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    What Led to Europe’s Vaccine Disaster?

    In late December 2020, it was announced that Switzerland would start its COVID-19 vaccination campaign. Eligible persons were asked to make an appointment. Those of a particular age with certain health risks — such as diabetes, high blood pressure and allergies — were encouraged to register.

    Given my age and the fact that I suffer from pollen allergies in the spring, I filled out an online form and was informed I was eligible for a jab. So, I went through to the registration page only to be told that there were no appointments available. Two months have since passed and there are still no openings. The way things are going, I probably won’t get vaccinated before the end of summer — or perhaps by fall or Christmas.

    “Unacceptably Slow”

    Switzerland is not alone. The pace of vaccination is proceeding at a snail’s pace throughout the European Union. Just weeks ago, Hans Kluge, the World Health Organization’s director for Europe, vented his frustration, charging that the vaccine rollout in Europe was “unacceptably slow.” Germany is a key example. By the first week of April, 13% of the population had received the first dose of a COVID-19 vaccine and 5.6% had received the second dose. In comparison, around the same time, more than a third of the US adult population had received at least one dose and 20% were fully vaccinated. In the UK, which is no longer a member of the European Union, the vaccination rate was even higher.

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    In the face of heavy criticism for its alleged mishandling of the COVID-19 pandemic, Thierry Breton, the EU’s internal market commissioner, speaking on behalf of the union, went on the offensive. On French television, he defended the European Commission’s vaccine procurement strategy and affirmed that Europe had the capacity to deliver 300 to 350 million doses by the end of June. He also claimed that Europe would be able to attain “collective immunity” by July 14, France’s national day.  

    France’s premier conservative daily Le Figaro was not the least impressed. In a biting response, it characterized the EU’s vaccine procurement strategy as nothing short of a “fiasco” and frontally attacked Breton and, with him, the European Commission. Not only had Breton refused to admit “the slightest error,” continuing instead to defend his vaccine policy, but he also took French citizens for fools. Clearly, Breton’s statements had hit a raw nerve, at least in France.

    Why Is Europe Behind?

    There are a number of reasons why the European Union is trailing the US and the UK. One of the most important ones is the union itself. Its sheer size allowed the EU initially to negotiate lower prices for vaccines by buying in bulk for all 27 member states. Reducing costs, however, came at a heavy price in the form of the slow delivery of the vaccines. In addition, the European Commission had to get the green light from EU member states before it could arrive at a decision over which vaccines to purchase. As a result, the EU “ordered too few vaccines too late,” wrote Guntram Wolff, director of the Bruegel think tank in Brussels. Hesitation on the part of member states, given “the novelty of the technological approach,” led to delays in authorizing the leading vaccines, including the Pfizer/BioNTech vaccine that had been developed in Germany.   

    According to Le Canard Enchainé, a French weekly known for its investigative journalism, the UK ordered the Pfizer/BioNTech vaccine in late July 2020; the EU did so in November. The same held true for Moderna. The EU was so late that by mid-November, Stephane Bancel, the CEO of Moderna, warned that if the EU continued “dragging out negotiations to buy its promising Covid-19 vaccine,” deliveries would “slow down” since nations that had already signed agreements would get priority.

    Add to that what Spain’s premier daily El Pais has called the “AstraZeneca fiasco.” The Oxford-AstraZeneca vaccine was supposed “to power the bulk of the continent’s inoculation campaign,” according to El Pais. Instead, holdups and delays in the distribution of the vaccine, together with pauses in the vaccination campaign following reports about suspected side-effects from the Oxford-AstraZeneca jab — rare cases of blood clots — seriously jeopardized the EU’s strategy. In Germany, at the end of March, it was decided that AstraZeneca would no longer be administered to people under the age of 60. Denmark has ceased administering the vaccine completely.

    By now, the fallout of a strategy that was more concerned with saving money than potentially saving lives is obvious to all — as is the damage done to the image of the European Union. As Mark Leonard, the director of the European Council on Foreign Relations, recently put it, the EU’s vaccine crisis “has been catastrophic for the reputation of the European Union.” Ironically enough, this is the very same Leonard who, in late December, celebrated “the return of faith in government.” The pandemic, he stated, had “reminded everyone just how valuable competent public administration can be.” Three months later, his optimism — “five cheers for 2021,” to use his words — had turned into gloom and doom. And for good reason, given the unfolding of the full extent of the vaccination disaster.

    The results of a recent survey are stark. In early March, around 40% of respondents in France, Germany and Italy thought the pandemic had weakened the “case for the EU.” When asked whether the EU had helped their country to confront the pandemic, a third of respondents in France and Italy and more than half in Germany answered “no.” At the same time, however, member states have not fared much better. In response to the question of whether their country was taking the right measures to combat COVID-19, almost 60% of French respondents, nearly half of Germans and more than 40% of Italians answered in the negative.

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    This is the crux of the matter. As time has passed and vaccines have started to be delivered, it has become increasingly difficult for individual countries to blame the European Union for their own failures and shortcomings in securing and delivering the vaccine to their populations — or for the reluctance of citizens to get vaccinated.

