Policy Paper §3: Economic Consequences of the Western protectionist emancipation

Policy Paper §3: Economic Consequences of the Western protectionist emancipation

Teodor Kalpakchiev

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3-07

Since his election Trump has embarked on a more restrictive economic policy, which includes reshuffling domestic policies, re-negotiating trade deals, as well as restricting America’s participation in multilateral organizations, thus reviewing traditional relationships with other countries.

The impending economic disjuncture

Globalization, as per popular conviction and theoretical underpinnings, is a result of the expansionary industrialization of England and USA combined with an attempt to structure value chains via exploiting the natural and human endowments of former colonial territories. Additionally, the block has been a stark proponent of deregulation, which provides a boost to emerging domestic economic operators by allowing them to float freely in the global economy. In order to secure a global market for its companies, the Obama administration embarked on coalescing these by materializing the interregional trans-Atlantic and trans-Pacific deals respectively with EU and East Asia. The strenuous process had a sobering effect on these counterparts, which realized that the globally present American companies would relish excessive advantage in competing with theirs, as well as sizeable extra-judicial protection. Trump’s motives mirrored a number of contrasting concerns, such as China’s GDP growth being continuously three times bigger while retaining parity in purchasing power and leverage in high-tech exports and monetary reserves[1]. The strong dollar and retrieving value chains from the regional NAFTA meant to him an opportunity to foment job places and incentivize growth, thus increasing American citizens’ ability to purchase imported goods and restoring USA’s place as the leading global economy. We may define his pledge to cut regulation by 75%[2], reduce corporate taxes and instigate trade barriers as protectionist neoliberalism, aimed at absorbing the waning fossil fuel prices and stagnant commodity prices’ growth. Thus, in contrast to Russia’s willingness to pave its way towards expansionism to the poles, Trump rather aims to maximize the attraction force of the Singaporean economic freedom and accumulate capital for the further modernization of America.

The trade – sustainability nexus

The juxtaposition between USA and China is expected to lead to a war between two camps in the global economy – that of neoliberalism and of regulatory statehood. Concerning trade, the new constellations are already taking shape. The first camp will be under the leadership of the English speaking-western camp, which will attempt to align to itself India, Australia and potentially Brazil. The second camp will be under the leadership of the European Union and China, which are the ripest emanations of regulatory statehood. The EU’s exclusive competence over the trade domain has led to the proliferation of trade negotiations with the different state and regional counterparts in Asia, as well as with Mercosur and South Africa[3]. While TTIP is still high on the agenda of the EU, it has become clear that the EU and the US would find it difficult to find a common denominator of the negotiations. Rather, the EU would reverse its available expertise in negative economic integration into a positive one by transforming its environmental and market standards into trade barriers. For the environmental domain is one of the essential legitimizing factors for the existence of the European Union, the European leadership would potentially adjust to the new reality by increasing its ownership over the environmental domain together with China. This would accrue further losses for the English-speaking world, as environmental goods hold the key to future economic growth.

Post-sovereignty or realist hegemony?

Trump and May have advanced themselves as proponents of a realist world, where hegemonic core-states would assume the role of agenda-setters globally. Their preferences clash substantially with the EU’s externalization of a post-sovereign order, whereby the EU uses its market to externalize both standards and organizational patterns[4]. The USA would rather prefer countries from the developing world to lack a form of self-organization, which would give them leverage in the trade negotiations. On the contrary, the EU sees in these potential like-minded collaborators, who are interested in advancing a forward-looking, post-sovereign agenda. Trumps’ and May’s neoliberal protectionism is an attempt to redirect taxpayers’ money from multilateral and regional organizations back to their own states. In addition to the financial disruption of post-sovereign establishments, Trump is deliberately propagating further „Exits“ of European Union member states, defining NATO as redundant[5] and phasing out the sustainable development goals from his agenda. For UK and US are nominal net payers, who are securing the functioning of regional and multilateral organizations, their phasing out would drastically cut available expenditures.

The consequences in the security domain would necessitate the reinvigoration of the existing security architecture in Europe. Although the OSCE has lived through a downfall, the revival of the East-West dichotomy will possibly necessitate a revision of the consensus-driven, non-binding rules making, as well as the low degree of institutionalization[6] of the organization. The possible withdrawing of NATO has resulted in the strengthening of the European Defence Agency’s capacity, as well as in programs for pooling of the capacities of EU member-states, which is rather directed at creating a pan-European defence procurement market, as well as increasing the effectiveness of research and innovation in the domain. In the environmental sustainability domain, the EU would continue with its manifold efforts at exporting its regulatory standards and shaping multilateral environmental negotiations. Concerning global multilateral efforts, it is quite probable that the EU would focus on increasing investment in environmental goods and technological transfer through the liberalization of trade in environmental goods among the highly industrialized states. It is namely there, where the EU would probably focus its protectionist efforts to undermine deregulation trends.

Effects on different regions

Along the security problematic, further research will explore whether the economic effects of the transition towards protectionism and the erosion of transnational institutions will actually take place, as well as how the new cooperation constellations will look like.

The most profound changes will be happening in East Asia, where China’s appetite for the territories in South China Sea is combined with an effort to step up globalization along domestic convictions for an uptake of inclusivity and sustainability. With the fall of the Trans-Pacific Partnership, China has reoriented itself into creating a free-trade area with ASEAN, Central Asia and other smaller countries that surround it. Its accession in the WTO, as well as the availability of capital reserves would allow it to prop up investments in the modernization of the economy, as well as the rewriting of the trade rules alongside new developments. Its One Belt, One Road initiative has increased the competition among other regional establishments in Asia and is likely to have substantial effects on Russia’s immediate neighbourhood, as well as on the programming of EU’s collaborative action eastwards. The American isolationism is rather seen as an opportunity for China to take over its place as global hegemon via the discussed plans.

Seemingly, OPEC countries in the Middle East have realized that the falling oil prices would result in maintaining good export volumes. However, the revenues from these are likely to be reinvested in an infrastructure that increases their own energy independence. While militant groups and issues with public health shake most of West and Central, and partially East Africa’s stability, regionalization and ceremonial public diplomacy is on the rise. African leaders are concerned mainly with development-oriented goals, such as securing access to water, food, shelter and education as a mean to offset expansionary growth. The European Union is readily investing in these sectors with its development aid, while attempting to build state institutions via horizontal cooperation. The expectation that Africa’s population will increase from 1.2 billion to almost 2 billion also makes such actions a necessity, as to avoid another migration crisis that will completely shatter Europe. Potentially, should UK exit the European Union, East and South Africa could be compelled to join the Global Britain project together with India and Australia.

South America, which was severely shaken by the oil bust, is focusing on diversification and poverty alleviation, with regionalism being largely on the rise with projects such as MERCOSUR, the Andean Communities, UNASUR and CELAC. The European Union is largely interested in a horizontal sharing of expertise, as well as the conclusion of an inter-regional trade agreement, modelled possibly on the lessons from ASEAN. While traditionally the North-South exchange on the continent was much stronger, Trump’s retaliation towards Mexico would serve as a lesson for the continent, which would seek alliances that will make it more independent.

[1] World Economic Forum, The world’s top economy: the US vs China in five charts, 05.12.16 https://www.weforum.org/agenda/2016/12/the-world-s-top-economy-the-us-vs-china-in-five-charts/

[2] The Atlantic, Trump’s Promises to Corporate Leaders: Lower Taxes and Fewer Regulations, 31.01.2017 https://www.theatlantic.com/business/archive/2017/01/trump-corporate-tax-cut/514148/

[3] European Commission, DG TRADE, Overview Of Fta And Other Trade Negotiations, February 2017 http://trade.ec.europa.eu/doclib/docs/2006/december/tradoc_118238.pdf

[4]  Sandra Lavenex & Frank Schimmelfennig (2009) EU rules beyond EU borders:

theorizing external governance in European politics, Journal of European Public Policy, 16:6,

791-812, http://tandfonline.com/doi/full/10.1080/13501760903087696

[5] Piotr Buras, Prepare for a New Europe, Stefan Batory Foundation, February 2017, p. 5-7 http://www.batory.org.pl/upload/files/pdf/rap_otw_eu/Prepare%20for%20a%20new%20Europe.pdf

[6] Leah Pybus, To Be or Not to Be: The OSCE in the ‘New Europe’, Interstate – Journal of International Affairs Vol. 1996/1997 No. 1.

