject

ive

of

the

EU re

spon

se, i

nclu

ding

pl

ayin

g ag

ains

t glo

bal

leve

l roo

t cau

ses

like

the

com

mun

icat

ion

revo

lutio

n an

d gl

obal

pov

erty

, and

loca

l on

es li

ke th

e w

ars a

nd c

rises

fro

m U

krai

ne to

the

Mid

dle

East

, Asia

and

Nor

th A

frica

.- T

he fr

ontli

ne s

tate

s ar

e re

cogn

ized

as

elig

ible

for

assi

stan

ce fr

om th

e U

nion

on

con

ditio

n of

iden

tifyi

ng

all i

rreg

ular

imm

igra

nts,

ch

ecki

ng th

e in

tern

atio

nal

prot

ectio

n of

the

appl

ican

ts,

and

retu

rnin

g irr

egul

ar

imm

igra

nts

to th

e co

untry

of

orig

in.

- Nov

.201

4 C

ounc

il’s

deci

sion

: Fr

onte

x O

pera

tion

Trito

n to

sub

stitu

te

Mar

e N

ostru

m o

n SA

R m

issi

on.

- Jun

e 20

15

Euro

pean

Cou

ncil’

s de

cisi

on: E

unav

for-

Med

mis

sion

ag

ains

t mig

rant

sm

uggl

ers.

- May

and

Se

ptem

ber,

Com

mis

sion

’s

relo

catio

n pl

ans

for

refu

gees

app

rove

d by

the

Cou

ncil

(maj

ority

vot

e) a

nd

the

Parli

amen

t.

- Coo

rdin

atio

n w

ith

the

Sout

hern

MSs

go

vern

men

ts.

- Pro

posa

l to

mov

e to

war

ds th

e co

mm

on

cont

rol o

f the

ext

erna

l bo

rder

s.- R

einf

orce

d Fr

onte

x’

supp

ort t

o M

Ss re

turn

op

erat

ions

.- C

omm

issi

on to

ne

gotia

te re

-adm

issi

on

with

out

flow

cou

ntrie

s an

d as

sist

ance

to b

orde

r co

ntro

l cap

acity

-bui

ldin

g.- E

U’s

fina

ncia

l co

ntrib

utio

n to

th

ird c

ount

ries

and

inte

rnat

iona

l or

gani

satio

ns to

est

ablis

h re

fuge

e ca

mps

in c

risis

ar

eas.

- The

co

mpr

ehen

sive

ap

proa

ch is

the

prop

er w

ay to

m

inim

ise

the

cris

is.

-The

cris

is is

an

oppo

rtuni

ty fo

r up

datin

g th

e EU

imm

igra

tion

polic

y

- Blo

ckin

g th

e en

try

of th

e pe

rson

s no

t qua

lifie

d to

inte

rnat

iona

l pr

otec

tion

pairs

the

man

agem

ent o

f the

re

fuge

e pr

oble

m.

- Alm

ost a

ll th

e go

vern

men

ts

com

mun

icat

e to

the

peop

le in

clin

atio

n to

dow

npla

y hu

man

itaria

n du

ties,

un

will

ingn

ess

to

bear

the

burd

en

of re

ceiv

ing

third

co

untry

nat

iona

ls,

and

the

will

to

unlo

ad it

on

thei

r ne

ighb

ours

.

31


Fenc

ing

Euro

pe

Oct

. 201

5-

- Cou

ncil

“Con

clus

ions

on

Mig

ratio

n”, 1

2 O

ctob

er 2

015,

- “C

omm

unic

atio

n fro

m th

e C

omm

issi

on”

to

the

Parli

amen

t, th

e Eu

rope

an C

ounc

il an

d th

e C

ounc

il on

Man

agin

g th

e re

fuge

e cr

isis:

St

ate

of P

lay

of th

e Im

plem

enta

tion

of th

e Pr

iorit

y A

ctio

ns u

nder

the

Euro

pean

Age

nda

on M

igra

tion

14.1

0.20

15.

- Con

clus

ions

of

the

Euro

pean

C

ounc

il m

eetin

g of

15

Oct

ober

.- T

he 1

5 D

ecem

ber

Com

mis

sion

’s

pres

s re

leas

e A

Eu

rope

an B

orde

r an

d C

oast

Gua

rd

to p

rote

ct E

urop

e’s

Exte

rnal

Bor

ders

- Eur

opea

n C

ounc

il (1

7 D

ecem

ber)

urge

s th

e M

Ss

to e

nsur

e sy

stem

atic

bo

rder

se

curit

y ch

ecks

with

re

leva

nt

data

base

s.- P

resi

denc

y Re

port

on

Man

agin

g th

e m

igra

tion

flow

s (16

D

ecem

ber):

id

entif

icat

ion,

re

gist

ratio

n an

d fin

gerp

rintin

g of

third

co

untry

na

tiona

ls

ente

ring

the

Sche

ngen

are

a irr

egul

arly

ar

e to

be

stre

ngth

ened

by

the

MSs

in

term

s of

hu

man

and

te

chni

cal

reso

urce

s as

a c

ruci

al

prec

ondi

tion

for e

ffici

ent

bord

er c

ontro

l an

d se

curit

y ch

ecks

.

- EU

gov

ernm

ents

and

the

Com

mis

sion

turn

aga

in to

th

e al

beit

elus

ive

shar

ing

of

mea

sure

s lik

e th

e re

loca

tion

of th

e re

fuge

es h

oste

d in

the

front

line

stat

es, t

he re

turn

of

the

mig

rant

s in

elig

ible

for

inte

rnat

iona

l pro

tect

ion,

the

exte

rnal

isat

ion

of th

e re

fuge

e ca

mps

, and

the

secu

ring

of

the

exte

rnal

EU

bor

ders

.

- 25

Nov

. 201

5,

EU C

ounc

il C

oncl

usio

ns: t

he

MSs

to p

erfo

rm

syst

emat

ic s

ecur

ity

chec

ks b

y us

ing

rele

vant

dat

abas

es.

- The

Com

mis

sion

’s

proj

ect o

f a

Euro

pean

bor

der

and

coas

t gua

rd.

- A g

roup

of

gove

rnm

ents

su

spen

d Sc

heng

en.

- The

Com

mis

sion

re

prov

es th

e M

Ss fo

r sl

owly

acc

ompl

ishi

ng

the

volu

ntar

y an

d fo

rced

re

turn

of m

igra

nts

not

qual

ifyin

g fo

r rel

ocat

ion,

an

d fo

r the

sm

all n

atio

nal

fund

ing

of in

tern

atio

nal

refu

gee

assi

stan

ce

prog

ram

s.- T

he c

onfe

renc

es w

ith

the

Balk

an c

ount

ries,

and

th

e A

frica

n co

untri

es to

su

ppor

t the

ir ca

paci

ties

need

ed to

sto

p irr

egul

ar

mig

ratio

n,- E

U le

ader

s an

d Tu

rkey

go

vern

men

t mee

t to

laun

ch th

e Jo

int A

ctio

n Pl

an.

- The

Com

mis

sion

to

brin

g to

geth

er F

ront

ex

and

the

MSs

’ aut

horit

ies

for b

orde

r man

agem

ent.

- Pol

itici

ans

of

Cen

tral a

nd

Nor

th E

urop

ean

coun

tries

bla

me

the

Gre

ek

and

Italia

n go

vern

men

ts

for n

ot

impl

emen

ting

bord

er c

ontro

l m

easu

res

and

iden

tific

atio

n pr

oced

ures

. - G

reek

an

d Ita

lian

polit

icia

ns

blam

e th

e C

omm

issi

on

and

the

othe

r M

Ss fo

r not

im

plem

entin

g th

e ag

reed

pr

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European Union - Asia-Pacific Trade Relations: Tentative Bilateralism amidst Competing Plurilateral Initiatives

Beatriz Pérez de las Heras1

Abstract: This paper2 analyses major current trends in EU trade policy and their impact on the Asia-Pacific region. It explains how after being a guardian of multilateralism for many years, the EU is currently negotiating bilateral Free Trade Agreements with countries in the area while important and competing trade initiatives are also emerging amongst these nations. The fact that the EU is not a party to any of these plurilateral projects jeopardises its goal of becoming an active player in this challenging geopolitical landscape. Moreover, the political conditionality linked to EU trade diplomacy is generally not welcomed by these countries, which are becoming increasingly more economically and politically assertive. The divergent trade agendas of Member States further complicate any joint EU policy in the region. In light of these factors, political conditionality needs to be revised to provide more flexibility to global dialogue with these countries and a genuinely common trade strategy must be defined for the EU to leverage more effective influence and involve itself in regional integration deals in Asia-Pacific.

Keywords: bilateralism, free trade agreements, political conditionality, plurilateral initiatives, regional integration.

Introduction

As the world’s largest trading bloc, the European Union (EU) has for many years been one of the major guardians of multilateralism. However, the EU’s focus is currently on bilateral free trade agreements (FTAs). Over the last seven years, the EU’s trade policy has also been characterised by a formal, rather legalistic approach, linking politics and economics. This trend entails the inclusion of a predefined set of clauses in political agreements negotiated in parallel with trade deals. As a result of this strategy, FTAs are very often relegated to the position of a subset of the political agreements. To make matters more problematic, the EU’s diplomatic trade efforts are frequently challenged by Member States, which may hold divergent interests and deploy different strategies.

1 Beatriz Pérez de las Heras is Professor of European Law and Jean Monnet Chair in European Integration at the School of Law, University of Deusto (UD), Av. Universidades, 24, 48007, Bilbao, Spain. She is Main Researcher of the ‘European Integration’ research team and Academic Director of the Jean Monnet Centre of Excellence on European Union Law and International Relations at the UD. E-mail: [email protected] 2 This article draws on the paper submitted in the international conference ‘30 Years after the Single European Act’ held in Hong Kong on 29-30 June 2016 and organised by the European Union Studies Association Asia Pacific (EUSA AP).

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Bilateralism, political conditionality and the lack of a cohesive trade policy all limit the EU’s ability to engage in a more flexible and strategic approach when dealing with its partners. This is particularly true of the EU’s relations with countries in Asia-Pacific, a region which has emerged as the most dynamic region in international trade3. Indeed, the proliferation of trade and business transactions clearly shows that this zone has become central to worldwide prosperity and to the EU’s growth prospects (European External Action Service, 2013). The Asia-Pacific region is now the destination for almost a quarter of EU exports and home to the world’s fastest-growing economies, such as China and India. But, beyond economic concerns, the EU also has a strategic interest in regional security in Asia, where historical disputes, national rivalries and territorial conflicts appear to be growing more serious (e.g. tensions on the Korean Peninsula, the China-Taiwan conflict, China-Japan territorial disputes, etc.) (Godement, 2013: 1-3). In addition, the European and Asian economies are linked by various sea routes, further increasing the EU’s strategic interests in the region.

In line with its current trade approach, the EU is presently immersed in bilateral trade dialogues with individual countries in the area. However, the most important trade deals currently being negotiated within the Asia-Pacific region are plurilateral and the EU remains outside these regional initiatives. In addition, this trade bilateralism accompanied by political requirements has been shown to be inconsistent with the EU’s stated foreign policy aim of contributing to greater integration in the Asia-Pacific region, and does not match the rapidly evolving geopolitical landscape of the region (Okano-Heijmans, 2014: 12).

This article examines current trends in the EU’s trade policy, with a particular focus on the implications for the Asia-Pacific countries. The approach does not take into account so much the economic opportunities this trade dialogue may provide, but rather the scope and consequences of the EU’s choices and norm-setting role. Against this background, the article first analyses major trends in the European trade diplomacy, highlighting the lack of a cohesive policy, notwithstanding the EU’s exclusive power in the field. Second, it assesses the effects of current European trade approaches in the Asia-Pacific region, providing a general overview of the bilateral FTAs and their state of negotiation by the EU. It finds that the EU’s trade bilateralism is moving in the opposite direction to concurrent plurilateral initiatives currently emerging in the region. This divergence risks sidelining the EU from playing a constructive role in the region. Third, given the EU’s crucial interests in the region, not only in trade and finance, but also in politics and regional security, the article concludes that the EU and its Member States must rethink their strategies, which are very often competing and mutually contradictory, and define a long-term comprehensive framework for the EU to act as a global player in the newly evolving Asia-Pacific context.