    In late March, the European Centre for Disease Prevention and Control published a report on the vaccine rollout in the EU. By far, the most important challenge facing most member states was the limited supply of vaccines and frequent changes in the timing of deliveries from suppliers, “which can be unpredictable and can significantly affect the planning and efficiency of the rollout.” Other challenges included problems with logistics, limited personnel to administer the vaccines, shortage of equipment such as syringes and special needles, and issues related to communication such as information about the vaccine and scheduling appointments.

    Is the EU Goal Realistic?

    Under the circumstances, the EU’s stated goal of having at least 70% of the population vaccinated by the summer appears to be an increasingly distant prospect. Or perhaps not: It depends on whether individual countries — particularly France, Germany, Italy and Spain — will get their act together and move to “warp speed.”

    Some countries appear to be prepared to do so. In Spain, health authorities expect a significant acceleration in the vaccination campaign over the coming weeks. There is growing confidence that the country will meet the 70% mark by the start of summer. Even in Germany, whose blundering performance during the past several weeks made international headlines, experts are optimistic that the country will reach the target.

    More often than not, the problem is not necessarily the supply of vaccines, but difficulties in getting target groups vaccinated. This is, at least in part, a result of communication infrastructure, which in some cases are far behind the technological frontier. Take the case of Switzerland, which is not a member of the EU. In late March, Geneva’s Le Temps alerted its readers that when it comes to the digitalization of its health system, Switzerland was in the “Middle Ages.” Instead of using the internet, Swiss health authorities sent faxes to communicate the number of new infections. When it comes to digitalization, the author noted, Switzerland, which prided itself as the world champion in innovation, was “full of fear” if not outright “recalcitrant” to adopt new technologies. The consequences were fatal not only with regard to dealing with the pandemic, but also with respect to the country’s international competitiveness.

    The situation has not been any different in Germany. Earlier this year, when the vaccination campaign got going, public authorities sought to inform the most vulnerable groups — those older than 80 — that they could get vaccinated. Yet they had no way of finding out who was in that age group. So, they guessed based on first names. Katharina, yes; Angelique, no. This is German efficiency in 2021. Or, as a leading German business magazine put it, if “your name is Fritz or Adolf, you will (perhaps) be vaccinated.” And this in Western Europe’s biggest economy.

    Better Preparation for Crises

    The COVID-19 pandemic has not only brutally exposed Europe’s unpreparedness to confront a major crisis, but it has also shown the parochial state of mind of significant parts of the European population.  Much has been written over the past year about American science skepticism and conspiracy theories, held partly responsible for the toll that COVID-19 has taken on the US population. Yet Europeans are hardly any better. Not only have parts of the European population eagerly adopted even the craziest conspiracy theories, such as QAnon, but they have also shown high levels of skepticism with respect to COVID-19 vaccines, despite scientific assurances of their efficacy and safety.

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    Again, take the case of Switzerland. In December 2020, only around 56% of the population indicated they would get vaccinated. The rest expressed great reservation, despite the fact that the survey stated that the vaccine was deemed safe and effective. In the meantime, as the pandemic has continued with no end in sight, there are indications that the mood has changed. In Germany, only two-thirds of respondents indicated they would get vaccinated when asked in June 2020. By the end of March this year, that number had increased to over 70%. These developments are encouraging. 

    Not only have most European countries finally managed to live up to the challenge, but their populations appear to have realized that COVID-19 is worse than the flu, that the pandemic poses a fundamental threat to life as we know it, and that the only way to get back to “normality is to get vaccinated — not only for oneself, but also for everybody else. In the old days, this was called “civic culture.” With the rise of populism in advanced liberal democracies, civic culture more often than not has gone out the window, replaced by a culture centered upon “me, me, me.”

    Yet the fact is that this pandemic is only the beginning. The next big challenge is confronting climate change. It is to be hoped that Europeans will be better prepared than they have while confronting the coronavirus.

    The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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    Failing to Protect the Independence of the European Commission

    I have always believed that the independence of members of the European Commission (EC) was a keystone of successful European integration. Commissioners are obliged by their oath of office to seek a European solution to problems, rather than just seek a balance between conflicting national interests. They have done so ever since 1958. This is why European integration has succeeded, while integration efforts on other continents have failed under the weight of national egoism.

    As the European Union grows, the independence of commissioners from national politics has become ever more important. Some believe the European Commission is too large. From an efficiency point of view, they have a point. But Ireland, among others, has insisted that despite this, each member state should have one of its nationals as a member of the commission at all times.

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    But if the one-commissioner-per-member-state rule is to be upheld as the EU enlarges, commissioners from all states — large and small — must demonstrate that they put European interest first and are not subject to the vagaries and passions of politics in their country of origin. In other words, European commissioners must be independent. All member states must be seen to respect this.

    This is why I am deeply troubled by the attitude taken by the Irish government, and then by President Ursula von der Leyen of the European Commission, to call for Phil Hogan to resign as EU trade commissioner. Both of them failed in their understanding of the European Union and of one of its vital interests — namely the visible independence of members of the European Commission from the politics of any EU state, large or small.

