Europe’s Judgement Day came on Monday, when Member State representatives, international health officials and medical experts met at The High Level Conference on Healthy Lifestyles held to discuss the state of childhood obesity in Europe. Are our children’s waistlines getting larger? Are existing initiatives helping us get healthy? What more do we need to do?
As in all conferences, papers and discussions about obesity, no clear cut answers were provided. While International Organization such as the WHO, OECD and EU Commission pointed to overwhelming amounts of data indicating the gravity of the obesity pandemic, Member States provided a number of enlightening examples of good practice, both at national and local level.
So how well are we actually doing?
The Commission and World Health Organization were fairly fatalistic.
John F. Ryan, a veteran of EU health policy and Director of the Public Health division at DGSANTE, noted that chronic diseases are responsible for 80% of deaths in Europe, hampering social cohesion and economic growth, despite being easily preventable. He called on the food and drink industry, NGOs, governments, parents and schools to help reduce childhood obesity by ensuring access to balanced and healthy meals and helping children engage in regular physical activity.
Dr Gauden Galea (Director of the Division of Noncommunicable Diseases of the WHO) used similar language to explain the importance of creating healthy food and drink environments in schools, as well as incorporating more physical activity in the curricula and funding infrastructure for this to occur.
But is it all doom and gloom?
Member states portrayed the situation in a more positive light. Latvia, Estonia and Hungary presented their own projects to ensure free, healthy meals in schools. The common denominator was the setting of national standards which list a number of allowed or required products in school meals such as fruit and vegetables, while excluding all confectionary and sugary or fatty foods. Under regulation 610, the government of Latvia also restricted the marketing and distribution of salty snacks and sugary drinks in schools – bringing a 10% reduction in consumption. For more examples on the Estonian and Hungarian models, you can watch the presentations here.
And how significant are these initiatives?
The national food schemes presented at the conference seemed extremely similar to the prescriptions laid out in the WHO European Food and Nutrition Action Plan launched in 2014, which demands 4 (or in truth, 5) key policy changes:
- Implementing mandatory standards for school meals
- Providing nutritional education in schools
- Offering free fruit and vegetable schemes
- Imposing strong controls on the marketing of food and non-alcoholic beverages in schools
- …as well as adopting initiative for physical activity.
Yet international organizations were all but satisfied. Dr Joao Breda of the WHO – who was defined throughout the conference as the guru on obesity policy – pointed to the strong disparity among schools even within single countries to conclude that more work needs to be done on the process of implementation – as also argued by Mr. Goof Buijs of the Schools for Health in Europe Network.
So if member states got a scolding, how did industry perform? It’s not looking good…
Although Stephan Loerke from the World Federation of Advertisers made a convincing argument to illustrate the value of industry efforts, it seems that there is a lack of trust in industry self-regulation among international organizations, and that industry commitments are deemed insufficient.
Stephan illustrated the efforts made under the European Platform for Action Diet, Physical Activity and Health to showcase industry’s proactive involvement. He reasoned that while the direct effect of marketing on children is only “modest”, as noted in most scientific literature, the food industry has recognized that marketing impacts family food choices, preferences and behaviours, and has therefore acted accordingly. Stephan mentioned the new initiative of the International Food and Beverage Alliance, due to come into force in 2016, which imposes thresholds for all marketing platforms, creates a single nutritional model to be used among all countries and bans the use of celebrity personalities.
In a final attempt at convincing his medical public, he decried the low levels of recognition for industry self-regulation… and he was certainly correct.
His most ardent critic was Tim Lobstein of the World Obesity Federation, who diplomatically defined the EU Pledge as not strong enough… to avoid using the term ‘useless’. He noted that, on marketing commitments, the 35% threshold of children watching television (which is necessary to prevent food promotion under the pledge) is very rarely reached. In addition, advergames such as on Nestle’s website are not included in the provision.
Even new developments were easily discarded. Lobstein mentioned that the new nutrient profiling system is still too lenient, especially on the threshold for salty snacks, such as crisps, and sugary products, including cereals. The WHO had other concerns, questioning whether third party auditing is reliable, with Joao Breda suggesting that the scientific community should be integrated in the monitoring of the commitments. He also called for the recently released WHO nutritional criteria for marketing to children to be taken into consideration.
Unfortunately, it seems that International Organizations will remain forever skeptical.
When asked what the biggest obstacle to an effective, coherent policy on obesity is today, Joao Breda pointed the finger at industry, saying that their influence on policy makers is to blame for the lack of effective policy measures being taken… a fairly simplistic answer for a guru, in this blogger’s opinion.
Nonetheless, the Commission was kinder in its approach. Philippe Roux, the head of Unit for Health Determinants at DGSANTE even praised the work of the EU Platform, noting that the commitments made under the EU Pledge (and specifically the responsible advertising measure which classifies schools as protected environments) have made an important difference.
Mr Artur Furtado from DGSANCO also adopted a more balanced position, taking into account the role of government structures in preventing effective policy measures. He claimed that changing representations prevent long term plans from being made and that government systems which separate policy provisions on health from agriculture and education inhibit the development of integrated and holistic solutions. His resounding message: there needs to be greater policy cohesion.
Since we’ve done pretty poorly, what’s next?
In line with the more market-oriented objectives of the new Commission, future work on healthy lifestyles will be aimed at abating health inequalities. The Commissioner has asked the private sector to do more on reformulation in the context of the EU Platform. Better mapping of Member State capabilities and resources to tackle obesity and endorse preventative measures also made the top of the to-do list.
