European Union

At the G7 summit on Tuesday (24 August), EU leaders urged US President Joe Biden to continue securing Kabul airport until operations to evacuate vulnerable Afghans are completed past the 31 August deadline, apparently without success.

The Lancet study found that the number of adults living with hypertension has doubled worldwide over the past 30 years to more than 1.2 billion.

Ukraine celebrated 30 years of independence on Tuesday (24 August) with a military parade and massive festivities in its capital Kyiv, vowing to reclaim territories annexed by Russia, in order to join NATO and the EU and escape Moscow's stranglehold.

A push by some EU lawmakers to ban targeted ads has entered the debate around regulation zooming in on Big Tech, with several business representatives voicing their concerns.

The eurozone’s sovereign debt crisis proved to be one of the most challenging tasks European policy makers had to face. Political-ideological, democratic, institutional and other constraints prevented the euro area governments from putting an abrupt end to it simply by increasing integration into the fiscal area. Instead, policy makers decided to “borrow” a crisis management strategy from the International Monetary Fund (IMF) and created an additional regional financial firepower – the European Stability Mechanism (ESM). This strategy could be called a “Crisis Management Mechanism” and was based on loans for recipient euro area countries under strict conditionality. The functioning of this Mechanism was underpinned by roles taken by the European Central Bank (ECB) and the European Court of Justice (ECJ).

Independent institutions of the EU assumed different roles during the sovereign debt crisis, but how to determine them? Were the ECJ and the ECB proactive leaders, or just agents of the eurozone governments? Or maybe the ECB and the ECJ merely rubber-stamped the strategy decided by the governments or acted under the business-as-usual mode? The two most important independent variables, which determined the strategic decisions taken by independent institutions, were the pressure in the sovereign debt markets via contagion effects and the pressure from the Crisis Management Mechanism developed by the governments of the member states.

There is a general consensus that the ECB was an indispensable player during the crisis. These explanations cover only part of the whole story and there are still ample unanswered questions, e.g.: if we think of the ECB as being the most important player, why did it hesitate to start a sovereign bond buying programme (QE) at the early stages of the crisis, or why were stricter ECB’s Emergency Liquidity Assistance (ELA) collateral requirements applied to programme countries?

The enhancements of the eurozone’s financial architecture during the sovereign debt crisis was put under the ECJ’s scrutiny. According to Wilkinson, or Scicluna the creation of the ESM and the ECB’s Outright Monetary Transactions (OMT) programme was not legal under EU treaties. Other authors argued that the positive ECJ’s rulings transformed, or even created a new European Economic Constitutional constellation. However, it is difficult to agree that market discipline was replaced by bureaucratic discipline in the eurozone. By introducing the Crisis Management Mechanism, the European policy makers have not enacted, but evaded the real transformation of the European Economic Constitution. The main economic policy principles enshrined in the Maastricht Treaty and the role of the market discipline were largely preserved without deeper integration into the fiscal area. Political and market pressures surely played a role, albeit implicitly, as regards the ECJ and the ECB during the sovereign debt crisis.

Accounts based on the two classical integration theories: liberal intergovernmentalism and neofunctionalism, could well explain some events and decisions taken during the sovereign debt crisis, but no one can provide a unified framework that could be used in explaining the roles taken by the independent institutions. According to the new intergovernmentalism, these institutions acted as de novo bodies (ECB) with relatively simple and issue-specific mandates. These claims could be true in some episodes but fails to explain why the ECB took the lead when its President M. Draghi pledged to do “whatever it takes” to save the euro. This intervention was the turning point in the crisis management, even though it was later significantly diluted by additional conditionality in line with the Crisis Management Mechanism. Therefore, we should be careful about exaggerating the role of independent institutions. In most cases during the sovereign debt crisis, the independent institutions hesitated to act and waited for implicit guidance from the governments. A unified approach could provide a better framework for evaluating decisions taken by the ECB and the ECJ during the sovereign debt crisis.

Based on the suggested approach (Table 1), the ECB initially assumed a pro-active leadership role, so called “whatever it takes” moment. On the other hand, later, the ECB become the agent of the principal, constrained by the decisions taken at the political level. The agent of the principal role was also evident, when the ECJ took a decision on the legality of the ESM. Furthermore, the ECB assumed the role of rubber-stamper when it decided not to object to emergency liquidity provision to the Greek banks, and the ECJ, paradoxically, acted under the business as usual mode when it decided on the legality of the OMT.

