Malta Transformed by Multi-level Governance: More Than Just an Outcome of Europeanisation. Occasional Paper 03/2014

Malta has been transformed in many ways with and by EU Membership. This paper goes beyond the more obvious impacts of ‘Europeanisation’ and instead reviews the implications of an explosion of multi-level governance on doing politics in Malta. While for most of its recent political history, there has been a clawing back of power by the central government – as when the Gozo Civic Council (1960-1973), an early foray into regional government, was “unceremoniously dissolved” in 1973 – this trend was reversed with the setting up of local councils as from 1994, an advisory Malta Council for Economic and Social Development (MCESD) in 2001, and then EU membership in 2004. These events have created a profligacy of decision-making tiers and multiplied the tensions that exist between different levels of governance in this small archipelago state. Malta has never experienced such pluralism before. In fact, since 1966, only two political parties have been represented in the national legislature and, therefore, there has been no division of powers between the executive and the national parliament. This paper reviews the implications of these developments on two hot political issues in 2014: the International Investor Programme (IIP) proposed by the Labour Government in its 2014 Budget; and the location of a Liquid Natural Gas (LNG)-storage vessel inside Marsaxlokk harbour.

Who calls the shots in the committees of the new European Parliament? CEPS Special Report No. 97, 21 November 2014

This CEPS Special Report analyses the composition of the 20 committees in the new European Parliament and how representative they are of the 28 member states, identifying which policy areas or committees are of particular interest to MEPs from certain countries. It also examines the allocation of committee chairs and party coordinator positions to assess whether the country of origin matters and if so, why. The study reveals that in general the countries’ share of representatives in the committees is very similar in most of the cases to their representation in Parliament. Still, some policy areas have a special relevance for some countries and attract their MEPs in larger numbers. Due to the procedure used in the allocation of the committee chairs, which favours the largest political groups and the largest national parties within them, MEPs from larger member states tend to hold most of these coveted positions. The internal process followed by the political groups in appointing their coordinators in the respective committees is predisposed towards MEPs with seniority, experience and good connections. All in all, the strategic relevance that national parties attach to these positions makes a difference.

The shape of the banking union confirms Berlin's privileged position in the eurozone. OSW Commentary No. 123, 10.01.2014

On 18 December 2013, EU finance ministers reached agreement on the structure of a banking union. The body will be tasked with oversight of the largest banks across the EU. It will also devise recovery and resolution programmes for institutions at risk of bankruptcy, and it will handle wind-up arrangements and decide on the allocation of resulting costs. The proposals are expected to be approved by March of this year by the governments of the eurozone states, by other EU members interested in joining the banking union, and by the European Parliament. A compromise on the supervision of the largest banks in the eurozone was reached several months ago. The most recent negotiations focused on the second pillar of the banking union: a Single Resolution Mechanism. The parties successfully negotiated a set of procedures for rescuing banks capable of recovery and for the closure of institutions that cannot be rescued. A joint position was also agreed on the allocation of costs resulting from such actions.

Any changes? The future agenda of Sweden's security policy. OSW Commentary No. 126, 28.01.2014

Sweden’s annual security and defence conference, which this year focused on the future of the country’s security policy, was held in Sälen on 12-14 January. It was attended by almost all the leaders of Sweden’s ruling and opposition parties. The discussions have revealed whether and how the mindset of the Swedish elite has changed following the heated debates on defence issues in 2013. The opposition parties (Social Democrats, the Green Party, and the Left Party), which are likely to form a coalition government after the election to the Swedish parliament in September 2014, were given the opportunity to present their own priorities. The discussions have brought to the surface conflicting perceptions within the political elite concerning the threats and challenges to Swedish security, and divergent positions on the future direction of the country’s security and defence policy. It is highly likely that, due to a coalition compromise, the current course of Sweden’s security policy (namely, a policy of non-alignment along with close co-operation with NATO) will be maintained following the parliamentary election, albeit with new “leftist” influences (a greater involvement in the United Nations). Big changes that could lead to a significant strengthening of Sweden’s defence capabilities, or a decision on NATO membership, are not likely. Paradoxically, polls suggest that in the long run a more radical change in Stockholm’s security policy may be shaped by a gradual, bottom-up evolution of public opinion on the issue.

