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.
April 1, 2015
As part of its wide-ranging digital single market strategy, the European Commission is considering introducing regulations which would bring about major changes for on-demand video providers like Netflix or Amazon Instant Video.
The Commission Vice-President for the Digital Single Market Andrus Ansip has firmly set his sights on the practice of geo-blocking, claiming it’s unfair that citizens across Europe can’t access the same digital services on equal terms. With the European Commission committed to ambitious legal steps in its digital single market strategy, geo-blocking is close to public enemy number one in the eyes of the EU’s executive branch.
Far too often, consumers find themselves redirected to a national website, or blocked. I know this from my own experience. You probably do as well….In the offline world, this would be called discrimination. In the online world, it happens every day.
Andrus Ansip, European Commission Vice-President for the Digital Single Market
The Commission seems to think that distributors, like these on-demand services, are deliberately signing contracts to distribute content selectively across the EU, then using this as a defence for geo-blocking, by claiming they only have the rights to distribute certain content in certain territories or languages (for example, when Netflix launched in Belgium, you could only watch the massively popular House of Cards if you set your language to English, as they’d sold the French-language rights to another channel).
The Commission, considering this an unacceptable situation for consumers, is actively considering banning arrangements like these, which could leave online services with the simple choice of licensing content for all of Europe, or none of it.
Operators like Hulu and Crave TV, or even Singtel have the advantage of watching the situation play out from the outside, even if they won’t be able to ignore the EU market and its 500 million consumers forever.
And when they do enter, they along with those already present, will likely have to deal with a new European-level law governing the sale of digital content, as the Commission looks to update existing rules on e-commerce and introduce new ones. This could even include forcing content providers to strip back their contract terms, presenting consumers with only the most important ones in an easy-to-read format, instead of the 100+ page agreements we are used to seeing.
As the definitive form of the digital single market plan evolves, all eyes will be on the European Commission ahead of the planned release of the strategy on May 6th.
March 26, 2015
On 10 March 2015 the Commission completed a survey on the impact of the REACH legislation on EU competitiveness which it launched in February. The Commission asked Europe’s industry a simple question: how much does REACH cost your business? Throughout 2015 the Commission will conduct other surveys, consultations and assessments like this one. The objective is clear: to make EU chemicals legislation an instrument of the industry’s competitiveness. Is your organisation making its voice heard in this process?
This initiative is part of a bigger move under REFIT
‘REFIT’ is the Regulatory Fitness and Performance programme: it is meant to ensure that existing legislation is ‘fit for purpose’. Its objective is to identify inconsistencies, contradictions, gaps or overlaps, and to solve them.
The Commission has new leaders who have a new agenda focused on jobs and growth. To help bring this about, they are doing things very differently. This year they are performing a fitness check up on Europe’s chemicals legislation. In 2015 the Commission will look at the whole body of EU chemicals legislation, and not only REACH.
In 2013 it conducted a review of REACH which concluded that REACH needed to be better implemented and to be less of a burden on the industry, particularly on SMEs. ECHA has already been working on reducing fees and supporting SMEs more, by simplifying the authorisation process.
What will it look like concretely?
- A study on the fitness of the risk management of chemicals: this study will mainly look whether the CLP regulation is implemented properly, and how the various laws at EU and national levels interact with each other.
- A study on the cost of the chemicals legislation: the results of the survey that closed this week will of course be part of this study, which will look to estimate the European industry’s losses each year due to the regulatory burdens generated by the chemicals legislation.
- A study on the benefits of the chemicals legislation: of course the costs will need to be weighted against the benefits this legislation brings, in terms of health, environmental protection and support to growth and competitiveness.
In parallel, the Commission is also conducting an evaluation of existing Health and Safety legislation. In particular, it will look at how health and safety can be better articulated within the chemicals legislation. The overlap between the two regimes is cumbersome and confusing for companies, and can require contradictory measures to be implemented at the workplace.
Based on all this, the Commission will have an overview of the concrete costs and benefits of EU chemicals legislation. The Commission plans to report in 2016 and recommend what needs to be done.
From there, it expects to be able to make policy proposals to adapt the legislation and make it more efficient, and more clear, in short, more fit for the 21st century.
Industry participation will be key
The Commission needs to know what impact chemical law is having. And, it can only do that if companies take the time from their busy schedules to let the Commission know what is happening. Silence is not an option. This will be your chance to directly tell the Commission where there are areas for improvement: don’t miss it.
European legislation is littered with too many examples of laws drafted in a vacuum, starved of the feedback from hard working men and women who know best what day-to-day impact European laws have on their lives. If companies do not speak up, bad decisions may be made.
