Circular Economy – Parliament presents its wish list whilst Commission remains tight-lipped

While the European Commission is not revealing much about its vision on how to achieve a “circular” economy, the European Parliament has now made its mind up. The own-initiative report from rapporteur Sirpa Pietikäinen, adopted yesterday in plenary with 394 votes in favour, 197 votes against and 82 abstentions, aims to inspire the Commissions’ discussions on the new Circular Economy package, which is expected before the end of the year. Whether the EP’s recommendations will put further pressure on the Commission to come up with an ambitious proposal remains to be seen but one thing is certain, the Parliament has its “wish list” ready.

Last June, the adoption of Mrs. Pietikainen’s report by 56 votes in favour reflected a large political consensus in the Environment committee. However, in the period leading up to the plenary vote, the tabling of new amendments and the request for split votes for various provisions showed that diverging views may challenge this consensus. And it did indeed. Interestingly, while the content of the report remains mostly the same, a few key changes shed a new light on the Parliament’s approach of the dossier. In an attempt to offer more flexibility and address the risk of over-regulation, the Plenary has noticeably softened the Parliament’s language and readjust some expectations downwards.

Parliament softens overall resource efficiency target and confirms waste targets

It is on targets that the plenary vote had most striking and symbolic impact. While the Environment committee decided to call for a binding target to increase resource efficiency by 30% by 2030 compared with 2014 levels; the target is no longer legally binding. On waste however, expectations are unchanged. The Commission should foresee a waste reduction target for municipal, commercial and industrial waste for 2015 and increase recycling and reuse target to at least 70% of municipal solid waste and 80% recycling of packaging waste by 2030. The Parliament wants such targets to be the same in all Member States while the Commission has already indicated that it will not be excluding differentiation to a certain extent. The binding food waste target (30% by 2025) and marine litter target (50% by 2015 compared with 2014 levels) also remain on the Parliament’s wish list.

Indicators are still on the menu as well. A lead indicator and a dashboard of sub-indicators on resource efficiency should measure resource consumption, including imports and exports, at EU, Member State and industry level. Interestingly, the Parliament points out the need to adopt a lifecycle approach and to apply a footprint methodology. In other words, products and services should be considered broadly and indicators should reflect at least land, water and material use as well as carbon emissions. According to verbal statements from Commission officials, the Commission is indeed planning to measure circular economy progress by using a dashboard of indicators.

Access to information reduced to consumers’ awareness

Access to information is another area where yesterday’s vote had a significant impact. Until then, the Environment committee had come to the conclusion that information about products should be enhanced:  consumers as well as businesses should have access to information about the resources a product contains and on its expected lifetime. Now the Parliament simply and vaguely “notes that it is crucial to raise consumers’ awareness and increase their proactive role.”

Product design remains high on Parliament’s agenda

Product design is another key aspect for the European Parliament. Products should be durable, repairable, reusable and recyclable. The Eco-design Directive is considered as the best instrument to meet such ambitions. On this matter the Plenary aligned with the Environment committee: the directive should be reviewed by the end of 2016 in order to expand its scope, introduce mandatory product passports and implement self-monitoring and third-party auditing.

The reference to Green public procurement disappears

During the conference organised by the European Commission on June 25, a significant number of speakers and participants mentioned the use of green public procurement as a tool to boost the circular economy. At that time, these views were reflected in the Environment committee report which called on the Commission to propose compulsory green public procurement procedures. The reference to compulsory green public procurement has been watered-down as it now just refers to public procurement without the “compulsory green” component.

 

The Circular Economy will keep EU institutions and stakeholders busy in the months to come. While the Parliament has now clarified its expectations, the European Commission must make important decisions. When withdrawing the previous Circular Economy package, they promised “a more ambitious” package. The question is whether the new proposal will meet this high level of ambition or whether the Commission is, rather optimistically, shooting for the stars. We will be able to judge in a few months when the Commission is expected to publish the new package. Until then, stakeholders have the opportunity to express their views by contributing to the Commission’s public consultation which is open until 20 August.