Rok Putina. Obwod kaliningradzki w kontekscie rozszerzenia Unii Europejskiej. Prace OSW 2/2001. = Putin's Year. The Kaliningrad Oblast in the context of EU enlargement. OSW Study 2/2001

Last year Kaliningrad became the subject of an international debate involving first of all the European Union, Russia, the USA, and the countries bordering the enclave, Poland and Lithuania. Such keen interest in a small region of less than a million inhabitants was mainly due to the fact that Kaliningrad has found itself in the very centre of two processes which are of paramount importance for Europe: EU and NATO enlargement. If Lithuania becomes a member of those units and Poland joins the EU, this Russian enclave will become an island surrounded on all land borders by a totally different, political, economic and military entity. In the course of the debate many questions were raised about the situation in the Oblast and how it affects neighbouring countries, the real interests and intentions of the parties involved in the debate, and the future of the region. The authors of this publication are attempting to answer these questions. The first part of this analysis is devoted to presenting the most important internal problems of the enclave, considering their influence on the surrounding world and the consequences of adopting the acquis communautaire in Poland and Lithuania. The second part characterises Moscow's policies towards Kaliningrad on the one hand, and those of Western countries on the other. Finally, the authors discuss the probable ways in which the situation in the enclave will develop.

Od demokracji "wirtualnej" ku europejskiej: Geneze i konsekwencje przelomu politycznego w Moldawii. Prace OSW 32/2009. = From "virtual" to European democracy - the origins and consequences of the political breakthrough in Moldova. OSW Study 32/2009

2009 may become a turning point in the history of post-Soviet Moldova. The country’s political class and society are faced with a fundamental choice. On the one hand, if the Party of Communists of the Republic of Moldova, which has governed the country since 2001, remains in power, this would mean a consolidation of the authoritarian rule of the party leader Vladimir Voronin, perpetuation of the superficial nature of democratic institutions and a continuation of the manoeuvring between the European Union and Russia (with the increasing risk of falling into the latter’s exclusive zone of influence). On the other hand, the take over of political power by the opposition parties creates an opportunity for Moldova to resume building a democratic, pluralistic political system based on the rule of law and to develop closer links with the European Union within the framework of the European Neighbourhood Policy, including the Eastern Partnership.

The fragile ‘reset’. The balance sheet and the prospects for changes in Russian-US relations. OSW Point of View (Policy Brief), April 2011

The ‘reset’ policy proposed by the USA has brought Russia a number of geopolitical, prestigious and economic benefits. The most important of those are: the resumption of arms control, the USA’s withdrawal from plans to locate elements of its strategic missile defence system in Poland and the Czech Republic, and the entry into force of the so-called 123 Agreement. In response, Russia has assisted the United States in resolving the Iranian crisis, and offered help with the Afghanistan operation, covering the transit of supplies and supporting the Afghan government. Moscow has also eased up on its anti-American rhetoric. The changes which have taken place in Russian-US relations are not durable. The two parties have not resolved their major disputes (for example, regarding missile defence), and any differences are hushed up for tactical reasons.

Belarus-Russia: Whither Integration? OSW Point of View (unspecified), May 2003

Of the re-integration processes currently taking place in the former Soviet Union, the formation of a Russian-Belarusian so-called 'Union State' is one of the most advanced. A customs union was formally announced between the two countries as early as 1995 and the process of constructing the Union State itself was launched in December 1999. However, both events were largely driven by the perceived need to match societal demands, without much concrete action and the Union State remained largely 'virtual'. Only in the last few years has the Russian initiative allowed for moving from symbolic gestures to political action and since late 2002 debate and policy have intensified on specific issues of economic and political co-operation. However, despite such advances in the integration process, its objectives remain vague and there is little or no agreement on the principles that should govern the process. Furthermore, current bilateral relations questions still dominate the dialogue. The project seems at present to be driven mainly by the political interests of both countries' presidents and also, to a lesser extent, by the interests of business, political, military and security elites, each apparently motivated by self- and group-interest in the emerging dialogue of integration. In contrast to EU integration, the societies of the two countries involved appear to have had little or no say in the process. Thus, several questions naturally arise. What is the real nature of such integration? What motivates the parties involved? What stage has the process reached? What likely future course will it take? What might be the consequences of it for Belarusian independence? Answers to these questions should ultimately determine the stance and policies of the enlarged EU in this area.