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Policy Brief §3: The G20 Summit between self-globalizing states and military buildup.

The G20 Summit between self-globalizing states and military buildup.

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Teodor Kalpakchiev

3-07

The world is now heading to the Hanseatic city of Hamburg, which has been one of the beating economic hearts of Germany for 800 years. However, for its hosting of a number of news outlets, it was a target of the violence of the extraparliamentary opposition, organized by the RAF in the 1970s. With the G20 Summit it seems that these two dimensions are converging. Since the global financial crisis, a stillborn balloon of the laissez-faire that brought one-third of the world’s wealth in the United States, many have taken rather distinct views. The EU, a supranational, state-like, non-state entity remains continuously committed to bringing together the best of world’s political philosophy in its trade deals by incorporating the odd externalities of liberalism such as welfare inequalities, environmental injustice and societal alienation. The isolationist West is dearly concerned with sharing its economic attainments with newcomers, while the East, led by China’s fast paced rebirth from a backward looking poverty stricken communist experiment to a blend of state-like control over the effects of capitalism with a globalization of the inner self.

To many, this is an expensive political meetup in times when problems are manifold. The sum of their actions construct non-governmentalism, which oftentimes takes a subjective and radical approach to societal problems. With G20 Germany has intentionally added up a new branch to world’s governance, which is inspired by the Sozialemarktwirtschaft and the culture of creating networks of structures. In essence, the inclusion of a civil society and youth component marks a transgression from the word “summit”, which in German translates as a meeting on the peak (das Gipfeltreffen). The tradition, which stems from the times of the German Staemmen (tribes) emphasizes the importance of equality over hierarchy. Its significant benefit is the ideational inclusion, which however grants a form of authority in its modern sense. With the police, the supreme organ of control over anarchistic propagations, being stripped of its own, the rise of ultra-leftist formations in Europe such as the Left in Germany and DiEM25 in Greece could easily utilize the potential clash between an authorizing society and disloyal state organs that are the embodiment of the all-encompassing bureaucratic and elitist alienation. However, the left not simply a synonym of the humanistic societal foundations, but also an allegory for the Eurasian alternative for political governance. Albeit not interchangeable, they reveal yet another mean for pressure over democracy in a social market economy.

With the Russian fast-paced incorporation of its newest democratic self-determined constituents in the background, the pressure over the buffer zone beyond EU’s eastern borders has renewed the concurrent manifestation of strength by the United States. For being largely isolated by Western powers, he has decided to play the forsaken card of historical memory that provides him psychological advantage over Germany, which still feels ill at ease with the topic. The EU’s continuous investment in Polish infrastructure has brought Warsaw much closer to the West not only in terms of outlook, but also in terms of economic practices. The polish voice is the strongest within the sub-regional backlash against what is seen as German externalization of internal historical responsibilities onto the European policy agenda. The recent Austrian plug into the V4’s favour of control over excessive migration uploads the topic onto the agenda consisting of trade, globalization, poverty and security issues.

LogoG20_teaserbild

What can one expect during the meeting of G20? Trump would most probably try to use his new allegiance with the Shia and the anti-migrant rhetoric to plunge into a well-organized, structured discussion. For the EU is attempting to establish its own security community, his is intent on being identified as the biggest troublemaker for Russia, thus cementing Ukraine as the biggest dividing factor and dooming any possible advancement of the Minsk 2.0 accords. China’s 11$ billion funding of Russia’s state development bank could be seen as a fortification of the one belt aspirations and could be utilized by Germany to press over the Ukrainian issues. The trade-globalization-development nexus would definitely stand firm on top of the agenda, as the readjustments of the winners and losers of globalization is probably what German social market democracy has most answers for. With no concessions planned for Brexit, the crucial aim of the hosts would be to multiply European standards of governance in the developing world and according to the high aspirations of its trade agreements with the rest of the global north.

Publication §1: Historical Constructivism and the Bulgarian Council of EU Presidency: Policy Externalization towards the Eastern Partnership

 

1-07

Historical Constructivism and the Bulgarian Council of EU Presidency: Policy Externalization towards the Eastern Partnership

Teodor Kalpakchiev

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(All content must be properly cited. Published by the University of Plovdiv in a collection of studies on the Bulgarian 10 years’ EU membership anniversary.)

Abstract

The paper presents a historical constructivism argument for Bulgaria’s involvement in the Eastern Partnership matter. Subsequently it explains the developments of the ENP I and II (to be updated with ENP III). It then uses a polling method to gather opinions on certain stances related to the Bulgarian Council of EU Presidency and the Eastern Partnership of the EU, which are presented graphically and analysed. Then, a comparison between the most pressing policy problems in Bulgaria and the Eastern partnership is presented. Overlaps are discussed in lieu of Bulgaria’s stances towards the programming of the ENP and its leadership in the Eastern Partnership. The paper argues that commonalities in the region require similar solutions and the Council of EU Presidency is the platform, where Bulgaria can reveal these dependencies (related to corruption, state capture, energy governance, finances).

 

Keywords

Neighbourhood, Corruption, Diversification, Security, Bulgaria

 

Introduction

After the fall of communism, the countries behind the Iron Curtain were reestablished as loosely shaped structures with anarchic intra- and interstate relations. Different paths of economic development, reconstruction of national identities and variability in institution building were brought together only after the exponential “Big Bang” Enlargement of the European Union. For Bulgaria has been among the traditional backbenchers, the lessons learned during its first 10 years of membership prove vital for the further integration eastwards.

Context and Methodology

The disillusionment with the absence of reforms and the increasing political scandals, Bulgarians and Ukrainians took the streets in 2013-2014. This paper attempts to abridge domestic predicaments in Bulgaria with the stalemate in the Eastern Partnership and argues that Bulgaria can upload transferrable solutions through its Council of EU Presidency. Its analytical framework relies on a poll consisting of 16 questions scaled with five possible measurements, as well as two questions directed preferences for policy priorities, whereby the 39 respondents[i] had to choose four out of ten possible answers.

Theoretical assumptions

As Ted Hopf points out, state identities in world politics are the product of social practices at home and as such enable state identity, actions and interests abroad.[ii] As a result of the Bulgarian multi-ethnic heritage the construction of a state identity becomes subjected to a revision of historical interpretations that may otherwise result in societal cleavages. Then, its reproduction of “intersubjective meanings that constitute social structures and actors” domestically could be turned into internationally legitimate practices with a degree of predictability[iii]. Their implementation has two important prerequisites – the existence of common structural contexts with the subject, as well as a shared collective identity (e.g. based commonness or a threat) with states that can form a coalition[iv]. At the same time, a policy entrepreneur, in that case Bulgaria, must conform with the “logic of appropriateness” defined by social norms and institutional rules, as well as those of the international community[v]. For being a relatively minimalist state, it could rely much more on epistemic communities[vi] to utilize and maximize its stake in the realization of particular policy project in the Eastern Partnership countries. Institutions (to be read sets of rules and norms) can penetrate into Bulgarian foreign policy, the articulation of it, common platforms, etc. revealing thus that Europeanization must not simply be a reflex to a lack of alternatives, but a holistic effort[vii]. Due to the shared history in the period between antiquity and the middle ages, as well as during the latter part of the 20th century, the interests and the behaviour of their actors and institutions Bulgaria and the frontrunners from the Eastern Partnership will be framed in a framework of historical constructivism. My argument is that, while the immediate past has resulted in a feigned form of statehood and democracy, the common distant past can serve as an engine for institutional learning and policy transfer.

The Evolution of the European Neighbourhood Policy

In terms of programming, the ENP has functioned both as an extension and Ersatz for further aggrandizement of the EU. The Enlargement policy of the latter has largely been defined as the “a process of gradual and formal horizontal institutionalization of organizational rules and norms”[viii], aimed at “the reversal, if not the total elimination of the democratic deficits or illiberal traits”[ix], as well as the externalities of economic transformation. It is marked by deepening and widening of “downloaded” policy patterns safeguarded by the pacta sunt servanda principle[x]. The pragmatic management of the policy is achieved through the employment of the conditionality principle, resp. giving rewards for achievements, which in the case of European Neighbourhood Policy is enhanced through “naming and shaming”, resp. negative conditionality. Beyond aid, legal approximation and market opening, the ENP relies largely on socialization through the EuroNEST parliamentary assembly, the Eastern Partnership Civil Society Forum and the penultimate reward – freedom of movement of persons, tightly intertwined with the hybrid Deep and Comprehensive Free Trade agreements, which include numerous stipulations on improvement of governance.