 

1. Roles assumed by independent institutions during the sovereign debt crisis and main determinants

 

This new approach could prove to be very useful in analyzing the European response to the COVID-19 crisis. Due to the significantly higher costs in the current episode, the Crisis Management Mechanism might be recalibrated, putting even more pressure on the independent institutions to act. This broad framework, with some adaptations could also be used for the analysis of crisis management implemented by the IMF and the roles assumed by independent institutions in other regions with potential spillover effects. In addition, the questions on how and why the Crisis Management Mechanism was developed could be a subject for further research with a view to better understanding its functioning and its effects on independent institutions moving ahead.

 

This blog post draws on JCMS article, “Independence of the ECB and the ECJ during the Sovereign Debt Crisis: From Active Leadership to Rubber-Stamping?”

 

 

Marijus Bernatavicius, PhD Candidate and Teaching Assistant from 2016, at Vilnius University, Institute of International Relations and Political Science. His research interests are in the areas of political economy and European integration.

Academic profile: http://www.tspmi.vu.lt/en/zmogus/marijus-bernatavicius/

Twitter: @TSPMI

 

 

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Facebook's and Twitter's contradicting approaches vis-à-vis the Taliban social media accounts are a perfect illustration of the content moderation dilemma online platforms are facing.

MEPs will be dealing with many important issues after the summer break, including climate action, public health and digital services.

Source : © European Union, 2021 - EP

MEPs will be dealing with many important issues after the summer break, including climate action, public health and digital services.

Source : © European Union, 2021 - EP

The record-shattering rainfall that caused deadly flooding across Germany and Belgium in July was made up to nine times more likely by the climate crisis, according to research. EURACTIV's media partner, The Guardian, reports.

Europe will no longer need Russian gas in 25 years' time, German chancellor Angela Merkel said at a meeting with Ukraine's president, Vladimir Zelensky, last weekend. "Europe will need to achieve climatic neutrality step by step by 2050," Merkel said, as quoted by Russian ned agency Tass. "It means that in 25 year[s] no gas, or very small volumes of gas, will be supplied to Europe from Russia," she added.

Climate change has made extreme rainfall events of the kind that sent lethal torrents of water hurtling through parts of Germany and Belgium last month at least 20 percent more likely to happen in the region, scientists said Tuesday, Reuters reports. "We will definitely get more of this in a warming climate," said the group's co-leader Friederike Otto, a climate scientist at the University of Oxford.

Tunisia's president Kais Saied has extended the suspension of the nation's parliament until further notice, his office said in a statement, Deutsche Welle reports. The president also extended the suspension of the immunity of lawmakers. Saied had dismissed prime minister Hichem Mechichi and suspended the legislature last month, saying his intervention was needed to save Tunisia from collapse following mass protests over the government's handling of the coronavirus outbreak.

The International Monetary Fund (IMF) has allocated Belarus roughly €850m in reserve funds as part of the body's unprecedented program to support the global economy as it emerges from the coronavirus pandemic, the Moscow Times reports. The payout comes despite last-ditch attempts by opponents of the embattled regime to block the transaction, fearing it could embolden the strongman president Alexander Lukashenko and further escalate the wave of repression in Belarus.

The government of Cyprus said it would revoke the passports from Turkish Cypriot officials in the northern part of the island, Ekathimerini writes. A number of Turkish Cypriot officials are known to hold or held passports of the Republic of Cyprus. "With their acts and deeds they undermine the sovereignty, independence, territorial integrity and security of the Republic of Cyprus, in violation of the Constitution," government spokesman Marios Pelekanos said.

US president Joe Biden is likely to come under pressure to extend the stay of US troops to be able to continue evacuations, but it is unlikely that Biden will budge.

Poland has become the latest European country to start building an anti-refugee wall, with a new fence on its border with Belarus.

Last year, 1,200 Afghans were deported from the EU. Thousands of them left voluntarily. Clearly 2021 is not 2015, despite what some governments might say.

Sustainability goals in the agrifood sector are achievable but risk being undermined by weak trade policies, a new assessment by the European Commission’s in-house scientists has found.

Business activity in the euro zone grew strongly this month, only dipping from July's two-decade high monthly pace, as a rapid COVID-19 vaccination drive allowed more firms to reopen and customers to venture out, a survey showed.

Igor Sechin, chief of oil giant Rosneft, has told the Kremlin that carbon border taxes like the European Union's could inflict far greater damage to Russia's economy than sanctions, the Kommersant newspaper reported on Monday (23 August).