Current Trends in EU Trade Relations: the Lack of a Cohesive Policy

Trade policy has always been an exclusive competence of the EU. However, in practice, Member States also pursue parallel external trade policies in order to obtain individual advantages. This diplomatic dispersion dilutes the EU’s potential leverage in trade deals.

3According to the UN definition, the Asia-Pacific area stretches from Pakistan in the west via India and China to Japan in the east and down through Indochina, Indonesia and the Philippines and many small Pacific islands to Australia and New Zealand in the south. http://www.un.org/depts/DGACM/RegionalGroups.shtml (accessed 2 September 2016).

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Beatriz Pérez de las Heras

A major trend is that EU trade policy is currently focused on bilateral FTAs. As a singular characteristic, current EU strategy is to condition the conclusion of an FTA on the signing of a political agreement. Depending on the partner, this conditionality may become a straitjacket, if not a barrier, to EU trade deals, adding to its inherent difficulty in engaging in comprehensive trade negotiations.

The EU’s Exclusive Competence among Parallel State Policies

Article 3.1e of Treaty on the Functioning of the European Union (TFEU) includes trade policy among the areas of EU exclusive power. According to Article 2.1 TFEU, exclusive competence implies that only the EU may adopt legally binding acts. Further on in the TFEU, trade policy is covered in Part V, governing the Union’s External Action (Articles 206 and 207). Exclusivity is not limited to trade in goods, but also includes trade in services, trade-related aspects of intellectual property and foreign direct investment. This is the current extent of EU exclusive competence provided by Article 207.1, as amended by the Lisbon Treaty4 (De Gucht, 2010: 2-3; Woolcock, 2012: 45-84; Bungenberg and Herrman, 2013). The most important extension of EU competence in the Lisbon Treaty is, without doubt, the inclusion of foreign direct investment, which was previously an area of shared competence (Waibel, 2013: 12-17). In keeping with this integrated nature, external trade relations rely on the European Commission’s responsibilities on behalf of the whole EU. Yet the European Commission does not act alone, but under the strict supervision of Member States and in close cooperation with the Council and the European Parliament which ultimately have to approve the overall agreement.

In reality, EU policy-making on trade involves a multi-layer dynamic. In this regard, before opening trade negotiations, the European Commission holds a public consultation on the interest and content of any trade agreement and then conducts an assessment of the impact on both the EU and the other partner. This preliminary phase is known as a ‘scoping exercise’. There is then an internal scoping exercise, as the European Commission has to request authorisation from the Council to enter into formal negotiations. This permission is known as the ‘negotiating directive’ and provides the legitimization from the Member States for the Commission to negotiate on behalf of the EU and sets out the general objectives and the Commission’s remit (European Commission, 2013:3). In general terms, trade agreements are intended to create reciprocal opportunities for opening new markets for goods and services, increasing investments and making trade cheaper and faster. However, the ultimate aim may vary depending on the EU’s partners. Thus, FTAs negotiated with developed countries and emerging economies have clear economic objectives5. In contrast,

4 Specifically, this first paragraph of Article 207 TFEU sets the scope of the EU’s exclusive competence on trade when it provides that ‘The common commercial policy shall be based on uniform principles, particularly with regard to changes in tariff rates, the conclusion of tariff and trade agreements related to trade in goods and services, the commercial aspects of intellectual property, foreign direct investments, the achievement of uniformity in measures of liberalisation, export policy and measures to protect trade such as those to be taken in the event of dumping or subsidies. The common commercial policy shall be conducted in the context of the principles and objectives of the Union’s external action’. 5 FTAs grant priority access to the markets of the partners concerned. They therefore represent an exception to the critical principle of granting equal treatment to all trade partners established by the World Trade Organization (WTO). This is why specific rules for FTAs are set out in the WTO, specifically in Article XXIV of the General Agreement on Tariffs and Trade, and in Article V of the General Agreement on Trade in Services. The legal texts of the WTO agreements are available at: https://www.wto.org/english/res_e/res_e.htm (accessed 2 September 2016).

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Economic Partnership Agreements with African, Caribbean and Pacific countries mainly seek to promote sustainable development and reduce poverty6.

Once negotiations are over and the text has been finally reviewed, the Presidency of the Council decides what person should sign the agreement on the EU’s behalf. This is usually the European Commissioner for Trade. Very often, however, trade agreements include issues that are the responsibility of the Member States (e.g. criminal sanctions for violations of intellectual property rights, visa matters –since not all Member States participate in the EU visa policy– etc.). These are the so called ‘mixed agreements’ and they also have to be signed by Member States (Rosas, 2011: 1313-1317). When it comes to this kind of agreement, Member States sometimes confer a second mandate on the Commission to negotiate on their behalf on those issues that fall within their competence. This duplication of mandates further complicates the European negotiation process. However, matters can become even more difficult when the European Commission is not given a specific mandate from Member States and the Council’s rotating Presidency negotiates on behalf of Member States. This parallel negotiation gravely jeopardises consistency in talks and deals with partners, while limiting the EU’s potential to wield political leverage over trade relations (Mang, 2014).

After signing and since the European Parliament has given its consent, the Council adopts the final Decision to conclude the agreement, which then enters EU law with publication in the Official Journal. In the case of a mixed agreement, Member States also ratify it in accordance with their respective constitutional procedures.

The multi-layer process on trade deals between the EU and Member States is not the only internal challenge to a truly common trade policy; dialogue between EU institutions themselves is another one. Indeed, the European Commission does not intervene as a sole actor when undertaking negotiations. Several Directorates-General are usually involved, though the EU chief negotiator generally comes from the Directorate-General for Trade. In addition, if a political agreement is linked to the trade agreement, the chief negotiator for the political arrangements comes from the European External Action Service (EEAS). In these cases, it would be a logical tactic to work in coordination, but apart from some informal meetings, there is as yet no institutionalized strategic interaction either between Directorates-General or between the Directorate General for Trade and the EEAS (Wouters et al., 2013:53-54; Bendiek, A. 2014:1-2).

The situation is further fragmented by the fact that Member States pursue parallel trade policy in a way that is increasingly undermining a common EU strategy. Moreover, Member States compete between each other for market access, seeking sources of growth in exports to compensate their current slow domestic growth. Thus, in dealing with China, most Member States –particularly Germany, Denmark, France, the Netherlands, Spain and Poland– have their own highly differentiated trade and investment promotion strategies. Germany, for example, has had no qualms in openly pursuing its own interests, as it did in 2011 when it negotiated a bilateral agreement with China on electric cars and renewables-related trade, undermining parallel EU deals (Kundnani and Parello-Plesner, 2012:2). Other cases include the lack of coordination over bids to join the Asian Infrastructure and Investment Bank (AIIB)

6 An overview of these agreements may be found at: http://trade.ec.europa.eu/doclib/docs/2009/september/tradoc_144912.pdf (accessed 2 September 2016).

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proposed by China and disputes over the European Commission’s decision to pursue China for dumping on trade in solar panels. In the first case, some Member States, such as France, Italy and Germany, ultimately coordinated their bids to participate in the AIIB, while the UK submitted its own bid. In the anti-subsidy solar panel case, a major controversy arose between Germany, France and other Member States, evidencing competing national interests7. These asymmetries observed in Member States’ trade and investment trends fundamentally complicate a joint EU strategy towards China (Parello-Plesner and Kratz, 2013:4; Huotari et al., 2015:5-6).

Divergent national agendas continue to override a common approach. Indeed, while Article 207.1 TFEU enshrines a commitment to bundle bilateral agreements into single EU deals, in reality the struggle for exports has stepped up bilateralism even further, away from EU common approaches. As a result, European capacity may be said to be split between the Member States and the EU, with the result that none of them appears to have any special leverage in external trade relations. In addition, this fragmented performance is unlikely to make Europe more prosperous. Indeed, some commentators believe that the EU needs to encourage domestic demand by promoting policies that also boost consumption and investment across Member States. Rather than obsessing about exports to the rest of the world, new efforts are also considered necessary to incentivise trade between the Member States themselves by achieving greater convergence between European markets and increasing competition between European companies. Initiatives aimed at meeting this challenge will help to raise the continent’s low productivity, a critical step for long-term prosperity (Springford and Youngs, 2013:40).

Economic recovery and growth promotion at home may indeed be additionally encouraged by a comprehensive common trade strategy. The EU’s current bilateral agenda is specifically designed with this aim in mind.

From Guardian of Multilateralism to Politics-Linked Bilateralism

Several strategy documents adopted by the European Commission in 2010 and 2013 explain the role that trade policy can play in fostering prosperity within the EU. These texts also evidence major trends in the EU’s current trade policy, to wit, a shift away from multilateralism towards bilateralism and an evolving approach to linking political and economic issues in trade deals.

The switch in the EU’s trade policies is justified in the 2006 document ‘Global Europe: Competing in the World’ (European Commission, 2006), on the basis of which the EU lifted the moratorium informally imposed on the launching of new FTAs by WTO Director-General Pascal Lamy (Woolcock, 2007:2). Despite the stated change, in this document the EU largely stressed that it did not actually intend to turn away from multilateralism, since FTAs should be built on WTO rules and should even become an instrument for including issues not covered by the WTO, such as investment or public procurement. In fact, the EU’s

7 More importantly, the European Commission had decided in May 2013 to impose provisional tariffs on solar panels imports from China, but the opposition of 18 Member States led the Commission, not only to lower anti-dumping duties, but also ultimately to settle the dispute in July 2013 (EU Trade Commissioner Karel De Gucht’s statement , 2013).

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new trade approach on FTAs would serve to accelerate multilateral liberalization within the WTO. At that time, potential target partners for the EU included Mercosur, Russia, Korea, India, the Association of Southeast Asian Nations (ASEAN) and China. However, the latter was considered to be a special case that required particular attention, given the opportunities and, at the same time, the risks it entailed (Xiaotong, Ping and Xiaoyan, 2014:527). In any case, FTA negotiations with these countries did not go very well, chiefly due to a general lack of foresight and planning (Khandekar, 2013:3).

The European Commission’s 2010 Communication on ‘Trade, Growth and World Affairs’ extended FTA partners to the Gulf countries, Canada and other ASEAN countries (European Commission, 2010). Nevertheless, the EU continued to give top priority to the Doha Round trade negotiations. In the same year, the Commission set out a strategy on investment, in accordance with the negotiation mandate it had received from the Lisbon Treaty (European Commission, 2010a). Shortly thereafter, following failed attempts to include investment within the WTO and the Organization for Economic Cooperation and Development (OECD) and after the Doha Round talks stalled, the EU firmly committed itself to a bilateral path (Antimiani and Salvatici, 2015:253-259).

Against the background of the global economic crisis, in 2013 the EU began to seek economic recovery through large-scale free trade agreements, such as those being negotiated with the US and Japan. Along these lines, the strategic document ‘Trade: a Key Source of Growth and Jobs for the EU’, published in 2013, largely explains the role of trade policy within the European Commission’s comprehensive policy for stimulating growth and job creation in Europe. Thus, ambitious trade deals with countries throughout the world and in the neighbourhood are deemed a key instrument for addressing this recovery policy. In particular, the document focuses on the contribution that trade deals with key Asian countries (South Korea, Japan, India, China and ASEAN) could bring, towards a boosting economic recovery in the EU (European Commission, 2013a). This new generation of agreements includes not only trade and investment issues, but also services and other matters not directly associated with trade, such as environmental protection, social standards and cultural values (Bendini, 2015:15-16).

The other current trend in EU trade, legalism linking economics and politics, in practice generally entails the EU’s conditioning FTAs on the signing of a political agreement with the third country concerned. This legalistic approach is a singular characteristic of EU trade diplomacy. It was made official by the Lisbon Treaty in current Article 21.1 TEU8. These political commitments are known by various epithets, but are usually called ‘Partnership and Cooperation Agreements’ (PCAs). They include a predefined set of political clauses on human rights, democracy, rule of law and non-proliferation of weapons of mass destruction, among other issues. The human rights clause, in particular, is considered an essential element, having been systematically included in agreements with third countries well

8 This provision states that ‘The Union’s action on the international scene shall be guided by the principles which have inspired its own creation, development and enlargement, and which it seeks to advance in the wider world: democracy, the rule of law, the universality and indivisibility of human rights and fundamental freedoms, respect for human dignity, the principles of equality and solidarity, and respect for the principles of the United Nations Charter and international law’. Trade policy is included in Part Five TFEU on the Union’s external action and must therefore be guided by the range of EU values, in which human rights feature prominently.