Historically, the ENP has begun with the Barcelona Declaration for a Euro Mediterranean Partnership (11.1995) that focused on democracy export to MENA blended with economic rationales. While the policy entrepreneurs in this case were France and Spain, the UK and Denmark came up with a separate “New Neighbours Initiative” meant to address the countries standing beneath the eastern external border of EU with a strategic focus on Ukraine, Belarus and Moldova in April 2002, which was elaborated by Poland in November the same year. Thus, although a “proximity policy” was already mentioned in the Enlargement strategies, the first official communication from the Commission came only in 2003[xi]. It aimed, in lieu with the (old) Security Strategy, to bring about a belt of stability and prosperity that can now be interpreted as a buffer of and testing site for EU’s foreign policy. It delivered bilateral enhancement of the regional approach towards the neighbourhood, expansion of its geographical scope, as well as rationalization of overlapping instruments (TAIEX, SIGMA, TACIS, MEDA, TEMPUS, etc.). For having already begun to overcome the externalities of its economic and political transition, Russia neglected the offer to join the ENP and was subsequently reproached with the “Four Common Spaces”[xii], which relied on a roadmap with no conditionality (in contrast with the Association and the Partnership and Cooperation Agreements). The main building block of rewards (in the scientific debate “carrots”) was market access through (enhanced) FTAs and increased allocations through the Neighbourhood Investment Facility. Beyond regional programs funded through the ENPI, concerns such as democracy and human rights (EIDHR), nuclear safety (INSC), poverty and development (DCI) and financial stability (IfS)[xiii] were also targeted.

At large, the ENP has lived through three stages, which can be described as a transition from an ambitious regional approach towards democracy building and overall leverage through an agenda underpinned by the fragility in the Middle East and North Africa and implemented by means of comprehensive strategies to the current pragmatic focus on governance, individual strategies towards each country and differentiation according to the achieved results. With respect to the specific focus of the paper it Eastern Partnership of the EU was largely influenced by the agendas of the Polish, Swedish, Czech and Lithuanian Council of EU Presidencies and came into being after 2008.

Due to the exclusion of Russia for long it was not clear whether the idea of the policy is the expansionist assimilation of the countries, or simply the establishment of a strategic partnership. Most recently, esp. after the redefinition of the UN’s Development Goals and the revision of the Cotonou agreement, the scientific debate has switched towards establishing partnership of equals, whereby the subjects of the policy have increased rights over the “ownership” of its programming. Additionally, the state-centric approach gradually transitioned to focus on building non-state actor’s capacity. In contrast with the Enlargement policy, the absence of the membership reward resulted in asymmetrical, selective and piecemeal rule adoption and application[xiv], which was further fragmented by the inconsistent application of negative conditionality[xv]. The break with the “one size fits all” policy was achieved in 2015[xvi], as the best performers in the East were awarded more aid through the umbrella financing of the policy, accession to the common market through the signing of Deep and Comprehensive FTAs, as well as, partially, freedom of movement of persons. The biggest stalemate in the policy has been triggered by the “frozen conflicts” in Transnistria, Donetsk, Nagorno-Karabakh, Abkhazia and Ossetia. Their maintenance is dependent on the stake of pro-Russian fractions and puts EU’s conflict resolution, peacebuilding and diplomatic capacity at an important test. The solution of these conflicts holds the key towards potential enlargement to the East.

Hence ENP has been initially assessed as a high-profile, but low valence attempt at establishing democracy in North Africa, which has no traditions in that area. Later, its purely economic stimuli proved inadequate due to insufficient financing and the large geographical scope. The competing claims of the Organization of Islamic Cooperation, the Eurasian Economic Union, as well as China through its One Belt, One Road initiative have only increased the stakes for EU’s ability to successfully program the extension of its Enlargement policy. The ENP has thus become prototypical example of structural foreign policy[xvii] that includes transfer of values through socializing and normative approximation through “selective extension of the EU’s norms, rules and policies”[xviii] and institution building.  Despite its attempts at differentiation, such has been achieved barely in the third revision of the policy in 2015, as before it was assessed as “driven by a desire for standardization and homogeneity and for asserting the EU’s hierarchical position”[xix].

The scientific debate has had a strong influence in not only explaining and assessing EU’s interventions, but also in contriving conceptual innovations. Within the domain of foreign policy, the EU was initially explained as a “civilian power”, which protects the fundamental rights of humans and attempts to maintain peace around the world. Since then, the concepts of “market power”[xx] and “normative power”[xxi] have taken the lead in defining the corporeity of EU’s foreign policy, which is playing a significant role in structuring globalization.

Bulgarians and the Eastern Partnership

The scientific debate over the early history of the Bulgarian statehood is currently shifting towards theories preferring explanations of their genealogy confined in the eastern European, resp. West-Eurasian locality. This is both because the ethnical depiction of the nation has ever since been influenced by the rise of Russian Slavophilism, which emphasized starkly the Slavic origins in the first official History of Bulgaria[xxii], as well as because the impact of the proto-Bulgarians on the indigenous Thracian and migrant Slavs has been overlooked[xxiii]. Although early settlements might include the Balhara Kingdom in today’s Afghanistan and Uzbekistan, as well as today’s Armenia, evidences for socio-cultural heritage are much ampler in the Eastern Partnership of the EU. To begin with, Old Great Bulgaria was founded on the territory of the currently occupied Crimea and Eastern Ukraine and Odessa (170 166) was one of the early place d’armes towards the Danube. To the north of Georgia, we may find the Kabardino-Balkaria Republic (112 924) and in Moldova (67 630) there is a pronounced minority of Bulgarians resettled during the Ottoman rule. One can’t also forego the fact that the Chuvash (1 637 094), Volga Tatars (5 310 649) and Karakalpaks (4466) in Russia have alternating, yet existent ethnical affiliation with the Bolghar tribes. In short, the Eastern trajectory of the Bulgaria foreign policy has been triggered by a historical necessity to extend the founding value of European unity.

After 2014, when the complete study was conducted and distributed to policy makers, two of them – the ex-president Plevneliev and MEP Mariya Gabriel became fervent supporters of the Eastern Partnership, resp. through voicing stark opinions towards the Crimean question and becoming a rapporteur on the visa liberalization with Georgia and Ukraine. The Bulgarian Ministry of Foreign Affairs, due to its financial constraints, has been active through disbursing scholarships and delivering lecturers in the target countries. However, there is no mention of a Bulgarian non-state actor involved in the preparation of the EU’s Global Strategy[xxiv]. Due to the intricate relationship between the MFA and the executive the Bulgarian state was also not represented at the 23. Ministerial Council of the OSCE, which dealt almost exclusively with the Ukrainian question. These examples can only serve as a reference of a complete, yet limited ownership of policy entrepreneurship by the state, which hinders the potential diversity of policy proposals, as well as the potential erection of epistemic networks. With the new president-elect, the last echo of a pro-integration stance has been dulled.