However, the real shift in obesity policy will be a global move to a more comprehensive approach that takes into account the social and economic context of obesity prevention. Prescriptive approaches to obesity no longer make the cut. Providing information in terms of labelling is not a determinant to health in the same way that engaging in physical activity is not a determinant of active lifestyles.
Taking a more holistic approach which encompasses an understanding of how information shapes behavioral choices and how urban environments influence our levels of physical activity, will be crucial to tackling this problem of the modern age – a system has been defined as health in all policies.
Alessia Mortara and Lindsay Hammes
February 26, 2015
With a few days to go before the High Level Conference on Healthy Lifestyles called by the Latvian Presidency, delegates and experts will be making their way to Riga to enjoy a glass of Kvass before discussions begin.
The industry, for its part, awaits the conference’s verdict(s) with baited breath. Will certain products be targeted? Will reformulation need a boost? The answers (or lack thereof) will be revealed on Monday 23rd of February.
In the meantime, let’s recap where the discussion on nutrition and physical activity currently stands….
Let’s begin the story in early 2014, at the High Level conference hosted by the Greek Presidency. The Hellenic crowd focused on non-communicable diseases (NCDs) among vulnerable populations including the elderly and, of course, children. Today, the Latvians have decided to hone the discussion down to the most important and most contentious of issues; one that Latvia’s Health Minister, Guntis Belēvičs, has described as the ‘taste of childhood’.
As is often the case with Council Presidencies, the decision to focus on childhood obesity reflects Latvia’s own public health aims. With obesity rates slightly above the European average, Latvia has implemented one of the most radical prevention schemes in the region. In 2006, the government limiting the distribution of foods containing additives, colourants, sweeteners and preservatives in schools, while also launching a National Sporting Development Program to increase physical activity among children.
But not all countries have endorsed the Latvian approach. With a wide variety of dietary styles and cultural particularities, defining a single, regionally applicable solution to obesity is all but simple. Nonetheless, the EU Action Plan on Childhood Obesity, drawn up under the Greek Presidency will be used as a solid common ground on which to base the discussions and will act as a ‘guide for effective action’.
By 2020, the plan aims to help Member States achieve 6 core objectives, each associated to a number of precise targets :
- Support a healthy start in life
- Promote healthier environments, especially in schools
- Make the healthy option, the easier option
- Restrict marketing and advertising to children
- Inform and empower families
- Encourage physical activity
While the nominal purpose of the conference is to “assess the implementation progress of strategic documents on nutrition and physical activity in the EU”, measuring success will be done in true EU style. To avoid any pointing of fingers at high or low achievers, the agenda of the High Level Conference will focus on sharing best practice among member states – in full respect of subsidiarity and proportionality. We expect much chit chat on who did what and very little practical information.
However, some data does exist and it looks like Europe isn’t doing too badly. The WHO’s country reports reveal that 100% of Member States have adopted policies limiting the marketing of food and beverages to children and over 90% have acted on salt reduction. They’ll need to work a little harder on trans-fat reductions and physical activity recommendations, but there is reason to believe that Europe is moving in the right direction. The 2014 Health at a Glance report also noted that education to consumers, availability of healthy food options and encouraging physical activity are the strongest areas of progress.
Now one question remains: will current progress be enough? What further recommendations can be expected? In line with the Global Status of NCDs Report, it is likely that the WHO will demand stronger political engagement towards encouraging physical activity. This may happen through social marketing and mass media campaigns. Other recommendations could focus on the re-activation of the fruit and milk scheme, recently suspended by the Juncker Commission under its new Work Programme. Only time will tell…
Either way, we expect that the High Level Conference will directly influence the EPSCO preparatory meetings and the final Council Conclusions later this year. If we were academics we would ask… To what extent? Well, to the extent that scientific opinion is taken into account in EU policy making. While experts will likely call for the need for social involvement programmes of adequate dietary guidelines and of perfectly nutritious school meals, country budgets will still be limited, political and cultural approaches to food will still diverge and in the end… humans will be humans… and we do love our culinary delights!`
Our policy analysis on the conference will be coming soon … watch this space!
Alessia Mortara, Adriano Addis and Lindsay Hammes
February 19, 2015
Every General Election claims that it is the most important, the one that will have lasting implications in our lifetimes and beyond. This election is no different. All parties state that this election is the most crucial one of a generation – and for once, this may not be just hyperbole. The results of the 2015 election could have huge ramifications for the UK, and of course, the EU as a whole.
In practice, any Conservative-led Government would have to deliver a referendum on Europe – because, regardless of the coalition partner, Conservative MPs would not tolerate any coalition deal which would not deliver this. The Liberal Democrats, the main prospective coalition partner for the Conservatives, are likely to concede this in return for sustainable constitutional reform, despite being the most pro-European of the mainstream UK parties. By contrast, the Labour Party has come out hard against any EU Referendum – and are pushing this as their defining offer to business. However, although the Labour Party does not offer the same short-term uncertainty, the rise of the Scottish National Party (SNP) poses real risks. In the event that Miliband is forced todo a deal with the SNP, the structural integrity of the UK, further down the line, might be undermined.
One thing that makes the election so unpredictable is the role of the smaller parties in eroding the voter bases of both the Conservatives and Labour. Due to an inbuilt electoral bias, and the decline in their vote to the point where they are effectively an England-only party, the Conservatives have almost no chance of forming a majority by themselves at the next election. However, although this means that it is far easier for Labour to get the seats needed to form a Government, their poll ratings have also collapsed over the last 18 months. Recent poll ratings have put the Conservatives and Labour neck-and-neck, with average polling of around 32% each.