    I was genuinely shocked by what happened. Late in the evening of August 22, leaders of the Irish government called on Hogan to “consider his position.” That means to resign. They piled on the pressure thereafter, with a further statement on August 23 containing a political determination that he had broken the government’s quarantine rules to combat the spread of COVID-19 after returning to Ireland from Belgium. Hogan resigned on August 26. That was his decision and one he was entitled to make.

    Lessons From This Precedent

    But there are profound lessons to be learned by President von der Leyen — and by the European Commission as a whole — as to how and to whom commissioners should be held accountable, and a need to understand what this precedent means for the future political independence of commissioners from their home governments. Separately, there are also questions to be asked about the internal management of and the collegiality of the EC.

    I will set out my concerns here, drawing on the words of the EU treaty, which I helped draft as a member of the Convention on the Future of Europe.

    On August 26, von der Leyen clearly withdrew any active support from Commissioner Hogan and unquestioningly accepted the line of the Irish government. This influenced him to resign from his position. In this action, I contend that the president did not fulfill all of her responsibilities under the treaties. I know she faced genuine political difficulty. But the treaties were framed to deal with fraught political situations while preserving the independence of the EC and due process.

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    The European Commission is the guardian of EU treaties and should be seen to defend the rules laid down in the treaties under all circumstances, even when it is politically difficult. Article 245 of the treaty requires member states to respect the independence of commissioners. Ireland is bound by that article, after having ratified it in a referendum. One should note that Article 245 refers to respecting the independence of commissioners individually, not just to the EC as a whole.

    It is for the Irish government to say whether publicly demanding a commissioner’s resignation for an alleged breach of Irish rules is compatible with the Irish government’s treaty obligation under Article 245. But it had other options,

    If a commissioner is visiting a member state for any reason, he or she is subject to the laws of that state on the same basis as any other citizen. A visiting commissioner would not be above the law, nor would they be below it either. If they breached the law, due process in the courts ought to be applied — as with any citizen. This is what would have happened if the visiting commissioner was from any country other than Ireland and had experienced the difficulties that Hogan did, and due process would have been followed.

    The statements of the Irish government, and the unsatisfactory explanations by Hogan, created political problems for von der Leyen. She had to do something, but not necessarily what she did. Yet there were options available to her, which she inexplicably failed to use or consider.

    Rules Ignored

    Commissioners are subject to a code of conduct. Under that code, there is an ethics committee to determine if its guidelines have been breached. If the matter is urgent, there is provision for a time limit to be set for a report by the committee. Nonetheless, a reference to the ethics committee would have allowed for due process and a calm and fair hearing. More importantly, using this process would also have asserted the independence of the European Commission as an institution.

    The code says that it is to be applied “in good faith and with due consideration of the proportionality principle,” and it allows for a reprimand that does not warrant asking the commissioner to resign. Due to the course followed, we will never know if there was any breach of the code at all by Hogan.

    President von der Leyen’s failure to use these mechanisms seems to be a serious failure to defend due process and proportionality and to protect the independence of individual commissioners, as was required by the treaty. The EC and the European Parliament should inquire into why she did not do so. There are consequences now for the viability of the code of conduct if it is not to be used in a case like this.

    Criteria Not Applied

    Was what Phil Hogan did a resigning matter anyway? Article 247 allows for only two grounds for asking a commissioner to resign. These are that he or she is “no longer being able to fulfil the conditions for the performance of [their] duties” or “has been guilty of serious misconduct.” I do not think either condition was met in Hogan’s case.

    Hogan would have been fully capable of carrying out his duties while the ethics committee did its work. Instead, his position is now effectively vacant.

    Most people I have spoken to do not think the breaches committed by Hogan — while foolish — amounted to “serious misconduct” within the meaning of Article 247. Failure to recollect all the details of a private visit over two weeks, or to issue a sufficient apology quickly enough, may be political failing, but they hardly rise to the level of “serious misconduct.” Any deliberate and knowing breach of quarantine measures should have been dealt with in Irish courts without fuss.

    In any event, von der Leyen would have been far wiser to have gotten an objective view on all of this from the ethics committee before allowing Hogan to resign.

    Why Did the European Commission Not Meet?

    Another issue is the president’s failure to call an EC meeting if she was considering that a commissioner should resign. Under Article 247, it is the EC — not the president alone — that can make a commissioner resign, and even then it must be approved by the European Court of Justice. These safeguards were put in the treaty to protect the independence of the European Commission. They were ignored in this case.

    The subsequent weakening of the institutional independence of the commission is very damaging to European integration and to the interests of smaller EU states. This should be of concern to the European Parliament.

    The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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    For Yemen, No Consistent EU Policy in Sight

    The European Union and its member states have presented an approach to the ongoing conflict in Yemen that has lacked both coordination and coherence. The situation in Yemen, which was the poorest Arab country already before the eruption of a civil war in 2014, has been described by the Secretary General of the United Nations António Guterres as the worst humanitarian crisis in the world. In the face of this, the EU and its national governments have too often proved unable or unwilling to make a positive impact on the developments in Yemen. Some EU members, in fact, have been going in the opposite direction.

