Russia and its Near Neighborhood: Competition and Conflict within the EU. Natolin Research Paper 04/May 2011

Russia in 2004 politely rejected the offer to become a participant in the European Neighbourhood Policy, preferring instead to pursue bilateral relations with the EU under the heading of ‘strategic partnership’. Five years later, its officials first reacted with concern to the ENP’s eastern dimension, the Eastern Partnership initiative. Quickly, however, having become convinced that the project would not amount to much, their concern gave way to indifference and derision. Furthermore, Russian representatives have failed to support idealistic or romantic notions of commonality in the area between Russia and the EU, shunned the terminology of ‘common European neighbourhood’ and replaced it in EU-Russian documents with the bland reference to ‘regions adjacent to the EU and Russian borders’. Internally, the term of the ‘near abroad’ was the official designation of the area in the Yeltsin era, and unofficially it is still in use today. As the terminological contortions suggest, Moscow officials consider the EU’s eastern neighbours as part of a Russian sphere of influence and interest. Assurances to the contrary notwithstanding, they look at the EU-Russia relationship as a ‘zero-sum game’ in which the gain of one party is the loss of the other. EU attempts to persuade the Russian power elite to regard cooperation in the common neighbourhood not as a competitive game but providing ‘win-win’ opportunities have been to no avail. In fact, conceptual approaches and practical policies conducted vis-à-vis the three Western CIS countries (Belarus, Ukraine and Moldova) and the southern Caucasus (Georgia, Armenia and Azerbaijan) confirm that, from Moscow’s perspective, processes of democratisation, liberalisation and integration with Western institutions in that region are contrary to Russian interests. In each and every case, therefore, the area’s ‘frozen conflicts’ have not been regarded by the Kremlin as an opportunity to promote stability and prosperity in the countries concerned but as an instrument to prevent European choices in their domestic and foreign policy. The current ‘reset’ in Russia’s relations with the United States and the ‘modernisation partnership’ with the EU have as yet failed to produce an impact on Russia’s policies in ‘its’ neighbourhood. The EU is nevertheless well advised to maintain its course of attempting to engage that country constructively, including in the common neighbourhood. However, its leverage is small. For any reorientation to occur in Moscow towards perceptions and policies of mutual benefit in the region, much would depend on Russia’s internal development.

When the rising dragon sees fading stars: China's view of the European Union. CEPS Special Report No. 73, 29 November 2012

This CEPS Special Report gives an overview of China’s perceptions of the EU and the protection of Chinese investments in Europe since the outbreak of the European sovereign debt crisis, especially since the more concrete talks in late 2011 on possible financial support from China. Although the top leadership of the communist party of China (CPC) changed in its recent handover, the perceptions described in this paper are likely to remain the same, just as the main tenets of China’s foreign policy are unlikely to change in the near future. The report argues that while the EU’s image has suffered greatly from the sovereign debt crisis and the way it has been handled, there is room to improve China’s view of Europe and for the EU to maintain a relatively strong negotiation position towards China.

Saving the Monopsony: Exclusivity, Innovation and Market Power in the Media Sector. Research Papers in Law, 7/2006

From the Introduction. The Media Sector has experienced a technological revolution in the last 15 years. Digital encoding of television signals made possible a more efficient use of the radiospectrum. Digital terrestrial television (hereinafter, “DTT”) allows now for the reception of a significant number of free-to-air channels.1 Moreover, the use of new transmission platforms (hereinafter,“platforms”), namely cable and direct-to-home satellite (hereinafter, “DTH”) paved the way for the arrival in Europe of pay-TV operators, which finance their activities mainly via subscription fees. This changing technological landscape is subject to further evolution in the near future, as incumbent telecommunications operators become increasingly interested in making available broadcasting content2 as part of their broadband offer and 3G mobile handsets can be used for the reception of TV signals....The present paper seeks to ascertain whether the Commission “regulatory approach” towards the exclusive sale of premium content is a sound one, in particular in view of the constant technological evolution outlined above. The assumptions underlying landmark Commission decisions will be compared with recent developments of the media sector in Italy. In the NewsCorp./Telepiù case, decided in 2003, the Commission imposed very strict conditions to allow the merger giving birth to Sky Italia, on the assumption that the operation created a lasting near-monopsony in the different upstream markets for the acquisition of premium intervened against the media conglomerate Mediaset (which controls, inter alia, the main three private free-to-air channels in Italy) for an alleged abuse of dominant position.17 In fact, and contrary to the forecasts made by the Commission, Mediaset was in a position to acquire the broadcasting rights of the main Italian football teams, thereby excluding the incumbent (and near-monopolist) pay-TV operator, Sky Italia. This may go to show that the reality of the sector is more complex and evolves faster than one may infer from the Commission practice, thus putting into question its stance regarding exclusivity. The experience of the evolution of the Italian media sector will be used as the starting point for the evaluation of alternative regulatory options.