Lara Visser and Pauline Tawil

Leave a Comment July 10, 2015

5 observations of the Parliament’s report on TTIP, and the road ahead

A lot will be written about today’s vote in the European Parliament on Trade Committee Chair Bernd Lange’s own-initiative report on TTIP. In the immediate aftermath of the vote, we noted that:

  1. Rules can work in your favour if you have the right position

The European Parliament’s President Martin Schulz followed the Rules of Procedure to the letter, though he frequently had to read directly from the rules to explain his decision to his fellow parliamentarians on the voting priority of amendments. Schulz brought to vote Amendment 117 — that of Socialist & Democrats (S&D) member and International Trade Committee rapporteur Bernd Lange — to amend the paragraph about Investor-State Dispute Settlement (ISDS). Speaking of ISDS, it is important to…

  1. Keep the mind limber to solve complicated cases

The most contentious point was the Parliament’s position on Investor-State Dispute Settlement (ISDS). Using a rhetorical Houdini-like escape act, the Parliament adopted a position which simultaneously allows MEPs to say that they have ‘killed’ ISDS while supporting work to develop a system for settling disputes between investors and states. The paradoxical amendment will prove difficult for many minds. It will result in reams of analysis between now and the end of this year. Most importantly, it could provide a pressure-release valve that creates space for constructive debate. Undoubtedly, the crafting and advancement of amendment 117 by Schulz and Lange, both part of the Socialist and Democrats (S&D) group, has consequences for internal cohesion as…

  1. Political group fragmentation continues

It is even clearer that the political groups fragment easily, as we have noted in the past. There will be many simmering disagreements that may impede intra-group collaboration even outside of trade policy. The fragmentation inside parties is not the only problem. Between groups, rancor has increased as smaller groups attempt to remain relevant while they are not always necessary coalition partners. As a result…

  1. The hemicycle can still deliver heated debate

The heated exchange between EP President Schulz and two members of the Greens group — Yannick Jadot (FR) and Reinhard Bütikofer (DE) — over the application of the Rules of Procedure revealed the confrontation. The applause and boos from the deputies provided political theatre rarely seen in sleepy Strasbourg. If only the dome of the hemicycle really did glow brighter as the volume in the chamber increased. Energetic words about TTIP will fly between the benches and the President’s desk again, because…

  1. This is not the last time we will hear from the EP on TTIP

Let us not forget that the European Parliament had already in 2013 issued its opinion on TTIP when it adopted the resolution of former International Trade Committee Chairman Vital Moreira. And, once agreed, the Treaty of the European Union requires the Parliament’s consent to the final text of TTIP. That will be an even more passionate debate.

 

 

Michael Stanton-Geddes

Leave a Comment July 8, 2015

We did it again! FleishmanHillard wins the EPACA essay competition 2 years in row

Every year the European Public Affairs Consultancies’ Association (EPACA) organises an essay contest for young Public Affairs professionals to discuss a topic of relevance to the industry. This year, EPACA wanted to know participants’ ideas on how to improve public trust in EU public affairs. A question key to Public Affairs professionals and which makes us rethink our relation to and responsibility towards a critical actor in European politics: the European people.

After all, EU citizens remain the pillar of the European Union. Their voice, whether it is dimmed or amplified by their national and European representatives, remains the fundamental source of legitimacy for any politician and stakeholder involved in politics. Indeed, without a certain level of approval from the European general public, individuals or organisations who want to impact on EU affairs loses significant support and credibility; and the more those are lost at the bottom, the more limited the effect at the top will be. Hence why public trust in EU public affairs is so critical, and why it is essential for businesses to keep thinking about what it takes to ensure and improve it. Our research executive Anne Sauviat was the winner of the EPACA Essay Competition and provided some answers to this challenging but crucial question.

EPACA Essay

How to improve public trust in EU public affairs?

 To what extent are EU public affairs public? Which ‘public’ is actually encompassed under such appellation? These are important questions when thinking about the issue of public trust in EU public affairs for a reason: trust comes from a feeling of inclusion, which itself encompasses both a physical and symbolic dimension.

Apathy and skepticism have increasingly taken over public opinion on European politics. This mistrust is notably due to Europeans feeling alienated from a political environment and process they expect to be integral to. Yet, many perceive European politics as unreachable and incomprehensible conversations between political, economic and industrial elites. In this context, public affairs consultancies mainly appear as illegitimate intermediaries influencing EU politicians for private stakeholders ‘ interests.

