2015 Latvian Presidency – Will Latvia secure a détente with Russia?
As part of the Government Gazette’s extended feature on the 2015 Latvian Presidency of the Council of the EU, Karolina Borońska-Hryniewiecka and Kinga Dudzińska analyse the significance of the Latvian Presidency for the EU’s relations with Russia.
Ukraine (Photograph: Streetwrk.com, Flickr)
Latvia has taken over the rotating presidency of the EU Council at a turbulent time, marked by intensified terrorist threats and disturbances to territorial integrity on the continent. The exacerbating Ukrainian conflict and aggressive Russian policy in the region pose a direct threat to the stability of the Eastern flank of the EU and will be a test for Latvia’s pragmatic approach towards Russia. In the current geopolitical circumstances, the aim of the Latvian foreign minister Edgars Rinkēvičs, expressed at the beginning of the presidency, to overcome stereotypes and convince Moscow that the Latvian stance is “in no way anti-Russian” might be difficult to realise.
As a country with strong economic ties to Russia and with 25% of its population of Russian origin, Latvia has to date followed the most pragmatic policy towards Moscow of all three Baltic states. Moscow remains one of Riga’s most important trading partners, accounting for about 10% of Latvian exports and imports. Russian monetary capital is still significant in the real estate and tourism sectors and Latvia is extensively dependent on energy supplies from Russia.
Yet at the same time, Latvia has been a member of the Economic and Monetary Union since 2014, views the EU as its most trustworthy partner and, despite its small size, would like to see itself firmly at the EU’s core. As regards foreign policy, before taking over the EU presidency, Riga stated it would be impartial in the implementation of EU priorities, but Latvia was expected to lean towards the neutralisation in its relations with Russia. In this uneasy context, it would be prudent for Latvia to keep a low-profile on the Eastern front while being seen to speak with the EU’s voice.
The present EU institutional context actually makes this task easier for Latvia by posing certain constraints to the agenda-setting role of the presidency. First, the Treaty of Lisbon formally weakened the role of the Presidency in the area of foreign policy to the benefit of the EU High Representative for Foreign and Security Policy. Secondly, the mechanism of the so-called ‘trio presidency’ further disciplines Member States against pushing particular national interests. In addition, the increased political ambitions of the new leadership of the EU in the form of Federica Mogherini and Donald Tusk further overshadows the role of the Latvian Presidency in the Russian debate.
LATVIA and EU POLICY TOWARDS RUSSIA
Latvian policy towards Russia hitherto has been ambivalent. Until now Latvia, as well as other Baltic States, has maintained a hard position in the wake of the Ukrainian conflict and has called for the increased presence of NATO forces in the region. At the same time however, just a few weeks ago Latvia admitted ago that it is not against the reduction of EU sanctions towards Russia. On January 12th in Moscow, Minister of Foreign Affairs of Latvia Edgars Rinkēvičs met with Sergey Lavrov, Minister of Foreign Affairs of the Russian Federation, and affirmed that the EU is interested in normalising relations with Russia but the annexation of Crimea cannot be recognised.
When it comes to its own initiatives on the Russian question, Riga has applied a “wait-and-see” policy and has taken a reactive position towards EU leadership by following the contours of the EU debate and by adhering to the decisions taken by European powers. Latvian presidential activity has remained ‘low key’ and limited to that of moderator between the hawkish, and the conciliatory tendencies in EU policy towards Russia. A change in this course should not be expected in the near future.
Yet Latvia’s approach will be tested at the Eastern Partnership (EaP) summit planned for May 2015 in Riga, during which Donald Tusk can count on the fact that Latvia will put pressure on other countries to tighten their policy towards Russia. However, the Latvian foreign minister has already promised a new orientation for the EaP, in order not to provide grounds for further antagonism with Russia. In the meantime, Mogherini expressed the hope that Latvia, at the helm of the EU, could help in reaching a détente with Russia.
