EUROPEAN THINK-TANK REVIEW – XXXVIII. (November 2014)

Written by | Friday, November 28th, 2014
European Values

Rebooting EU Foreign Policy
Nick Witney, Mark Leonard, Francois Godement, Daniel Levy, Kadri Liik and Vessela Tcherneva (European Council on Foreign Relations)

Since the adoption of the European Security Strategy in 2003, the world has changed significantly. The dominion of the West has ended and the transfer of influence to the East and South seems to be continuing. Similarly, the global influence of the Union itself is fading and the journey towards its renewal (or rather towards its creation) is relatively long. At this point, the European Union has no constant and meaningful foreign policy which would reflect the needs of the contemporary world. For several years, the basis of the EU foreign policy has been formed by phrases and terms such as “neighbourhood policy”, “strategic partnership” and “encompassing attitude”. Frederica Mogherini, the new High Representative of the European Union for Foreign Affairs and Security Policy, has an important task and a great challenge before her. She has to bring back meaning and the right direction to the EU.

The European neighbourhood policy itself is very important for the Union in the sense of our self-definition as a regional power. However, in the context of the contemporary globalised world, this strategy is insufficient. If we really want to become one of the global superpowers, it is essential that we are interested in what is happening outside: that is beyond the borders of our neighbours. Another type of policy, so highly acclaimed by Brussels, fails here: the policy of strategic partnership. It has not even been properly defined – who is this strategic partner? Surely, it cannot be Russia, for example, who seems to want to foment conflicts and unrest along its borders, which is the exact opposite of the Union’s efforts.

Among Mogherini’s main tasks, there is mainly the definition of clear and mutual challenges which the EU foreign policy faces. Furthermore, the EU should commence a certain form of intervention in one of the problematic areas in order to demonstrate its will and interest in international events as well as it wants to be their part. Last but not least, it is necessary to redefine the relationship between the Union’s institutions and Member States. A good start would be the creation of informal work groups of Ministers of Foreign Affairs which would describe the key issues and provide a draft of common proceedings towards their solution. The European Union needs to think about its partners and other superpowers in a strategic manner and replace the existing delusion with realistic thinking.
(The study can be downloaded here:http://www.ecfr.eu/publications/summary/rebooting_eu_foreign_policy319)


How do Member States Handle Contributions to the EU Budget in their National Budgets?

Jorgen Mortensen, Jorge Núñez Ferrer and Federico Infelise (Centre for European Policy Studies)

Discussions about the need of a fundamental reform of the EU’s system of resources are being voiced from many directions. The correction mechanisms stem from imbalances both in the choice of means and in the allocation of years’ expenditures: due to this, the system has become complicated, unclear and distorted. It is a widely accepted opinion that the transformation of the existing state into a system based on taxes could liberate the EU’s own resources from struggles over budget balances while also ensuring better transparency and responsibility in the EU budget area. The suggestions for a change can be divided into two groups. While one is supporting the change of the correction mechanisms, the other one focuses on new tax instruments.

At the present time, more than 70 percent of the EU income comes from the contributions that are based on the estimated gross national income (GNI) of the Member States, who consider these transfers as expenditures in their budgets. Nevertheless, there are various ways in which the contributions to the Union’s budget and, vice versa, incomes from the Union’s budget to are national budget are recorded. The discussion over the own resources is closely connected to the wider debate on the future of the European integration, representing the struggle between two different visions: federal system and intergovernmental approach.

Although a contribution based on the GNI does not represent the entire income, the original arguments for the existence of own resources remain valid. This concerns predominantly the new resources such as the income from VAT, financial transactions tax and emission allowance trading tax. Nevertheless, since there are valid arguments for including new taxes and other types of income among the EU’s own resources as a partial replacement of the contribution based on the GNI, this paper reaches the conclusion that the contribution of tax sources needs to be considered in regard to the existing significant obstacles.

The manipulation with the contributions to the European Union budget needs to be fully harmonised in the sense of ensuring that all Member States could record the contribution as a governmental income, not as an expenditure. In contrast, the local rules and processes for ascribing financial means and for handling financial flows should still be directed by the intrastate institutionalised systems for the financing of local governments’ expenditures. The decision on the classification of incomes from the EU budget can therefore be left up to the Member States. In contrast to the urgent need for the harmonisation of the member contributions to the EU budget, the argument for harmonisation of the division of the incomes from the EU will be of little use in the near future.
(The study can be downloaded here:http://www.ceps.eu/book/how-do-member-states-handle-contributions-eu-budget-their-national-budgets)


The EU and Its Partners on Development: How Strategic on the Ground?
Clare Castillejo and Christine Hackenesch (European Strategic Partnerships Observatory)

The amount of money designated for development aid reaches hundreds of millions of euros. Still, these mechanisms and mainly the cooperation with other actors in the field of development aid are not very well known. Nepal and Mozambique serve as two study cases for two very different ways of accepting development aid both from the EU and from other global actors.

Nepal is a major benefactor of aid provided by China and India: mainly because of its strategic geographic position. China is the biggest investor in the country, although historically it was India who had the major influence on Nepal. In contrast to the government in Beijing, India shares some information about the scope and purpose of the provided aid with other players. European involvement in the development of Nepal is, to a certain extent, coordinated with the India’s own development strategy in its northern neighbor. The same does not apply to the relationship between the EU and China since the latter has steadfastly refused sharing information about its development aid due to the European criticism of the situation in Tibet.

Due to its vast natural resources, Mozambique naturally draws the attention of both local investors, such as the Republic of South Africa, and the aforementioned China, along with India and Brazil. The EU is not an exception: in the 2008-2013 period, Europe invested over 700 million of euros in development aid in Mozambique. While the cooperation of different aid donors in Mozambique occurs on the level of bilateral negotiations, it is nowhere near strategic planning. The EU’s attempts to deepen tripartite dialogues with individual players have not yielded good results because most of them have preferred not to disclose their data and information on their development aid.

A possible way towards a more efficient cooperation between individual actors could lead through the EU Member States: the experience shows that national governments are far more successful in the field of development aid coordination. This is obvious in the case of the UK and China in Nepal, and in the case of a fruitful cooperation between Germany and Italy, as well as the UK with Brazil, in Mozambique.
(The study can be downloaded here:http://www.egmontinstitute.be/wp-content/uploads/2014/10/PB13.pdf)

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