    The lack of a common European position on Yemen could be observed after September 14, 2019, when Aramco oil facilities in Saudi Arabia were hit by airstrikes, forcing the kingdom to cut its oil production by more than a half. The attacks were claimed by the Houthi rebels who had seized the capital Sanaa in 2014.

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    Although the Houthis had hit Saudi territory several times in the past, Riyadh insisted that the Aramco attacks were launched from the north, implicitly blaming either Iran or Iraqi militias backed by Tehran. Iran provides the Houthis with support, although claims that the group is an Iranian proxy are far-fetched. An investigation carried out on behalf of the United Nations Security Council concluded that the attacks had probably not been launched from Yemen.

    On the one hand, France and Britain reacted to the attacks (whose authorship was even more uncertain at that moment) with very similar statements, highlighting their commitment to support the security of Saudi Arabia. On the other hand, the German Foreign Ministry and the European External Action Service (the diplomatic arm of the EU) emphasized the need for de-escalation and made no reference to Saudi security.

    The Embargo That Never Was

    The different wording of these statements following the Aramco attacks could be considered anecdotic if it did not reflect a more profound divergence of views among EU members regarding the conflict in Yemen. France, the United Kingdom, Italy and Spain have continued to sell weapons to Saudi Arabia despite its blatant violation of international humanitarian law and human rights in Yemen. According to the Armed Conflict Location and Event Data project, direct targeting by the Saudi-led coalition has resulted in more than 8,000 civilian deaths since 2015.

    Germany is the only EU heavyweight that has banned weapons sales to Saudi Arabia, even though Berlin has exceptionally approved the export of €400 million ($449 million) in weapons to Saudi Arabia in March last year. Denmark, Finland and the Netherlands are some of the countries that have taken a similar position. It must be noted, however, that the economic value of weapons sales to Riyadh differs greatly from country to country. Saudi Arabia represents Britain’s biggest market for weapons exports and the third-largest for France. On the contrary, none of the above-mentioned countries implementing a ban has Saudi Arabia among its top-three buyers of military equipment.

    An EU-wide ban on weapons sales to Saudi Arabia is not only extremely unlikely, it would also have a limited impact if implemented. The United States remains by far the major arms supplier to Saudi Arabia, providing 68% of the weapons the kingdom has bought since 2014. Even so, an EU-wide ban on weapons sales to Riyadh is one of the strongest policies the EU could enforce. The share of Saudi weapons imports originating from EU countries is not the sole indicator of its importance for Riyadh. Switching from one weapons supplier to another takes money, time and may lead to incompatibilities in the weapons systems.

    EU countries exporting weapons to Saudi Arabia are acting against the EU Council Common Position on Arms Exports approved in 2008. Article 2 of the Common Position establishes that EU member states must deny an export license for military technology that “might be used in the commission of serious violations of international humanitarian law.” Adding to this, the EU’s former foreign policy chief, Federica Mogherini, used to speak strongly against military solutions for Yemen. Mogherini’s successor, Josep Borrell, has less credibility to take such a position since he was Spain’s foreign minister when the Socialist government reversed its initial ban on weapon sales to Saudi Arabia.

    At the end, however, national EU governments retain sovereignty in the management of arms exports and thus often contradict the EU Common Policy. The European Parliament has called for a sanctions committee to be implemented in order to monitor weapons sales, but the decision is non-binding. Actually, it is not unusual to see members of the European Parliament voting in favor of severing support to the Saudi-led coalition in Yemen while their own parties implement a diametrically opposite policy at the national level.

    The Rhetoric-Reality Gap

    This notwithstanding, it would be a mistake to think that the European Union has not been able to formulate a coordinated and coherent strategy regarding Yemen only because of the dissimilar positions of its member states regarding weapons exports. The low priority given to formulating and eventually supporting such a policy has been equally important. The volume of aid Yemen has received from the European Union is proof of its limited importance to EU leaders.

    Between 2015 and 2018 — the last year for which reliable data is available — Yemen has been allocated €2.33 billion in aid from EU institutions and member countries. During these same four years, Afghanistan and Morocco have received more than €5 billion each from the European Union, the largest global contributor of humanitarian aid.

    It is true that the effective delivery of humanitarian assistance is always complicated when a country is involved in a civil war, and Yemen is no exception. Actually, there are reasons to fear the Houthis might be diverting aid to non-humanitarian purposes. However, it would be naïve to assume that this is the main reason for the low levels of humanitarian aid Yemen has received from the European Union and its member countries. With a slightly smaller population, war-ravaged Syria has received three times as much humanitarian aid as Yemen between 2015 and 2018.

    The explanation for this reality has more to do with the fact that the war in Yemen does not carry the threat of a refugee crisis for the European Union. As surprising as it may seem, more than 160,000 migrants, mostly from Ethiopia and Somalia, arrived in Yemen in 2018. Once there, they often join Yemenis in trying to reach Saudi Arabia in the search of a better life. Riyadh, however, exerts strict controls on migration on the Saudi-Yemeni border, having built a fence along it during the early 2000s.