Thus, building trust in EU public affairs necessitates overcoming the negative connotation they often assume. The notion and activity of lobbying should be brought back to its original meaning and purpose: providing decision-makers with practical information on topics they are not necessarily fully aware of, and informing them of the demands from the various groups of the civil society they represent. European public affairs would be better acknowledged if they were given a more ‘positive’ definition and if their relevance for both public and private entities were promoted.

Public trust also relies on the transparency of the information and services exchanged by the various actors (in)directly involved in the European political process. Giving accessibility to such data helps the public better understand and confide in the reliability of politically-invested individuals and organisations.

Finally, beyond the status of witnesses, European citizens should be more extensively and actively included in the public affairs debates. The new methods of communication and wide range of social media can significantly contribute to the ‘re-democratisation’  of European public affairs and their relative re-appropriation by the general public.

Anne Sauviat

1 Comment May 28, 2015

‘Brexit’ and Business – What does industry think?

In the run up the UK elections FleishmanHillard reached out to its network of clients across the EU to ask them what they thought of the possibility of a ‘Brexit’ . The feedback was overwhelming in its clarity – business is concerned that a Brexit would not just hurt Britain, it would hurt Europe. Below are some key quotes with which to contextualise business, Britain and Brexit.

We are concerned about the uncertainty caused by the Referendum

The UK is important to many of our clients, and not just as a market. One client remarked that the UK was the home of an R&D centre, for which the free movement offered by the EU was vital. The benefits of the UK’s position as an English-speaking country which enjoys a generally positive business environment make it a key investment point and ‘staging ground’ for many international businesses. Businesses from outside the EU invest in the UK disproportionately to its share of Europe’s economy: in 2013 the UK commanded 20% of FDI, while producing about 15% of GDP. brexit 1

It’s clear that businesses are happy to invest in the UK. What is also clear is that businesses are nervous about a Brexit; a recent survey of business leaders highlighted that it is even more concerning than a ‘Grexit’ (Greece’s possible departure from the Eurozone). It seems likely – and prudent – that businesses will be more hesitant about investing, when the stakes of the upcoming referendum are so high. It is for this reason that the new UK government seems to be considering a referendum in advance of its already ambitious 2017 deadline. Minimising the period of uncertainty is doubtless a step in the right direction, but it seems businesses would rather not see the issue come to a head, only 11% of respondents to our survey favoured having a referendum at all.

“Regulation and market barriers as a consequence of a Brexit would substantially harm our business”

brexit 2

There are those who fear that regulation and market barriers will negatively impact their business. The altered future relationship between the UK and the EU could mean that where once the “free movement for our supply chain across borders and for our workers is valuable” the reinstatement of barriers, wholly or partial could serve to make trading with the UK more difficult. When we asked our clients whether they think a Brexit would see them reducing the work they do in the UK, they were split quite evenly. Britain is the EU’s second biggest economy, and businesses are unlikely to stop trading with it, regardless of its membership status. What will happen though, as cited by our clients, is that the UK will no longer be an agenda setter, with limited ability to steer the course of the EU’s economy.  However, while the recognised advantages of the EU Single Market would prove a difficult obstacle if revoked, one client envisaged that the “most important bottom line element for our UK business is the UK business environment, notably tax levels and this is independent from the work of the EU.” This correctly identifies one of the most popular aspects of investing in the UK, and while the tax levels would evidently not be affected by a Brexit of any kind, the business environment rests on tender hooks as uncertainty over the future prevails.

“Brexit would simply be another factor to the broad view that Europe is less and less attractive for investments”

brexit 3

One highly pessimistic view depicts a Brexit as the final straw in a long history of decisions which contribute to an uncompetitive and stagnant investment environment – something the European Commission seems well aware of, considering the grand efforts of the Juncker Plan (an investment fund for Europe championed by Commission President Jean-Claude Juncker) to stimulate growth and investment in the EU. Our clients certainly think that this would be a step backwards for the EU as a whole, with an overwhelming majority agreeing that the EU’s economy would suffer in the case of a Brexit. Perhaps the view of many in the US when it comes to the EU was summed up by US Presidential long-shot Bobby Jindal when he said they must avoid turning “the American Dream into the European Nightmare.