Indeed, the collapse of Labour’s poll ratings has not directly benefited the Conservatives. Instead, Labour’s poor showing appears to be correlated to increased competition from the Scottish National Party in Scotland, and UKIP and the Green Party in England. In turn, the Conservatives also have to deal with a threat from UKIP. With UKIP polling at up to 15%, this disproportionately impacts the Conservatives’ support. This has forced both parties to scramble into designing strategies to appeal to their core support.
Labour’s intention is to focus on Conservative cuts to public services and the perceived risk to the health service in particular; while the Conservatives are hoping to keep the debate focused on deficit reduction and economic competence, an area where Labour still lags significantly behind. By being forced to defend its economic competence by conceding that it will make spending cuts to aim for a balanced budget, Labour risks exposing its left flank, with votes being defected to left-wing, anti-austerity parties including the Greens, SNP, Welsh nationalists, and even to a degree, UKIP. On the other hand, if the Conservatives are seen as too much of a gamble on the public services front, their support risks leeching to the Liberal Democrats, UKIP or even Labour – a scenario which would likely deliver Miliband into Downing Street.
The rise of UKIP has consumed much media attention. UKIP are targeting around 10 seats, with internal expectations of taking up to five. Their effect will be felt across the political spectrum, taking a significant number of votes off the Conservatives in the South, votes off Labour in the North and even impact the Liberal Democrats in the South West. While they may well garner the third largest vote share, they are unlikely to yield sufficient seats to feature in any post-election coalition. Quixotically, their chief impact on the election may be to make a Labour-led Government more likely, by depriving the Conservatives, in particular, of support. The Tories are likely to adopt two, slightly contradictory, responses to this. The first will be to downplay Europe as an issue – because their message is never going to be as potent as UKIP’s – and to argue, if asked, that only a vote for the Conservatives will deliver a referendum. They are also expected to try to reinforce their message on this by offering the prospect of a referendum sooner than 2017, in an effort to neutralise the impact of any prolonged uncertainty. This is something for which some business groups – notably the British Chamber of Commerce – has also recently called for.
The likelihood that the Conservatives will get the chance to implement this rests in part on the performance of the Labour Party. Labour has a crumbling vote share, the most left-wing offering since 1992, and a leader widely considered to be unsuitable to be Prime Minister. Current polls suggest Labour is facing a wipe-out in Scotland, with the SNP poised to take the vast majority of Scotland’s 59 seats. If Labour’s campaign collapses in England, it is possible that the UK faces either a Conservative-led Government offering an immediate referendum on Europe or alternatively, a Labour Party Government propped out by Scottish Nationalists, to whom they will have been forced to offer concessions that threaten the medium-term integrity of the United Kingdom.
Director, Public Affairs and Corporate Communications
February 18, 2015
The ‘European project’ felt somewhat of a bounce in 2014, thanks to the pan- European elections that brought a refresh and renew to both the European Parliament and the European Commission.
But even the briefest of glances at the European political horizon for 2015 will tell you that this bounce is not set to last.
The outcome of Greece’s national elections, and the national elections of Portugal and Spain (and to a lesser extent, Poland and Denmark’s)- all scheduled for the latter part of this year, have cast a looming shadow over the ongoing shape and stability of the ‘European Project’.
But the biggest shadow of all is now less than 100 days away- the UK general election on May 7th.
The very nature and raison d’être of the EU means that domestic politics will always play a dominant role in EU affairs. But David Cameron’s proposed In/Out referendum on the UK’s membership of the EU- should the Conservatives win an outright majority in the UK general elections- has elevated that role to near unprecedented levels.
Whether or not ‘the European project’ has a few more steps in it is likely to hinge on the outcome in the UK in May, and how far the German Chancellor and the UK Prime Minister can align their views of a future EU with their domestic political needs. Chancellor Merkel herself signaled the overarching priority of the UK/EU relationship with her choice of the United Kingdom as her first foreign outing of the New Year.
Far from being concerns largely limited to ‘the other side of the channel’, the daily churn of politics in the UK will take on increasing relevance to EU politicians, policy makers and Industry as they measure and analyse the likely impact of UK domestic policy announcements and political machinations.
And in turn, as the major parties in the UK scramble to respond to the rising popularity of UKIP and mounting levels of euroscepticism, the day to day happenings of the ‘Brussels bubble’ and the broader politics of the EU will take on increased levels of meaning and impact on the ‘realpolitik’ of Britain as May 7th draws near.
The existing gap between the expectations of those based in Brussels and those in London should not be underestimated. Whilst a recent survey of the British Chamber of commerce in Europe’s capital (full disclosure, I chair the EU Committee) showed that 68% of members felt a BREXIT was only somewhat likely in the next ten years, and a quarter said it was not likely at all; a poll taken at the end of 2014 by OnePoll for the UK’s ITV’s Tonight programme, showed a clear majority of Brits would’ve voted to leave the EU, if a referendum had been held in Dec 2014.
With this in mind, our Brussels and London offices will be offering up their different perspectives and analysis of the ‘on the ground happenings’ in both the UK and EU in the run up to the UK general election.
Over the coming days and weeks as Britain heads towards the polls, we will be posting a series of posts and insights on this very blog, starting with the current view from Westminster from our London office.