The roots of economic challenges facing Egypt in the aftermath of the 25th January revolution. Jean Monnet Occasional Paper No. 9/2014

Introduction. Since the 25th of January 2011 revolution the Egyptian economy has been suffering on all fronts. Almost all the economic indicators have been pointing towards a deteriorating situation, and in many cases have reached the trough. Yet, the economy is still surviving. This is mainly due to the unprecedented support of some of Arab Gulf countries, whose unconditional aid has helped to mitigate the deteriorating economic conditions. The economic challenges facing Egypt have been exacerbated after the 20th of January revolution mainly because of the deteriorating political and security conditions which have interrupted the functioning of the economy. Yet, this is not to say that revolution has caused these challenges. In fact, the challenges that the Egyptian has been facing have deep roots in its socio-political-economic context, which this paper aims to explain. The revolution and its aftermath have brought to the forefront challenges which have always been mitigated by short-term solutions that never dealt seriously with their roots. Moreover, the revolution has brought additional problems associated with the macroeconomic imbalances. As a result, the challenges became more complex especially in light of the need to balance the social and economic aspects. The paper proceeds as follows; in section one we pinpoint the main challenges faced by Egypt where we identify the symptoms and causes of such challenges. In section two we discuss the roots of such challenges. Finally, we conclude and provide our understanding of how Egypt is expected to face its challenges in the near future.

Russia goes on the offensive ahead of the Eastern Partnership summit in Vilnius. OSW Commentary No. 115, 30.09.2013

In recent weeks, Russia has stepped up its efforts to prevent a group of former Soviet republics from tightening their relations with the European Union. The intensification of these efforts comes ahead of the upcoming Eastern Partnership summit, scheduled to take place in Vilnius on 28-29 November. It is expected that during the summit Kiev will sign the EU-Ukraine Association Agreement (AA) initialled in March 2012, including an agreement for a Deep and Comprehensive Free Trade Area (DCFTA). Meanwhile, Moldova, Armenia and Georgia are expected to initial similar documents, effectively accepting their terms and conditions, and paving the way for their official signing in the near future. Moscow has always viewed the relations between the EU and the post-Soviet states as a threat to its own influence in the region. Consequently, any attempts to tighten these relations have been actively opposed by Russia. The EU’s Eastern Partnership programme, launched in 2009, has posed a particular challenge to Moscow’s policies in the region.. Russia responded by rolling out a Eurasian integration project, which began in 2010 with the establishment of the Customs Union of Russia, Kazakhstan and Belarus, and is expected to culminate in the establishment of the Eurasian Economic Union by 2015. Moscow’s overarching objective has been to persuade the countries in the region, especially Ukraine, to adopt an unambiguously pro-Russian geopolitical stance and to join the integration project proposed by the Kremlin. The Russian government hopes that this would permanently place these states in Moscow’s sphere of influence and at the same time prevent them from developing closer relations with Brussels. Russia has regularly taken actions aimed at showcasing the benefits of integration with the Customs Union (particularly, by promising preferential pricing of Russian energy resources) and at the same time it has adopted measures highlighting the pitfalls of retaining a pro-European orientation (mainly by imposing occasional trade sanctions). The upcoming summit in Vilnius, during which Ukraine, Moldova, Armenia and Georgia could lock themselves on to a pro-European course, has spurred Moscow to intensify its efforts to torpedo a successful outcome of the Vilnius meeting, with a view to slowing down or even blocking the possibility of closer cooperation between the EU and the former Soviet republics.