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    Marissa Quie and Hameed Hakimi argue that in the European Union, aid has become “a tool to stem what electorates perceive to be a ‘tidal wave’ of migration.” This goes a long way into explaining why Libya — through an Italy-Libya deal supported by the EU — Morocco, Turkey or Afghanistan, important points of rigin or transit for migrants aiming to reach Europe, are seen as a higher priority than Yemen.

    The incapacity of the European Union to reach and implement a comprehensive strategy regarding Yemen damages its soft-power projection in the world. Even though the EU stance on the Yemeni conflict is only one of many aspects leading to the questioning of Europe’s soft power, it does not always have to be this way. Europe proved this with its constructive role in the negotiation of the Iran nuclear deal, regardless of the fact that the EU was far less successful in finding a solution to the US exit from the deal in 2018.

    The European Union rhetorically upholds a certain set of norms that are presumably the result of a certain European identity. These include the defense of human rights, the respect of international regimes — the 2008 EU Common Position and the 2014 Arms Trade Treaty among them — and the responsibility to help avert humanitarian crisis through aid. Nevertheless, as Mai’a K. Davis Cross explains, “identity, image, policies and Public Diplomacy are all interrelated.” EU public diplomacy in Yemen cannot work as long as its policies, and those of its member states, convey an image at odds with the identity the European Union claims as its own.

    The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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    Negotiating the End of Brexit

    It is increasingly likely that, unless things change, on January 1, 2021, we will have a no-deal Brexit. That would mean the only deal between the European Union and the United Kingdom would be the already ratified EU withdrawal agreement of 2019.

    There are only around 50 working days left in which to make a broader agreement for a post-Brexit trade deal between the UK and the EU. The consequences of failing to do so for Ireland will be as profound — and perhaps even as long-lasting — as those caused by the COVID-19 pandemic.

    A failure to reach a UK-EU agreement would mean a deep rift between the UK and Ireland. It would also mean heightened tensions within Northern Ireland, disruptions to century-old business relations and a succession of high-profile court cases between the EU and the UK dragging on for years.

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    Issues on which a deal could have easily been reached in amicable give-and-take negotiations will be used as hostages or leverage on other matters. The economic and political damage would be incalculable. And we must do everything we can to avoid this.

    Changing the EU trade commissioner, Phil Hogan, under such circumstances would be dangerous. Trying to change horses in midstream is always difficult. But attempting to do so at the height of a flood — in high winds — would be even more so.

    The EU would lose an exceptionally competent trade commissioner when he was never more needed. An Irishman would no longer hold the trade portfolio. The independence of the European Commission, a vital ingredient in the EU’s success, would have been compromised — a huge loss for all smaller EU states.

    According to the EU’s chief negotiator, Michel Barnier, talks between the European Union and the UK, which ended last week, seemed at times to be going “backwards rather than forwards.” The impasse has been reached for three reasons.

    The Meaning of Sovereignty

    First, the two sides have set themselves incompatible objectives. The European Union wants a wide-ranging “economic partnership” between the UK and the EU, with a “level playing field” for “open and fair” competition. The UK agreed to this objective in the joint political declaration made with the EU at the time of the withdrawal agreement, which was reached in October 2019.

    Since then, the UK has held a general election with the ruling Conservative Party winning an overall majority in Parliament, and it has changed its mind. It is now insisting, in the uncompromising words of it chief negotiator, David Frost, on “sovereign control of our own laws, borders, and waters.”

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    This formula fails to take account of the fact that any agreement the UK might make with the EU (or with anyone else) on standards for goods, services or food items necessarily involves a diminution of sovereign control. Even being in the World Trade Organization (WTO) involves accepting its rulings, which are a diminution of “sovereign control.” This is why US President Donald Trump does not like the WTO and is trying to undermine it.

    The 2019 withdrawal agreement from the EU also involves a diminution of sovereign control by Westminster over the laws that will apply in Northern Ireland and thus within the UK. That agreement obliges the UK to apply EU laws on tariffs and standards to goods entering Northern Ireland from Britain — i.e., going from one part of the UK to another.

    This obligation is one of the reasons given by a group of UK parliamentarians — including Iain Duncan Smith, David Trimble, Bill Cash, Owen Paterson and Sammy Wilson — for wanting the UK to pull out from the withdrawal agreement, even though most of them voted for it last year.

    Sovereignty is a metaphysical concept, not a practical policy. Attempting to apply it literally would make structured and predictable international cooperation between states impossible. That is not understood by many in the Conservative Party.

    The Method of Negotiation

    Second, the negotiating method has proved challenging. The legal and political timetables do not gel. The UK wants to discuss the legal texts of a possible free trade agreement first and leave the controversial issues — like competition and fisheries — until the endgame in October. But the EU wants serious engagement to start on these sticking points straight away.