Whatever your view on the UK’s membership of the EU, the ongoing shape and structure of the EU/UK relationship will have a critical impact on European politics, policy and industry. 2015 may well see the ‘European Project’ pivot in alternate direction.
February 10, 2015
Nενικήκαμεν (We have won!) After a short but intense electoral period SYRIZA won a milestone victory. According to official results, ‘SYRIZA’ won 36.34% of the votes compared to 27.81% for the outgoing government coalition leader ‘New Democracy’, 6.28% for Golden Dawn, 6.05% for ‘To Potami’ party, 5.47% for the Communist party ‘KKE’, 4.75% for the right wing ‘Independent Greeks’ and 4.68% for the centre-left ‘PASOK’ party.
According to the Greek electoral law, in an effort to ensure a stable government, the party to win first place in the general elections receives a fixed number of seats in the Parliament. This explains why ‘SYRIZA’ managed to gather 149 seats compared to 76 for ‘New Democracy’. Nonetheless, absolute majority would have required 151 seats, forcing Mr. Tsipras, the youngest Greek Prime Minister in recent Greek history, to go on the hunt for a coalition partner.
As agreed this morning, SYRIZA will cooperate with the Independent Greeks, an anti-austerity offshoot of New Democracy that has been extremely critical of austerity policies. It is the second time in 30 years that Greece will be led by a right-left wing coalition, only this time the radical left is the leader. As expected popular sentiment against austerity won over the usual left-right ideological differences. It also raises questions on the Ministries that will be allocated to the Independent Greeks given it has held conservative views on social policies.
New Democracy and PASOK: Farewell to the old
Even before exit polls were announced ‘New Democracy’ officials came off as defeatist on Greek television. Over the past days, outgoing Prime Minister Antonis Samaras and his allies in the party had received criticism over the increase their right-wing rhetoric, when the majority of undecided voters identified with the centre. Today, while no one openly voices doubt over Samaras’ leadership of the party, it is likely that the liberals will begin discussing on the direction the party should take to become an efficient opposition force and not lose its appeal to its voters in order to avoid what happened to ‘PASOK’ (socialist party).
Also of note, for the first time in 93 years, there will not be a Papandreou in the Greek Parliament. Talking about one of Greece’s largest political dynasties, this is a big deal! Contrary to analysts’ expectations, Papandreou’s party, ‘KI.DI.SO’, did not manage to go beyond the 3 per cent threshold that is required to elect representatives. Going forward, the centre-left will have to change both its leadership to a younger more inspiring one and its agenda in order to re-claim the space owned by Tsipras in latest elections.
Golden Dawn: The far right becomes mainstream
With the decline of the centre-left also came the rise of the far-right. Golden Dawn scored 3rd and maintained a similar share of votes with the one won in the European elections. It is worrying to notice that despite voters having outlets to express their right-wing anti-austerity sentiment, such as the ‘Independent Greeks’, Golden Dawn’s scores show that being from the far-right and xenophobic has become relatively mainstream in Greece today. The challenge for SYRIZA? Address key issues, such as immigration in a productive way in order to prevent further shift to the extremes.
What’s coming up from now on?
Once sworn Prime Minister, Tsipras will have to put his priorities in order. While SYRIZA officials negotiate their position in the new government – it is rumoured that MEP Papadimoulis will lead the Ministry of Interior – Tsipras is to nominate a successor for Mr. Papoulias, the outgoing President, before the next Parliament Plenary on 5 February 2015. After all, this is the reason why elections were called in the first place. Latest rumours suggest that he will nominate a centre-right President in order to ensure the opposition’s support. Names discussed include Commissioner Avramopoulos and former Prime Minister Karamanlis.
All eyes on Brussels
Even though things happen to run smoothly in Athens all eyes have shifted to Brussels and Berlin. The elections’ results will likely dominate the discussions at today’s Eurogroup.
In Berlin, Angela Merkel indicated what everyone expected: Germany will cooperate with the new government only if agreements are honoured and the debt is repaid – a position which does not seem to fully acknowledge the meaning of yesterday’s vote. The Kanzlerin has no other choice. She is trying to balance a potential anti-Euro sentiment from her voters while acknowledging impact of the Greek vote other countries such as Spain or Portugal. Ms. Merkel will hope to find support across Europe to further prevent the ruins of her austerity politics crumbling down on her.
Looking West, Paris might be a first pillar of support .In Paris, François Hollande is also in a delicate position, seeking to strike a balance between, on the one hand, upholding France’s European commitments and preserving the Franco-German duo, and on the one hand, fighting the rise of the extreme-right fuelled by social disgruntlement and calming the rising voices within the left fringe of his own party.
Tsipras’ actions will have an impact on other Southern European countries as well. If he abides to the Troika’s requirements the shift in the European austerity paradigm will have merely been wishful thinking. Either decisions will also strongly impact the performance of parties such as Podemos in Spain, in light of the December 2015 general elections.
This leaves us to wonder whether Tsipras will come back on his word to re-negotiate Greece’s debt, thus creating a crisis within both his party and his coalition partner or will decline the Troika’s offer and lead Greece out of the Eurozone. This becomes even more pressing considering Greece may face a liquidity problem as soon as early February.
As we have predicted Tsipra’s decision to make a U-turn will be the beginning of both a crisis in his party and of political instability in Greece. We’ve only gone from the fights of the Iliad to the unchartered waters of the Odyssey and there’s quite some manoeuvring to do, before we’re safely ashore.