The crisis in Iraq and the twists and turns of Turkish Middle East policy. OSW Commentary No. 142, 29.07.2014

The spectacular offensive by Islamic radicals in Iraq this June has led the country to the verge of collapse, and is another scene of the deep crisis in the Middle East, in which Turkey is entangled. The immediate consequence of this is a severe crisis of prestige after the kidnapping by terrorists of Turkish diplomats and Ankara’s inability to resolve the situation; in the long term consequences include escalation of the Kurdish problem, and a further increase in threats to the security of Turkey itself as well as the fundamental principles of its foreign policy. Both Ankara’s options and its political will to actively respond to the crisis are extremely limited. Yet again in recent years, the current crisis, the broader situation in the Middle East, and finally the position of Turkey in the region elude unambiguous assessments and forecasts – these are prevented by the scale and growth of the reappraisals and tensions in the region. The only undoubted fact is that Turkey is strategically and irreversibly entangled in the Middle East’s problems, which are an important factor affecting the transformation of the state which the ruling AKP is implementing; and in the near future, this state of affairs will only deepen.

Visegrad development aid in the Eastern Partnership Region. OSW Report, February 2014

The international development cooperation systems of the Visegrad countries are all rather new, in most cases only about a decade old. They are still undergoing reforms and the countries are striving to strengthen their own profiles as development donors in the world by gradually increasing their bilateral ODA. Although their resources are limited and were further cut due to the financial and economic crisis, the bilateral ODA ratio of the Visegrad countries as a group spent in the EaP region gradually increased after 2009. Given that the individual systems are still developing and the countries are focusing on creating their own brand, it is highly unlikely that in the near future it would be in their interest to set up a common development fund – either for the EaP region or in general. Instead of creating new institutions, however, a rationalization of the current cooperation systems and a consolidation of existing resources is feasible and should be considered.

Ukrainian economy on the verge of recession. OSW Commentary No. 96, 2012-11-21

In the third quarter of 2012, Ukraine’s economy recorded negative growth (-1.3%) for the first time since its 2009 economic crisis. Q4 GDP is projected to suffer a further decline, bringing Ukraine into formal recession. In addition to the worsening macroeconomic indicators, Ukraine is also facing a series of concomitant economic problems: a growing trade deficit, industrial decline, shrinking foreign exchange reserves, and the weakening of the hryvnia. Poor economic growth is expected to result in lower than projected budget revenues, which in turn could lead to the sequestration of the budget in December. The decline evident across the key economic indicators in the second half of 2012 brings to a close a period of relative economic stability and two years of economic growth, which had been seen as a significant personal achievement of President Viktor Yanukovych and the ruling Party of Regions. The health of the Ukrainian economy largely depends on the state of the country’s export- -oriented industries. The current economic forecasts for foreign markets are not very optimistic. It is impossible to determine whether the current economic downturn is likely to be merely temporary or whether it heralds the onset of a prolonged economic crisis. The limited capacity to deal with the growing economic problems may mean that Kiev will need to seek financial support from abroad. This is particularly significant with regard to external debt servicing, since in 2013 Ukraine will need to pay back around 9 billion USD, including over 5.5 billion USD to the International Monetary Fund. In order to overcome the recession and stabilise public finances, the government may be forced to take a series of unpopular measures, including raising the price of natural gas and utilities. These measures have been stipulated by the IMF as a condition of further financial assistance and the disbursement of the 12 billion USD stabilisation loan granted to Ukraine in July 2010. The only alternative for Western loans and economic reforms appears to be financial support from Russia. The price for Moscow’s help might however turn out to be very high, and precipitate a turn in Kiev’s foreign policy towards a gradual re-integration of former Soviet republics under Moscow-led geopolitical projects.

Economic Approaches of the Internal Market. Bruges European Economic Research (BEER) Papers 13/April 2008

