Systemic crisis in Alexander Lukashenko's regime. OSW Commentary No. 66, 2011-10-28

Measures undertaken by the Belarusian government in the areas of the economy, internal affairs and foreign policy in recent months have proven increasingly ineffective. Despite the deteriorating macroeconomic situation, Minsk is not implementing the reforms necessary to combat the crisis and its activity is limited only to feigned actions and administrative regulations. As a result, the economic situation is worsening but the chances of obtaining external loans as support, for example from the International Monetary Fund (IMF), are decreasing. At the same time there is mounting fear among the regime of social unrest, therefore by raising salaries of the least well-off groups of citizens it is trying to compensate for the increased costs of living. On the other hand, the government is extending the scope of control over society and competences of enforcement bodies. Belarus’s room for manoeuvre in foreign policy has also been diminishing substantially. Despite the EU’s declared willingness to reach an agreement and its encouragement, Lukashenko is not ready to make concessions in the political sphere (e.g. to rehabilitate political prisoners), and this is hindering the normalisation of relations with the West. Minsk furthermore feels a mounting pressure from Moscow, making the Belarusian negotiating position ever weaker. The lack of freedom of manoeuvre in foreign policy, no possibility to maintain a costly economic model and the lack of support from the majority of society all prove that Alexander Lukashenko’s regime is in severe crisis. The system he established is no longer able to respond to current threats with adequate and effective strategies. This situation is challenging the regime’s stability and calls into question its viability in the longer term.

Changes in the political elite, economy and society of Belarus: Appearances and reality. OSW Study 30/2008

In late 2006 and early 2007, relations between Russia and Belarus were hit by the most serious crisis in many years. In a setting of heightened tension, the Belarusian authorities decided to gradually modify their economic policy and thoroughly restructure the ruling class. The new situation created new, much more difficult challenges for the Belarusian opposition. The processes initiated by the authorities were not intended to bring about either the democratisation of public and political life or full economic liberalisation; their only purpose was to enable the regime to tackle new challenges and survive in the changing international context. Nevertheless, modernisation has been initiated in Belarus' authoritarian system of power, which until now was considered to be completely incapable of reform. This puts the country's main political and economic partners, including the European Union, in a new situation.

After the Euro Crisis: The President of Europe, A new paradigm for increasing legitimacy and effectiveness in the EU. EuropEos Commentary No. 12, 1 June 2012

The crisis in the eurozone– which became worse in Europe at the same time that the Lisbon Treaty entered in force at the end of 2009 – has presented the first test of the crisis management capabilities of the intergovernmental approach. As provided under the Lisbon Treaty, the European Council has been the true decision-making centre for the policies adopted in response to the financial crisis, with the Commission playing a technical role. This commentary finds, however, that this institutional set-up has been unsatisfactory and unable to overcome the three fundamental dilemmas of the integration process: the dilemma of veto power, the dilemma of enforcement of the agreements and the dilemma of decision-making legitimacy. While it remains to be seen whether the election of François Hollande as President of France signals the beginning of a new political cycle characterised by new ideas on the institutional future of the EU, if that were to materialise, this paper aims to contribute to the debate on those new ideas.

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.

Hegemony Without Stability: The fiscal and political vulnerabilities of monetary union. ACES Cases No. 2011.2

The crisis has forced the Euro area to establish an emergency fund that supports member states experiencing a sovereign debt crisis. The difficulties of coming up with such a fund for Greece and other Euro area members stands in marked contrast to the balance of payments support that non-Euro members like Hungary received, swiftly and quietly. In order to solve this puzzle, we first establish the difference between EU interventions and IMF programs and, second, trace the evolution of crisis management with France and Germany in the lead. The lens of hegemonic stability theory suggests that the Franco-German leadership is too weak to provide stability and the extensive use of conditionality is one symptom of this weakness. Providing incentives for cooperation "after hegemony" (Keohane) is the unresolved issues troubling the monetary union. Its dominant powers must acknowledge that markets perceive monetary union to be already politically more integrated than its lack of fiscal integration suggests.

The Euro: A Crisis of the Currency or a Failure of Politics? Paper from the Colloquium: The Politics and Economics of the Euro Crisis, Institute for European Studies, University of Malta, 2 December 2011

Summary: Overall the monetary pillar of the EMU project has worked well so that it is incorrect to speak of a 'euro' crisis though it is at the epicentre of the present crisis. The origins of the problems it is facing have more to do with the economic component, particularly because of the breach of budgetary rules which points to a failure of politics. Hence the solution must be political, namely a strong commitment by governments to achieve balanced budgets and implement structural reforms so as to lay the basis for improved competitiveness, job creation and sustainable growth.