    Any resolution of these matters will require complex legal drafting, which cannot be left to the last minute. After all, these texts will have to be approved by the European and British Parliaments before the end of 2020. There can be no ambiguities or late-night sloppy drafting.

    The problem is that the UK negotiator cannot yet get instructions on the compromises he can make from Boris Johnson, the British prime minister. Johnson is instead preoccupied with combating the spread of the COVID-19 disease, as well as keeping the likes of Duncan Smith and Co. onside. The prime minister is a last-minute type of guy.

    Trade Relations With Other Blocs

    Third, there is the matter of making provisions for the trade agreements the UK wants to make in the future with other countries, such as the US, Japan and New Zealand. Freedom to make such deals was presented to UK voters as one of the benefits of Brexit.

    The underlying problem here is that the UK government has yet to make up its mind on whether it will continue with the European Union’s strict precautionary policy on food safety or adopt the more permissive approach favored by the US. Similar policy choices will have to be made by the UK on chemicals, energy efficiency displays and geographical indicators.

    The more the UK diverges from existing EU standards on these issues, the more intrusive the controls on goods coming into Northern Ireland from Britain will have to be, and the more acute the distress will be for Unionist circles in Northern Ireland. Issues that are uncontroversial in themselves will assume vast symbolic significance and threaten peace on the island of Ireland

    The UK is likely to be forced to make side deals with the US on issues like hormone-treated beef, genetically modified organisms and chlorinated chicken. The US questions the scientific basis for the existing EU restrictions and has won a WTO case on beef over this. It would probably win on chlorinated chicken, too.

    If Britain conceded to the US on hormones and chlorination, this would create control problems at the border between the UK and the EU, wherever that border is in Ireland. Either UK officials would enforce EU rules on hormones and chlorination on the entry of beef or chicken to this island, or there would be a huge international court case.

    All this shows that, in the absence of some sort of partnership agreement between the EU and the UK, relations could spiral out of control. Ireland, as well as the European Union, needs its best team on the pitch to ensure that this does not happen.

    The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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    The CO2 Border Adjustment for the EU

    The heads of state and government of the European Union propose introducing a “carbon border adjustment mechanism” from 2023, to charge imported goods according to the CO2 emitted during their production. At their recent summit, they decided to use the ensuing revenues to boost the EU’s budget. This gives a fiscal twist to an instrument actually designed for climate policy.

    Ursula von der Leyen, the president of the European Commission, had already announced in 2019 that she would like to introduce a “carbon border tax” as part of her European Green Deal. In spring 2020, the commission launched a roadmap process to prepare concrete legislative proposals by 2021. Its proposal also responds to fears that higher European CO2 costs caused by EU emissions trading (EU ETS) could cause companies to relocate activities outside the union, causing carbon leakage.

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    Outsourcing would contribute to reducing European emissions, but not to tackling the global problem. To date, the European Union has addressed the risk of relocation by allocating free emission allowances to sectors at risk of carbon leakage. A CO2 border adjustment could create an alternative with a global impact.

    There is rising support for the idea, after years of resistance from many EU member states and business associations. And the pressure is set to grow, with an increase in the EU’s climate target for 2030 — and anticipated higher CO2 costs for EU businesses — expected this fall. Furthermore, a CO2 border adjustment for foreign products will be widely interpreted as a clear message, especially to Washington and Beijing, that the EU intends to implement the 2015 Paris Agreement. When designing the instrument, it will be important to comply with World Trade Organization (WTO) rules and to get important trading partners on board. 

    WTO-Compatible Design

    The European Commission proposes three ways in which a “carbon border adjustment mechanism” could be implemented: “a carbon tax on selected products, a new carbon customs duty or the extension of the EU ETS to imports.” From a trade law perspective, any of these options could be designed in accordance with WTO rules. The crucial aspect is the principle of non-discrimination: that a CO2 border adjustment must not differentiate among like products or between WTO members. If it were necessary to depart from the principle, for example, where a trading partner or individual company is able to demonstrate that it is already taking care of emissions reductions, the rules for exceptions would need to be observed.

    An EU-wide CO2 “product tax” and its implementation by the EU member states would be the most straightforward approach from a trade law perspective. To do this, the EU would first have to levy a CO2 tax on goods manufactured in the European Union. Then, it would be unproblematic to apply this tax to imports as well — the value-added tax, for example, follows this approach. Imported “like” products would be treated the same way as domestic products, which is WTO-compliant.

    Extending the EU ETS to industrial imports would be more complex. The task for the European. Commission would be to demonstrate that under trade law, the CO2 allowance price is ultimately equivalent to a “product tax.” Failing that, the commission could argue that it was acting to protect a global resource, i.e., that avoiding carbon leakage was the central aim of the EU legislation. The “conservation of exhaustible natural resources,” which includes the Earth’s atmosphere, is a valid ground for violating WTO principles, subject to certain conditions. Such an exemption would also have to be claimed for a new CO2 customs duty.

    However, the European Council decision has exacerbated the risk that WTO dispute settlement panels will regard the new instrument as a means of generating income, rather than a means to protect the climate. This would make a difference if trading partners challenged the new tool. The climate focus, which would be taken into account in WTO rulings, is currently slipping into the background.