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before the Lisbon Treaty9. In contrast, agreements on other political clauses were adopted by the Council in the 2000s. More recently, this political framework has been known as the ‘2009 Common Approach’10. After the Lisbon Treaty, the legalistic approach linking trade diplomacy to political commitments was reaffirmed by the Strategic Framework and Action Plan for Democracy and Human Rights adopted by the Council of the EU in 2012. It specifically provides that the conclusion of trade and/or investment agreements is to be linked to the human rights situation in third countries, while human rights dialogues are to be reinforced with FTAs (Council, 2012).

The EU currently negotiates trade agreements and political agreements in parallel, but in reality, this political conditionality relegates FTAs to a subset of political agreements, while limiting the EU’s ability to engage in a more flexible way. In this vein, partners are very often reluctant to accept human rights and other political commitments required by the EU, since they do not see why trade issues must necessarily be made conditional on such exigencies (Zwagemakers, 2012:4-5). In addition, the EU has also demonstrated that it has some leeway to include political engagements or not as it deems fit. Thus, the Transatlantic Trade and Investment Partnership (TTIP), currently being negotiated with the US, does not provide for the negotiation of a political pact. In contrast, the FTA with Japan includes a binding political agreement largely opposed by the Japanese government. The EU has consequently been criticised for applying different standards depending on the partner. Another line of criticism concerns implementation since, in general, the conditionality policy lacks any proper mechanism for monitoring and evaluating the effectiveness of the clauses in partner countries, making most political commitments unenforceable (Hachez, 2015:20). Different standards of conditionality and a low level of enforcement compromise the legitimacy of the EU’s efforts to link political engagements and trade in international agreements. In addition, EU political conditionality has not proved very effective in today’s rapidly-changing international context, where non-western partners, Asia-Pacific countries among them, are gradually strengthening their influence in global affairs and resisting it very assertively.

Zooming in on Asia-Pacific

The economic and political landscape of the Asia-Pacific region is rapidly changing. Several of the world’s fastest-growing economies are located in the region, where internal commercial exchange has increased greatly since 2000. In trade terms the EU interacts with the region on a bilateral basis. However, this trend turns out to be opposite to the Asian economies’ approach of increasing commercial integration among them. The EU is not a party to any of these region-wide economic initiatives, reducing its relative leverage as an actor in the region.

9 The first mention of human rights in an EU trade agreement can be found in Article 5 of the 1989 Lomé IV Convention with ACP countries. Since 1995, the human rights clause has been included in agreements with more than 120 countries. It is accompanied by a sanction mechanism providing for the possibility of suspending the agreements or parts of it. This suspension mechanism has seldom been applied, a fact that some consider as a sign of weakness on the EU’s part, while some partners, such as Japan and Singapore have criticised it for being selective and discriminatory (Okano-Heijmans, 2014:17). 10 COREPER document of 29 May 2009 on ‘Common Approach on Political Clauses’. Available at http://register.consilium.europa.eu/doc/srv?l=EN&f=ST%2010491%202009%20REV%201%20EXT%202 (accessed 2 September 2016).

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Fostering Bilateral FTAs as a Geo-Strategic Tool…

EU trade with Asia-Pacific partners has been growing over recent years. In 2015 the region accounted for 57.9% of all EU trade, while Europe remains the largest trading partner for most of these countries11. Negotiations on FTAs are ongoing with several countries in the region, which could increase trade flows with them and help the EU integrate much more into the Asian economy.

To date, the EU-South Korea FTA, which came into force in 2011, is the only such agreement concluded by the EU with an Asian country. As a result of its implementation, around 70% of bilateral trade is now free of duty and EU exports to South Korea have increased by over 15% in the last three years12.

Bilateral trade negotiations are underway with other countries, but the envisioned agreements vary depending on the partner concerned. Thus, the EU is currently negotiating an FTA and an economic partnership agreement with Japan, which specifically includes market access for goods, non-tariff measures, services, investment, public procurement, trade and sustainable development (Amighini et al., 2016:76-77). In contrast, negotiations with China are geared towards a Bilateral Investment Treaty (BIT), as a first step before a potential FTA is concluded with the Asian giant. Indeed, the EU’s current priority is for greater coherence by bringing together the EU Member States’ BITs with China (Parello-Plesner and Kratz, 2013:3). Trade relations with China can sometimes prove very tense, due to the country’s still state-led capitalist system and the unfairly low prices of Chinese imports (Barone, 2015:4-5). Nonetheless, the EU will probably have to rethink its deals with China in the short term, since it is the main trade partner of Japan, South Korea, Taiwan and India. Indeed, trade integration between China, Japan and South Korea is currently larger than intra-EU trade relations. Moreover, China has become an exit point for Asia’s exports, with other countries in the region using China as a path to global export. However, as China gradually becomes a producer of high-tech goods, the situation may be reversed with China using the rest of Asia’s FTAs as a stepping stone to global markets (Yoshimatsu, 2014:12-13).

Following the failure of negotiations on a trade agreement with the ASEAN in 2009, the EU embarked on bilateral talks with the ten countries in ASEAN. These individual negotiations created tensions among ASEAN countries and the EU was consequently criticised for seeking to undermine ASEAN unity, in clear contradiction with the EU’s aim of fostering regional integration in Asia. Among ASEAN countries, Singapore was the first to begin talks on an FTA with the EU. Negotiations for a comprehensive FTA were completed in October 2014, but the agreement has still not entered into force due to a dispute between the European Commission and the Council concerning the EU competence. FTA negotiations are ongoing with other ASEAN countries, such as Malaysia, Vietnam, Thailand, and Myanmar, while negotiations for a FTA have yet to materialise with Cambodia, Laos, the Philippines, Brunei and Indonesia (Khandekar, 2014; European Commission, 2015).

11European Commission, Directorate-General for Trade. 2015. Available at http://trade.ec.europa.eu/doclib/docs/2006/september/tradoc_111473.pdf (accessed 2 September 2016) 12 European Commission, Directorate-General for Trade. 2015. Available at http://trade.ec.europa.eu/doclib/docs/2006/september/tradoc_111834.pdf (accessed 2 September 2016).

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Outside the ASEAN, in South Asia, the EU launched negotiations on an FTA with India in 2007. However, bilateral dialogue was suspended in summer 2013 due to discrepancies on the level of ambitions and outcomes (Wouters et al., 2013a; Amighini et al., 2016:74-75).

In the Pacific, an FTA is being negotiated with New Zealand. This country is not among the EU’s largest export markets, receiving only 0.2% of its exports, but the EU-New Zealand FTA is expected to open the doors of the European trade agenda to Australia and ASEAN. Indeed, Australia and New Zealand are tied into a common market by the Closer Economic Relations agreement with estimated economic output equivalent to North American Free Trade Association. In addition, both Pacific countries have concluded ambitious FTAs with ASEAN. Consequently, the results of the EU-New Zealand FTA could be operationalised beyond Oceania by the EU (Lee-Makiyama, 2015:13-14).

As with other third countries, political agreements with Asia-Pacific partners are also pursued in parallel with trade deals. Experience shows that negotiations may last two or more years, depending on the partner’s sensitivity on the issues to be included in the PCA. Once concluded, it has to be ratified by both sides, which also takes time. Disagreement on certain political clauses may bring dialogue to a standstill, also affecting trade relations. PCAs have currently been concluded with Indonesia (signed in 2009, came into force in 2014), Thailand (concluded in 2013 after seven years of negotiations), Vietnam, Singapore and Philippines. The Manila government strongly opposed the clause requiring the Philippines to join the Statute of Rome on the International Criminal Court. After the EU amended the terms of this clause, the government of Philippines agreed to conclude the PCA, recognising that ‘the most heinous crimes of international concern must not go unpunished’. Negotiations on political agreements are now underway with Malaysia and Brunei, while talks have not yet been initiated with Laos, Cambodia and Myanmar. In South Asia, India refuses to negotiate an EU PCA, preventing progress on FTA negotiations. Japan has also objected to the EU’s inclusion of a human rights clause and expressed its displeasure at the fact that the EU wants to impose such a clause on a G-7 country. South Korea, on the other hand, was willing to yield on the political clauses, in light of its keenness to facilitate a quick trade agreement. With China, negotiations on a PCA started in 2007 and are still ongoing (Okano-Heijmans, 2014:40; EEAS, 2014:1-2; Bendini, 2015:12).

As already mentioned, political conditionality is linked to the EU’s current trade diplomacy. However, it is evident that this legalistic approach to wielding influence is not proving particularly effective when it comes to countries in Asia-Pacific, which remains the sole region in the world that lacks an institutional and legal human rights system (Croydon, 2014: 290). Discrepancies, delays and stalemates in political dialogue also demonstrate that these partners do not share the EU’s view of these PCAs as a legal basis for future cooperation that may turn these countries into privileged partners for the EU. Political conditionality on Asia-Pacific, therefore, does not have the same strong effects as it has on EU’s developing neighbour countries or candidate states, for which economic aid, market access and the prospect of membership are incentives for introducing political and legal reforms (Schimmelfenning and Scholtz, 2008:194).

The key question is therefore whether the EU should tailor this legalistic approach to the challenging geopolitical context of the Asia-Pacific region or find other ways of promoting its democratic values.

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…amidst Regional Integration Attempts

Over the last five years, major commercial developments in Asia have transformed the economic landscape of the region, which has become the focus for world trade and business. A key factor in this economic transformation is the significant increase in Asian intra-regional trade. Commercial exchange within the region is growing faster than in the rest of the world. Behind this phenomenon lies a proliferation of FTAs among Asian countries: from 53 in 2000 to over 250 in 2015, of which 150 are intra-regional (Asia Regional Integration Centre, 2015).

In line with this trend, ASEAN, for example, has concluded FTAs with important regional actors, including Australia, New Zealand, China, India and South Korea. Implementation of these FTAs is already boosting commercial exchange and investment, as a result of the removal or reduction of trade barriers and customs duties. The FTA with China, for instance, has effectively reduced tariffs on nearly 8,000 products and completely eliminated them for 90% of imported goods, with favourable effects for China and ASEAN countries. However, the specific impact of the ASEAN’s FTA with China goes beyond trade, in that its implementation is shifting manufacturing capacity from China, whose workforce is now becoming older and wealthier, to Vietnam, Indonesia and other ASEAN countries, where wages are lower and there is a large available workforce. This shift in world manufacturing capacity to these countries is attracting foreign investment from both China and other markets such as Europe and the US. ASEAN’s FTA with India has also reduced or eliminated tariffs on most goods traded between them. This FTA has a similar effect to the agreement with China in that it opens the Indian consumer market to ASEAN manufacturers’ goods. This FTA with India is being expanded to include services and investments. The joint impact of these two agreements with China and India is turning ASEAN into a strategic hub for global sourcing and manufacturing. The ASEAN market, coupled with China and India, currently represents a total middle class consumer market with complete free trade of some 650 million people. By 2030, it is estimated that around 64% of the world’s middle-class population will be located in Asia (Devonshire-Ellis, 2014).

Besides bilateral deals, three large regional free trade initiatives are emerging in Asia. One of them is a trilateral FTA between China, Japan and South Korea, negotiations having started in 2012 (Yoshimatsu, 2014). As a more ambitious initiative, the ASEAN Framework on Regional Comprehensive Economic Partnership (RCEP) aims to create a vast free trade area by interlinking ASEAN’s existing FTAs and including agreements covering services and investments. The RCEP will cover 45% of the world’s population and a third of its GDP (Pham 2016:95)13. The Trans-Pacific Partnership (TPP) is another mega-initiative, launched and backed by the US as a geo-strategic tool for wielding its influence in the region. The TPP has twelve members and was concluded in October 201514. It is expected to enter into force in 2018 after ratification by the participating economies. The TPP is a more comprehensive framework than the RCEP, including trade and investment in goods and services, issues related to digital economy and other topics (Amari, 2016:14-15).

13 The RCEP includes the 10 ASEAN countries and Australia, China, India, Japan, New Zealand and South Korea. 14 The TPP embraces US, Canada, Mexico, Chile, Peru, Australia, New Zealand, Singapore, Brunei, Malaysia, Vietnam and Japan.

