No greater nightmare would have been imagined by the technocrats in Brussels when forming the guidelines for expanding the EU than one of the new and relatively unprepared nations joining the EU becoming a candidate for removal from the Union. All nations in applying for EU membership had to meet specific economic stability levels to be able to join the Union. It was expected that most who joined the EU met the designated criteria, but in reality a global economic crisis and pressures for many European countries to become part of the economic bloc was substantial. Being a European country outside of the EU was tantamount to keeping their nations out of the largest trading regime in the region and globally, as well as forcing their currency to compete with those of their main investors in the region who would likely do business in Euros in any case. So the question arises in 2010, did Greece, and other Southern European countries have the economic stability to become part of the EU at the time they joined? and if they did not, was it an error on Brussels part or that of Athens or both?

The lesson of Greece in 2010 is not a new one, but perhaps is new for those countries within Fortress Europe. Currently officials in the EU’s largest economies are spending most of their time assuring investors that the EU is stable, the Euro is sound a lot more than a Pound, and that Greece’s austerity measures will be one of success and not succumb to pressure inside Greece from its labour unions and protestors. The fear is that the globalisation of investment will catch up to the EU as it has done with many countries in the past when investor confidence has waned in a country. The EU is not only concerned about Greece however, but most of Southern Europe as the impression of false information and lack of transparency on a country’s books can lead to a Contagion, which in the dictionary of Globalisation means a frantic rush of investment out of a country based on a large part on investor speculation. So the reaction to negative media, is positive media, and if the books are sound or have issues it might not matter if investors believe they might lose some of their investment.

In 2001 economic measures in Latin America’s two economic giants of Brazil and Argentina set the standard in IMF development programs at the time. The IADB at the time spent much of its efforts vocalising against reports that Argentina’s Central Bank did not have the funds to pay down its debt and that reserves could not support the 1 peso to 1 dollar rate established by the bank at the time. The head of the IADB in 2001 knew that any negative publicity and doubt about Argentina’s Central Bank would take any negative issues in the country’s finances and create a situation where investment would bleed out of the country at a record setting pace. The globalisation of investment meant that slight instability and bad publicity could lead to an economic tragedy, and at the end of 2001 it lead to a collapse of a scale never before seen in global economics.

In those economies in 2010, Brazil’s austerity measures and slow growth development has poised it to become one of the next Supereconomies, and Argentina’s President Cristina Kirchner is in the middle of a fight with her government, Judiciary and Central Bank to use austerity funds and her Executive powers to pay down Argentina’s debt, due soon, and reengage with the international investment community to be able to take loans again and receive a good investor rating. Whether attempting to fire her Central Bank governor and going against the judiciary helps investor confidence is questionable, but the drastic action in Argentina to recover from 2001 or Greece’s positive investor campaign in 2010 simply needs to keep liquid investments in the country and keep investors believing that their economies are transparent and investor friendly.

The reaction to the globalisation of investment by Germany in this latest Greek Tragedy and the US in handling their own debts share little difference between their issues and those of Brazil and Argentina in 2001 and after. Everyone knows that nervous investors can take an economic issue and turn it into a crisis. The closing of banks in Argentina in 2001 and blocking people legally from removing their cash from the country likely will not happen in the EU if the media campaign to save Greece does not allow for a contagious effect to break investor confidence in Italy, Spain and Portugal. In the end, EU Expansion might be on hold for the time being and the Euro will be at its lowest rate since it first became available on global markets…it was probably too high anyways, making now a good time to visit the Eurozone!

The Council on Hemispheric Affairs recently published an interesting article online discussing the EU policy towards Cuba, and its effectiveness in balancing trade, human rights and US-EU policy regarding Castro’s Cuba. COHA research associate Evgenij Haperskij points out that the EU’s “Common Policy” towards Cuba has suffered from the same problems as many policies in the EU that affect one member more than the other current 27 members, in that EU interests on certain key issues tend to aggravate national issues and have no clear supranational result in the EU itself. Focusing on national issues when one member has stronger ties with one policy issue than other members in the EU is not wholly negative, but with complex issues such as Cuban relations, EU ties with the US and non-US reaction to the 1996 Helms-Burton Act, the Common Policy becomes a policy of accommodating the optics of EU-Cuba relations as opposed to solving technical issues between the two countries.

Spain has taken on the Presidency of the EU since January and outstanding issues between the EU and Cuba may become one of the key achievements of Spain’s EU Presidency. Spain has always pushed for a more open relationship with Cuba since the Common Policy was adopted in 1996 as a response to Helms-Burton. Spain and its companies have been the most active European firms in the island and outstanding debt with Cuba and Spanish companies have been an unresolved issue since adoption of Helms-Burton in 1996. While the Clinton administration eased some restrictions towards foreign companies operating in Cuba since then and US-Cuban relations have opened up somewhat under Raul Castro, the EU has yet to ease its own policy ties with Cuba, ones which tie economic development to the progression of democracy and rights on the island. EU policy in Cuba has done little but to aggravate relations between Castro and Brussels with little improvements in EU-Cuban economic relations nor a concrete improvement for human rights on the island. Despite this, the economic and cultural ties between Spain and Cuba and the general opening up of ties between the US and Cuba will allow Spain to widen its relations with Cuba and produce less opposition among EU members as Cuban ties will not affect US ties with EU, even thought other EU members would like a more democratic Cuba and new Central European EU members would prefer weaker ties with Cuba who is seen as having stronger links with Moscow.