By Ilektra Tsakalidou, Claire Bravard, Joachim Wilcke, Lucie Martin & Martin Bresson
January 26, 2015
Over the past couple of years the spotlight has been shining over Alexis Tsipras, the leader of the Greek opposition radical left party ‘SYRIZA’. Media and political analysts across Europe have either been raving about his political charisma, presenting him as Europe’s new champion against austerity, or painting him as the Eurozone’s biggest threat.
SYRIZA’s rise – meteoric yes, unexpected no
But how can one explain the rise of the radical left in Greece when just a few years ago, ‘SYRIZA’ only received 6 per cent of the votes?
One doesn’t need to look very far – the crisis and its enormous impact on the Greek population is the very simple and obvious reason. With an unemployment rate around 30 per cent (50 per cent for young people) and wages across private and public sectors plummeting, the most effective political rhetoric is one damning the austerity paradigm.
In his programme for economic recovery, the “Thessaloniki plan”, named after Greece’s second largest city and a former industrial centre, Alexis Tsipras’ promises include raising the minimum wage and halting the laying off of public servants. This of course sounded like music to the ears of the millions of Greeks who had been enjoying the security of working for Europe’s most overinflated public administration. To be specific, in Greece, if one wants to rise to the top of the political pyramid, one needs the support of the public administration. Otherwise, not only is election less likely in the first place, in the event one manages to do so, it will be almost impossible to gather sufficient support from the administration to deliver quality work. The latter is exactly what happened in 2004 after the election of the centre-right ‘New Democracy’ party. The administration was unofficially affiliated with the centre-left ‘PASOK’ party, who had been in power for over 10 years. A significant number of administrators refused to work with newly elected ‘New Democracy’ Ministers, hiding documents and refusing to share information. In addition to increasing levels of dysfunction within the public sector, the refusal of part of the existing staff to work with the new government had led to an explosion in the size of the administration. Nepotism aside, to combat the old guard’s refusal to work with the new guard, ‘New Democracy’ Ministers simply just hired more staff, making the existing bubble even bigger.
Another reason for Tsipras’ rise has been the political vacuum in Greece’s centre-left. At the moment, 3 political parties, ‘To Potami’ (The River), ‘To Kinima’ (The Movement) and ‘PASOK’ (Socialist Party) have been bickering over who better represents “socialist” ideas. The lack of a unified social-democratic party with a programme differentiating itself from ‘New Democracy’s’ “pro-Europe, pro-austerity” stance or SYRIZA’s “anti-austerity” posture encourages many voters’ to flirt with ‘SYRIZA’. That has been especially the case for older generations who worshiped former PASOK Prime Minister Andreas Papandreou, and who Alexis Tsipras’ has modelled his communications style on.
Alexis Tsipras has been careful to model himself on Papandreou, and in doing so has developed a campaigning style that is informal, ‘close to the people’ and one that strongly appeals to Greece’s 1980’s ‘PASOK’ generation
In any case, “στους δυο τρίτος δεν χωρεί” (in two there cannot be a third), proclaims a Greek saying. Historically, from the eternal North/South Thessaloniki-Athens divide, the Civil War in the late 1940’s, to the military junta in the late 1960’s, and even to football, Greeks have always been polarised. In this election, Greek politicians are capitalising on that polarisation, and campaigning on the very explosive question “Are you pro or against Europe (interchangeable with austerity)?”
The ‘day after’ – The impact of a Tsipras U-turn
Regarding the current “pro or against Europe” dilemma, the ‘day after’ the elections will be critical. In the event ‘New Democracy’ wins (it seems unlikely at the moment according to polls), Tsipras will remain in opposition and continue to play on his “charisma” in order to further develop his image of Europe’s messiah. However, if he is called to form a government on the 26th January 2015, things may prove a bit trickier.
First, it is not yet clear whether or not he will make a U-turn and put forward a more moderate stance on the renegotiation of Greece’s debt and austerity package, as he has indicated in his latest interviews. Depending on which parties he decides to form a coalition with, his room for maneuver may be limited. There is no way he can introduce structural reforms and maintain a productive relationship with the Troika of the International Monetary Fund, the European Central Bank, and the European Commission, if his government coalition partners include the ‘KKE’- Greece’s communist party. On the other hand, if he decides to align with the right-wing, anti-austerity ‘ Independent Greeks’ party, he will receive intense criticism from within his own party, as the two parties do not align on a number of core social issues, such as the division of the State and the Church.
Second, in the event Tsipras manages to form a government with more moderate partners such as the ‘Democratic Left’ or ‘The River’, it’s crucial to keep in mind that Tsipras is not ‘SYRIZA’’s “absolute monarch.” ‘SYRIZA’ is in fact a coalition of small left wing parties, some of which have significantly more radical opinions than Tsipras on issues of national interest such as the debt negotiations. This means that, even in power, Tsipras is at risk of being derailed by his own party.
In any event, the day after will therefore by no means signify the end of Greece’s political instability. In his effort to appeal to Greek voters and the Troika, Tsipras may jeopardise his appeal to his own party. Given the existing fragile balance of power, forming a stable government seems more like wishful thinking over a possible reality. There is a very high chance that following the January elections, Tsipras will fail to please all his partners, and a second round of elections will become inevitable. Two elections in two months – that’s a guaranteed way to put stress on financial markets and for Greece to lose its international partners’ “unconditional’ trust. This would result in decreased bargaining power for Greece during the negotiations on the financial assistance package (for more on the elections’ impact Greek-EU relations take a look at Claire Bravard’s post from yesterday on GREXIT- BRACING EUROPE FOR A SECOND ROUND).