Public feeling in Ukraine ahead of the parliamentary election. OSW Commentary No. 89, 2012-07-12

After two and a half years under President Viktor Yanukovych and the Party of Regions, the overwhelming majority of Ukrainians are dissatisfied with the state the country’s economy is currently in and the direction it has been developing in. There has also been a significant drop in stability and social security with the general public increasingly feeling that the government has little interest in their problems. Only 16% of Ukrainians believe that the current government has performed better than their predecessors, although overall confidence in both the ruling party and the opposition remains low. Nonetheless, falling support for the president and the Cabinet does not seem to have translated into greater popularity for the country’s opposition parties; these currently enjoy the confidence of only a quarter of the electorate. The clear lack of credibility for politicians on either side of the political spectrum, coupled with an almost universal preoccupation with the bare necessities of life, has shifted the political processes in Ukraine further down the agenda for the majority of Ukrainians. Ukraine’s poor economic performance, which over the last two years has been addressed through a series of highly unpopular economic reforms, has resulted in a growing mood of discontent and increased civil activity, with the Ukrainian people reporting a greater willingness than ever to join protests on social issues. Most of them, however, have shown much less interest in political rallies. This is likely to stem from low levels of trust in the opposition and the general belief that opposition politicians are not a viable alternative to the current government. One may therefore assume that there will be little public scrutiny of the parliamentary election scheduled for 28 October, and that the likelihood of mass demonstrations during it is low. However, in the event of large-scale vote rigging and a dismissive response from the government, spontaneous unsanctioned rallies cannot be ruled out. What is more likely, however, is a series of protests after the elections, when the already difficult economic situation is further exacerbated by a predicted rise in the price of gas for Ukrainian households and a possible move to devalue the Ukrainian hryvnia.

The electoral success of the Svoboda Party - the consequences for Ukrainian politics. OSW Commentary No. 97, 2012-11-26

The All-Ukrainian Association ‘Svoboda’ scored an unexpected success in the parliamentary elections, winning support from over 10% of the voters and entering the select group of Ukrainian parliamentary parties which operate at a national level. Svoboda’s manifesto is nationalist and anti-liberal, in both economic and political aspects. It is in fact the anti-liberal component of this party’s manifesto which it can thank for achieving such a big electoral success. The faction formed by Svoboda’s 37 representatives in the Verkhovna Rada (Ukrainian parliament) will have a small impact on legislative work, but their activity may add further to the brutalisation of parliamentary life. Furthermore, Svoboda will attempt to make other opposition groupings adopt a more radical approach, which may trigger the disintegration of the United Opposition Baktivshchyna. A new wave of public protests is likely to emerge in Ukraine in the coming months. Therefore, it can be expected that Svoboda will make efforts to join in or even incite them, in order to promote its social and nationalist messages. This may contribute to increasing the popularity of nationalist ideas and to a further radicalisation of sentiments in Ukraine.

Morocco at the Crossroads: Seizing the window of opportunity for sustainable development. MEDPRO Technical Report No. 2/April 2011

The question of state sustainability is highly relevant in the case of Morocco. Despite the image of a modernising and liberalising country, Morocco is undergoing a delicate phase in its development. The recent upheavals in the Maghreb and the Middle East alongside the growing problems of poor education and high unemployment are likely to bring to the surface the unsustainable elements of Morocco’s status quo. The central issues concern the quality of institutions, reforms aimed at promoting the rule of law, curbing corruption and overhauling the judiciary. This paper will argue that while institutional quality is a pre-requisite for successful and sustainable socioeconomic performance, this cannot be achieved unless major reforms in the political system are carried out. There exists a window of opportunity to accelerate reforms and to address the acute centralisation of Moroccan politics and decision-making, the lack of accountability of the monarchic institutions, as well as the fragility of representative bodies, such as parties and trade unions. Seizing this window of opportunity could spare Morocco a period of instability, while also assuring continuity in the framework of the transition that started in 1999 when the new king came to power.

Mixed Public-Private Enterprises in Europe: Economic Theory and an Empirical Analysis of Italian Water Utilities. Bruges European Economic Research (BEER) Papers 4/July 2006

Mixed enterprises, which are entities jointly owned by the public and private sector, are spreading all over Europe in local utilities. Well aware that in the vast majority of cases the preference of local authorities towards such governance structure is determined by practical reasons rather than by the ambition to implement new regulatory designs (an alternative to the typical “external” regulation), our purpose is to confer some scientific value to this phenomenon which has not been sufficiently investigated in the economic literature. This paper aims at proposing an economic analysis of mixed enterprises, especially of the specific configuration in which the public partner acts as controller and the private one (or “industrial” partner) as service provider. We suggest that the public service concession to mixed enterprises could embody, under certain conditions, a noteworthy substitute to the traditional public provision and the concession to totally private enterprises, as it can push regulated operators to outperform and limit the risk of private opportunism. The starting point of the entire analysis is that ownership allows the (public) owner to gather more information about the actual management of the firm, according to property rights theory. Following this stream of research, we conclude that under certain conditions mixed enterprises could significantly reduce asymmetric information between regulators and regulated firms by implementing a sort of “internal” regulation. With more information, in effect, the public authority (as owner/controller of the regulated firm, but also as member of the regulatory agency) can stimulate the private operator to be more efficient and can monitor it more effectively with respect to the fulfilment of contractual obligations (i.e., public service obligations, quality standards, etc.). Moreover, concerning the latter function, the board of directors of the mixed enterprise can be the suitable place where public and private representatives (respectively, welfare and profit maximisers) can meet to solve all disputes arising from incomplete contracts, without recourse to third parties. Finally, taking into account that a disproportionate public intervention in the “private” administration (or an ineffective protection of the general interest) would imply too many drawbacks, we draw some policy implications that make an equitable debate on the board of the firm feasible. Some empirical evidence is taken from the Italian water sector.