Empirical Data

Statement Strongly Agree Agree Neither Agree nor Disagree Disagree Strongly Disagree
1. I see only negative sides from Bulgaria’s membership in the European Union? 5% 5% 18% 33% 39%
2. There are direct effects of the recent events in Egypt and Ukraine in Bulgaria. 21% 28% 33% 12% 5%
3. There is a interrelationship between the governmental instability in Bulgaria and Ukraine. 5% 21% 28% 31% 15%
4. Politicians have learned a lesson from the protests in Bulgaria and the situations will improve. 2% 13% 26% 18% 41%
5. There are numerous ways for a small country to be influential within the European Union. 26% 26% 28% 10% 10%
6. In the next legislature period in EU /2014-2020/ the significance of Bulgaria’s position will increase. 2% 8% 41% 31% 18%
7. I understand well what is the European Neighbourhood Policy. 23% 33% 15% 21% 8%
8. Russia’s actions can be defined as neo-colonialism and neo-imperialism. 36% 28% 8% 20% 8%
9. Protests against governments is the only efficient way to defy state capture in the region. 10% 23% 33% 26% 8%
10. The increased representation of Eurosceptic and far-right parties contributes to the democratic nature of the European Union. 10% 8% 31% 33% 18%
11. The Presidency of Council of the European Union that Bulgaria will hold in 2018 is a viable opportunity to solve domestic problems in the country. 3% 36% 33% 18% 13%
12. The European Neighbourhood Policy poses a challenge to the inefficient coordination of foreign policy in the European Union. 10% 41% 34% 10% 5%
13. There are no enlargement perspectives towards the countries that are taking part the Eastern Partnership. 8% 20% 26% 36% 10%
14. I see no security threats for Bulgaria as a result of the disturbances in the Middle East. 13% 15% 21% 23% 28%
15. Only economic interests of certain member states in the EU matter when it is dealing with the European Neighbourhood Policy. 13% 18% 23% 23% 23%
16. I see that as an external border of the EU and a country in the Black Sea Region Bulgaria will have to increase its maritime security expenditures. 10% 31% 23% 28% 8%

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Figure 1. Domestic Priorities in Bulgaria According to Respondents (2014)

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Figure 2. Preferences for Priorities of the Bulgarian Council of EU Presidency According to Respondents (2014)

Options for exerting influence – Case studies and Scientific Discussion

Sweden is a relatively small state, which maximized its bargaining power during its Council of EU Presidency. By focusing on conflict prevention and taking advantage of its recognized efforts in the matter, it successfully employed framing, diplomatic tactics and timing. For this to work an actor must remain observant of possible interpretations and actively construct the norm within a foreseeable period, adjust it to the evolving context and meet expectations, while existence of a political document with guiding principles remains crucial. Sweden’s actions consisted of:

  • Distribution of an Action Plan in the MS capitals
  • Informal contacts in consideration of backing up the proposal by other MS (Finland, Germany, Italy)
  • Avoiding putting too much effort on partners with little interest or alternative visions
  • Utilization of competition for power within EU institutions
  • Good personal communication, distribution of materials
  • Counting on the Council Secretariat for achieving broad acceptance and expertise
  • Avoiding over-institutionalized forms of shaping the policy proposals

Poland attempted to secure membership prospects for Belarus, Ukraine and Moldova already in 2003, but bumped into Spain and France, which were competing for financing with an agenda on the South (bg must step in to improve prospects). Instead, Poland advocated a separate track in the ENP, found supporters in the face of Czechia and Sweden and faced no constraints from southern member states. Yet, Poland did not manage to make full use of the V4 regional block in the effort sharing towards the Eastern Partnership track, as well as of the existing human capital in the EU institutions, which could have compensated the lack of diplomatic experience. Poland’s turning into an extension of the Franco-German duo through the Weimar triangle played a significant role in the advancement of the inclusiveness, democracy and reconciliation agenda towards Ukraine.

The two cases reveal that the “uploading” of domestic issues and problems onto the European agenda might play a vital role in the successful chairmanship of the European Union, as well as provide a boost for the foreign policy. While Brexit has functioned as a catalyst of an accelerated preparation process, domestic agenda setting remains fluid due to the necessary stabilization of party dynamics and actors interests. Yet, as can be seen from the empiric material, there are substantial overlaps between the domestic priorities in Bulgaria, as well as the preferences of respondents towards a potential agenda for a Council of EU Presidency. While respondents have chosen the ENP as a second most vital priority, their preferences reveal considerations toward sectoral policies such as Anti-Corruption, the Energy Union, Banking Union, Education, Security and Defense. Besides tackling corruption, the Energy and Banking Unions, immediate problems such as economic restructuring and independence of media seem to be most important domestically. Albeit limited in scope and outreach, this poll could serve as a legitimization of the real Council of EU agenda, esp. since public ownership is a prerequisite for a successful policy cycle.

Separately, the statements could abridge the two agendas with the Neighbourhood[xxv]. The parallel between Bulgaria and Ukraine includes not only the protests against the dysfunctional, captured state, resp. the continuous necessity of enforcing anti-corruption rules, but also the energy dependence to Moscow. The fact that people have seen protests as a viable alternative to political participation means only that their inclusion in policy-making can subdue such emotions. Already then the negative stance towards Russia could explain why far-right parties are not considered as democracy-enabling actors. The potential of the Council of EU Presidency as an interface between the nation state and the post-sovereign, supranational institutions is seen as high by only half of the respondents, which can be explained with the general negative stances towards domestic governance. The ENP is seen is difficult to implement possibly because the ownership of its implementation is shared between (some) of the member states, as well as DG Near of the European Commission, the European External Action Service, as well as diplomatic representations and NGOs in Brussels. Nevertheless, a majority of the respondents believe that the Enlargement towards the Eastern Partnership is indeed possible. More of them do also foresee beneficial effects of market integration on both sides of the equation. A rise in expenditures for land and maritime security is not preferred though.

Towards a focus on the Eastern Partnership through Externalization of Domestic Solutions

The vital question remains how to bridge domestic preferences with the Neighbourhood through the Council of EU Presidency and turn these into concrete legislative proposals or initiatives. With specific regards to the topic, one sixth of the respondents saw the ENP as a necessary focus of the Presidency. The section will group the analysis in three categories – good governance, energy security and economics.

Corruption continues to be the most endemic issues, as Bulgaria is the single member state that is still scrutinized by the post-accession conditionality of the Cooperation and Verification Mechanism. The country fails to address vested interests, the consistency and independence of the judiciary, the lack of effective prosecution and conviction of organized criminal groups. Of utmost importance remain therefore emblematic convictions of higher officials and politicians that can foster the credible and impartial rule of law. Bulgaria should concentrate on domestic resource mobilization, transparent procurement, fighting conflict of interest, nepotism, as well as the shortening of the Chief Prosecutor’s term of office (to 1 year). After the completion of the CVM mandate, the lessons learned should be applied vigorously in the Eastern Partnership. As a holder of the Presidency, Bulgarian authorities should advocate that the CVM be included in the programming of the ENP and engage directly on spot to train non-state actors. Media ownership transparency should be increased in lieu of uncovering the interests behind the content in domestic media. Last, but not least, hate speech limitation domestically must be combined with a harsh rhetoric against Turkey’s disrespect for human rights and political freedoms.

Through diversification and improved efficiency energy security remains high on the agenda of the EU and its 2020 targets. Even if gas consumption is falling, dependence on external suppliers such as Russia (32,4%), Norway (26,7%), Algeria (13,0%), Qatar (11%) continues[xxvi]. With South Stream having fortified the Russo-Turkish friendship, the question over the Nagorno-Karabakh conflict becomes a litmus test for EU’s diplomacy. Despite the fact that Armenia is in the Eurasian Union and the Collective Security Treaty Organization, Russia continues to provide arms to Azerbaijan bought through gas exports. Hence, the lowering of gas prices and diversification of suppliers in Bulgaria can happen only when the conflict is brought to a halt. Bulgarian authorities could use the prisoner’s dilemma tactics and backup their claims for non-discriminatory access from Russia with the alternative scenario of supply through Azerbaijan. If necessary, they could launch a domestic initiative for partial revival of the Four Spaces with Russia (e.g. establishing R&D networks) since the federation holds the biggest depot of resources and is a large polluter. Removal of sanctions, albeit existent in the discussions, should be subjected to the solution of the separatist tendencies in Ukraine and the respect of the Minsk Commitments. When it comes to energy efficiency, the launch of centers for free public consultations on improving household energy and resource efficiency, building’s sanitation, procuring shared renewable energy installations, establishing bio, shared and circular economy business should be created in each large regional city. With regards to traditional security, rebuffing the naval fleet and the training of asylum seekers and refugees to work in the agricultural sector, handcrafts and small businesses could ensure a better stance in negotiations with the non-EU neighbours.