Opening ties with Cuba might be a great achievement for Spain, but may do little to get media attention outside of the Iberian Peninsula. In the end, Spanish companies which number 280 firms that have been or had operated in Cuba have $US300 million in payments owed to them suspended in Cuba through investment ties or by its the Cuban government. With countries like Cuba not often giving compensation for property of foreign companies or forcing legal processes for compensation to be processed within the Cuban legal system, it is in Spain’s interest to quietly deal with Cuba and appease the US and other EU members where it sees fit. In the end, the natural ties Spain has with Cuba economically, socially and culturally might serve Cuba and Spain better in the long run than the lack of contact since 1996 between the US and EU with Castro’s Cuba.

Here is a video dispatch on what’s to come for Europe in 2010, as the Lisbon Treaty comes into effect.

The relatively unknown Brit, former EU Trade Commissioner and UK minister, Baroness Catherine Ashton was selected last month to be the European Union’s first official High Representative for Foreign Affairs and Security Policy.  The move came following the approval of the Lisbon Treaty, held up for almost a year by countries like Ireland and the Czech Republic.

Writing in The Times of London, Ashton outlines her approach to the new position, beginning with the creation of a new European diplomatic corps — to be known as the European External Action Service — and outlining a number of challenges she faces  in her new and unprecedented role.

Read the Article Here

According to an article in the Guardian:

The draft says a future Palestine should be made up of the West Bank and Gaza with East Jerusalem as its capital. It adds that the EU did not recognize Israel’s annexation of East Jerusalem – a position shared by the rest of the international community. “If there is to be a genuine peace, a way must be found to resolve the status of Jerusalem as the capital of two states,” says the draft, which the Israeli newspaper Ha’aretz has obtained a copy of.

“After the important steps taken by the government of Israel to enable the resumption of negotiations with the Palestinians, the European Union must now exert pressure on the Palestinians to return to the negotiating table. Steps like those being led by Sweden only contribute to the opposite effect.”

Read the full article HERE

“It would be impossible to have a better choice of personalities for European Union leadership,” said European Commission President José Manuel Barroso in an EU briefing.

Under the treaty, Herman Van Rompuy, the Prime Minister of Belgium became the permanent President of the European Council and Catherine Ashton, the EU Trade Commissioner and former leader of the British House of Lords became the High Representative of the Union for Foreign Affairs and Security Policy. Additionally, Pierre de Boissieu, the current Deputy Secretary General of the Council of the EU, become its Secretary General.

Read the Briefing Here

The Pact is still painfully relevant. As Figges says the Pact remains “a constant thorn in Russia’s relations with neighbouring European states”, as Russia has shown repeatedly, and most recently in Georgia & Ukraine, that the Soviet notion of sphere of influence is very much alive in Russia’s foreign policy.

Last April the European Parliament called for “the proclamation of 23 August as a Europe-wide Remembrance Day for the victims of all totalitarian and authoritarian regimes, to be commemorated with dignity and impartiality”. For those European countries who still deal with the effects of totalitarianism on their country and their families, the 23 of August is a day that will remain in their hearts for all the wrong reasons.

Leonhard Lapin: Molotov-Ribbentrop - The uneasy alliance of hammer & sickle and swastika

As if this was not enough action, in addition to the above, the EU this week has already tightened travel-bans on those involved in the sentencing of Burmese leader Aung San Suu Kyi, condemned a deadly suicide bombing in the southern Russian republic of Ingushetia, been called to support monitoring of Isaeli nukes by the Arab League and signalled that it will impost harsher sanctions against Iran.

All this suggests that the newly strengthened (under the yet-to-be-approved Lisbon Treaty) High Representative for Foreign Policy will have plenty of work as will the newly created (under the same Treaty) President of the European Council will have plenty of work when appointed. But even then, I doubt they will resist the temptation to tempt fate and go on holidays next August - just as long as they keep their PDA on!

Some European Swimming Pools are likely to be empty this summer as the EU's foreign policy engagement leads to some unforeseen actions

The European Union has often acted in the past as the whipping boy for Member State politicans for  the effects of some of its unpopular but necessary policies. Therefore it is actually qute unbelievable that that the catostrophic effects of the worst economic crisis since the Great Depression has not weakened the Union and has actually had a unifying effect.  Many factors have affected this, including the radid informal March summit (on which I blogged)  where European leaders had to face each other and, in the process, collectively face away from intra-EU protectionism. However, a greater conclusion about the European Union itself must be drawn. As Moravcsik says “the crisis taught Europeans that if they want to protect their prosperity, there is no alternative to tighter policy coordination” - it appears that the EU has proved that it has an undeniable underlying logic for Europeans and it must be concluded that it will be providing solutions for economic, social & political problems for many years to come.

The EU's underlying logic means it will be around for years to come

In May the EU also highlighted that it will seek to harmonise rules for the selling of digital conent throughout the EU. This will mean (for example) that an EU consumer cannot be stopped from dowloading a song from another EU country because the licence does not cover sale in the consumer’s country (an extremely frustrating experience for me especially when trying to dowload new Belgian music on my Irish credit card). EU Information Society and Media Commissioner Viviane Reding stated “in the EU, consumer rights online should not depend on where a company or website is based. National borders should no longer complicate European consumers’ lives when they go online to buy a book or download a song” . “In spite of progress made, we need to ensure that there is a single market for consumers as well as businesses on the web.” I agree heartily - please hurry up!