The Eurozone crisis and the erosion of democratic legitimacy: Lessons from the gold standard. ACES Cases No. 2013.3

This paper makes four propositions. First, it argues that the euro’s institutional design makes it function like the interwar gold exchange standard during periods of stress. Just like the gold exchange standard during the 1930s, the euro created a ‘core’ of surplus countries and a ‘periphery’ of deficit countries. The latter have to sacrifice their internal domestic economic equilibrium in order to restore their external equilibrium, and therefore have no choice but to respond to balance of payments crises by a series of deflationary spending, price and wage cuts. The paper’s second claim is that the euro’s institutional design and the EU’s response to its ‘sovereign debt crisis’ during 2010-13 deepened the recession in the Eurozone periphery, as EMU leaders focused almost exclusively on austerity measures and structural reforms and paid only lip service to the need to rebalance growth between North and South. As Barry Eichengreen argued in Golden Fetters, the rigidity of the gold standard contributed to the length and depth of the Great Depression during the 1930s, but also underscored the incompatibility of the system with legitimate national democratic government in places like Italy, Germany, and Spain, which is the basis for the paper’s third proposition: the euro crisis instigated a crisis of democratic government in Southern Europe underlining that democratic legitimacy still mainly resides within the borders of nation states. By adopting the euro, EMU member states gave up their ability to control major economic policy decisions, thereby damaging their domestic political legitimacy, which in turn dogged attempts to enact structural reforms. Evidence of the erosion of national democracy in the Eurozone periphery can be seen in the rise of anti-establishment parties, and the inability of traditional center-left and center-right parties to form stable governments and implement reforms. The paper’s fourth proposition is that the euro’s original design and the Eurozone sovereign debt crisis further widened the existing democratic deficit in the European Union, as manifested in rising anti-EU and anti-euro sentiment, as well as openly Eurosceptic political movements, not just in the euro periphery, but also increasingly in the euro core.

Debating the European debt crisis: Government leadership, party ideology and supranational integration as focal points of parliamentary debates in Austria, Germany and the United Kingdom. ACES Cases No. 2012.3

Parliamentary debates about the resolution of the EU debt crisis seem to provide a good example for the frequently assumed “politicizationˮ of European governance. Against this background, the paper argues that in order to make sense of this assumption, a clearer differentiation of three thematic focal points of controversies – with regard to the assessment of government leadership, concerning the debate between competing party ideologies within the left/right dimension, and with regard to the assessment of supranational integration – is needed. Applying this threefold distinction, the paper uses a theory of differential Europeanization to explain differences in the thematic structure of debates in the Austrian Nationalrat, the British House of Commons, and the German Bundestag. Empirically, the paper is based on data gained from the computer-based coding of plenary debates about the resolution of the European debt crisis between 2010 and 2011.

The ICC and its Deteriorating Relationship with Africa in Light of the Kenya Cases: What Should the EU Position be? IES Policy Brief Issue 2013/09 • November 2013

Summary. The African Union (AU), a union consisting of 54 African States, held an Extraordinary Summit on 11-12 October 2013, to discuss its relationship with the International Criminal Court (ICC or the Court). The meeting took place just weeks before the trial of Kenya’s President Uhuru Kenyatta is scheduled to begin, and was clearly intended to voice discontent and put on hold the ongoing ICC proceedings against Kenyatta as well as his deputy, Vice-President William Ruto. Before the Summit, there were even widespread rumors that the Assembly of the AU would call for a mass withdrawal of African States Parties from the ICC Statute. Eventually, the Assembly did not go that far and took two important, but less controversial decisions. It called for the granting of immunities to Heads of States from prosecutions by international criminal tribunals and requested a deferral of the ICC cases against Kenyatta and Ruto through a resolution adopted by the UN Security Council (UNSC). After providing a background to the Kenya cases, this policy brief aims to evaluate what the position of the EU and its Member States as outspoken supporters of the ICC and the fight against impunity should be, especially given the fact that France and the UK, as permanent UNSC members, could block a UNSC deferral at any time.