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These large plurilateral initiatives are in fact competing paths for regional integration in the Asia-Pacific zone (Oba, 2016: 100). No doubt they offer benefits for those participating, but they also have negative effects for those that do not join. For instance, the TPP is considered to have a detrimental impact on China’s economy, mainly due to the trade diversion effects caused by its implementation. China is responding to competing pressure by giving priority to its FTA with Japan and South Korea, as well as those with Australia and with Western Asia (Hearn and Myers, 2015: 6-7).

The EU does not participate in any of these large trade initiatives. The FTA being negotiated with Japan might in some ways be seen as a response to these regional trends, since the EU-Japan agreement could provide a bridge to the TPP and the RCEP, but it is still too early to confirm this prospect. To date, there have been no signs that the EU is considering a more regional approach, which lessens the EU’s potential presence and relative weight as an actor in the region.

What is already evident is the role of the ASEAN integration process as a key factor in the evolution of Asian geopolitics in recent years. ASEAN is behind the two mega-regional initiatives: the RCEP and the TPP. The TPP in particular could be expanded to embrace all ASEAN countries. The ultimate aim is also to transform these plurilateral FTAs into a Single Free Trade Area of the Asia Pacific (FTAAP) (Amighini et al., 2016:56). Therefore, the landscape of the region is changing dramatically with the emergence of these large trade frameworks and the economic growth of most Asian countries. In this scenario, the EU’s insistence on bilateral deals does not seem to be the optimal strategy.

To capitalise on the growing market boom in Asia-Pacific, which is building political and economic ties between countries, the EU’s approach and strategies need to be revised to match this challenging geopolitical context.

Revising EU Policy towards a more Flexible and Cohesive Trade Strategy

Relations between the EU and Asia-Pacific countries are based on diverse and sometimes contradictory policies. A coherent strategy needs to be defined that will enable the EU to effectively address the rapid economic and geopolitical developments in the region. This strategy document would provide the EU with permanent guidance in the medium and long term. The new EU trade strategy ‘Trade for all’ prioritises concluding on-going projects, while opening the door to new negotiations, such as those proposed for Taiwan and Hong Kong. Yet, no specific strategy is formulated for this region (European Commission, 2015a).

More coherence among Member States at a political level would further strengthen the position of the EU as a whole, especially in negotiations with China and Japan. In the Asia-Pacific region, where large economic and trade integration initiatives are proliferating, the EU should be the level for policy-making to leverage a more effective influence.

Likewise, the EU should get involved in regional trade deals in Asia-Pacific. Strengthening the dialogue with ASEAN is one way. The two organizations have a combined population of over 1.1 billion and both blocs have an important stake in global affairs. The EU and ASEAN share common interests in global security and peace, particularly counter-terrorism, rule of law, economic stability, climate change and energy security, which provide the basis for

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stronger mutual engagement. In April 2012, the two regional blocs signed a five-year Plan of Action in Bandar Seri Bagawan (Brunei), providing the political framework to build dialogue. The plan, which replaces an earlier one covering 2007-2012, expresses the EU’s interest in collaborating more with ASEAN on a number of issues going beyond trade (Jetschke and Portela, 2013). ASEAN envisions and is currently working on establishing a community built on three pillars: the ASEAN Political-Security Community, the ASEAN Economic Community and the ASEAN Socio-Cultural Community. More specifically, the ASEAN Community seeks to become a region that is people-centred and socially responsible, where member states will live in peace with one another and there will be a competitive single market (ASEAN, 2015; Caballero-Anthony, 2016). Working more closely with ASEAN should therefore permit the EU to address two of its major ambitions: to enhance its visibility and influence and to support regional integration.

At present, the EU and ASEAN have a multi-layered relationship. In 2014, both sides agreed to strengthen cooperation in certain key areas for the period 2014-2020: connectivity between ASEAN countries through sustainable inclusive economic integration and trade; climate change; environment and disaster management and comprehensive dialogue facility. With regard to trade and investment flows, in particular, initiatives include work towards a region-to-region FTA, building on bilateral agreements between the EU and ASEAN countries (High Representative and European Commission, 2015). However, achievement of this ambitious objective, like many others agreed on by both sides, will have to be backed by stronger political endorsement, beyond the current ASEAN-EU ministerial meetings. The changing economic and geopolitical context in Asia-Pacific requires closer dialogue at the highest political level, since only bilateral summits can define joint priorities and provide the necessary drives to turn relations into an enduring strategic partnership.

Besides enhanced dialogue with ASEAN, one way for the EU to increase its relevance in the Asia-Pacific region could be a free trade and investment agreement with China. Given the weight of China’s trade in Europe and its effects for Asian suppliers as well, such an agreement could in the long term address the core of the EU’s economic relationship with Asia. China itself is calling for a more comprehensive trade and investment deal with the EU, as a way of counteracting increased US presence in the region through the negotiation of the TPP, as well as in the north-western hemisphere through the TTIP. The time may not yet be ripe for an agreement of this scope with China, but the proposal should be considered by the EU, since it could have comparative advantages for European industry, improve political dialogue with Beijing and strengthen the European trading position throughout Asia (Godement and Stanzel, 2015:7-8).

In revising its policy, the EU would also do well to review its rather old-fashioned approach of setting political objectives in its trade negotiations by trying to influence others. Political conditionality was devised for an era when European countries were still able to impose their norms on trade and geopolitical interests on others. However, that time is rapidly passing, and there is currently a greater and more diverse group of countries whose voice and influence in global affairs is becoming even stronger. In particular, the formal linkage between politics and economics has proved inefficient in addressing the broad range of interests of the EU and its Member States in a region such as Asia-Pacific. Consequently, the 2009 Common Approach needs to be revised to provide greater flexibility and diplomatic room for manoeuvre, something which is always required in international negotiations.

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Whatever course of action the EU chooses, there can be no doubt that it would be better to reinforce its trade diplomacy to suit the Asia-Pacific context. Region-wide FTAs are paramount, not just for economic, but primarily for strategic reasons.

Conclusions

In the current post-Doha era of competitive liberalisation and multi-track trade policy, the EU is presently focused on bilateral FTAs. Large-scale trade deals are deemed a key instrument for boosting economic recovery in Europe. However, the EU is not alone in this endeavour, since its Member States are pursuing divergent commercial policies with the same aim of making up for slow domestic growth, thus undercutting EU efforts. Poor performance in terms of economic growth over recent years has also aggravated the EU’s decline as a normative power. Indeed, political conditionality, linked to trade and economic deals, does not seem to be very effective for exporting European democratic values in the current multipolar world and, moreover, it limits the EU’s ability to engage in a more strategic and flexible way.

The international economic and political focus is presently centred on Asia-Pacific region, where emerging markets are playing an increasing role in the rapidly changing global context. The EU is immersed in negotiating bilateral FTAs with most countries in the area, but this approach is out of step with the continent’s own trends towards trade integration through the implementation of large FTAs. While other western powers, such as the US, have already switched from a bilateral approach to a regional trade strategy, backing the TTP, the EU remains outside these extensive regional dynamics. Therefore, if the EU does not want to waste the opportunity to access the region’s opening markets, it should follow suit and become involved in this area’s free trade architecture.

Deeper engagement with ASEAN could be a key way to developing a more rounded strategy for the Asia-Pacific region. Both sides share integration aims. ASEAN is working to consolidate the ASEAN Economic Community and develop its post-2015 vision, and the EU can help ASEAN to achieve its integration goals as a trusted partner, without predicating any specific model. The moment to articulate a strategic framework for the future of EU-ASEAN relations is therefore now.

EU trade diplomacy should in any event be reinforced, in its extent and its effective power, so as to better address the new region-wide strategic initiatives. The European Commission, on behalf of the EU, and Member States should define what kind of trade and economic power the EU should be. To achieve this, however, it is urgently necessary to clarify the respective institutional powers of the EU vis-à-vis the Member States, as determined by the Lisbon Treaty. Revising political conditionality to provide more flexibility and room for diplomatic negotiation is also desirable, in particular, with Asia-Pacific countries, which are strengthening their voice in global politics and economics. The region has become a new centre of economic and geo-political influence. Therefore, only through intensified ties and coordination with partners in the region will the EU be able to address major global issues, such as trade, security, migration and climate change. The EU and its Member States should seize the momentum and define a joint comprehensive strategy for Europe to take the field.

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The Participation of Austria and Hungary in the Framework Programmes for Research and Technological Development of the European Union. A Comparative Analysis

Ágota Dávid1

Abstract: The significance of the framework programmes for research and technological development of the European Union is constantly increasing. Horizon 2020, the Eighth Framework Programme with its 80 billion euro budget is a very important player in science funding. At the same time, due to the economic crisis and limited state budget for research and technology, national governments gladly encourage their scientists to apply for funds on the European level. Especially if they want to cooperate and carry out research internationally. So, as a surprising result, increasing amounts for funding result in more fierce competition. How do new and old Member States perform in this competition? The study will show this through the example of the performance of one old Member State – Austria – and one new Member State – Hungary. In the paper, first the history of framework programmes will be summarised, then the analysis of STI statistics about participation, success rates and financial contribution in retained proposals will follow. The difference in success rates might derive from various factors, including public and business expenditure on R&D, number of researchers, governmental support schemes or the more active involvement of innovative small and medium-sized enterprises.

Keywords: research and development, Horizon 2020, 7th Framework Programme, research funding

The significance of the framework programmes for research and technological development of the European Union is constantly increasing. In Horizon 2020, the current framework programme of the EU, 80 billion euro will be distributed among researchers based on scientific excellence. Unlike in the agricultural or structural policy of the Union, where funds are mainly distributed based on previously defined quotas, framework programmes for research and development (R&D) are strictly competitive. As a result of the economic crisis and budgetary restrictions, the competition for such funds is constantly

1 Ágota Dávid is a PhD candidate at the Pázmány Péter Catholic University (Doctoral School of Political Theory) and senior counsellor at the National Research, Development and Innovation Office of Hungary. She is responsible for bilateral scientific cooperation with several countries, among others with Austria. E-mail: [email protected].

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increasing. All the Member States and associated countries of Horizon 20202 are aiming at the largest possible share of available funds, which is also encouraged on government level. Such EU provided funds can ideally supplement government expenditure on R&D.

The first 15 Member States of the European Union, the so called EU15 or old Member States usually perform much better than the “new” member states, which have joined the EU in or after 2004 (EU13). I will compare the performance and participation data of one EU15 country – Austria – with one EU13 country – Hungary. I try to find an answer to the question: why is Austria more successful in the framework programmes of the European Union than Hungary? After a short overview of the history of the framework programmes for research and technological development I will compare the participation data and success rates of Hungarian and Austrian researchers in the framework programmes (number of projects, size of budget). Finally I will mention some reasons why Austria is more successful than its eastern neighbour, Hungary.

Historical overview of the framework programmes for research and technological development

There is no broad academic literature on the emergence and development of Framework Programmes for Research and Technological Development of the European Union. Guzzetti3 and Krige4 are authors of two general historical overviews about the origins and growth of the European Framework Programmes. In 1957, in the Treaties of Rome, no collaborative mandate was given in the area of science and technology outside nuclear energy. In the mid-1960s even EURATOM had to abandon its original objective of Europe-wide cooperation – it seemed as if the European countries would cooperate only outside the Community framework if at all.5 From the early 1970s sectorial programmes with the aim of closing the “technology gap” were launched.6 Authors like Sandholtz7 or Papon8 emphasise the importance of such programmes mainly aimed at increasing competitiveness in specific sectors, well in line with international trends of science policy, to focus on innovation and applicability of research efforts. These initiatives still lacked the ambition to maintain or develop a broad research base in Europe. A typical

2 All the Member States of the European Union are automatically members of the framework programmes, too. As of 29 April 2016, the following countries are associated to Horizon 2020: Iceland, Norway, Albania, Bosnia and Herzegovina, FYROM, Montenegro, Serbia, Turkey, Israel, Republic of Moldova, Switzerland (partial association), Faeroe Islands, Ukraine, Tunisia, Georgia. The Association Agreement with Armenia was also signed on 19 May 2016, but it has not entered into force yet. 3 Luca Guzzetti: A Brief History of European Union Research Policy. Luxembourg, Office for the Official Publication of the European Communities, 1995. 4 John Krige, Luca Guzzetti (Eds.): History of European Scientific and Technological Cooperation. Luxembourg, Office for the Official Publication of the European Communities, 1997. 5 Margaret Sharp, Claire Shearman: European Technological Cooperation. London, Routledge, 1987. 6 Edgar Grande, Anke Peschke: Transnational cooperation and policy networks in European science policy-making in Research Policy Vol. 28, 1999, pp. 43–61. 7 Wayne Sandholtz: High-Tech Europe: The Politics of International Cooperation. Berkeley, University of California Press, 1992. 8 Pierre Papon: European Scientific Cooperation and Research Infrastructures: Past Tendencies and Future Prospects in Minerva Vol. 42, 2004, pp. 61-76.