Reviewing the EU’s Crisis Management Procedures. IES Policy Brief Issue 2012/04/November 2012

Summary. The ongoing review of the EU’s Crisis Management Procedures warrants attention. What passes as an update of an arcane and technical document masks a profoundly political debate concerning what the Common Security and Defence Policy (CSDP) should be about. This policy brief summarises the main proposals and formulates a set of critical reflections. It calls for replacing the bureaucratic scheming with a more forthright political debate, and warns against sacrificing incompatible organisational cultures on the altar of the comprehensive approach. At a time when European security and prosperity trends are increasingly pointing downwards, the EEAS and the member states must look to the future and embrace, rather than resist, change.

Lessons for the EU from the Senkaku/Diaoyu Islands Crisis. IES Policy Brief Issue 2013/01 • February 2013

Summary. From April until October 2012, China witnessed a series of public protests against the Japanese purchase of the Senkaku/Diaoyu Islands. Besides providing further evidence of growing Chinese nationalism, this unrest is interesting for other reasons relevant to EU policy. The Beijing leadership, which is traditionally perceived as the only source of foreign policy decisions in China, faces a changing domestic constellation. Domestic opinion increasingly constrains Chinese foreign policy, and it becomes obvious that foreign policy decision-making in Beijing is not insulated from larger social developments. Even if foreign policy decisions in China are still made without direct input from civil society, the influence of social forces on Chinese foreign policies has to be taken seriously. The EU thus might want to reconsider its approach to China: as long as EU concerns about human rights are met with a rather uncompromising attitude by the Chinese political elites, Brussels should double its efforts to reach Chinese civil society.

The Sahel Crisis: Where do European and African Perspectives Meet? IES Policy Brief Issue 2013/02/March 2013

Summary. The crisis in Mali has brought the Sahel to the centre of international attention. This fragile region not only suffers from longstanding development challenges, but also from an acute security vacuum that has triggered military intervention. Many questions have arisen as a consequence of the crisis. Has the European Union the ability to cope with such a complex and dynamically evolving security environment? How have divergent views on the political roadmap to be adopted, and the lack of resources at the African level, impacted the crisis response? Can the different players involved agree on what are the most pertinent needs and challenges to be addressed? Are they ready for long-term engagement? Can regional organisations effectively collaborate and are they able to successfully integrate different agendas? Following a conference organised by the Institute for European Studies, the Egmont Institute and the Observatoire de l’Afrique on these questions this Policy Brief builds on the findings of the conference and provides an analytical overview of the regional crisis by focusing on the main challenges facing the Sahel, the local and regional dynamics at play and the military and security response.

It’s not just Russia: Currency crisis in the Commonwealth of independent states. Bruegel Policy Contribution 2015/01, February 2015

The currency crisis that started in Russia and Ukraine during 2014 has spread to neighbouring countries in the Commonwealth of Independent States (CIS). The collapse of the Russian ruble, expected recession in Russia, the stronger US dollar and lower commodity prices have negatively affected the entire region, with the consequence that the European Union's entire eastern neighbourhood faces serious economic, social and political challenges because of weaker currencies, higher inflation, decreasing export revenues and labour remittances, net capital outflows and stagnating or declining GDP. •The crisis requires a proper policy response from CIS governments, the International Monetary Fund and the EU. The Russian-Ukrainian conflict in Donbass requires rapid resolution, as the first step to return Russia to the mainstream of global economic and political cooperation. Beyond that, both Russia and Ukraine need deep structural and institutional reforms. The EU should deepen economic ties with those CIS countries that are interested in a closer relationship with Europe. The IMF should provide additional assistance to those CIS countries that have become victims of a new regional contagion, while preparing for the possibility of more emerging-market crises arising from slower growth, the stronger dollar and lower commodity prices.

The economic and financial crisis in Russia – background, symptoms and prospects for the future. OSW Report 02/2015

The crisis in Russia’s financial market, which started in mid-December 2014, has exposed the real scale of the economic problems that have been growing in Russia for several years. Over the course of the last year, Russia’s basic macroeconomic indicators deteriorated considerably, the confidence of its citizens in the state and in institutions in charge of economic stability declined, the government and business elites became increasingly dissatisfied with the policy direction adopted by the Kremlin, and fighting started over the shrinking resources. According to forecasts obtained from both governmental and expert communities, Russia will fall into recession in 2015. The present situation is the result of the simultaneous occurrence of three unfavourable trends: the fact that the Russian economy’s resource-based development model has reached the limits of its potential due to structural weaknesses, the dramatic decline in oil prices in the second half of 2014, and the impact of Western economic sanctions. Given the inefficiency of existing systemic mechanisms, in the coming years the Russian leadership will likely resort to ad hoc solutions such as switching to a more interventionist “manual override” mode in governing the state. In the short term, this will allow them to neutralise the most urgent problems, although an effective development policy will be impossible without a fundamental change of the political and economic system in Russia.