What is ‘the’ EU internal market, as economists see it? The present BEER paper attempts to survey and help readers understand various ‘economic’ approaches to the internal market idea. The paper starts with a conceptual discussion of what ‘the’ internal market is (in an economic perspective). Six different economic meanings of the internal market are presented, with the sixth one being the economic benchmark in an ideal setting. Subsequently, the question is asked what the internal market (i.e. its proper functioning) is good for. Put differently, the internal market in the EU Treaty is a means, but a means to what? Beyond the typical economic growth objectives of the Rome Treaty (still valid today, with some qualifications), other Treaty objectives have emerged. Economists typically think in means-end relationships and the instrumental role of the internal market for Treaty objectives is far from clear. The ‘new’ Commission internal market strategy of 2007 proposes a more goal-oriented internal market policy. Such a vision is more selective in picking intermediate objectives to which ‘the’ internal market should be instrumental, but it risks to ignore the major deficits in today’s internal market: services and labour! The means-end relationships get even more problematic once one begins to scrutinise all the socio-economic objectives of the current (Amsterdam/Nice) Treaty or still other intermediate objectives. The internal market (explicitly including the relevant common regulation) then becomes a ‘jack of all trades’ for the environment, a high level of social protection, innovation or ‘Social Europe’. These means/ends relationships often are ill-specified. The final section considers the future of the internal market, by distinguishing three strategies: incremental strategies (including the new internal market strategy of November 2007); the internal market as the core of the Economic Union serving the ‘proper functioning of the monetary union’; and deepening and widening of the internal market as justified by the functional subsidiarity test. Even though the latter two would seem to be preferable from an economic point of view, they currently lack political legitimacy and are therefore unlikely to be pursued in the near future.

The harsh reality of Ukraine's fiscal arithmetic. Bruegel Policy Contribution ISSUE 2015/07, June 2015

Ukraine is struggling with both external aggression and the dramatically poor shape of its economy. The pace of political and institutional change has so far been too slow to prevent the deepening of the fiscal and balance-of-payments crises, while business confidence continues to be undermined. • Unfortunately, the 2015 International Monetary Fund Extended Fund Facility programme repeats many weaknesses of the 2014 IMF Stand-by Arrangement: slow pace of fiscal adjustment especially in the two key areas of energy prices and pension entitlements, lack of a comprehensive structural and institutional reform vision, and insufficient external financing to close the expected balance-of-payments gap and allow Ukraine to return to debt sustainability in the long term. • The reform process in Ukraine must be accelerated and better managed. A frontloaded fiscal adjustment is necessary to stabilise public finances and the balance-of-payments, and to bring inflation down. The international community, especially the European Union, should offer sufficient financial aid backed by strong conditionality, technical assistance and support to Ukraine’s independence and territorial integrity.

Flashlight Europe N°7–09 July 2015. Greece After the Referendum: Three Possible Scenarios for the Euro Area

About ten days ago Alexis Tsipras, the Greek prime minister, announced that there was going to be a referendum, and thus terminated the negotiations on a new rescue package unilaterally. Since then the euro area has been plunged into a wholly unprecedented political crisis. Whether or not Greece can re-main in the monetary union is more uncertain than ever, and decisions that can give a new twist to the political and financial situation are being made almost every day. The Greek banks have been closed for over a week. The economic data are deteriorating rapidly. And yet a solution is nowhere to be seen. The No vote in the Greek referendum has not exactly improved the chances of reaching an agree-ment. For the time being the positions seem to have become uncompromising. At the summit of the heads of state and government on 7 July the Greek government was given five days and a “final deadline” in order to come up with viable proposals for reform. Thus the next few days are of crucial im-portance. At the weekend the heads of state and government of all 28 EU member states are going to meet in order to decide the future of Greece. This flashlight europe provides an overview of the events of the last few days, outlines possible scenarios for what may happen in the near future, and identifies factors which may exert an influence in the short term. We are not trying to give an exact forecast or to formulate action recommendations. But we are trying to shed some light on a confusing situation by identifying important patterns and some of the salient factors.

Prospects for Security on the European Continent. EU Diplomacy Paper 05/2015.

This collective EU Diplomacy Paper on relations between the North Atlantic Treaty Organisation (NATO) and the European Union (EU) consists of essays written by students of the EU International Relations and Diplomacy Studies programme at the College of Europe in the class on EU-NATO relations taught by Fulbright Professor Mark Sheetz in the academic year 2014-15. It seeks to provide a blueprint of what the near future of the transatlantic alliance and of the European security framework might look like. Special attention will be given to the possible effects of Finland joining NATO, Swedish-NATO relations, the question whether NATO should continue to exist at all, and finally the use of the Common Foreign and Security Policy (CFSP) and the Common Security and Defence Policy (CSDP) in relation with the transatlantic military alliance.