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example for such a sectorial programme was ESPRIT, the “flagship” programme for the promotion of R&D in the information technology industry, launched in the early 1980s. In the following years, both the EC budget devoted to R&D and the legal framework were significantly expanded. Nevertheless, Reger and Kuhlmann9 emphasise that this tendency did not mean that the EU would have replaced national policies – if we compare the R&D budget of the Member States to the EU budget, the latter is still relatively small. Increased amounts of funding could not overcome the so-called “European Paradox” either. As Georghiou10 explains, in spite of a generally high level of investment in science, the technological and commercial performance in Europe has worsened since the mid-1980s.

Other authors put the emphasis on analysing the role of the European Commission in setting the agenda of science policy in Europe. Peterson11 sees the emergence of the Framework Programme as the result of the interplay between developing stakeholder networks and senior-level Commissioners. While Citi12 sees the emergence of policy ideas as the realm of high politics and treats the Commission as a reactive policy entrepreneur not seriously involved in the initiation and specification of the issue in its early phases, Edler and James13 assign the role of an active policy entrepreneur to the EC. Unlike Peterson who stresses the role of senior-level Commissioners, Edler and James say that “it was individual mid-ranking Commission officials who identified a window of opportunity to put the theme on the agenda and mobilised the political and financial resources” of the European Commission. “In doing so, the Commission gained the credibility to be the venue for science and technology policy.”

The significance of European research policy started to grow in the 1980’s. The First Framework Programme was also created in 1984 with the general aim of defining goals, fields and related funding of European science policy. The First Framework Programme lasted for four years. In order to establish a Europe-wide scientific platform for the cooperation of national research institutes and universities it mainly supported cooperative research projects on key scientific areas of mutual interest. Collaborative research is even today the most common form of scientific cooperation on European level.

Based on the success of the First Framework Programme, the Single European Act devoted a separate chapter for research and development in 1986. The Act declared that science policy of the European Communities can be implemented via framework programmes for research and development. This declaration set the legal basis for R&D

9 Guido Reger, Stephan Kuhlmann: Europäische Technologiepolitik in Deutschland. Heidelberg, Physica, 1995. 10 Luke Georghiou: Evolving frameworks for European collaboration in research and technology in Research Policy, Vol. 30, 2001, pp. 891–903. 11 John Peterson: EU research policy: the politics of expertise in: Carolyn Rhodes, Sonia Mazey, (Eds.): The State of the European Union: Building a European Polity? Lynne Rienner, Boulder CO, 1995, pp. 391–412 and John Peterson: Technology policy in Europe: explaining the framework programme and EUREKA in theory and practice in Journal of Common Market Studies Vol. 29, No. 3, 1991, pp. 269–290. 12 Manuele Citi: Revisiting creeping competences in the EU: the case of security R&D policy in Journal of European Integration, Vol. 36, No. 2, 2014, pp. 135–151. 13 Jakob Edler, Andrew D. James: Understanding the emergence of new science and technology policies: Policy entrepreneurship, agenda setting and the development of the European Framework Programme in Research Policy Vol. 44, 2015, pp. 1252-1265.

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activities on community level.14

The first two framework programmes were mainly focusing on energy and information and communication technologies in order to establish a solid technology base for industry. A turning point in science policy was the acceptance of the White Paper on Growth, Competitiveness and Employment15 and the Green Paper on Innovation16. Both strategies had the aim to increase the competitiveness of the European Union, to increase employment and to coordinate national research policies. A special focus was given to innovation, to the efficient use of scientific results while developing products or services, as well as to the role of education in economic growth. The Fifth Framework Programme was built on the results and conclusions of previous framework programmes – it emphasized the importance of competitiveness and growing employment as well as the significance of European added value in project proposals. This latter means that the proposed activities could not have been carried out by one country, so proposals had to be submitted by consortia formed by scientists coming from various European countries. Not only wide participation, but also European-level impact was a prerequisite for funding.

Table 1. Duration and budget of framework programmes 17

Framework Programme Duration Budget (billion ECU17/ euro)First 1984-1987 3.8Second 1987-1991 5.4Third 1990-1994 6.6Fourth 1994-1998 13.2Fifth 1998-2002 15Sixth 2002-2006 17.9Seventh 2007-2013 50.5Horizon 2020 2014-2020 80

Source: Official Journal 1983, 1987, 1990, 1994, 1999, 2002; EUR-Lex

Based on the targets of the Lisbon Strategy and the Barcelona objectives, the Sixth Framework Programme was another turning point in the history of European science policy. Being set out during the European Council in Lisbon the Strategy’s aim was to make the EU “the most competitive and dynamic knowledge-based economy in the world

14 Single European Act 1987: Treaties Establishing the European Communities. Treaties Amending these Treaties. Brussels – Luxembourg, Office for Official Publications of the European Communities pp. 335-343. 15 European Commission: White Paper on Growth, Competitiveness, Employment. The Challenges and Ways Forward into the 21st Century. Brussels – Luxembourg, Office for Official Publications of the European Communities, 1993. 16 European Commission: Green Paper on Innovation. Brussels – Luxembourg, Office for Official Publications of the European Communities, 1995. 17European Currency Unit, a basket of the currencies of the European Community member states between 1979 and 1999, used as the unit of account of the European Community before being replaced by the euro.

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capable of sustainable economic growth with more and better jobs and greater social cohesion”, by 2010.18

Two years later, back to back with the launching of the Sixth Framework Programme, the Barcelona European Council, which reviewed progress towards the Lisbon goals, agreed that national investment in European research and development must be increased with the aim of approaching 3 % of GDP by 2010. It also called for an increase of the level of business funding to two-thirds of total R&D investment.19 As these ambitious objectives could not have been reached until 2010 they have also become part of the Europe 2020 strategy.20

The Seventh Framework Programme (FP7) reflected the growth and employment targets of the EU. The four separate programmes of FP7 represented the four main objectives of the Framework Programme: “Cooperation”, “Ideas”, “People” and “Capacities”. Cooperation programme was the core of FP7, representing two thirds of the overall budget. Its aim was to foster collaborative research across Europe and other third countries through projects carried out by transnational consortia on the following thematic fields: Health; Food, agriculture and fisheries, and biotechnology; Information and communication technologies; Nanosciences, nanotechnologies, materials and new production, technologies; Energy; Environment (including climate change); Transport (including aeronautics); Socio-economic sciences and the humanities; Space; Security. The Ideas programme supported frontier research solely on the basis of scientific excellence. It was implemented via the newly established European Research Council (ERC). The People programme provided support for researcher mobility via the Marie Curie actions. The Capacities programme strengthened the research capacities of Europe. It supported inter alia SMEs, the establishment and operation of research infrastructures or some special activities of international cooperation. Nuclear research (EURATOM) remained a separate field with two programmes: one on fusion energy research and one on the activities of the Joint Research Centre (JRC).

FP7 represented a budget of more than 50 billion euro, which is about 3% of total R&D expenditure in Europe or 25% of competitive funding. Over its seven years duration, more than 139 000 research proposals were submitted, out of which 25 000 projects of highest quality were selected and received funding. Universities were the most important group participating in FP7, by receiving 44% of FP7 funding. They were followed by research and technology organizations (27%), large private companies (11%) and SMEs (13%), while the public sector (3%) and civil society organizations (2%) played a minor role.21

Horizon 2020 is the currently running Eighth Framework Programme with a budget of 80 billion euro for 7 years (2014-2020). By coupling research and innovation, Horizon

18 European Council: Lisbon European Council 23 and 24 March 2000. Presidency Conclusions, p.3. 19 European Council: Barcelona European Council 15 and 16 March 2002, Presidency Conclusions p. 20. 20 Europe 2020 strategy is a 10-year strategy proposed by the European Commission on 3 March 2010 for advancement of the economy of the European Union. 21 Louise O. Fresco: Commitment and Coherence. Essential Ingredients for Success in Science and Innovation. Ex-Post Evaluation of the 7th EU Framework Programme (2007-2013). 2015, p.5.

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2020 puts emphasis on excellent science, industrial leadership and tackling societal challenges. Compared to previous framework programmes it offers a unified framework of R&D funding on EU level. It has also introduced a number of simplification measures to make the application procedure quicker, more simple and transparent. Horizon 2020 is also the financial instrument implementing the Innovation Union, a Europe 2020 flagship initiative aimed at securing Europe’s global competitiveness.

The first pillar, called “Excellent science” has a budget of 24.4 billion euro. It consists of four programmes: the European Research Council (ERC) supports frontier research, inter and cross disciplinary ideas based on scientific excellence. The actions in the programme Future and Emerging Technologies are expected to initiate radically new lines of technology through unexplored collaborations between advanced multidisciplinary science and cutting-edge engineering. Similarly to FP7, Horizon 2020 also supports researchers’ mobility via the Marie Skłodowska-Curie Actions (MSCA). The support of research infrastructures, including e-infrastructures also belongs to this pillar. The second pillar, “Industrial Leadership” disposes of a budget of 17 billion euro. This pillar aims to speed up development of the technologies and innovations that will foster European economic growth. One of its tools, the so-called SME instrument provides funds for SMEs for product/service development, marketing and commercialization. The third pillar consists of seven multidisciplinary “Societal Challenges”:1. Health, demographic change and wellbeing;2. Food security, sustainable agriculture and forestry, marine and maritime and inland

water research, and the bioeconomy;3. Secure, clean and efficient energy;4. Smart, green and integrated transport;5. Climate action, environment, resource efficiency and raw materials;6. Europe in a changing world – inclusive, innovative and reflective societies;7. Secure societies – protecting freedom and security of Europe and its citizens.

The budget of this pillar is about 30 billion euro.22

Hungarian and Austrian participation in the framework programmes

R&D expenditure in Hungary considerably decreased after the system change: while 1.6% of the GDP was spent on R&D in 1990, the same ratio was 0.63% in 1996. Gross domestic expenditure on R&D (GERD) as a percentage of GDP started to grow slowly after 2000. It reached 1.41% in 201323, which is still not only far from the general 3% target of the Europe 2020 strategy, but also from the national target of 1.8%.24 Concerning the ratio between government and industry financed R&D, the dominance of government funding was characteristic for Hungary until 2007-2008. As the stagnation of government expenditure was coupled by a quick growth of industry financing, the trend started to

22 European Commission: Fact sheet: Horizon 2020 budget, 2013. 23 Hungarian Central Statistical Office. 24 European Commission: Europe 2020 targets (translated into national targets), 2013.

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change around 2008. In 2014 the percentage of GERD financed by the government was 33.49% while the share of industry was 48.28%.25 We can also see from these numbers that international funds, as a third component play an important role in the funding of R&D in Hungary.

Hungarian researchers first took part in the Fourth Framework Programme. Their participation was only built on personal connections though; they were invited into some international consortia by their partners. Hungarian researchers were already able to participate in the Fifth Framework Programme (1998-2002). The country had to pay a certain contribution into the budget of the Framework Programme in return. From the very beginning of the Sixth Framework Programme (2002-2006) Hungarian researchers were able to participate and apply with the same rights as their partners in EU Member States. After the accession of Hungary in 2004 it was not a question any more to be a member state in FPs.

Hungary received a preferential rate when financially contributing to the Fifth Framework Programme (FP5). A considerable share of this contribution could have been paid by the PHARE instrument26 (see Table 2.). Based on data from November 2004 there were Hungarian participants in 817 retained proposals in FP5, who received 64.19 million euro funding in total.27 If we compare real government expenditure with received EU funding then Hungary’s participation in FP5 can be considered successful. If Hungary did not have a preferential rate and the possibility to partly use PHARE funds to pay its contribution the result would have been much less favourable: Hungary could have retrieved about three-quarters of its contribution.