Economic diversification beyond IT services remains a problematic issues and continues to lead to significant brain-drain of engineers, natural and social scientists. On one hand the lack of any significant added-value manufacturing leads to an opportunity cost for the economy and on the other, the market rationale leads to deprivation of the domestic consumer of local bio-produce, which is sold as “bio” in other member states and substituted with greenhouse grown plants. Tax breaks for investments in added value and high-tech sectors, as well as state subventions for bio- and circular economy initiatives (e.g. repair services, eco-industry, production of solar panels, electric vehicles, autonomous agricultural, processing and recycling machinery) must be complemented with increased efforts at improved domestic resource mobilization (e.g. issuing VAT bills). The creation of industrial research center(s) with focus on sustainable transportation and housing components and turning waste into resources could make use of the well-qualified labour in the Eastern Partnership and forge important ties. During its EU presidency, Bulgaria should attempt to redefine EU’s own resources by advocating the adoption of a Tobin Tax on financial transactions (that could compensate the clampdown of KTB) that would expand to DCFTA members, so as to consolidate the banking sector and avoid scenarios such as the banking crisis in Moldova. Additionally, it should propagate the establishment of an environmental customs union that includes DCFTA members, stimulates the adoption of EU’s regulatory patterns from trade partners and provides new revenues to EU’s budget from non-compliant actors. Naturally, accession the Eurozone and the Banking Union, improved economic and fiscal surveillance of the neighbours and maximization of the New Silk Road opportunities should also remain as priorities.

Conclusions

The historic junction between Bulgaria, the Eastern Partnership and Russia has continued into modern times and has transformed into a competition for integration of the countries between EU and Russia. The common history, cultural, linguistic and theological ties between Bulgaria and the Eastern partners of EU could be utilized by shaping the interface between identity, institutions and actors’ interests and framing it within EU’s regulatory integration. The empiric material of this paper reveals substantial overlaps between the preferences for domestic priorities and an agenda for the Presidency. As the case studies reveal, with adequate outreach to partners and coalition-building domestic problems can be transformed into a policy agenda for the Council of EU Presidency that Bulgaria will hold in the first half of 2018. The subsequent analysis frames the existing problems in three categories – good governance, energy security and economics and proposes policy initiatives that are relevant both domestically and for the Eastern Partnership branch of EU’s multivariate foreign policy.

[i] Profile: 77% of the respondents were Bulgarian citizens and 23% – citizens of foreign countries. The majority were in or had completed the tertiary cycle of their education.

[ii] The Promise of Constructivism in International Relations Theory, Ted Hopf, International Security, Vol. 23, No. 1 (Summer, 1998), pp.195

[iii] Ibid. pp. 174

[iv] Collective Identity Formation and the International State, Alexander Wendt, The American Political Science Review, Vol. 88, No. 2 (Jun., 1994), pp. 389

[v] Casier, T. (2008). The New Neighbours of the European Union: The Compelling Logic of Enlargement? In J. DeBardeleben, The Boundaries of EU Enlargement: Finding a place for the Neighbours (pp. 19-33). Palgrave, p.28

[vi] They transcend material means and rely much more on people-to-people contacts. Examples include interparliamentary forums, academic exchange and research networks, confederalization of NGO structures, etc. See Sebenius, J. K. (2009). Challenging conventional explanations of international cooperation: negotiations analysis and epistemic communities. International Organization / Volume 46 / Issue 01 / December 1992, pp 323 – 365, DOI: 10.1017/S0020818300001521, Published online: 22 May 2009 , 323-365.

[vii] Andreatta, F. (2011). The European Union’s International Relations: A Theoretical View. In C. Hill, & M. Smith, International Relations and the European Union. Oxford University Press.

[viii] Sedelmeier, F. S. (2002). Theoritizing EU enlargement: research focus, hypotheses, and the state of research. Journal of of European Public Policy, 9:4, 500-528, http://dx.doi.org/10.1080/13501760210152411 , p. 503.

[ix] Cohen, L. J. (2008). The Europeanization of ‘Defective Democracies’ in the Western Balkans: Pre-accession challenges to democratic consolidation. In J. DeBardeleben, The Boundaries of EU Enlargement. Finding a Place for the Neighbours (pp. 205-222). Palgrave.

[x] Accession requires the adoption of primary law of the treaties and respect of the Copenhagen criteria.

[xi] Wider Europe — Neighbourhood: A New Framework for Relations with our Eastern

and Southern Neighbours, 03.2013, http://eeas.europa.eu/archives/docs/enp/pdf/pdf/com03_104_en.pdf

[xii] See EU/Russia: The four “common spaces”, http://europa.eu/rapid/press-release_MEMO-04-268_en.pdf

[xiii] European Neighbourhood Policy: History, Structure, and Implemented Policy Measures

Edzard Wesselink & Ron Boschma, 10.13, pp. 9-11

[xiv] Langbein, J., & Wolczyk, K. (2011). Convergence without membership? The impact of the European Union in the neighbourhood: evidence from Ukraine. Journal of European Public Policy, Volume 19, Issue 6, 2012 , pages 863-881.

[xv] Langbein, J. (2013). Die Europäische Nachbarschaftspolitik. In E. Stratenschulte, Grenzen der Integration: Europas strategische Ansätye für die Nachbarregionen (pp. 29-55). Nomos, p.39.

[xvi] Review of the ENP, EEAS, 11.2015, http://eeas.europa.eu/archives/docs/enp/documents/2015/151118_joint-communication_review-of-the-enp_en.pdf

[xvii] Landaburu, E. (2006). From Neighbourhood to Integration Policy: Are there Concrete Alternatives to Enlargement? Retrieved from CEPS Policy Brief No. 95: http://aei.pitt.edu/6600/1/1305_95.pdf, p.3

[xviii] Lavenex, S. (2011). EU external governance in ‘wider Europe’. Journal of European Public Policy, 11:4, 680-700, DOI: 10.1080/1350176042000248098 , 680-700, p.694

[xix] Browning, C. S., & Joenniemi, P. (2008). The European Neighbourhood Policy and Why the Northern Dimension Matters. In DeBardeleben, The Boundaries of EU Enlargement: Finding a Place for the Neigbours. Palgrave Macmillan.

[xx] See Chad Damro, Market Power Europe, University of Edinburgh / Europa Institute, 2011

[xxi] See Normative Power Europe: A Contradiction in. Terms?* IAN MANNERS. University of Kent at Canterbury. JCMS 2002 Volume 40. Number 2. pp. 235–58

[xxii] Mihăilescu, e. a. (2008). Studying Peoples in the People’s Democracies II: Socialist Era Anthropology in South-East Europe. Münster: LIT Verlag, p.148

[xxiii] Karachanak, S. e. (2012). Bulgarians vs the other European populations: a mitochondrial DNA perspective. Retrieved from Int J Legal Med (2012) 126:497–503, p. 497-8

[xxiv] The only explicit mention is of the Bulgarian Diplomatic Institute, see Shared Vision, Common Action:

A Stronger Europe: A Global Strategy for the European Union’s Foreign And Security Policy, 06.2016, pp. 54 http://eeas.europa.eu/archives/docs/top_stories/pdf/eugs_review_web.pdf

[xxv] Due to the limited size of the paper, the discussion of the results will include only an analysis of these that have a correlation with the topic.

[xxvi] EuroStat. (2013, May). Natural gas consumption statistics. Retrieved from http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Natural_gas_consumption_statistics

Policy Brief §2: Towards pan-European Liquid Democracy?

Towards pan-European Liquid Democracy?

Teodor Kalpakchiev

1-07

Introduction

The potential underrepresentation of the Bulgarian diaspora, as well as exclusion of the anti-corruption pact, the alternative to European conservatism and the non-effectuation of a progressive liberal left necessitates the adoption of new patterns of inclusion in the decision-making process. Referenda are on the rise, yet an expensive democratic innovation within the confines of the country marked by centralization of political power, economic interests and the right to initiate legislative proposals. Regions are bereft of mindful individuals that generate economic revenues and thus rely extensively on subventions from the state. Hence, this dependence is subjected to the cooperation readiness of an actor with limited democratic legitimacy. Additionally, it has become clear that a nation- and political spectrum-wide consensus for the future development of the country is necessary. Bearing in mind the exponential advancement of digital technologies, as well as the e-government expertise accumulated in the previous partner of the Council Presidency Trio, Estonia, the challenge to democracy can currently be crumbled down to a number of fundamental questions:

 

How to ensure the efficient and continuous link between the voters’ constituency and the effects sought for initially?