“It would be a glorious mistake”

brexit 4

At present, nobody knows what the terms of a Brexit would be, or even what is being requested in the “renegotiation” period leading up to a popular vote. There are a number of overhanging issues, for example Directives which are transposed into national law would still apply if the UK were to leave the EU, agreements which have been signed with countries the world over on trade and international relations will have to be renegotiated. That is not to say that the UK’s relationship with the EU must stay the same, businesses are certainly open to the possibility of negotiation, but Brexit is overwhelmingly considered a bad idea. Therefore the above short comment which neatly summarised what a lot of our respondents were conveying may become true, however it remains to be seen how a Brexit might work, what basis a future relationship with the EU would be served on and the state of the UK post-EU.

 

 Rob Anger Martin Bresson,  Joachim Wilcke, Cillian Totterdell and Anne Murray 

 

 

3 Comments May 21, 2015

The Better regulation package: A new start for European policy-making?

Click to access the briefing

Click to access the briefing

FleishmanHillard publishes today its briefing on the Better Regulation package, which will be presented tomorrow by the Commission.

When Jean-Claude Juncker took office he made it clear that he would not only make Europe “bigger on the bigger things”, but also promised to make it more efficient. The ultimate goal is to restore confidence in the EU.

Tomorrow, the Commission will present its Better Regulation package to the Parliament. It will consist of a Communication to explain a number of new working methods, alongside a proposal for an interinstitutional agreement on better law-making, a common understanding on delegated acts and a new REFIT scoreboard. It is expected to make the decision-making process more efficient, but most importantly it will include additional opportunities for consultations, notably on impact assessments.

The initiative will have a direct impact on any future policy proposal and is aimed at making the legislative process more accountable, more transparent, and more science-based. The Commission will be looking to reach an agreement with the Parliament and Council by the end of 2015. Ahead of the debates, FleishmanHillard wanted to share some of the main elements of the proposals, and whether they are likely to have an impact on how European legislation is prepared.

Lucie L’Hopital, Martin Bresson

3 Comments May 18, 2015

Is #Brexit a reality? and why should the Eurobubble care?

Yesterday was a long night on both sides of the Channel. With the final results of UK general elections imminent, the option of a popular referendum on the UK’s EU membership is likely to soon become a reality.

Against this backdrop, FleishmanHillard is examining what an exit might hypothetically mean for the institutional set-up in Brussels – starting with the EP. Have a look at the implications for Parliament in our in-depth analysis posted here.

With 73 British MEPs currently in the European Parliament, a UK exit would significantly disrupt current political group dynamics and impact policy choices. Important questions would be raised over the impact on parliamentary group dynamics and changes to current coalition formations.

Key amongst these changes would be the potential emergence of the ALDE group as a ‘kingmaker’ for political agreement, increasing its influence vis-à-vis the larger political groups.   brexit

 

Additional headline implications of a UK exit

  • The Grand Coalition of the EPP and S&D would become more fragile, with a possible return to the traditional left v. right alliances
  • With the EFDD no longer a viable group, Marine Le Pen’s Front National delegation might give the formation of a new Eurosceptic group another try.
  • The S&D’s centre of gravity might move further towards the left, without its 20 MEP strong Labour delegation.
  • Any UK exit would likely necessitate a widespread reallocation of senior EP positions
  • Larger Member States might not push for a reallocation of vacated seats

We hope you find this analytical insight interesting, and we will follow up with an analysis of a UK exit on the Council’s political dynamics in the coming days.

Stay tuned!

 

The Institutional Research Unit

 

 

1 Comment May 8, 2015

Chemicals and Environment: what can industry expect from the EU this year?

FleishmanHillard publishes today its EU Environment and Chemicals legislation timeline. What can industry expect from the EU in the coming  years? Our timeline provides a tour d’horizon of the most important milestones to look for.

Click to enlarge

Click to enlarge

When he took office, Commission President Juncker promised the Commission would be “bigger on the bigger things” and would support industry’s growth and jobs. His “10 priorities” said it clearly: “We need to bring industry’s weight in the EU’s GDP back to 20% by 2020”. Surprisingly to many, this did not seem to include ambitious environmental targets: sustainable development and the environment were hardly mentioned in the 10 priorities. In the mission letter he sent to the new Commissioner for Environment, Maritime Affairs and Fisheries Karmenu Vella, priority was given to the avoidance of new environmental legislation and ensuring existing rules are “fit for purpose”. The first move of the Commission was to withdraw the circular economy package and its legislative proposal on waste, which threatened to become overly broad and burdensome. This move was strongly criticised by NGOs, MEPs and Member States, and the Commission now needs to demonstrate its environmental ambition. In this context, what can be expected this year for environment and chemicals?