Table 2. Hungarian contribution to the Fifths Framework Programme (1999-2002)

1999 2000 2001 2002 TotalFull Hungarian contribution (million euro) 19.05 19.88 21.53 22.14 82.60Real contribution. reduced by the preferential rate (%) 40 60 80 100 71.31

Real, payable contribution (million euro) 7.62 11.71 17.18 22.14 58.91Government contribution (million euro) 4.05 6.28 9.22 11.73 31.22PHARE contribution (million euro) 3.53 5.43 7.96 10.41 27.69

Source: Nyiri Lajos: Vitorlázunk, vitorlázgatunk... in Magyar Tudomány, Volume CLXXIII., 2002/1., p. 96.

In the Sixth Framework Programme (FP6) Hungary enjoyed the same rights as all the other Member States of the European Union. There were 1185 successful Hungarian

25 OECD S&T indicators. 26A PHARE (Poland and Hungary Assistance for the Reconstruction of the Economy) a pre-accession instrument financed by the European Union to assist the applicant countries of Central and Eastern Europe – among others Hungary – in their preparations for joining the European Union. 27 Jeney Nóra: A kutatás-fejlesztés és technológiai innováció helyzete az Európai Unióban és Magyarországon – különös tekintettel a K+F finanszírozására, 2006, p. 90 (MA thesis).

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applicants in FP6, which was 1.59% of all the successful applicants. These 1185 researchers were granted 149.765 million euro support by the EU, which was only 0.9% of the total budget of FP6.28

Table 3 shows Hungary’s performance in the Seventh Framework Programme (FP7). As there are still some running projects that started during the lifetime of FP7, final data is still not available. Such unfinished projects provide an explanation also for the lower numbers in 2013. As Hungary has been a member of the European Union since 2004 it was also automatically a full-right member of FP7.

Table 3. Hungarian and EU participation in the Seventh Framework Programme

2007 2008 2009 2010 2011 2012 2013 Total Success rate

Successful participants (Hungary)

307 200 229 202 209 222 131 1500 20.3%

Successful participants (EU)

19242 12412 17592 15174 17493 19031 11454 112398 21.6%

Received funding (Hungary, million euro)

46.6 37.1 40.5 34.8 41 46.1 33 278.9 15%

Received funding (EU, million euro)

5881 4340 5306 4999 5705 6794 4261 37289 19.2%

Source: European Commission: Seventh FP7 Monitoring Report, 2015.

There is a huge difference between Hungarian success rates concerning the number of successful applicants and received budget: while the success rate for applicants is 20.3%, which is slightly below the EU average of 21.6% , Hungary considerably lags behind the EU average (19.2%) concerning received budget with its success rate of 15%. Nevertheless, Hungary has the 16th position on the list of EU Member States both in terms of successful participants and received budget, which can be considered as a good result especially among new Member States; only Poland ranked before Hungary. It is also interesting to note that the funding intensity of proposals has been growing from FP6 to FP7: the average support per project has grown from 126 000 to 186 000 euro.

28 European Commission: FP6 Final Review. Subscription, Implementation, Participation. Brussels, European Commission, Research Directorate-General 2008, p. 19.

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GERD/GDP ratio in Austria has been constantly growing since 2000. The originally high rate of 1.89% has grown to 3.1% until 2015.29 Although Austria has reached the general Europe 2020 target this way, they were even more ambitious while planning their own national GERD/GDP target: Austria plans to spend 3.76% of its GDP on R&D by 202030. Concerning the ratio between government and industry financed R&D, government expenditure ran to 32% of the GERD while industrial expenditure (including sources from abroad) reached 62%, so Austria has also fulfilled the BERD31 objective of Europe 2020.32

Austria joined the European Union on 1 January 1995, so it has automatically become a member of the Fourth Framework Programme (FP4) starting in 1994. Austria performed well in the framework programmes from the very beginning (see Table 4.), although in FP4 government expenditure has still exceeded obtained EU funds. In FP5 government contribution and received EU funds were in balance. This tendency continued: in FP6 and FP7 obtained EU funds significantly exceeded Austria’s financial contribution to the FPs. In FP7 125% of the national contribution was “applied back” by Austrian scientists (see Figure 3.).

Table 4. Austrian participation in the Fourth, Fifth and Sixth Framework Programmes

FP4 FP5 FP6Successful participants (Austrian) 1 923 1 987 1 972Share of successful Austrian proposals (compared to total) 2.3% 2.4% 2.6%Number of Austrian coordinators 270 267 213Share of Austrian coordinators 1.7% 2.8% 3.3%Received funding (million euro) 194 292 425.2Share of received funding (compared to total) 1.99% 2.38% 2.56%Received funding in percentage of Austrian contribution to the FPs 70% 104% 117%

Source: Margit Ehardt-Schmiederer et al.: 6. EU-Rahmenprogramm für Forschung, technologische Entwicklung und Demonstration (2002-2006). PROVISO-Bericht, 2009, p. 47.

In the Seventh Framework Programme Austria performed above the average both in terms of successful participants (Austria: 22.3%, EU average: 21.6%) both in terms of received budget (Austria: 20.9%, EU average: 19.2%). Just like in the case of Hungary funding intensity has been growing: in FP6 the average support per retained proposals was 216 000 euro, in FP7 this amount reached 331 000 euro. As we can see in both cases

29 OECD S&T indicators. 30 European Commission: Europe 2020 targets (translated into national targets), 2013. 31 BERD: Business enterprise R&D expenditure. 32 Wolfgang Polt et al.: Austrian Research and Technology Report. Vienna, Peter Sachartschenko & Susanne Spreitzer OEG, 2015, p. 3.

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the average received funding by Austrian scientists were almost twice as much as the funding available for their Hungarian colleagues.

Table 5. Austrian participation in the Seventh Framework Programme

2007 2008 2009 2010 2011 2012 2013 Total Success rate

Successful participants 577 350 546 462 557 542 334 3368 22.3%

Received funding (million euro) 177.4 144.6 164.2 144 179 169.2 116.6 1115 20.9%

Source: European Commission: Seventh FP7 Monitoring Report, 2015

If we compare the participation of Austrian and Hungarian researchers in the Seventh Framework Programme (see Table 6.) we can see the following: although the success rate of applicants is similar (Austria: 22.3%, Hungary: 20.3%), there is a huge difference in the success rate of received funding (Austria: 20.9%, Hungary: 15%). One of the reasons is simple: researchers’ salaries are higher in Austria. Another reason might be the much higher inclination of Austrian scientists to take up the role of a project coordinator: three times as many Austrians were project coordinators as Hungarians. And project coordination not only means a larger share of work, but also a larger share of budget.

Table 6. Austrian and Hungarian participation in the Seventh Framework Programme

Austria Hungary EU28Number of applicants 15057 7391 519997Requested EU contribution (million euro) 5333 1858 194371Successful applicants 3368 1500 112398Received funding (million euro) 1115 278.9 37289Success rate (applicants) 22.3% 20.3% 21.6%Success rate (funding) 20.9% 15% 19.2%Number of coordinators 675 207 22473

Source: European Commission: Seventh FP7 Monitoring Report, 2015

In order to see Austrian and Hungarian results in a wider context, successful applicants and received funding in each Member State are presented in the below figures. It clearly shows that the 15 old Member States performed much better both in terms of successful applicants and in terms of received funding than countries, which joined the EU in or after 2004. There are only old Member States on the first 13/14 places of the ranking lists respectively. The results for new Member States would be even less favourable if we compared the concrete numbers: the most successful old Member States received about twenty times as much funding as Hungary did.

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Figure 1. Number of successful applicants in the Seventh Framework Programme


Figure 2. Received funding in the Seventh Framework Programme (million euro)


Although in absolute numbers Germany, the UK and France are leading the ranking lists in FP7 both in terms of successful applicants and received funding, the result is quite different if we compare received funding with Member States’ contributions to

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the Framework Programme (see Figure 3.). As we have already mentioned, Austria is a net beneficiary of the framework programmes since 1998 – in FP7 Austrian scientists received 25% more resources than the contribution paid by Austria. Although Hungary received only 82% of its contribution, this data is equal with the – in absolute terms leading – German rate. Surprisingly, a new Member State, Estonia, has the best ratio in this comparison: received funding exceeds national contribution by 50%. Otherwise most of the new Member States lag behind; only Estonia, Cyprus, Slovenia and Malta had better ratios than Hungary.

When analysing this indicator we should take into consideration the large differences in national contributions. Countries with a lower GNI and a lower national contribution might have disproportionately better results, which will automatically change with economic growth, growing GNI and growing national contributions. Considering this remark, the result of Austria, which is already a net contributor of the European Union’s budget, is even more remarkable.

Figure 3. Ratio of received funding and national contribution to the Seventh Framework Programme

Source: Margit Ehardt-Schmiederer: 7. EU-Rahmenprogramm für Forschung, technologische Entwicklung und Demonstration (2007–2013). PROVISO-Bericht, 2014, p. 58

The ranking list is again different if we compare the number of successful applicants with the number of full-time researchers employed in a given country (see Figure 4.). This latter indicator is calculated as a share of the total number of researchers employed full-time in the European Union, which is considered as 100%. This data shows the

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performance of Member States from a different angle, it shows the activity of the research community compared to its size.

Figure 4. Success rates related to the number of researchers (FTE33) in the Seventh Framework Programme

Source: Margit Ehardt-Schmiederer: 7. EU-Rahmenprogramm für Forschung, technologische Entwicklung und Demonstration (2007–2013). PROVISO-Bericht, 2014, p. 56, (no data was available for Cyprus and Malta).

Regarding this indicator Austria performs again better than the EU average. Hungary’s share in retained proposals is in balance with the number of FTE researchers in the country (99%). When analysing this indicator we have to be aware of the distortion effect of the number of scientists; countries with a high number of scientists (e.g. Scandinavian countries, Germany, France) – which is a positive indicator in itself – might have worse results than countries with a small research community. Except the Baltic countries and Slovenia, new Member States perform below the average also in this regard. It is interesting to see though that Greece, which is far ahead of all the other countries in the ranking, employs 7.49 researchers per thousand total employment, which rate is hardly below the EU average of 7.72.34 So the success of Greek scientists is definitely a result of their engagement.

Currently available data about Horizon 2020 (H2020) participation of 30 October 2015 can only show us some first results (see Table 7.), which cannot be considered as relevant for the whole lifetime of the programme. Nevertheless, it can already be

33 FTE: Full Time Equivalent: one FTE is equivalent to one employee working full-time. 34 OECD S&T Indicators.

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seen that competition has grown further compared to previous framework programmes. The number of submitted proposals is constantly increasing, which results in decreasing success rates in each Member State. Generally speaking, success rates are lower by 7-8% than they were in FP7. Hungary performs even worse: compared to the success rate in FP7, which was 20.3%, currently only 10.1% of Hungarian applications are successful, which is below the EU average of 13.8%. Austrian applicants perform above the EU average again – 15.5% of their applications are successful. As we have already seen in the case of previous framework programmes, the difference between Austria and Hungary in received budget is even larger than the difference in successful applicants. One of the reasons might be again the high number of coordinated projects by Austrian scientists.

Table 7. Austrian, Hungarian and EU28 participation in Horizon 2020

Austria Hungary EU28Successful applicants 795 255 24987Received funding (million euro) 320.18 67.54 10879Success rate (applicants) 15.5% 10.1% 13.8%Number of coordinators 144 49 5472

Source: Österreichische Forschungsförderungsgesellschaft (FFG) 2015: Österreich in Horizon 2020, Cockpitbericht zum Datenstand 30. Oktober 2015.

If we only focus on such successful proposals which were submitted by a consortium with joint Austrian-Hungarian participation, Hungarian success rates change significantly. In these joint proposals 67 Hungarian and 80 Austrian scientists took part.35 In addition to success rates we also wanted to investigate the composition of these consortia.

If we calculate success rates based on the numbers in the above figure, we can see that the Hungarian success rate (15.1%) and the Austrian success rate (15.9%) in jointly submitted proposals are quite similar. Hungarian success rate in such proposals is by 5% higher than in retained H2020 proposals in general. It is also interesting to see that the ten most successful countries in such consortia are all old Member States, where Germany, the UK and France are playing a leading role. As old Member States usually have better results, new Member States have also better chances to win if they join forces with EU15 countries.

While the number of successful Hungarian applicants (67) and Austrian applicants (80) is quite similar, there is a huge difference between the received funds (see Figure 6.). Austrian scientists have received almost three times as much funding as their Hungarian colleagues. Although the ranking is different, there are only old Member States to be found on this list again. All in all we might conclude that even if new Member States are taken on board, they receive a quite limited budget in the consortium.