How to increase the democratic legitimacy of strategies for regional and supranational development?

How to secure voters’ informed decision-making and the protection of their personal data?

 

Towards a Liquid Form of Democracy

What does liquid democracy entail? It can be described as a continuous, shapeless, decentralized process of preference formulation that allows for adjustment, should any substantial changes take place. It relies mainly on small scale, digitally confined establishments that allow a group of dissimilar interests with a locality to be crumbled down to numerical exemplification. The collective will of these sub-entities is collected and analyzed via a necessarily independent private operator, whose services are procured after a rigorous check from a supranational actor.

How will this work in reality? Each regional municipality creates a unit consisting of IT and big data professionals and applies for European funding to procure secure servers, the establishment of a database, an user-friendly site, USB-based digital signatures for each of its citizens, as well as any other technical equipment that might become necessary, such as an UPS.

Then, it creates a vision for the future development of the region based on alternating scenarios. These include sectoral policies that are vital for the implementation of the UN post-2015 development agenda, such as natural resource and food security, low-carbon adaptation as a pathway towards competitiveness, public health and fostering technological innovation, while adjusting each scenario for specialization possibilities. It prepares a sufficiently strong and wide-reaching communication campaign spanning over at least six months before launching its first public opinion drilling that is limited strictly to registrants in the region, who own property. The vote is recast up to three times, if less than a simple majority of the voters’ preferences is collected.

Defining Regional Development

Upon the selection of the regional specialization scenario, the municipality then goes on to restructure tax collection, while paying special attention to resource mobilization. Within a low-carbon adaptation scenario, this would mean for example shifting from taxing labour to shifting waste, the usage of resources and energy. Additional adjustments, such as the creation of regional markets for electrical and emission certificates, dropped down from the state platform for allocation will ensure that non-competitive and non-complying private actors are brought down to default. Emissions from cars, households and land use change and economic activities are collected and the biggest polluters are targeted with command and control policies for accelerated reductions. Any revenues from non-compliance are then reinvested into research and innovation, creating entrepreneurial hubs and sponsoring local businesses. Yearly reports based on predefined collectibles are then publicly presented in the state radio and television and voters are asked to adjust their preferences if not satisfied. Thus, the public body maintains continuously balance between a coercive form of executive implementation and societal interests.

Ensuring Data Security

/Interview with Mariyan Ivanov – Global Service Desk Officer @ Adecco/

The predominant necessity for a transition to a fluid, continuous and elastic process of decision-making would be data security and the enactment of independent overseeing and enforcement bodies, which would act in cases of disrespected codification. As starting point, one must underline that voting digitally would not be an economically viable system due to the high initial costs. Firstly, the government must procure a number of USB-based electronic signature certificates that is equal or higher than the number of the electorate with passive voting rights. The additional, resp. substitutive items must be kept safe in a vault. Each certificate must come with an initial password token enclosed in an envelope that allows the logging in into a web platform and the selection of a final password. The password would inquire the use of a range of characters. Its confirmation would ensue with the registration of a phone number for emergency contacts, which will receive a pin number, resp. a token. Each time one voting is required the person will enter the token and be redirected to a website, valid for one minute, which will require the use of the electronic certificate.  All data should be stored on servers, locked with access cards and pin codes and protected by security officers. Servers should have backups and UPS systems attached to them and be locked to each other with a chain. Two IT companies, working on Pen testing will be continuously checking whether the data could leak. Any update of the system will be conditioned to approval from system administrators with proven and experience and controlled impartiality. A national system with customer support will ensure that users understand how the system works.

The Responsibility to be Sufficiently Informed

Two inherent issues need discussion, in case these requirements take place. The first one is related to the transfer of responsibility from the electorate to the national parliamentary representatives. Psychologically speaking, the current state of democracy based on cyclic elections is a convenient way for the voters to seek responsibility from its delegates, while retaining none of it themselves. The problem lies in the fact that thus the voters are also bereft of the responsibility to remain rationally informed on the political processes and are counting on an often only allegedly independent judiciary to protect their interests. The key to democratization is in the debate that ensures democratic innovations, resp. its relegation from the parliament back to the citizenry.

It must, however, be accompanied by an overarching sense of justice. It would rely on the relegation of responsibility for being sufficiently informed back to the voter. Further, one must cater for the abolishment of the post-truth servility of traditional media to political interests and transforming them into businesses aimed at informing the society of the nature, alternatives and the consequences of their cast votes. The way to do that will be to 1) forbid any stimulus to purchase goods and services not related to the information itself, 2) use taxes for the equitable distribution of the information to those not being able to pay for it and 3) abolish national parliaments in small state entities, which are part of larger regional integration units. While being a contentious solution, the depoliticization of the information flow is largely contingent upon the abolition of local, largely non-representative political interests.  Within a digital voting system, regional and national parliaments could become redundant. Thus, the responsibility for taking informed decisions will be relegated back to the voters and will ensure their effective politicization.

The Pathway to Democratic Federalization of the EU?

While in this article I have discussed some technical, sectoral and ethical issues I had in mind the current shift in European governance, which is the overarching topic of the governance project of the ENPI. If the technical solution is applied on the level of Nuts 3 to Lau 2 (e.g. regions to municipalities) in all member states, it would result in a number of subsystems for the collection of voters’ will that could be used for the organization of pan-European referenda. While the European Commission has infrequently used its White Book card, the White Paper for the Future of Europe’s scenarios could easily be transformed into an online poll with short explanatory overviews of the consequences involved.

Once the pan-European citizenry decides on a scenario, the transition to the new form of statehood will follow suit.

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Policy Brief §1: The End of „Democracy“ as Core of the „New Deal“ for Europe.

1-07

The End of „Democracy“ as Core of the „New Deal“ for Europe.

Teodor Kalpakchiev

The European Union is disintegrating and the degradation of democracy will make sure this happens – one way or another. It is high time they are substitute with a network of cities-led regional governance.

The EU – a marriage without a geographical axis.

Yes, we are heading headfirst towards a brick wall. The last time, the Berlin Wall’s intermediate effect was division of the traditional East and West dichotomy that resulted in the elaboration of two distinct ways of governance. In the west, we saw corporate governance, an exemplification of capitalisms’ natural selection, permeating into the bureaucratic leadership. At the same time, in the East, we saw a glorification of bureaucracy’s biggest achievement – the ability to elaborate strategies, yet at the time, with limited enforcement efficiencies. The creeping evolution of the only quasi-state without a statehood brought not only the geographical marriage of these two ideational camps, but also an important feature of regional integration, not yet seen elsewhere. A post-democratic executive federal guardian of regional integration, whose actions are safeguarded by a jurisdiction able to transfer competencies by the power of interpretative argumentation.

Do you already see the end of this as I do?

The European Union is disintegrating. It is in a deep ideational paralysis. You are struggling to define how to democratize an entity that is effectively already defining how you live. In smaller member states, national parliaments have become redundant – their constituents are wealth-capturing mechanized gramophones, struggling to numb any attempt for dethroning from grassroots. The end of politics is imminent, as greediness – the biggest flaw of capital, which brought the plague of risky financial derivatives to Europe is has now contaminated the biggest achievement of humanity – the ability to self-organize ourselves.

The outstanding alternative: Federalization through dissolution of democracy.  

Hence, politics must succumb to its own self-degradation. We already have the necessary means and structures to cooperate and co-exist in a rational manner. The ideational forces of philosophy are ripe, yet the dearth of alternative structures and the scarcity of time make change imminent. The answer lies in the least politicized bodies, the ones where words such as solidarity, equity and justice are not a feigned materialization of generic terms. Sectoral and functionalist cooperation is proliferating and discussants in small chambers can no longer provide the expertise needed. We do not need a debate about is right or wrong, we need a debate on how to implement effectively what we know is right. What we need right now is the executive leadership of each member state to negotiate the dissolution of national parliaments and a strengthening of sub-regional governance that will effectuate their substitution.

Enforcement of post-democratic functionalism.

National parliaments have turned simply into mechanisms for transposing norms. Their constituents have lost the connection with voters and all too often find ways to embezzle funds through intermediaries or campaigning. The pan-European dissolution should begin by enforcing a holistic strategy for anti-corruption embedded into the European Semester. What you need is just a reliable, resilient and sufficiently despotic green leftist to ensure this.