See our briefing: “2015 A new beginning for EU Chemicals legislation?”
Aaron McLoughlin and Lucie L’Hopital
March 13, 2015
When Jean-Claude Juncker took office last year as President of the European Commission he claimed that Europe had a problem – it was chronically under-investing in its critical infrastructure. The long lag in economic growth following the financial crisis and the fiscal pressure felt by most European countries since have contributed to an investment gap of up to €370 Bn below Europe’s current potential – compounding the economic malaise of the continent and reducing, in turn, Europe’s foundation for economic growth in the future.
Luckily however, Juncker didn’t just identify the problem but made finding a solution to it the headline priority of his first year in office. Enter the EU Investment Plan (#InvestEU for you Twitter addicts, and better known as the ‘Juncker Plan’) which proposed to mobilize €315 Bn in investment finance over three years along with a range of initiatives to improve the general investment environment in Europe. The centerpiece of the Plan was the creation of the European Fund for Strategic Investment (the EFSI) which would work within the European Investment Bank to leverage and direct the seed capital for the €315 Bn target towards the most efficient projects Europe has to offer.
We might then all have a cause to celebrate this week, as EU Finance Ministers reached a quick agreement on the structuring legislation for the EFSI yesterday. But before anyone uncorks the champagne, we should take stock of the obstacles the Juncker Plan still faces – as the road between yesterday’s agreement and filling Europe’s yawning investment gap is a very long one indeed.
Challenges Ahead for the Juncker Investment Fund
It is firstly worth noting that the political process to establish the EFSI Investment Fund is not actually complete. European Member States, having now reached an agreement, will now have to negotiate with the European Parliament on a common position before EFSI can enter European law – something which needs to happen before the summer break (this is, by all means, an extremely tight timeline for the European legislative process).
The bigger challenges, however, might lie outside of the political process, as it’s a very poorly kept secret that the European money mobilized for the Fund is nowheres close to its €315 Bn target – it’s actually just €21 Bn.
All the rest has to come from leverage and co-investment, which can’t be done by legislative decree.
The first step will be for the EIB to leverage the €21 Bn three times to €63 Bn. This is, of course, very achievable for an institution with the expertise and creditworthiness of the EIB.
The trickier bit is co-investment. In short, the remaining funds (fully €252 Bn) will have to come from public and private investors who decide to invest alongside the EIB in specific projects supported by EFSI (a process that will look something akin to the graphic below).
To give you an idea of the scale of the challenge, France and Italy, Europe’s second and fourth largest economies respectively, just this week committed to co-investing €8 Bn each in EFSI projects undertaken in their countries. That still leaves another €236 Bn of funds entirely unidentified at this stage.
What about the private sector?
It’s clear enough to everyone involved that the private sector is going to have to step up and take advantage of historically low interest rates by investing more in infrastructure. But how can we convince them to actually do that in time?
The answer to this is not so much in the Fund itself, but the broader Plan. You didn’t forget that the Plan was bigger than just the Fund, did you? Crucially, it is.
The ‘Juncker Plan’ includes a range of initiatives meant to substantially improve the environment for infrastructure and other investment in Europe. This includes creating a European Infrastructure Pipeline and Infrastructure Advisory Hub, both meant to enhance the transparency and investability of infrastructure as an asset class for large institutional investors (think pension funds and insurers).
Initiatives like the infrastructure pipeline are crucial innovations as one of the biggest roadblocks for private sector investment in infrastructure has been the lack of deal-flow and past performance data in many countries. This is mostly the case because infrastructure is traditionally seen as a public good with no steady record of private sector involvement in funding its creation. A European-level pipeline of identified projects would help investors plan their investment allocations over time and give them more information to consider increasing their exposure to infrastructure in general.
This maybe sounds easier than it will actually be. In practice, private investors often plan their investment allocations years in advance and have to balance those decisions within a diversified strategy that relies on carefully made decisions about risk appetite and the financial instruments used for investment.
In this context, it’s important that public sector officials develop a strong understanding of how private investors make their decisions and what they need in order to co-invest in EFSI-type projects. The skepticism demonstrated by some EU countries over the infrastructure pipeline (now made optional by the Council’s agreement for countries to participate in) is an example of just such a disconnect that could risk the Plan’s ability to attract private interest.
Overall however, the Juncker Plan has been proposed by the Commission and initiated into the European legislative process in record time. The need for such an initiative is clear, and this has been reflected in the high priority attached to it by almost all Member States and political groups in the EU. The quick process of establishment though, highlights the need to make sure we get things right the first time. Recognizing the role the private sector will have to play in this and considering how best to ensure that this actually happens is therefore perhaps as urgent as the Plan itself.
March 11, 2015
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