35 Higher number of Austrian participants can be explained by the fact that there can be more applicants from the same country in the same consortium.

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Figure 5. Participating countries in successful consortia with joint Austrian-Hungarian participation (ten most successful countries)

Source: ECORDA database

Figure 6. Received funding in successful Austrian-Hungarian project proposals (ten most successful countries)

Source: ECORDA database.

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It is worth analysing the type of organisations in jointly submitted retained proposals, too. As Figure 7 shows research institutes, business enterprises and higher education institutes are equally important in Hungary. At the same time business enterprises prevail in the Austrian case. Just like the higher percentage of business funded expenditure on R&D, the different organisational structure also shows the more active role and engagement of Austrian enterprises in conducting research.

Figure 7. Type of organisations in jointly submitted Austrian-Hungarian retained proposals

Source: ECORDA database

Conclusions

Innovation and the application of scientific results are considered to be among the main factors in facilitating sustainable economic growth. No wonder that since their establishment in 1984 the importance of the framework programmes for research and technological development of the European Union has been constantly increasing. Parallel to increasing funding possibilities the competition for these financial resources has been also increasing. After losing the advantage of the benefits of preferential treatment before becoming full-right members, the new Member States of the European Union had to prove their scientific excellence to obtain their share of these highly competitive funds.

Most of the EU15 countries are economically developed countries with high GERD/GDP ratios, long-established scientific organisations, high-quality infrastructures that guarantee scientific excellence. During the years of integration they have learned to closely work together, to build up networks of trust and cooperation. New Member States are often confronted with difficulties when trying to join consortia mainly formed by old Member States. They not only lack the scientific excellence, but also the well-established networks for cooperation.

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What are the possibilities for new Member States? How can they improve their performance in the framework programmes? Firstly, it should be highlighted that scientific excellence also exists in these countries. Well-known researchers are able to join or even form scientific consortia without any difficulties. This kind of excellence should be also supported nationally: excellent scientists should be motivated to volunteer for the role of a project coordinator.

One way of motivating excellent, but not successful applicants is a kind of grant provided for scientists with highly evaluated but rejected proposals. Such grants guarantee funding for high quality proposals in any case and can increase the success rates in framework programmes by encouraging a second application after further development of project proposals by national financial resources. There are already such running programmes in various countries; a good example is the Hungarian programme for the support of ERC Starting Grant, Consolidator Grant and Advanced Grant applicants.

Researchers and institutions with less reputation should work on building up their networks and become members of consortia coordinated by more experienced institutions. National governments can support this process not only by providing mobility funds and supporting researchers to join international consortia but also by joining and co-founding ERA-Nets and other European joint programmes, initiatives (e.g. Joint Technology Initiatives, Public-Private Partnerships, Knowledge and Innovation Communities etc.). In addition to scientific matchmaking these initiatives often serve as discussion and proposal-making fora with significant lobby power, which can influence programming and decision making on European level.

Another way of networking could and should be the cooperation on regional level. Single Eastern and Central European countries hardly have the capacity and lobby power to influence European decision making. A critical mass around shared concerns and competencies should be built on regional level. Such an attempt is the strategic partnership of the Visegrád 4 countries, which is occasionally open for further partner countries.

Governments can also facilitate the preparation and successful application of national scientists by a strategic alignment and coordination between national and European programmes. National priorities should be set, national support programmes should be planned in accordance with European priorities and programmes.

As we have seen the real problem is not so much the number of successful applicants, but rather the received funding by these applicants. There are already ongoing negotiations about possible compensation for Member States with much lower wages for scientists. But increasing allowances should be coupled by increasing levels of scientific excellence. Otherwise the inclusion of researchers from new Member States will become even less attractive. Taking up the role of a coordinator is always the best way to receive additional support.

Last but not least, research performing SMEs and large enterprises should play an important role both in investing into science and performing research and development, which should be facilitated by tailor-made government programmes and professional advice.

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Climate Policy of the European Union: What to Expect from the Paris Agreement?

Wadim Strielkowski, Evgeny Lisin, Inna Gryshova1

Abstract: Our paper aims at evaluating the provisions of the EU climate change and policies to reduce greenhouse gas emissions as well as articulating the EU’s position with regard to sustainable development. In particular, we analyse the provisions and the outcomes stemming from the UN Convention on Climate Change (so-called “Paris Agreement”) held in France, last December.

Our results show that Paris Agreement sets a reasonable path to follow for the EU’s climate policy and bridges current climate policies and climate-neutrality prior to the end of the century. We conclude that if the Paris Agreement had not been signed, there would be a clear and urgent need for the similar binding framework that would shape up the European climate strategy in the face of the new political and economic changes facing Europe. Moreover, we stress the importance of the provisions emerging from the Paris Agreement for the existing EU Member States as well as for the countries aspiring to become EU members.

Keywords: energy policy, sustainable development, emissions, renewables, Paris Agreement, European Union

Background

European Union's (EU) CO2 emission and climate policies are undergoing fundamental changes driven by environmental and energy security concerns that cause energy generation and demand to face a challenge of decarbonisation (Grosjean et al., 2016). Significant decarbonisation goes hand in hand with recent technological developments that put a strong emphasis on the electrification of the transport and heat demand sectors through the introduction of new technologies, such as electric vehicles (EV) and electric heat pumps (EHP).

1 Dr. Wadim Strielkowski is a Research Associate at the Cambridge Judge Business School, University of Cambridge. E-mail: [email protected]. Evgeny Lisin is an Associate Professor at the Department of Economics in Power Engineering and Industry, National Research University “Moscow Power Engineering Institute”. E-mail: [email protected]. Inna Gryshova is a Senior Research Fellow at the Legislation Institute of the Verkhovna Rada of Ukraine. E-mail: [email protected].

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Postolache (2012) points out that EU is attempting to adjust its environmental policies with the current impending trends in order to keep up in the global governance and maintain its leading position in the world’s international relations.

According to the EU’s renewable energy plan up to date, renewable energy can be generated from a wide assortment of sources comprising of solar, tidal, aeolian, geothermal, and biomass. The targets for renewable energy sources are tricky but they must be met since the EU has previously committed to them (Bryngelsson et al., 2016; or Böhringer et al., 2016).

The European Union’s energy policies are guided by three main objectives: secure energy supplies that ensure reliable provision energy, creating a competitive environment for energy providers with the purpose of safeguarding affordable energy prices, and a sustainable energy consumption through lowering the greenhouse gas emission, pollution and fossil fuel dependence (Böhringer et al., 2016). To achieve these objectives, the European Union has decided to allow free flow of energy across the national borders of the European Union countries. The free flow of energy is expected to minimize the monopoly of national energy providers thus mitigating on the issue of high prices (European Commission, 2016a). Consequently, new power lines and pipelines continue to be deployed in the region to create a resilient and integrated energy market. This is contradictory to the 1990s market design of the energy industry because energy transfer from one state to the other imposed higher rates of rates in a short period of time.

Various EU Member States have also created schemes which help to spur the adoption of renewable energy. For example, the Dutch government offers subsidies to businesses which are willing to invest in production capacity of sustainable energy. All the EU members have also shown full support for the targets of 2020 and are dedicated to decarbonize the electricity sector of EU by 2050.

Our paper evaluates the EU climate policies dealing with emissions and the introduction of renewable energy sources and analyses the provisions and outcomes of the United Nations Framework Convention on Climate Change (UNFCCC) held in Paris on the 12th of December 2015 (so-called “Paris Agreement”). We ponder over the reasons for the Paris Agreement and the pre-conditions for its preparation. Moreover, we discuss the Agreement in details, describe its main points and analyse its possible outcomes. The paper concludes with some general remarks and policy implications, as well as with strengthening the argument about the timely introduction and the importance of the Paris Agreement for all participating parties, in general, and for the European Union, in particular.

Theoretical framework

The European Union has always been the supporter of sustainable growth and development and, since its beginnings, it has embedded this strategy into its main provisions and pathways for its further existence and functioning. With regard to these commitments, the European Commission (EC) put forward a legally binding target for renewable energy sources, aiming to cover 20% of the total energy consumption in the

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Wadim Strielkowski, Evgeny Lisin, Inna Gryshova

countries of the European Union (EU) by 2020. In the UK, the Climate Change Act has gone even further and set a legally binding target of 50% reduction in greenhouse gases emission by 2030, extended to a further ambitious target of 80% reduction by 2050 (Fisher and Geden, 2015). The Paris Agreement, reached in December 2015, set up even more demanding goals for the UK (Committee on Climate Change, 2016). In order to achieve this, the European Union nations have committed to reaching their own national renewable targets ranging from 10% in Malta to 49% in Sweden (Calliess and Hey, 2013). Additionally, they have further required that 10% of transportation fuel to be produced from renewable power by the year 2020. All European nations have adopted national renewable power describing the measures they intend to take in order to meet their renewable targets objectives. This strategy entails sectoral targets for heating, transport and cooling; planned policy measures; the various mix of renewable innovations they expect to employ and the planned use of cooperation mechanism. The European Union similarly underpins public interventions like support systems which remain essential in accelerating the renewable energy reforms. To circumvent distorting the business and energy rates, support schemes of renewables are meticulously outlined and time limited.

Moreover, it becomes apparent that EU supports the increasing use of renewable energy sources (RES) in various power sectors, for instance in the public electricity and heat production (see Chart 1).

From the information provided in Chart 1, one can observe how the share of RES is increasing while, at the same time, the CO2 emissions are plunging at remarkable rates. Renewable energy reservoirs are a power source that represents an alternative to fossil combustible. Trace fuels were formed very many years ago and are abundant worldwide but are, in comparison with the renewables, subjected to depletion. The electricity mix has continued to be dominated by fossil fuel use; more than a half of the gross power generation is from fossil fuel but this has been a typical feature for many European countries over the last century. Currently, the share of fossil fuel has decreased by 20% since 1990 and this can largely be attributed to renewable energy sources. A sustainable market design is characterized by an approach that can achieve long-term goals and as to accommodate medium term and short term changes. In addition, it needs to guarantee a decent supply of power and has to ensure the effective usage of resources and offer simultaneous investment incentives and innovation. Generations from renewable energy sources are commonly located and dispersed in remote regions which are far away from large consumption centres such as grand EU cities.

Nevertheless, in spite of the large-scale introduction of renewables and the shift towards the sustainable climate policies, there are persistent problems that need to be addressed. The Paris Agreement was initiated in order to find solutions to the impending climate policies and challenges that are faced by the world’s key players, such as United States, Russian Federation, and China, and the European Union alike.

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Chart 1: Public electricity and heat production in the EU-28 (1990-2014)

Source: European Commission (2016b)

Paris Agreement conference: main provisions

The Paris Agreement is a climate conference organized by the United Nations Framework Convention on Climate Change (UNFCCC) which was held in Paris, France on December 2015 and included delegations and representatives from 195 countries. The conference (further referred to as “Paris Agreement” was a long-awaited endeavour speeded up by the recent developments in the world marked by the plunging oil and coal prices that resulted from the upheaval in the world’s politics and caused many industries do turn away from the sustainable energy (Wang and Li, 2015).

The Agreement was a timely and long-awaited climate deal that was preconceived and pre-negotiated long before it shaped up into a formal deal involving global players from all around the world. It represented an important consensus and a recognition of the danger brought about by the climate changes and the related issues. Furthermore, it proved it is, indeed, possible to mobilise the key players to sit around the table and to strike a deal that has global consequences. With regard to the above, the Paris Agreement proved to be a milestone event that means a lot both for the policy-makers and for the climate activists.

Moreover, the Paris Agreement also tackles one of the most alarming issues of the industrial development of the last decades - the issue of emissions. Although decreasing, they remain at high levels even in EU-28 countries (see Chart 2).