So no matter what happens on Sunday, this is not the end of the tunnel. In trying to please everybody, Tsipras’ likely U-turn may cost him power, and see a return to the polls within weeks. As we all know; the road to hell is paved with multiple elections.
By Ilektra Tsakalidou
With the help of: Claire Bravard, Alexandria Hicks, Joachim Wilcke, Lucie Martin & Martin Bresson
January 21, 2015
Don’t blink; Greece again is on the brink.
Once again, it seems like it’s never the right time to take some days off in Brussels. As Europeans were still unpacking gifts and drinking and eating unreasonable amounts, Greece put a halt to holiday cheers by announcing it was going to hold general elections on the 25th of January- a year and a half ahead of schedule.
As far as explanations go for this sudden and politically charged decision, the reality is that Antonis Samaras played a high hand, and lost.
Under the Greek constitution, elections for President are held every 5 years (against 4 for the Parliament). Nominated by the government in place, the Presidential candidate must go through 3 rounds of voting in the Greek Parliament (Vouli) to secure a minimum of 180 votes in the final round of voting. The term byzantine doesn’t come from nowhere, and Greek politics is played hard- politicians use of the three rounds to leverage their influence and secure outcomes for themselves, their parties and their constituencies. If support of 180 parliamentarians is not secured at the end of the third round, a general election is automatically triggered.
On the 29th December, it became clear that the current government, a coalition of the Centre-right (New Democracy party) and the Centre- left (PASOK), led by Antonis Samaras, had fallen short by 12 votes.
Whilst observers may have been expecting elections, surprisingly, none of the two big political parties, including the opposition party SYRIZA and its leader Alexis Tsipras, who have been leading in the polls, were completely ready for a political campaign and were vocally expressing their desire for elections later in the year.
The sudden call for elections has caught them all on the hop, and has pulled the veil back on a volatile situation that has been bubbling under the surface for months.
Inefficient reforms in a dissatisfied Greece
This economic and political turbulence is seemingly exactly what is working for Alexis Tsipras, the leader of the radical left party Syriza, now leading the polls on average 3 points ahead of New Democracy as we approach the election date. Mr. Tsipras is surfing on a wave of exasperated voters, pinned down by harsh reforms that failed to bring back growth 5 years in a row. Indeed not only has GDP in Greece fallen back to its year 2000 level, but this time it’s accompanied by an exorbitant amount of debt reaching 174% of its GDP (109% back then). Moreover, the reforms engaged have cut expenditures (reduction of the number of civil servants, salary freezes, etc.) but have not tackled the deeper problems of the Greek society: tax evasion, corruption, absence of modern land registers… and have thus failed to complete the modernization of the country.
Nonetheless, the potential arrival of a radical left party at the head of a severely indebted state has stirred reminiscent fears of a Greek exit – or “Grexit” – in 2012. As expected, renewed fears have had an immediate impact on financial markets. The Athens Stock Exchange has lost over 20% of its value in less than a month (link). In turn, all eyes turned to Berlin and Frankfurt. The Spiegel reported that Germany would not necessarily be opposed to a Grexit, as the Eurozone is now much more resilient than it was in the period from 2010 to 2012. Indications of these fears are soaring spreads on Greek bonds to levels recalling those of 2010. In parallel, these qualms are triggering a drop of the value of the euro which reached its lowest levels against the dollar since November 2005, and is likely to continue to fall (this drop is also supported by expectations of quantitative easing measures from the ECB).
Apples and apples or apples and pears?
In spite of some striking similarities, the situation is not the same as during the 2010 to 2012 period when the future of Greece in the Eurozone was at stake. And Alexis Tsipras understands this. Indeed, in his program it is no longer a question of leaving the euro for the drachma or refusing to pay back the country’s debt, but rather he has adopted a more reasonable discourse asking for a renegotiation of the Greek debt and a halt to the austerity policies which have failed to bring back growth or diminish the debt burden. He aims to appeal to the more moderate Greek voters but also to the sympathy of other European countries currently facing similar debt burden difficulties, namely the 2nd and 3rd economies of the Euro Area, France and Italy.
Another major change compared to 2012 has been the watering down of SYRIZA’s initial program. Indeed the Eurozone is better equipped than it used to be. It has established a number of firewalls such as the European Stability Mechanism, the Banking Union and especially a Central Bank which has shown it will act and buy government bonds when necessary. In other words, the risk of contagion to other Eurozone countries is contained and markets respond to it: spreads of Spain and Italy have barely moved.
Surprisingly though, this is not necessarily good news, especially not for Mr. Tsipras. The increased strength of the Euro Area (at least in appearance) provides Germany with a stronger deck of cards in the upcoming gamble for Europe’s future. The major argument which finally convinced Ms. Merkel (almost too late) to participate in the bail out of Greece was that the Euro Area would implode if Germany did not act. However, if this argument is less valid today, voices against “the lazy Mediterraneans” have not faded away. The German Chancellor is facing very strong pressures from her own political base against erasing (even partially) the Greek debt, which in Germany is perceived as German taxpayers having to pay for the Greeks’ “laziness”. Therefore, it is possible that Ms. Merkel will indulge slightly to the right following the CSU, in order to oust the AfD (Alternative für Deutschland).
Moreover, the German government also understood that it was being closely watched. Indeed, firewalls may calm financial markets but it is feared that demonstrations of leniency might encourage other countries to cut austerity policies short. Firewalls erected to stop the deadly “feedback loop” between sovereigns and banks are not high enough to stop other Member States to start questioning current economic policies.