An Exercise in Legal Honesty: Re-writing the Court of Justice and the Bundesverfassungsgericht. IHS Political Science Series No. 136, February 2014

At a time of crisis – a true state of emergency – both the Court of Justice of the European Union and the German Federal Constitutional Court have failed the rule of law in Europe. Worse still, in their evaluation of the ersatz crisis law, which has been developed in response to financial and sovereign debt crises, both courts have undermined constitutionality throughout Europe. Each jurisdiction has been implicated within the techocratisation of democratic process. Each Court has contributed to an incremental process of the undermining of the political subjectivity of European Citizens. The results are depressing for lawyers who are still attached to notions of constitutionality. Yet, we must also ask whether the Courts could have acted otherwise. Given the original flaws in the construction of Economic and Monetary Union, as well as the politically pre-emptive constraints imposed by global financial markets, each Court might thus be argued to have been forced to suspend immediate legality in a longer term effort to secure the character of the legal jurisdiction as a whole. Crisis can and does defeat the law. Nevertheless, what continues to disturb is the failure of law in Europe to open up any perspective for a return to normal constitutionality post crisis, as well as its apparent inability to give proper and honest consideration to the hardship now being experienced by millions of Europeans within crisis. This contribution accordingly seeks to reimagine each Judgment in a language of legal honesty. Above all, this contribution seeks to suggest a new form of post-national constitutional language; a language which takes as its primary function, proper protection of democratic process against the ever encroaching powers of a post-national executive power. This contribution forms a part of an on-going effort to identify a new basis for the legitimacy of European Law, conducted jointly and severally with Christian Joerges, University of Bremen and Hertie School of Government, Berlin. Differences do remain in our theoretical positions; hence this individual essay. Nevertheless, the congruence between pluralist and conflict of law approaches to the topic are also readily apparent. See, for example, Everson & Joerges (2013).

Promoting the agenda for a social Economic and Monetary Union: Attention, credibility and coalition-building. Bruges Political Research Paper No. 37, November 2014

In the aftermath of the crisis, new instruments of economic governance have been adopted at the EU level. Until recently, these have been strongly dominated by what I assume to be the ECFIN coalition. However, at least since 2011, this coalition’s supremacy has been challenged by the competing coalition’s (EPSCO) willingness to rebalance the economic governance so that social concerns are better taken into account. Hence, drawing on the agenda-setting literature in the EU context, this working paper aims at retracing the process that has led to put this issue of the social dimension of the EMU on to the EU political agenda. Three hypotheses are made concerning the rise of this issue, the strategies employed by agenda-setters, and the policy subsystem of the economic governance. First, this study shows that the interest in this issue has been gradually fostered ‘from below’, at the level of the European Parliament and the European Commission. Second, due to its ‘high politics’ nature, this issue could only be initiated ‘from above’ (European Council) and then expanded to lower levels of decision-making (Commission). Specifically, DG EMPL has managed to attract attention to this issue and to build its credibility in dealing with it by strategically framing the issue and directing it towards the EPSCO venue. Finally, I analyze the outcome of this agenda-setting process by assessing to what extent the two new social scoreboards which form part of this social dimension have been taken into account during the 2014 European semester. The result of this analysis is that the new economic governance has not been genuinely rebalanced insofar as its dominant policy core remains that of the ECFIN coalition.

A Crisis of Democratic Legitimacy? It’s about Legitimation, Stupid! European Policy Brief No. 21, March 2014

Are we witnessing a crisis of democratic legitimacy? While citizens may lose trust in political authorities, democratic principles and ideals continue to exercise considerable appeal. This Policy Brief argues that this paradox must be understood as a crisis of legitimation. Research suggests that legitimacy is inherently subjective and must be constantly re-earned. Low levels of political trust can be explained as the result of the complexity of globalised yet fragmented societies. The present feeling of malaise calls for a redefinition of the relationship between citizens and the authorities by which they are ruled. If popular sovereignty is to mean anything in today’s age, it requires a new legitimising narrative.