Ensuring that existing legislation is implemented and supports competitiveness

EU environmental policy is well developed, and a driver for global progress. It is however often criticised for burdening industry and for being applied unequally by Member States. Making it “fit for purpose” therefore means, in Juncker’s agenda, ensuring that existing rules are not only properly applied, but that they also support EU jobs and growth. This is why 2015 will see the evaluation of a broad range of existing EU policies on water, environmental liability, environmental noise and the birds and habitats directives. These evaluations could lead to future policy proposals to tackle inefficiencies and unnecessary burdens.

What this means for now is that industry should participate in the early stages of this process. The Commission would likely welcome any information on the current practical implementation of existing legislation.

Revising the waste legislation in a push towards a circular economy

In 2015, all eyes will be on the upcoming circular economy proposal. Whilst focus will of course be on the proposal, the main legal impact will come from the revision of the waste legislation which it will contain. Juncker’s Commission made the controversial move of withdrawing the original proposal, promising to replace it with a more ambitious one. It will have to prove it is able to present a package that makes economic and environmental sense. The proposal is expected for the end of the year. MEPs expect a strong signal to make sure that toxic substances are kept out of the production stream early on, taking into account the importance of waste and recycling for sustainable growth.

Whether or not the Commission will answer these calls remains unsure. What appears at this stage however is that the Commission is looking to ensure its proposal will be realistic and can actually be implemented by industry without creating unnecessary burden. Despite the Commission’s limited environmental agenda, the real question is whether the Parliament and Council will accept its proposal or will decide to strongly enhance it.

An ongoing focus on industry’s emissions into the environment

Meanwhile, work will continue on industrial emissions into air and water. There are ongoing discussions on the emission of pollutants from medium combustion plants, and the Commission recently adopted a watch list of substances to be monitored in surface water. The emission of hazardous substances in the environment will continue to be the focus as the Commission is currently working on the elaboration of a similar watch list for groundwater, and is expected to come forward with a proposal for a strategy to tackle the presence of pharmaceuticals in the environment.

Although these topics attract less political attention than the circular economy, they could be the source of significant regulatory obligations for industry. Preparatory work is ongoing to define substances of interest and ways to measure their presence into the environment.

A new beginning for EU chemicals legislation?

Concrete changes are also expected in chemicals legislation this year. On nanomaterials, the Commission has been due to present proposals on the definition of nanomaterials and their regulation under REACH since 2014. They are now expected for the first half of this year and could impact a large number of chemical producers and end-users as nanomaterials are more and more closely examined by the European Chemicals Agency (ECHA). The Commission originally planned to present a proposal for the creation of an EU-wide register but now appears to have changed its thinking on this, seeing it could create additional burden with uncertain results in terms of consumer information and protection.

Meanwhile, the implementation of existing regulations on biocides, REACH and RoHS will continue, but industry stakeholders are invited to transmit experience of the advantages and difficulties of implementing EU chemicals legislation across Member States and sectors. This feedback will be crucial in feeding into the ongoing evaluation of existing chemicals legislation, its interaction with health and safety legislation and its overall impact on the EU’s industrial performance. It will be important for industry to take this opportunity to make its voice and concerns heard (see our previous blog post on the REFIT of chemicals legislation).

The work plan of the Commission for 2016 should contain the long-awaited proposal on endocrine disruptors and could contain a number of new proposals on chemicals legislation. Whether or not they will drive change is partly in the hands of industry. If companies do not make their voices heard in the ongoing evaluation and consultations they are likely to see any existing flaws and inefficiencies maintained.

Lucie L’HôpitalRob Anger, Aaron McLoughlin, Pauline Tawil, on behalf of the M&I team

1 Comment April 30, 2015

Decrypting the EU Energy Jargon

I love words. I work in public affairs and communications, so I love words. As public affairs consultants, we write all day long. We write, rewrite, rephrase, edit, amend, tweak, this is all we do: we play with words, we build strong cases and look for convincing arguments.