Yes We Can – Podemos or not?
The Greek elections are not only a Greek issue, nor even a German-Greek problem, but the outcome will resonate within other European national political/election debates. On one side, voters in crisis-ridden countries such as Spain and Portugal will be watching if new negotiations between the Troika and Greece are to result in either debt forgiveness or renegotiation of the bailout terms – due to end in February – or both. A favourable outcome for Greece (staying in the Euro Area with a haircut on its public debt) could rattle up support for Spain’s new left-wing party Podemos calling for fairer and more growth orientated politics. On the other side, Fins, Brits, Poles, Danes and Estonians (also facing elections this year) might under such circumstances turn to populist anti-European parties, which will promise them that no more hard earned tax money will be spent on “lazy Southerners”.
Either way the Greek elections on 25 January will rattle the cages of Europe’s capitals and Brussels as Mr. Juncker will be seeing the rules of the game on his investment plan change and the perception towards stimulus-based growth policies evolving. Although 2015 has just begun, with such an outlook ahead, we might already wish it to be 2016.
We’ll be closely following the Greek elections this week, and into next week. Tomorrow, Ilektra Tsakalidou will be writing on Alexis Tsipras options in the event of a win on Sunday. We will also be tweeting throughout the week and from the polls on Sunday: @fleishmanhillardEU.
By Claire Bravard
With the help of: Ilektra Tsakalidou, Alexandria Hicks, Joachim Wilcke, Lucie Martin & Martin Bresson
January 20, 2015
Juncker’s strategy could kick start some badly needed investment in Europe’s energy infrastructure
On Wednesday Commission President Juncker announced his long-awaited investment strategy, a plan which aims to give Europe’s economy a much needed shot in the arm as the bloc continues to stagnate. Formally called the European Fund for Strategic Investments (EFSI), the mechanisms of the fund are based on leveraging an initial €21bn into an eventual €315bn of investments in both long term infrastructure and short term access to capital for SMEs and mid-cap firms.
The strategy itself is based on three main principles (the “three sides of the triangle”, as Vice-president Katainen put it at the Strategy’s launch).
- New finance will be mobilised
- Finance will be steered towards EU approved projects
- Regulatory barriers will be removed via the entrenchment of the single market.
With enough leverage…
The basic principal behind the fund is quite simple (though no doubt the economics will be discussed ad nauseum in the coming months).The fund is intended to act as a first line of investment, shouldering risks which traditional banks might shy away from, and in doing so, it hopes to encourage private investors to fall in line behind it. “At the heart of this package there is a political choice” Vice President Katainen explained during his speech. The EU must choose between a traditional grants and loans system, limited by the capital at hand, or it can facilitate “riskier borrowing and create a larger lending capacity”.
Diagram 1: How the strategy should work
Energising Europe’s future
The second part of this “triangle” is the identification of infrastructure projects for funding. The EU is currently reviewing around 1,000 projects for viability and utility, and those that receive the “European stamp” can expect to have the weight of this fund behind them, reducing the risk and incentivising investors
It comes as no surprise, given the current cloud hanging over Europe’s somewhat precarious energy situation, that a good chunk of this fund will be earmarked for investment in energy infrastructure. Vice-president Šefčovič may not have been presenting the plan, but he certainly will have a hand in running it, with the oft-repeated goals of “completing the internal energy market” and “diversifying supply” firmly on his mind.
The abovementioned projects will no doubt have drawn heavily on the ‘Projects of Common Interest’ (PCIs) agreed last year, boosting financing and speeding up infrastructure development. However, Katainen shied away from making any firm commitments, saying “there will be no sector-specific or country specific quotas”. This leaves an air of uncertainty over how much of the fund will be spent on energy, though there is no doubt in its priority
Tearing down the barricades
The third side to the triangle, the completion of single markets in the energy, digital, services and transport sectors, was spoken about at length by Katainen. It comes as no surprise that energy infrastructure was a top priority, given its necessity in the completion of the energy union. “There are many people who want to invest in the energy sector” he noted “but until we have an Energy Union they cannot do so as easily as say in the food sector”.
The trouble with an investment fund, it appears, is that it will have to choose what to invest in. This immediately leaves the Commission open to the often heard criticism that it is interfering in the market and inevitably “picking winners”. Immediately after the strategy was proposed numerous industry associations published position pieces that were at the same time optimistic and concerned. Aside from those that were sceptical (to put it lightly) of the level of private investment the fund would create, renewables industries were quick to claim this as a large step forward for their sector, while the more ingrained electricity providers were more cautious, encouraging investment in the “framework”, while leaving technology choices up to the market
What happens now
Juncker has bet on the fund sailing through the other institutions. Certainly, Parliament President Schulz appeared to welcome it with open arms, calling it a “turning point” following years of financial and currency woe and austerity. However, we will have to wait until the next European Council meeting (between 18-19 of December) to see how much the Member States agree. All going according to Juncker’s plan, the fund should be up and running by spring 2015.
Cillian Totterdell and Cillian O’Donoghue
November 27, 2014
In between the chaotic mid-week politics, and changing of the guard in the Commission, over the eerie quiet of a weekend in a Brussels emptied of its lawmakers, regulators and lobbyists, an equally quiet revolution took place. On 1st November, in accordance with the Lisbon Treaty, new Council voting rules were introduced to keep the ever-expanding complexity of Council of the EU meetings under control. Amidst all the institutional changes that this year has seen, this one could well be the game-changer in disguise.