    Don’t Underestimate the Diplomatic Effort

    A CO2 border adjustment mechanism will need extensive explanation given the many open details, and it can only promote international climate policy cooperation if trade partners are informed at an early stage and regularly consulted. For this, the European Union should use WTO forums and the climate regime as well as other international organizations. In 2012, the European Commission was made painfully aware of the difficulties involved in going it alone, after seeking to include international aviation in the EU ETS. Major partners put political pressure on the EU, even threatening sanctions, and the union decided to backtrack and reduce the coverage of the ETS to flights within the European Economic Area.

    Trust can only arise if the EU adheres to multilateral climate and trade agreements — i.e., supports the Paris Agreement and the troubled WTO and expresses this clearly and often. This task has probably become much more difficult after the European Council decision because a fiscally-motivated border adjustment cannot be convincingly attributed to these multilateral concerns — especially as the revenues would flow to the EU rather than to funds supporting climate protection, for example, in poorer countries. If a CO2 border adjustment specifically targeted cement, steel and other energy-intensive industries, as has already been discussed, producers from emerging and industrialized countries would be especially affected.

    The union should start discussions with these countries without delay. A good opportunity will arise at the meeting of G20 finance ministers in Saudi Arabia toward the end of the year. In addition, the EU should insist to the US that this initiative is not intended as a provocation in the smoldering customs dispute. Ultimately, the climate policy success of a CO2 border adjustment will depend on how the world’s major economies react to it.

    *[This article was originally published by the German Institute for International and Security Affairs (SWP), which advises the German government and Bundestag on all questions relating to foreign and security policy.]

    The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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    Is Europe More United Than the US?

    During the Trump era, America increasingly seems like a motley collection of states brought together for reasons of territorial contiguity and little else. The conservative South is ravaged by a pandemic. The liberal Northeast waits patiently for elections in November to oust a tyrant. A rebellious Pacific Northwest faces off against federal troops sent to “restore order.” The Farm Belt, the Rust Belt and the Sun Belt are like three nations divided by a common language.

    The European Union, on the other hand, really does consist of separate countries: 27 of them. The economic gap between Luxembourg and Latvia is huge, the difference in median household income even larger than that between America’s richest and poorest states (Maryland and West Virginia).

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    European countries have gone to war with each other more recently than the American states (a mere 25 years ago in the case of former Yugoslavia). All EU members are democracies, but the practice of politics varies wildly from perpetually fragmented Italy to stolid Germany to ever-more illiberal Hungary.

    Despite these economic and political differences, the EU recently managed to perform a miracle of consensus. After 90 hours of discussion, EU leaders hammered out a unified approach to rebuilding the region’s post-pandemic economy.

    The EU is looking at an 8.7% economic contraction for 2020. But the coronavirus pandemic clearly hit some parts of the EU worse than others, with Italy and Spain suffering disproportionately. Greece remains heavily indebted from the 2008-09 financial crisis. Most of Eastern Europe has yet to catch up to the rest of the EU. If left to themselves, EU members would recover from the current pandemic at very different rates and several might not recover at all.

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    That’s why the deal is so important. The EU could have helped out its struggling members by extending more loans, which was basically the approach after 2009. This time around, however, the EU is providing almost half of the money in the new recovery fund — $446 billion — in grants, not loans. The $1.3-trillion budget that European leaders negotiated for the next seven years will keep all critical EU programs afloat (like the European structural and investment funds that help bridge the gap between the wealthier and the less wealthy members).

    Sure, there were plenty of disagreements. The “frugal four” of the Netherlands, Denmark, Austria and Sweden argued down the amount of money allocated to the grant program and the budget numbers overall. Germany has often sided with the frugal faction in the past, but this time Chancellor Angela Merkel played a key role in negotiating the compromise. She also managed to bribe Hungary and Poland to support the deal by taking “rule-of-law” conditionality off the table. Both countries have run afoul of the EU by violating various rule-of-law norms with respect to media, judiciary and immigration. Yet both countries will still be able to access billions of dollars from the recovery fund and the overall budget.

    Until recently, the EU seemed to be on the brink of dissolution. The United Kingdom had bailed, Eastern Europe was increasingly authoritarian, the southern tier remained heavily in debt, and the pandemic was accelerating these centrifugal forces. But now it looks as the EU will spin together, not spin apart.

    The United States, on the other hand, looks ever more in disarray. As Lucrezia Reichlin, professor of economics at the London Business School, put it, “Despite being one country, the U.S. is coming out much more fragmented than Europe.”

    The Coming Storm

    The Trump administration has been all about restarting the US economy. President Donald Trump was reluctant to encourage states to lock down in the first place. He supported governors and even armed protesters demanding that states reopen prematurely.

    And now that the pandemic has returned even more dramatically than the first time around, the president is pretending as though the country isn’t registering over 60,000 new infections and over a thousand deaths every day. Trump was willing to cancel the Florida portion of the Republican Party convention for fear of infection, but he has no problem insisting that children hold the equivalent of thousands of mini-conventions when they return to school.