Read industry position papers and Commissioners’ speeches, they use the same jargon. This jargon is comfortable. It gives us an ‘esprit de corps’, as it were. However, the jargon also clouds our discussions. As consultants we try not to fall into the trap and propose alternatives. It is not always easy. In the energy policy area, 10 phrases are on everyone’s lips. They are so commonly used that we tend to forget what they really mean and where they’re coming from.

Word Cloud Blog

  1. Energy Union

Term coined in 2014 by then Polish Prime Minister Donald Tusk to instigate common gas purchasing and strengthen the EU’s negotiating powers towards external suppliers Russia. This is now a catch-all phrase for our entire Energy and Climate policy programme for  the next five years – which in effect no longer includes obligatory common gas purchasing.

  1. Decarbonisation

This is not even a word in the English dictionary (about this, I encourage everyone to read the Commission’s publication on Misused English Words and Expressions in EU Publications, which is an excellent read). Brussels is not Oxford, so let’s continue to encourage Europe to ‘decarbonise’ its economy, just like we want to ‘internalise external costs’.

  1. Level-playing field

You will rarely find a stakeholder not asking for a ‘level-playing field’. More often than not, it will be accompanied by words of caution against ‘unintended consequences’ and calls for the popular ‘regulatory certainty’.

  1. Energy subsidies

There is a tension about subsidies, almost a love/hate relationship about them. You dislike them unless they are directed to you. Whilst they are widely acknowledged for distorting the market, they can be accepted under certain conditions, for example for technologies that are not yet commercially available. Their phasing-out is recommended, but Member States continue to use them massively, both for renewables and fossil fuels. Figures are usually thrown into the debate, with no strong evidence backing them.

  1. Carbon Leakage

When I first heard this phrase in 2009, I remember thinking there were actually molecules of carbon physically leaking from somewhere. There are not. In effect, this is about industries likely to relocate outside Europe (and emitting carbon there) due to additional costs incurred by EU climate policy (namely, the Emissions Trading Scheme). Most expert studies have so far concluded that there is no evidence of carbon leakage. This might change when/if the carbon price increases.

  1. Completion of the internal energy market

Since Heads of States agreed to complete the internal energy market by 2014 (February 2011 Council Conclusions), and to “allow gas and electricity to flow freely”, this has become the mantra of EU energy policy. Progress has definitively been made – with more interconnections, more diversity of supplies and some convergence in prices. But who would really argue that the EU energy market prevails over the 28 national energy markets?

  1. Hardware

A new piece of vocabulary that emerged with the Energy Union. This is neither a computer nor a piece of electronics, but rather the physical infrastructure needed to complete the internal energy market: gas and electricity interconnections, pipelines, LNG terminals.

  1. Software

Again, a creation of the Energy Union.  Should be understood as the regulatory framework building links between domestic gas and electricity markets and making cross-border flows possible. Be it network codes or the reform of the power market design, they all fall under ‘The Software’.

  1. Intermittent

Don’t describe renewable energies as intermittent. EWEA, the wind energy association, “recommends using the qualifier “variable” when referring to wind power generation, rather than “intermittent”, which means starting and stopping at irregular intervals.” Now you know.

  1. Clean coal

A very bold oxymoron, and a good marketing tool to promote Carbon Capture and Storage.

The EU energy lingo goes beyond these few examples. I could expand on ‘windfall profits’, ‘technology neutrality’, ‘capacity mechanisms’, ‘prosumers’, ‘the energy-only market’ and many others. If you have any personal preferences, feel free to share. For my part, I am off writing about the plenary vote on ‘Indirect Land-Use Change’ – my favourite.

 

Clara Lemaire

 

 

1 Comment April 28, 2015

The Finnish Effect – What Finland’s elections can tell us about the Future of European Politics

2015 promises to be a year of change. With elections fast approaching in Finland, the United Kingdom, Portugal, Spain, Poland and Ireland voters seem to want to reject the status quo. While everyone is talking about the Greek debt negotiations and the rise of Podemos in Spain, in the North of Europe, an important election has skipped many people’s radar.