Under the new rules, larger member states – namely, Germany, the UK, France and Italy – gain significantly more voting power, whilst medium-sized and smaller states lose out as voting in the Council will now be determined by population size. This means the voting weight of Germany – the largest member state – will nearly double, and the UK, almost the same, whilst medium-sized and smaller members like the Czech Republic and Belgium, nearly halve and Malta and Luxembourg see their voting weight nearly vanish.
The new rules aim to bring to a close the, at times, seemingly never ending quarrels in Council, where Member States hitherto could team up fairly easily and form a blocking minority. In its essence, these rules will mean that proposals will need 65% of the EU population’s support to pass, while 55% of Member States must be on board. So is this a conspiracy by the big member states, you ask? Ahh! No! Not really. As you will remember (or not), the political momentum way back in 2007 – before the financial crisis turned politics into dedicated “national treasuries first” strategies – was all about making Europe more democratic and transparent and this was to be reflected in the one man/woman – one vote system entering into force last weekend.
As always in European politics a few reasonable safeguards has been set, the additional requirement to have the blessing of 55% of member states is part of the eternal great trade-off between big and small in the EU.
Equally, to ease the transition from the old to the new, the safety net of the old voting rules may still be employed by any Member state until 2017. Although calling on the old rules is not going to be a free ride for the Member State(s) who does it. Au contraire; it is expected to be a highly political issue and countries that employ it will have to muster up a lot of political capital.
The new voting rules make blocking minorities harder to form. Our analysis (read full report here) shows that the ‘euro-out’ countries and Eastern European countries will no longer be able to achieve a blocking minority. However, the large Mediterranean countries can still form a blocking minority – something which could prove crucial in austerity themed debates.
So; are we going to see massive changes in how Council makes decisions from now on? Ehhh…again; No! We’re not going to see it. Our analysis of votes held in the Council over the last year show that 65% of the votes were agreed upon unanimously, and many more only saw a single member state abstain or object. And the Ministers in Council are likely to proceed in the same manner of seeking consensus and making efforts not to make a display of disagreements.
However, we are going to feel the change. It will occur in the negotiations in the working Groups before a proposal is put in front of the ministers and thus in the day-to-day compromises as voting rules are generally more an instrument in the hands of the negotiators to identify (and solve) key issues and to push negotiations forward.
Still; while in all likelihood the Council of the EU will remain a consensus building machine, these new voting rules significantly shifts the balance of power into the direction of the big 4. Whether this is a step in the right direction in terms of taking on the great challenge to close the democratic deficit in the EU, or whether it will more likely leave the governments, negotiators and especially populations of the smaller Member States even more disenfranchised from the European project, is still to be seen. Clearly the aim of those ratifying the Lisbon Treaty was the former… But so much has changed since then.
Martin Bresson, Marijn Swinters and Anne Murray and the FH Institutional Research Unit
November 13, 2014
There was a certain irony in being asked by the British Chamber to open their New Generation visit to France’s Death Star inspired version of the European Parliament building by talking about why going down to Strasbourg is important. The irony being that most of us seek to avoid going there if we can help it and I am no exception. I even started a short lived Facebook group called “I’ve been to Strasbourg once too often” after a particular heavy Parliamentary year about a decade ago. However, it must be said that as long as remains a relatively infrequent occurrence rather than a monthly trek (poor souls you MEPs/EP staff), it’s a lot of fun. I came back tired, but rejuvenated.
So five things I learned while down there, some serious, some not, on the British Chamber’s Past It Generation trip (i.e. the full EU Committee visit), which I had the honor of chairing the following days.
It’s all a little bit too early for policy discussion
Unlike last year’s British Chamber trip – at the height of the rush to get stuff agreed before the elections – our panelists were eloquent, passionate but general. One even said they’d been so fixated on hearings the real work of the EP had yet to start. With a couple of notable exceptions it was clear that the real legislative work on many committees has yet to get into full swing.
Ok, so it may not last long but all those we spoke to in the main groups had a sense of optimism that Juncker and his team are a fresh start. All feels possible. The incoming Commission has a window of goodwill to draw upon, which if used could see the EP be more help than hindrance.
Animal welfare by day, foie gras by night
One dinner guest sheepishly admitted they were an animal welfare advocate by day, while getting stuck into a foie gras starter followed by a veal main. It’s a bit like Strasbourg as a whole. If you want to understand what’s really going on, forget the statements for the record in plenary, you’re more likely to hear what people really care about in in the bars and restaurants late into the evening. Yes, that makes the whole experience much more tiring, but also more fun.
The Flower Bar is the place to see
Talking of bars, the Flower Bar is a magnet for MEPs who are cooped up in their offices as well as those – like me – who have no office in the building. If you want to catch up with folk, see who is talking to who or try to catch someone over coffee, grab a table and just people watch. It’s fascinating what you can learn.
The British contribution is both walked all over and scares people off
As part of the British Chamber visit we of course could not but discuss the rather tight corner the UK seems to be backing itself into. Indeed we’ve even surveyed our members on this issue (unsurprisingly they think leaving the idea is a bad idea). The Flower Bar carpet is perhaps a suitable metaphor, as I’m told it’s designed by a Brit. Walked over by Europeans all day long, at first glance it appears frightfully unreasonable. But after you get used to it, you realize it is as much a part of the furniture as the hemicycle itself. The place would simply not be the same without it.
October 29, 2014