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Policy Paper §2: The Four Concentric Cycles of a Circular Economy

Policy Paper §2: The Four Concentric Cycles of a Circular Economy

2-07

Teodor Kalpakchiev

Current State of Affairs

In the contemporary world, we are evidencing a number of important processes that begin to take shape. First of all comes the anti-globalization sentiment that has spread as a reaction to one’s inability to adjust to global competition both in terms of reaching sufficient efficiency of the factors of production, such as input resources, usage of available technology and human capital, as well as finding the sufficient means for ensuring an adequate level of consumption through monetary exchange with means accumulated via economic activity. In short, both producers and wage workers outside the most-developed core in the global economy are finding it hard to create new production capacities that correspond to all environmental standards, as the initial investment is too high and outputs would need to compete with established, stronger names, while workers do not see any point in further qualifications, as they would hardly bring them any additional benefit.

What would be the opposite of globalization? Some would call it encapsulation in the confines, or in a more modern term, the boundaries of a country’s territory. Therefore, the natural endowment of a country must be sufficient to feed its population and supply its factories with resources. In a perfect polity,  energy is produced solely by means of the earthly forces, is sufficiently cheap and decentralized to avoid natural monopolies. As often strong economies are in need of three or four times more non-renewable, resp. extracted resources to function, a precondition for that would be turning them to renewable ones through a closed loop. Enabled by high-quality recycling, repair and upscale industries, digitally organized cities and logistics and a revitalized model for a greener, social democracy sustained through education and training the new economy would be much less dependent on imports of resources, resp. political intrusion. Considering that the post-sovereign world is transforming into regions, one can easily grasp that there would be two options. One would be to continue with the current model of resource extraction that is having detrimental environmental externalities and is possible only in regions richly endowed with resources per capita of the population, while the other one would be the total encapsulation within the region, while focusing on turning the non-renewable resources to renewable.

Having identified that the only exit option for EU is namely the second scenario, the European Commission came up with the relatively ambitions second version of the circular economy, which states that the “The circular economy will also need to develop globally”[1]. Strategically, what it aims is to be at the forefront of the adaptation, which would allow it to foster and frame the environmental dialogue alongside the principles of the Circular Economy, as well as to set the regulatory standards for sustainable production of goods, which would allow it to remain competitive at least on its own territory and the wider European market. The latter is being created by means of a network of Deep and Comprehensive Free Trade Agreements with the European Neighbourhood, where the EU is having stronger negotiation power and is meant to both supply EU with sufficient natural resources and cheap labour, which it is in dire need of. The  encapsulation of the European Union would require that its geographical borders are sufficiently big, so as be on equal terms with fast-developing economies, such as the constituents of BRICS.

What Exactly is the Circular Economy?

The Circular Economy can be framed within the domain of economic development, as it hovers over the idea of creating recycling, renewable energy and logistical infrastructure, upgrading the methods and the outputs of production to make it more sustainable and increasing the wage growth by means of providing additional employment perspectives and increasing the value of the produced goods. It can thus also be premised on the green economy, as it preaches that the adaptation of production capacities includes limiting resource inputs, reducing energy usage with preference towards green energy and reducing the emissions of greenhouse gases. It can also be understood as a diversification strategy, as it is not only dependent on high-value production, but also the emergence of a strong service economy, where performance contracting would allow the emergence of a repair and upscale sector, which requires highly qualified technical personnel and results in economic stabilization due to the predictability of monthly instalments paying for leased goods.

One can attempt to explain it as a slowly-emerging, natural process of highly-needed change, which would result in potential cool-off of the economy, while providing it a long-term boost in terms of non-GDP related progress. In its complete form, it will be possible only in highly industrialized countries or such hosting a strong financial sector, while in the developing world, it will have to be limited to adaptation of the agricultural, waste, water and energy sectors. Its implementation is definitely dependent not only on the available monetary resources, but also on the ability to mobilize exogenous stressors, such as public policies, market interventions, education and research in its support. These will have to consider the underlying principles of the Circular Economy, whose number has doubled to six, namely reduce, reuse, recycle, recover, re-manufacture, redesign[2]. In a Circular Economy, resources remain closest to their original place of extraction.  Philosophically speaking, the Circular Economy is way to construct a society harmonious with nature by means of emulating the dynamic, which it has created over time. The elements of a Circular Economy are thus understood as an integral parts of a system and analysed both in sub-systems, as well as a part of the whole.

Micro cycle

The first, lowest, “micro” cycle of analysis deals with products and their adaptation alongside the logic of eco-efficiency.  In a Circular Economy, products do no end their life – they are manufactured with high-quality materials, which allows high levels of durability. Mechanical and performance parts have undergone massive standardization, which allows for interoperability and interchangeability with other similar products. Furthermore, they are designed with the idea to be not only easily repairable by the customer himself, but also easily upgradeable. Had they reached the end of their operational activity, then they must be easily disassembled and recycled, which would mean that impurities must be minimized. Products are smart and interconnected through the Internet of Things, operate under oper-source software and have a life cycle defined by digital identities fostered through mini-RFID labels. The latter would allow their easier decomposition into separate material flows, appropriate rescaling or sourcing towards a new user through an established infrastructure of reverse logistics. Although slightly more expensive, they utilize the possibility of establishing a leasing society, where performance contracting ensures both the timely paymenet of installments and the continuous hardware support. Additionally, their higher cost and endurance will allow the emergence of tele-living solutions, such as renting of electric cars, procured with blended public and private financing and charged at their docking stations with renewable energy.

Meso cycle

The meso cycle of the circular economy works on the principles of eco-effectiveness, which incorporate the design requirements of products and expand them with a number of actions. Among them is the improvement of the energy and CO2 profile of the industry through sanitation, carbon capture, but most notably – resource efficiency achieved through synergies among interconnected capacities. While enterprises should be powered by renewable capacities created with mature technologies, it aims to transform resource inputs into renewable flows by reusing, e.g. wood splinters for empowering waste-to-energy capacities, which are connected with district heating and whose end products can be used, for example, for pharmaceutical products or fertilization. The human factor can also be turned into a part of such a circular loop through rotation of tasks, turning the production facility into a living environment and achieving harmony with its surroundings. Hence,  investment in research of both immature technologies (e.g. carbon capture) and less innovative adaptation techniques (resource preparation, efficient combustion, belt transportation, etc.) alongside the focus on recycling capacities should be shared between the private and the public sector. In the utilities sector, the Circular Economy can be used to increase the synergies between waste and water treatment plants, such as adjoining purification infrastructure, using waste water for irrigation, erecting small-scale hydroelectric plants, etc. The biggest problem with the meso level of adaptation is that most of the capacities are dispersed geographically, making thus the planning of new co-joined enterprises a much more viable solution.

Macro cycle

The macro cycle of the Circular Economy incorporates and creative destructs numerous sustainability visions, such as interpreting the urban environment as a socio-technical flows of resources, thus for example planning for the easier disassembly of the built urban environment, as well as of grand infrastructure solutions intended for public usage. It attempts to improve resource efficiency through economic modelling and ICT solutions, such as the optimization of urban traffic through a system of sensors, surveillance cameras, satellites and cloud services, which would allow the user to make informed choices or the contraction of the width of railways and road infrastructure. Within the living spaces, it supports the advancement of decentralized renewable energy production, as well as the optimization of domestic resource and utilities usage through a system of sensors,  servers and OLED displays giving feedback. Preference is given to sustainable means for urban transport, such as light bikes and light railways (e.g. trams), with the latter being also used for materials’ transportation and services. The IoT can also enable the creation of a resource market of repair parts, recycle materials and decommissioned elements from the built urban environment. This will be made possible through the erection of  “pull”-type reverse logistics, which combine different resource flows and channel them to the industries in need. Another target is the full abolishment of fossil fuels through electrification empowered with sustainable energy, including of personal vehicles. Strategies for improving the harmony with nature, such as green roofs, urban gardens, shortening the cycles of bio-production alongside the ideas of bio-regionalism, using biodegradable materials for packaging and probing of topsoil, etc. are also embedded in the vision.