Finland, Europe’s tough fiscal hawk, is likely to face a change of government after Sunday’s election. The change is likely to come about due to a slowing Finnish economy and what Prime Minister Alexander Stubb called a “lost decade” with recession entering into its third consecutive year, unemployment growing and competitiveness declining. Thus similar to other struggling economies in Europe, Finland is experiencing economic hardships which in the eyes of nearly all parties can only be resolved through harsh labour market reforms and fiscal austerity. In contrast, however, to the trend in the South where such policies led to public discontent and a steep increase in popular support for anti-EU parties, Finland is experiencing a revival of the established parties, while the Finnish anti-EU party, the Finns, however, is falling behind their landslide successes from the previous election in 2011.

Will they vote for anti-establishment?

Will they vote for anti-establishment?

Watch out – The Finns are coming…

Despite the decline in popularity of his anti-establishment party, Timo Soini, the Finn´s leader, might well end up on top as the winner of the Finnish election-dilemma as part of a coalition in a government led by the Central Party. To be more specific, in the event of an “equal” split of votes between the four largest parties (all four are polled to receive around 15%-25% of the votes), a coalition of three will need to be formed. While, the current governing parties have already turned down the idea of working together again, that would leave the Finns as the most likely alternative to become the third partner in a Central Party-led government.

Mr Juha Sipilä, the Central Party’s leader and likely to become Finland’s new Prime Minister currently leading with 24.9% of the votes, is not opposed to the idea so long as its partners agree with his political agenda. Not to mention that the current Prime Minister Alexander Stubb has reiterated that the Finns are much better than the reputation preceding them abroad, showing that he would also be open to support them as a coalition partner. As a result, anti-EU forces might find themselves in the Finnish government, despite the fact that voters are rallying around the established parties and support for reactionary parties is fading.

The Finn’s leader Timo Soini

The Finn’s leader Timo Soini

… to Europe!

A coalition including the Central Party and the Finns is expected to be less pro-European as the current government. Mr Sipilä, though successful in business, is not renowned for his international experience and although his party might consider itself pro-European difficult compromises will need to be made with the Finns, who are opposing new bailout programmes, the Euro and further deepening of European relations.

In Brussels the event of a coalition between the Central Party, the conservative National Coalition Party and the Finns will mainly impact Finland’s position and negotiation leeway in the Council. Mr Sipilä’s hands in negotiations will be more tied than Mr Stubb’s or Mr Katainen’s have been. On the one hand he would have to demonstrate his support for a deeper EU to its European partners – to whom Finland will grow more and more economically dependent the longer sanctions against Russia prevail. On the other, he would have to reassure his coalition partner Finland is maintaining high levels of sovereignty and remaining critical towards the Eurozone.  In particular on the latter, however, Mr Sipilä demonstrate strength by continuing to back strict rules and austerity measures – policies that all Finnish parties support both for their own country and for Europe. Finland is therefore expected to remain “Europe’s fiscal hawk”. Moreover more than before Finland will be likely to defend EU disintegration positions and align itself to the UK defending sovereign interest and the principle of subsidiarity.

Anglo-Finnish cooperation is already well established in the European Parliament, where the Finns have joined the British-led European Conservatives and Reformists Group demonstrating a conservative yet mainstream political agenda. As the elections are likely to make Prime Minister Stubb’s party a junior coalition partner, we neither expect that the outcome will neither affect the focus of the National Coalition as part of the EPP nor workings of the Finnish Vice-President of the Commission Jyrki Katainen nor drastically change the focus of his political agenda in Europe.

All in all, the Finnish elections may not change the tone in Brussels tremendously on their own, but they will provide insights on how anti-establishment parties are likely to affect national politics and therefore affect London’s, Copenhagen’s, Berlin’s and Madrid’s positioning in Brussels.

Is Europe Finnish(ed)?

trash

The Finnish “case study” is helpful in understanding and dealing with the fast growing support for anti-establishment movements across the Continent. In the North, Sweden, Denmark and Norway are watching closely as growing support for their respective populist parties is making it harder for their mainstream parties to continue ignoring them. While Norway is currently being led by a coalition of conservatives and the populist Progress party, the Sweden Democrats came third in the September 2014 elections in Sweden and Denmark’s Danish People’s Party is gaining influence and support before the upcoming elections in autumn.

In the Centre of Europe, the Finns’ positioning and agenda seem familiar to a still domestically unwelcome anti-Euro party in Germany, the Alternative für Deutschland (AfD). Bernd Lucke, the party’s leader, will eye developments in the North closely to assess whether the Finnish outcome might be a valuable example on how he could achieve his power aspirations in Germany.