    Europe, which was much more stringent about prioritizing health over the economy, is now pretty much open for business.

    The challenge has been summer tourism. Vacationers hanging out on beaches and in bars are at heightened risk of catching the COVID-19 disease — which is caused by the novel coronavirus — and bringing it home with them. There have been some new outbreaks of the disease in Catalonia, an uptick in cases in Belgium and the Netherlands, and a significant increase in infections in Romania. Belgium is already re-instituting restrictions on social contacts. Sensibly, a number of European governments are setting up testing sites for returning tourists.

    The EU is determined not to repeat what’s going on in Florida, Texas and California. It is responding in a more deliberate and unified way to outbreaks leading to an average of 81 deaths a day than the United States is responding as a whole to a very nearly out-of-control situation producing more than 900 deaths a day.

    The US isn’t just facing a deadly resurgence of the pandemic. Various economic signals indicate that the so-called “V-shaped recovery” — much hyped by the Trump administration — is just not happening. More people are again filing for unemployment benefits. People are reluctant to go back to restaurants and hang out in hotels. The business sector in general is faring poorly.

    “The sugar rush from re-openings has now faded and a resurgence of domestic coronavirus cases, alongside very weak demand, supply chain disruptions, historically low oil prices, and high levels of uncertainty will weigh heavily on business investment,” according to Oren Klachkin, lead US economist at Oxford Economics in New York.

    The Organization of Economic Cooperation and Development (OECD) released a report in July that offered two potential scenarios for the US economy through the end of the year. Neither looks good. The “optimistic scenario” puts the unemployment rate at the end of 2020 at 11.3% (more or less what it is right now) and an overall economic contraction of 7.3%. According to the pessimistic scenario, the unemployment rate would be nearer to 13% and the economic contraction at 8.5%.

    Much depends on what Congress does. The package that Senate Republicans unveiled last week is $2 trillion less than what the Democrats have proposed. It offers more individual stimulus checks, but nothing for states and municipalities and no hazard pay for essential workers.

    Unemployment benefits expired a few weeks ago, and Republicans would only extend them at a much-decreased level. Although Congress will likely renew the eviction moratorium, some landlords are already trying to kick out renters during the gap. The student loan moratorium affecting 40 million Americans runs out at the end of September.

    The only sign of economic resurgence is the stock market, which seems to be running entirely on hope (of a vaccine or a tech-led economic revival). At some point, this irrational exuberance will meet its evil twin, grim reality. On the other side of the Atlantic, the Europeans are preparing the foundation for precisely the V-shaped recovery that the United States, at the moment, can only dream about.

    The Transatlantic Future

    What does a world with a stronger Europe and a weaker America look like? A stronger Europe will no longer have to kowtow to America’s mercurial foreign policy. Take the example of the Iran nuclear deal, which the Obama administration took the lead in negotiating. Trump not only canceled US participation, but he also threatened to sanction any actors that continued to do business with Iran. Europe protested and even set up its own mechanisms to maintain economic ties with Tehran. But it wasn’t enough. Soon enough, however, the United States won’t have the economic muscle to blackmail its allies.

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    The EU has certainly taken a tougher stance toward China over the last couple years, particularly on economic issues. But in its negotiations with Beijing, the EU has also put far greater emphasis on cooperation around common interests. As such, expect the European Union to take full advantage of the US decline to solidify its position in an East Asian regional economy that recovers far more quickly from the pandemic than pretty much anywhere in the world.

    Europe is also well-positioned to take the lead on climate change issues, which the United States has forfeited in its four years of catastrophic backsliding under Trump. As part of its new climate pact, the EU has pledged to become carbon-neutral by 2050. The European Commission is also considering a radical new idea: a carbon tax on imports. In the future, if you want to be competitive in selling your products in the European market, you’ll have to consider the carbon footprint of your operation.

    Of course, the EU could do better. But compared to the US, Russia or China, it’s way out in front. The European Union is not a demilitarized space. It has a very mixed record on human rights conditionality. And its attitudes toward immigration range from half-welcoming to downright xenophobic.

    But let’s say that Europe emerges from this pandemic with greater global authority, much as the US did after World War II. A lot of Americans, and most American politicians, will bemoan this loss of status. But a world led by a unified Europe would be a significantly better place than one mismanaged by a fragmented United States.

    *[This article was originally published by FPIF.]

    The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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    The EU Should Collect Health Data Centrally

    When the COVID-19 disease began to spread in Europe, France and Germany prohibited the export of medical equipment, while Italy asked in vain for supplies of protective equipment under the EU Civil Protection Mechanism. Neither the European Centre for Disease Prevention and Control (ECDC) nor the member states of the EU themselves were aware of […] More

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    Who Will Make Rules for the Internet?

    National legislations across the European Union — with the exception of states that have implemented their own digital laws, such as Germany and France — are very difficult to enforce when it comes to online. This is because, in the absence of overarching legislation that would govern digital space, tech giants implement community standards that may sometimes contradict the […] More