(Photgraph: Streetwrk.com, Flickr)
Despite the Baltic States’ persistent efforts to increase security on the eastern flank of NATO, Latvia may also seek to cool EU action towards Moscow in the face of potential disagreement within the presidency trio, as Italy also opposes stricter sanctions on Russia. For Latvia this is especially important given that Russia’s trade embargo on various products in response to the EU sanctions could cost Latvia a contraction of 0.7% of its GDP. At the moment, securing a consensus in the Eastern policy could be difficult since unity among EU Member States appears weak, evidenced in the latest statements by Greek and Hungarian leaders.
Moreover, the effectiveness of the existing sanctions has been undermined as their main political objective has not been achieved. While economically the Russian market has been hit hard, sanctions did not prevent Moscow’s actions in Ukraine. Meanwhile, the events in Mariupol and Donetsk represent a severe setback in the negotiations with the EU which urgently needs solidarity and consistency if it is to make progress in this conflict.
Karolina Borońska-Hryniewiecka is an analyst at the Polish Institute of International Affairs in the Eastern (EU Programme) and an Assistant Professor at the Institute of Political Science of the University of Wrocław. Kinga Dudzińska is an analyst at the Polish Institute of International Affairs in the Eastern and South Eastern Europe Programme.
TTIP – the trade deal at the heart of Europe’s democratic deficit
The February-March issue of the Government Gazette features a balanced and evidence-based overview of the Transatlantic Trade and Investment Partnership (TTIP) negotiations, with opinion and analysis from both sides of the debate. Here, Polly Jones from Global Justice Now argues that TTIP holds negligible economic benefit for EU citizens and could lead to further privatisation of public services across Europe from outside existing democratic political channels.
The eighth round of negotiations on the Transatlantic Trade and Investment Partnership (TTIP) concluded at the start of February 2015. There is little sign of progress, despite the ambition of political leaders including Barack Obama and David Cameron, who heralded the trade talks as setting standards for the 21st century and establishing a blueprint for future trade.
TTIP is to be a key tool in improving growth and increasing jobs in Europe and the USA, at a time when the two largest economies are struggling to maintain, let alone increase, their GDP. But the case for TTIP is weakened by the lack of credible evidence to substantiate the claims of growth and jobs gains. The European Commission’s own studies suggest up to 1.3 million European workers could lose their jobs, which is one of the reasons that UK trade unions are unanimous in their opposition to TTIP. The growth claims are based on clumsy models which even in the best case scenario, predict that each person will only benefit by £2 per week and not until 2027.
© Jess Hurd
However, there are three ways TTIP aims to boost growth. The smallest and least controversial part of the deal is to reduce tariffs between the EU and USA. By reducing costs for exporters there could be new opportunities to trade and, if the reductions are passed on to consumers, lower prices for goods and services at the end.
However 80 per cent of the deal is concerned with minimising non-tariff barriers. These are the rules and regulations which goods and services must meet in order to be traded between the EU and USA. The idea is to find a common standard between the two trading blocks to make bilateral trade simpler.
The example most commonly used is of the regulations surrounding seat belts. Currently the EU and US have different standards, which are arguably no less safe but because they are different they generate unnecessary red tape and delays as standards are double checked and seat belts adjusted. In this sense, the different regulations are a barrier to trade between EU and US exporters.
Much of the controversy surrounding TTIP is about its impact on a wide range of standards very different from seat belt safety. For example, the EU applies the precautionary principle whereby something must be proven to be safe to be used in Europe. In the USA, the test is the opposite, something must be proven to do harm if it is to be banned. At the start of TTIP negotiations, 60 US agricultural export and food marketing organisations asked the US trade representative for US food standards to be secured in Europe through TTIP, instead of the EU’s more stringent precautionary principle. Food and farming groups in the EU and US are deeply concerned that TTIP is a backdoor to lower standards which are not in the best interests of consumers, farmers, animals or the environment.
There are many areas of everyday life which could be affected by a race to the bottom in standards between the two economies, including labour standards, health and safety rules, public procurement, digital rights and regulation of financial services. In most cases the EU sets higher standards, which could only mean a levelling down.