In the South, Spain is also experiencing a similar trend with new anti-establishment parties, even though its popularity appears to be fading the closer we get to parliamentary elections in December. Podemos could grasp a large part of the votes, leaving no party with a majority to form a government.

Although anti-establishment parties are experiencing a slow in their popularity across Europe, all eyes will remain on them.  The success of Podemos, Syriza, the Finns, the UK Independence Party and others will furthermore force the establishment to make concessions and re-orientate their position on a great variety of issues such as European integration, social, economic and fiscal policies.

While the traditional separation of power between centre-right and centre-left parties will continue to dominate Europe, anti-establishment parties are likely to make this election year way more thrilling and unpredictable than previous ones. Let’s see what happens!

Announcement:

We will keep you up-to-date with all our coverage of this election year with upcoming analysis of the UK and the consequences of a possible Brexit as well as following the election developments in Denmark, Portugal, Poland and Spain.

 

Martin Bresson, Joachim Wilcke, Ilektra Tsakalidou

Leave a Comment April 17, 2015

35 Days to the UK General Election: The View from Westminster

With 35 days to go, Labour and the Tories remain neck-and-neck in the polls, to the internal frustration of some Labour politicians, who recognize that the party should be faring much better by now, given the persistence of its anti-austerity rhetoric.

As such, it continues to be clear that neither main party will secure enough votes to form a majority government-paving the way for small parties to hold the balance of power on May 8th.  It’s all going to come down to a numbers game, and a confidence and supply arrangement between Labour and the Scottish Nationalist Party (SNP) remains a very real option.

The possibility of any such formal arrangement caused significant controversy few weeks back, amidst revelations that some Labour strategists are in favour of a permanent alliance with the SNP after the election. The prospect of a Labour-SNP coalition was widely perceived as a threat to the unity of the country, and the news was met with calls for Labour to confirm that no electoral pact with the SNP would be made in the event of a hung Parliament, putting the Leader of the Opposition under pressure to declare there would be “no SNP ministers in any government I lead.”

The SNP currently has only six MPs at Westminster, but is predicted to significantly increase its number at the general election, possibly winning up to 50 of the 59 Scottish parliamentary constituencies. Feeling emboldened by the opinion polls, Alex Salmond, the party’s former leader, declared in a New Statesman interview last week that the SNP would block a minority Conservative government by voting down its Queen’s Speech. This would effectively result in a vote of no confidence against a minority conservative government, and provide Labour with the chance to form a stable government.

His comments may be bold, but Alex Salmond has good reason to feel smug. This week’s Guardian/ICM poll confirmed SNP’s lead at 43% of the of the predicted vote-a whole 16% ahead the Scottish Labour party. Considering how unlikely it is that Labour and the Liberal Democrats alone will be able to scrape together the 326 MPs needed to form an overall majority, these numbers indicate just how likely it is that the SNP will remain central to any post-election negotiations. It’s worth remembering that the SNP brought down a government in 1979- there’s every chance it could do so again.

Salmond’s comments were of course met with fierce criticism from the Conservatives who accused the ex-SNP leader of “trying to sabotage the democratic will of the British people”.  It is highly likely that the ex-Scottish First Minister will play a big role post-election despite no longer being the leader of the SNP, and such rhetoric is being used to portray Miliband as a weak leader who is dancing to Alex Salmond’s tune.

There is much uncertainty around this election, and the aftermath is set to throw up even more uncertainty, especially for business.  Any confidence and supply arrangement between Labour and the SNP would result in large cash transfers to Scotland, and potentially another referendum on independence. This would lead to a climate of uncertainty for business, and result in a potentially dramatic drop in foreign investment. The other potential scenario, which would see an SNP surge north of the border, could cost Labour enough seats to put the Conservatives into power, bringing with it the dread of an EU referendum in 2017. This situation could prove equally disastrous in the economic sense, and result in just as much business uncertainty and fear of investment.

It’s going to be a tight race, and it remains to be seen whether the SNP will succeed in persuading enough Scottish voters that they are the magic solution that will both keep the Conservatives out of Westminster and protect Scottish interests; or whether Labour’s message that a vote for the SNP means a vote for Cameron, will finally resonate. Either way, the possible economic impact of each outcome appears worryingly bleak.

 

James Dowling

Leave a Comment April 1, 2015

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