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Chart 2: CO2 emissions in EU-28

Source: European Commission (2016b)

Paris Agreement was a historical event owing to the large number of countries that adopted the first-ever universal, legally binding global climate deal. The purpose of this convention was to establish a global action plan that will guide the world on pursuing plans and development projects that would avoid dangerous climate change through limiting global temperature rise to 2

° Celsius (European Commission, 2016a). According to scientists, a temperature rise of 2 degrees Celsius forms the upper limit of the acceptable temperature rise that can limit the adverse effects of climate change (Steinacher et al., 2013). This is based on a consensus that global warming should be limited to 1.5 degrees Celsius above pre-industrial temperatures that will ensure the survival of low lying islands and coastal areas. This agreement involved member states of the UNFCCC which sets a general framework that encourages intergovernmental effort devoted to solving the challenges brought about by climate change. The agreement came about after the realization that climate is a shared resource which is currently struggling with the effects of industrial emissions of carbon dioxide and other greenhouse gases caught up with the stakeholders and policy-makers (Hustedt and Seyfried, 2016). This convention offers membership to any country globally under which a member states’s government is expected to:

• Investigate, collect, analyse and share information concerning greenhouse gas emissions, national policies and best practices in the specific member state.

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• Establish national strategies that focus on handling greenhouse gas emissions and adapt to the expected impacts of these gases, including the provision of financial and technological support to developing nations.

• Cooperate and assist in the preparation for adaptation to the impacts of climate change (UNFCCC, 2014).

The Paris Agreement is due to take full effect in 2020. With regard to mitigation of carbon emissions, governments that consented on this convention agreed to ensure that the global average temperature remains below 2 degrees Celsius above pre-industrial levels (Andresen et al., 2016). They also had a collective desire of ensuring that global emissions peak as soon as possible with the recognition that developing nations may require a longer period to achieve this goal. However, following the end of the period each developing nation agreed upon, they were expected to ensure rapid reductions in carbon emissions through the adoption of the best available scientific approach (European Commission, 2016a). This consensus was followed by the submission of comprehensive climate action plans which provided reports about the method to be adopted in achieving these objectives (Hustedt and Seyfried, 2016).

Main outcomes of the climate policies of the future

In an effort to create transparency in the enforcement of strategies established by member nations and to enable global stocktaking, the member parties agreed that they would converge after every five years so as to set more ambitious goals which are guided by scientific contributions. Member parties were also expected to report to each other and their public systems on the efforts they have put into ensuring they achieve their goals. Finally, members were also expected to track their progress through the creation of robust transparency and accountability systems which will aid in achieving the long term goal. With respect to adaptation to climate change, member parties agreed to ensure that they strengthen their individual communities and citizens’ abilities and duties in dealing with the effects of climate change on their lives and those of others. In addition, signatories were expected to provide continued and enhanced international support for the adaptation to developing countries (UNFCCC, 2014).

Loss and damage was also an element that the convention focused on. Within this bracket, signatories were required to recognize the need to avert, minimize and address loss and damage resulting from the negative impacts of climate change observed all across the globe. Member states also needed to recognize that there was a need to provide some form of cooperation between nations and better their understanding, action and support within varied sectors that may help in dealing with the effects of climate change such as early warning systems, emergency preparedness and risk insurance programs. The UNFCCC had also established that cities, regions, subnational authorities, civil societies, the private sector and local authorities each had a role to play in tackling climate change issues whereby each member was expected to increase their efforts and support actions to decrease emissions. Member states also had to build resilience and decrease vulnerability brought about by the changing climate patterns. It was therefore necessary to uphold

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and promote regional as well as international cooperation to ensure that climate change issues are effectively and efficiently dealt with. Signatories of the Paris Agreement were expected to show support for the efforts being made to control the drivers of climate change. Developed countries such as the United States, China, and the EU were expected to provide continued support for climate action aimed at reducing emissions and building resilience to the adverse effects of climate change witnessed in developing nations. Other nations were provided with the option of providing continued support for the fight against global warming on a purely voluntary basis. Developed nations were also expected to achieve their goal of raising USD 100 billion each year up to 2020 which extends to 2025 after which other more ambitious goals will be settled (UNFCCC, 2014).

The Paris Agreement therefore established a historical mark as being the largest step in the development and maturity of the U.N. climate change regime which was first organized in 1992 along with the adoption of a framework convention (Clémençon, 2016). This led to the UNFCCC acquiring a long-term objective, general principle, common and differentiated commitments and the establishment of a basic governance structure (Center for Climate and Energy Solutions, 2015). Ever since its establishment, there has been an evolution of the convention thus taking different paths with the course of time. In 1997, a similar convention, Kyoto Protocol, was held. This convention adopted a rather different strategy which involved utilizing a top-down, highly differentiated approach that intended on enforcing agreed upon goals for developed nations without any new commitments directed towards developing nations. Owing to the failure of the United States to join this protocol as well as the decision by some countries not to set targets that were beyond 2012, there is a less than 15 percent coverage of global emissions by this protocol (Andresen et al., 2016).

Other attempts of dealing with climate change were also made by the Copenhagen Accord and the Cancun Agreements in 2009 and 2010 respectively. These conventions adopted a parallel bottom-up framework whereby countries were required to take pledges for 2020. However, unlike the Paris Agreement which took on a legal approach, these conventions adopted political approaches. Despite these two conventions having wider participation with specific mitigation pledges by developing countries being present for the first time in history, they were not enough to meet the objectives of the Copenhagen and Cancun Conventions of preventing the average global warming temperature from reaching 2 degrees Celsius above preindustrial levels (Center for Climate and Energy Solutions, 2015). The negotiations that led to the Paris Agreement first began at the Durban Platform for Enhanced Action which took place in 2011. This convention led to the suggestion for a legal instrument or uniformly agreed upon outcome which would apply to all signatories from 2020 without any additional guidelines provided. This was followed by COP 19 which was held in Warsaw where members were expected to provide their intended nationally determined contributions (INDCs) prior to the hosting of the Paris Conference which indicated the importance of the bottom-up approach in the emerging Paris Agreement in which more than 180 countries which produced over 90 percent of the global emissions had submitted their INDCs (Center for Climate and Energy Solutions, 2015).

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In addition to the INDCs submitted to the UNFCCC prior to the commencement of the convention, additional outcomes were achieved during the Paris Agreement. A large number of national governments offered new financial pledges resulting in 19 billion USD having been pledged aimed at assisting developing countries. This was followed by a pledge by the U.S.A. to double its support for adaptation efforts in order to reach 800 million USD per year. Vietnam also portrayed a sign that developing nations are offering support to the program by pledging to offer 1 million USD to the Green Climate Fund (GCF). There were also pledges from subnational governments. In addition to pledges, there were also new joint initiatives which were launched such as the International Solar Alliance which consisted of 120 nations spearheaded by India and France. This initiative was started with the aim of promoting the establishment of solar energy facilities in developing countries. Another joint initiative was Mission Innovation which consisted of over developed and developing nations which pledged to increase investments in clean energy research and development over a period of five years. Non-state actors such as cities, states and regions, company and investors such as Bill Gates were also recognized as having participated in the convention whereby they launched initiatives such as Breakthrough Energy Coalition whose main goal is to generate capital from the private sector that will drive clean energy deployment (Center for Climate and Energy Solutions, 2015).

Currently, developing countries are actively scoping out financial, technological and technical support to enable them to implement Nationally Determined Contributions (NDCs) whereby there exists well embedded national climate strategies and poverty reduction plans. Where no clear path is in view, measures are being taken to ensure that the necessary inputs are acquired along the journey (Dupar and Bickersteth, 2016).

Conclusions

Overall, it can be clearly seen that the Paris Agreement forms a gateway that links the current climate policies and climate-neutrality prior to the end of the century. The Agreement sets up a comprehensive path to follow for the countries that committed to its provisions and offers a sustainable strategy for the development of each economy in question.

Paris Agreement is an important milestone for all signing members but it is not less important for the European Union with its long-term commitments to the sustainable growth, climate protection policies and reducing emissions. The growing share of renewable energy sources, the incline to move towards the electrified transport and heating in the nearest decades call for the new binding international agreements for which Paris Agreement provides a clear agenda and provisions by setting up objectives and goals that are to be followed.

As opposed to the 1990s market design, the EU’s goals are the reduction of carbon emissions, increased generation of renewable energy and efficient use of the renewable energy sources. EU renewables policy to date recognizes that climate change poses

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a significant risk for an extensive range of natural and human systems. Consequently, regulations to reduce emissions are critical if we are to avoid the costly damages associated with climate change. Market-based regulations can efficiently reduce greenhouse gasses emissions by creating a financial incentive for greenhouse gas emitters to emit less.

The EU has established market-based rules program to curb the emission of greenhouse gasses. Market-based environmental controls work by designing an incentive to reduce harmful production that emits greenhouse gases or to reduce discharges. Under this framework, each regulated cooperation chooses independently how to most cost-efficiently achieve the needed pollution abatement. Notably, some firms can reduce pollution in a more cost-effective manner than other companies, and this can mainly be attributed to the age of the equipment they use among many other factors.

This enables them to reduce their pollution more to remunerate for those facing higher costs doing less. Consequently, the overall environmental objective will be achieved at a low cost. A policy is termed market-based if it provides a financial incentive and if it is aimed to elicit a distinct behaviour from those who are responsible for pollution. Some regulation options are only applicable as economy-wide solutions where greater efficiencies can be achieved whereas others are more particularly targeted to distinct sectors or market segments. There are several market-based policy options which include taxes and subsidies, cap and trade program, baseline and credit programs, renewable electricity standards, phasing out lead gasoline and feebates. These policies force the unions to lessen the greenhouse gasses they release slowly driving businesses to embrace reliable energy.

Last but not the least, it has to be noted that the outcomes of the Paris Agreement and the commitment the European Union has obtained set up a very important example for the countries that seek EU membership in the nearest future, e.g. Moldova or Ukraine. Climate protection, emission reduction, and the shift to the renewables all constitute very important provisions that need to be tackled in the face of the new challenges of the 21st century.

References

• Andresen, S., Skjærseth, J. B., Jevnaker, T., Wettestad, J. (2016). The Paris Agreement: Consequences for the EU and Carbon Markets?.Politics and Governance, 4(3): 188-196

• Böhringer, C., Keller, A., Bortolamedi, M., & Seyffarth, A. R. (2016). Good things do not always come in threes: On the excess cost of overlapping regulation in EU climate policy. Energy Policy, 94: 502-508

• Bryngelsson, D., Wirsenius, S., Hedenus, F., Sonesson, U. (2016). How can the EU climate targets be met? A combined analysis of technological and demand-side changes in food and agriculture. Food Policy, 59: 152-164

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• Calliess, C. Hey, C. (2013). Multilevel Energy Policy in the EU: Paving the Way for Renewables? Journal for European Environmental & Planning Law, 10(2), 87-131

• Center for Climate and Energy Solutions. (2015). Outcomes of the UN climate change conference in Paris. Arlington, VA: C2ES.

• Clémençon, R. (2016). The Two Sides of the Paris Climate Agreement Dismal Failure or Historic Breakthrough?. The Journal of Environment & Development, 25(1): 3-24

• Dupar, M., Bickersteth, S. (2016). Opinion: After Paris - Developing countries look first to their own resources to deliver agreement. Retrieved from CDKN: http://cdkn.org/2016/04/opinion-paris-developing-countries-look-first-resources-deliver-agreement/?loclang=en_gb

• European Commission (2016a). Paris Agreement. Retrieved from: http://ec.europa.eu/clima/policies/international/negotiations/paris/index_en.htm

• European Commission (2016b). Energy Datasheets: EU-28 countries. Available at: https://ec.europa.eu/energy/en/data-analysis/country

• Fischer, S., Geden, O. (2015). The changing role of international negotiations in EU climate policy. The International Spectator, 50(1): 1-7

• Grosjean, G., Acworth, W., Flachsland, C., & Marschinski, R. (2016). After monetary policy, climate policy: is delegation the key to EU ETS reform?.Climate Policy, 16(1), 1-25

• Hustedt, T., Seyfried, M. (2016). Co-ordination across internal organizational boundaries: how the EU Commission co-ordinates climate policies. Journal of European Public Policy, 23(6): 888-905

• Postolache, A. (2012). The Power of a Single Voice: The EU’s Contribution to Global Governance Architecture. Romanian Journal of European Affairs, 12(3), 5-18

• Steinacher, M., Joos, F., Stocker, T. F. (2013). Allowable carbon emissions lowered by multiple climate targets. Nature, 499(7457): 197-201

• UNFCCC. (2014). The United Nations Framework Convention on Climate Change. Retrieved from: http://unfccc.int/essential_background/convention/items/2627.php

• Wang, Q., Li, R. (2015). Cheaper oil: A turning point in Paris climate talk?.Renewable and Sustainable Energy Reviews, 52: 1186-1192

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