There is considerable concern about the impact of TTIP on public services. For the first time in a European trade deal, governments must explicitly exclude their public services if they do not want them to be liberalised by the deal. This is difficult because there is not a clear definition of what constitutes a public service. There are many services, further education in the UK for one, which are perceived as a public service but do not fit the criteria. Furthermore, as waves of austerity measures have swept Europe, many governments have chosen to cut public services and open them up to greater liberalisation.
In the same vein, these governments are not choosing to protect public services from the impact of TTIP, even though they could. According to YouGov, more than two thirds of people in the UK do not want public services run by private companies, which is why this is so controversial.
The third arm of TTIP is a set of new protections for investors, known as Investor State Dispute Settlement (ISDS). These rules have increasingly been included in bilateral trade agreements to give companies an extrajudicial avenue, outside of national law, to pursue damages against a government as a result of government decisions, but never before on the scale of TTIP. The tobacco giant, Philip Morris, used these rules to sue the Australian government for the likely reduction in its profits as a result of the plain packaging introduced on tobacco products. Veolia sued the Egyptian government for raising the minimum wage. Energy companies sued Argentina for freezing energy prices for consumers. A major concern in the UK is that ISDS could make the cost of renationalising public services prohibitive, thereby locking in privatisation.
Molly Scott Cato MEP addressing TTIP negotiations in Brussels, February 2015
© Jess Hurd
While it is true that the UK is already party to many investment rules of this nature with many countries and has not yet lost a case, the UK has not signed an investment treaty with the USA before. UKTI argues that “Americans are, in general, inclined to start litigation or to threaten it – probably more so than the British”. Given that the Department for Business Innovation and Skills’ own study also found that an “EU-US investment treaty that does contain ISDS is likely to have few or no benefits to the UK, while having meaningful economic and political costs”, it is hard to make a case for ISDS in TTIP. This is why 150 000 citizens across Europe participated in a consultation on the inclusion of ISDS in TTIP, with 97 per cent of them arguing it should be removed from the deal because it takes power from governments and hands it to corporations.
Negotiators claim that many of the concerns about the impact of TTIP are exaggerated. Yet without public scrutiny of the negotiating texts and the positions of national governments, this cannot be substantiated. Furthermore, elected representatives, from MEPs to MPs, will not be able to amend the deal but will only be able to vote to accept or reject it in its entirety once the negotiations are complete. There is a democratic deficit, with European citizens being asked to simply trust that the unelected negotiators strike a ‘good deal’, whatever that signifies.
It is possible that TTIP may never get agreed beyond a deal on harmonised seat belt regulation. But its impact outside of the negotiations has been much greater. The scale of these bilateral trade negotiations has exposed the dysfunctionality of the multilateral trade system nominally governed through the World Trade Organisation. The absence of scrutiny by MPs during the negotiation process has renewed questions about the proper relationship between the European Parliament and national parliaments and the transparency of the negotiating process. The opposition to TTIP has also brought more than a million citizens across Europe together. At the very least we are scrutinising European decision-making and engaging with our MEPs for the first time. Wider still, there are signs that the foundations of a European movement challenging neoliberal orthodoxy and austerity is being built.
Polly Jones is Head of Campaigns and Policy at Global Justice Now, a third sector organisation campaigning against social and economic inequalities around the world.
Greek elections: Syriza and the populist blame game
© European Union 2015 – European Parliament
The February-March issue of the Government Gazette offers an extended focus on the implications of the 2015 Greek elections and the eurozone debt crisis. Here, Takis S. Pappas assesses Syriza’s populist rhetoric and analyses the possible political machinations behind a Grexit.
In last month’s snap election, the Greek voters brought to power the populist Coalition of the Radical Left (known by its acronym, Syriza), a party led by the 41-year old Alexis Tsipras. However, as Syriza was unable to muster a parliamentary majority on its own, it opted to form a coalition government with the rightist populist and ultra nationalist Independent Greeks (ANEL), a party that was launched in February 2012 also on an anti-austerity platform.
ANEL party leader Panos Kammenos is a vocal champion of racist, homophobic and anti-Semitic views and has a penchant for conspiracy theories that verge on the absurd. This seemingly “unholy” alliance of Mr. Tsipras and Mr. Kammenos is the equivalent of a working relationship between say, Michael Foot and Nigel Farage in the UK, Jean-Luc Mélenchon and Nicolas Dupont-Aignan in France, or, at party level, Die Linke and the Pegida movement in Germany.
In the aftermath of the election, the new prime minister was quick to place his government between a rock and a hard place. First, he made clear that the government is not interested in an extension of the current bailout program, thereby setting Greece on a collision course with its foreign lenders that may eventually cause a Greek exit from the euro.
Second, Tsipras made pledges that are clearly undeliverable without extra money, including an increase of the minimum wage, the halting of privatisation plans and other reforms, the abolition of an unpopular property tax, and the promise of generous social welfare packages to low-income groups in society.
But, third, as he now has effectively brought his Government (and Greece) to the brink, Tsipras was also quick to identify those to be held responsible in case of a Grexit: Germany, which, according to the new Greek government, still owes Greece reparations for its invasion during World War II, the ECB, which recently stopped acting as a lender of last resort for Greece, the Greek banking system and, of course, the previous government for all its misdeeds.
Is it all irrational brinkmanship, then, or is there some logic to it? For it seems that the Greek prime minister, himself under considerable pressure from far-left internal opposition, may indeed welcome a Grexit and then engage in a blame game against the Germans, the ECB, the Greek bankers and the outgoing political classes for having betrayed the Greek people.
As opinion polls now show that over 70 percent of the Greek public supports an open confrontation with the Troika, Tsipras has tried to project himself and his party as the sole representatives of Greeks. As he put it in his first policy speech before the Greek Parliament on February 8th, “This government is just the voice of [our] people. In the honour, history, and civilization this people carries in its luggage, we can only be its own will … We are flesh from the people’s flesh, we come from within the pages of this people’s history [book], and for this reason we are going to serve it to the end”.
Greek Finance Minister, Yanis Varoufakis
Syriza is a populist party par excellence and as such, is guaranteed to antagonize the liberal political elites. It conceives of and refers to, Greek society as divided between the “pure,” “ethical” or blameless people, and the parasitical native political oligarchy which is firmly subservient to foreign interests. These two groups stand poles apart and there can be no reconciliation between them, or, as an earlier slogan of Syriza snapped, “It is either Us or Them.” Nor is there any need for compromise since the people as a natural majority are bound to finally win and impose their collective will on the political system. In fact, some believe that so strong will be the impact of the Syriza-led popular movement in Greece that it will soon sweep across the rest of southern Europe to the north until all “European people” finally regain sovereignty.
Will this government last? Well, that depends on whether the country can retain its position in the Eurozone. Staying in will give the new government a new lease of life but it will be forced to implement painful structural reforms under the eye of foreign lenders and against forceful internal party opposition.
Being compelled to leave the Eurozone, however, may actually offer the government a better chance of retaining power because, in that case, it would be able to mobilize a rainbow of political forces from both the left and the right, domestically and internationally, in a relentless blame game against all actors who could be held responsible for such a development.
For the time being, and as important decisions about the future of Greece are currently being taken in Athens, Brussels and the other major world capitals, Greece’s liberal democracy is in the balance. Since the crisis began in 2009, the Greek people have taken part in four elections, put six different prime ministers to the test of office and experimented with government coalition partners of most political hues – from the nationalist and populist ANEL, to the ultra conservative Popular Orthodox Rally (LAOS) to the centre-right New Democracy and the centre-left PASOK, to the moderate leftist Democratic Left, and now the radical leftist Syriza. The only other parties that have not been given a chance to govern in crisis-ridden Greece are the Communist Party (KKE) and the neo-Nazi Golden Dawn. This naturally raises the question of what may be the next development in Greece if even Syriza, in its strange partnership with ANEL, may not succeed in solving the Greek crisis.
Takis S. Pappas is the author of Populism and Crisis Politics in Greece and co-editor of the forthcoming book ‘European Populism in the Shadow of the Great Recession’.