Horizontal Cycle

The horizontal cycle analyses restrictions to the advancement of a Circular Economy, which are connected with human behaviour and attempts to target them through the adjustment of education plans, communication instruments and further research. Fundamentally, as the last cycle of the Circular Economy it incorporates all the previous ones.

Towards a Global Circular Economy

Considering the increase of popular discontent with the effects of globalisation, the Circular Economy can provide the much needed answer for a transition to a new model, which reduces resource usage, creates employment and contributes to mitigating climate change. Whilst embedded in a communication by the European Commission, due to the pressing questions on the future of Europe, its realization as an adaptation method that needs to be embedded horizontally in all sectoral policies has not gained the sufficient momentum. What is more, outside the Brussels Bubble, the vision has been mainly employed by the private sector, which constitutes a risk for its transformation into a yet another public relations strategy, further wealth concentration or in the best case – corporate social responsibility with limited effects. The focus needed is the realization of possible synergies between climate, energy and water diplomacy, a domain, which the EU has strongly occupied since the signing of the Paris accords and the employment of the Circular Economy as the official strategy for technical adaptation alongside the global new climate deal. Essentially, this means that the links between the Commission and the UNFCCC Secretariat in Bonn must be strengthened and that the external dimensions of the EU’s environmental policy must be directly embedded into the public policy dialogue with other regional organizations.

[1]                      European Commission, Closing the loop – An EU action plan for the Circular Economy, 2.12.2015, http://bit.ly/1MVjZGf

[2]                      I.S. Jawahir and Ryan Bradley, “Technological Elements of Circular Economy and the Principles of 6R-Based Closed-loop Material Flow in Sustainable Manufacturing”, Procedia, CIRP 40, 2016, p. 103–108

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Policy Paper §1: Brexit. Effects on Continental Europe and the Bulgarian Presidency of the Council of the European Union.

Policy Paper §1: Brexit. Effects on Continental Europe and the Bulgarian Presidency of the Council of the European Union.

1-07

Teodor Kalpakchiev

With 52% of votes cast, the Brits decided to leave behind 46 years of intense, yet strenuous and complex cooperation with their adjacent continental partners. Dividing lines have existed for long – beginning from the way we prepare our breakfasts to the way politics are conducted. In essence, for its long account of wealth concentration, made possible through the continuous development of war, industrial and financial capitalism, the Kingdom has allowed itself constant breaches of one of the fundament principles of human rights and intergovernmental cooperation – equality. Interferences into the domestic affairs of other countries has herewith reached a historical zenith of impunity, foreshadowed by a colonial might made possible by a permanent war-like state of affairs. The combination of a strong bureaucracy, a mighty fleet, as well as the exploitation of the cheap labour force and abundant resources has further allowed its leap into the industrialization age in the latter part of the 20th century. Successful as this society might be, it has benefited those who have managed to squeeze the best of these developments, as their counterparts have struggled to compete with the influx of migrant workers and wealthy well-educated upper intermediate class.

What role for Education?

Bewildering as it is, Britain is one of the world’s centers of education and research, which is absorbing around 16% of the Horizon 2020’s financial injections aimed at speeding up the scientific development of a new society. Today’s choice would literally mean that the sharing of best practices would significantly diminish, unless fed by bilateral budget support. Thus, for example, a Czech researcher would find it difficult to participate in a consortium at the University of Cambridge or a Manchester scholar would no longer be welcome to share his neoliberal views in the Aula of the Sofia University. Instead, England would have to rely much more on its Commonwealth for these exchanges. Potentially, there would be a stronger influx of English students in EU’s universities than vice-versa. Considering the fact that the division of the voters mirrors their educational census and their belonging to certain classes, it is quite probable that many of those who remain will be further stratified and radicalized due to the reduction of possibilities for the internationalization of a degree.

Countering the Negative Spill-Overs

Spill-overs onto other net contributors to EU’s common budget, such as the Netherlands, which is led by a radical conservative party helped by Turkey, as well as Denmark, which is boasting one of the most advanced and restricted economies, are highly possible. The precedent that any country could later leave unilaterally would be transposed into higher bargaining power for the smaller, eastern member states, as they could potentially any time decide to withdraw their membership for the sake of joining the Eurasian Union. Elements such as the presence of the Russian factor, as well as populist nationalism as a result of the politics of austerity and the obligation to participate in the new migration policy under the German leadership are to remain the most disuniting. It is up to the European parliamentarians and the elders in the Commission to continuously communicate the negative consequences of an “Exit” to the economy.

(Dis-)United Kingdom’s new place in EU’s internal order

What is important now is that the EU begins a twofold process of renegotiation. One of its arms must cater for Britain’s new role, which would be either similar to that of Albania or of Norway, resp. strenuous re-accession pathway or European Economic Area type of market access in expense for adoption of policies dropped down from Brussels. Third possibility could be its inclusion in the quasi-regulatory space of the Neighbourhood, which is defined by continuous granting of mobility rights and access to EU’s own funding in expense for conditionality. Such a form of external governance might possibly be directed at the transformation of the British offshore companies into transparent enterprises, as well as to the relocating financial institutions such as the European Banking Authority and the European Bank for Reconstruction and Development into mainland Europe.

Whilst losing the ability to exert its sovereign right to exercise authority over the formulation of EU’s policies, Britain would most possibly attempt to retain the access to the policy and physical networks created by EU, such as the scientific exchanges, cooperation among NGOs and SMEs, the TEN-T transport corridors, the energy transportation networks, lower roaming tariffs, ability to litigate in front of the European Court, the information databases on aviation, etc. When it comes to the mid-term future, which is inextricably linked with the organization of a new European constitutive assembly and the adoption of statehood elements, such as a common treasury, investigative capacities, army and foreign policy, the United Kingdom will most possibly be denied access to the latter two. The traditional, realist branch of EU’s foreign policy will thus lose its approximation to the transatlantic priorities and would become much more diversified and based on policy dialogue and export of governance recipes. In such a situation questions that would arise are connected with whether the UK will in a way be subjected to or will readily seek a formula for participation in mechanisms such as internet security, consumer protection, the emissions trading system and adaptation towards competitiveness. Many of those would possibly be dependent on contractual budget support by UK fed into EU’s own account or directly into consortia.

Effects on the European Parliament, Financial Governance and Regionalization

It is by no surprise that the complex governance solution brought to being by the old democracies in the European Union’ asymmetry has resulted in such an erroneous shock. Being guided by a club of elderly national and transnational governors, who ascend to the status of a commissioner, responsible for all member states and counterbalanced by a parliament that does not correspond to the traditional notion of such due to the lack of genuine opposition and its actual policy borrowing and culture of unanimity, the governance apparatus of the EU often does not distinguish among and depend on the policy-making based on competing ideas of transnational political families. By means of a permanent, policy-driven equalization and approximation of preferences, the European political parties have been unable, on one hand to come up with distinctive political platforms and on the other hand to defend them. It is only in the European Parliament and possibly the parliaments of illiberal, undemocratic and despotic regimes, such as the neighbours Belarus, Russia, Turkmenistan, North Korea, Laos and Vietnam that there has been no real ambition for the creation of an opposition. One begins to ask himself – what exactly is the master plan for future development of the Union – is it a loose confederation of states, or really a powerful executive federation with the elements of a state?

Britain’s mere participation in the discussions over the development of the EU have strengthened the notion of confederal inter-governmentalism as opposed to the federal dream of the founding fathers of the EU. For being a state largely defined by the mystical glory of its past, the Island has sought the preservation of the traditions in statehood and sovereignty. Thus, with USA, Australia, Singapore, India and other countries fortifying its back, it has sought a state-to-state dialogue, which provides it with clear superiority, rather than one based on the formulas derived from the size of its population and territorial surface. From a reverse psychology perspective, one can expect that the European family of states would attempt to creatively destruct itself by turning the “losing” of a state into its evolution towards a state-like entity. For that to happen, there must be above all similarity of preferences in the Council, followed by hearings of representatives of national parliaments in the European Parliament and finally – a selection of trans-European networks and movements.

In that sense the British vote could trigger at least two developments. One would be transformation of the European Parliament into a body that is partially driven by its opposition, whose policies are not borrowed alongside the political spectrum and which is able to collect the will of its federal republics. Whether the adjustment of the seats in the European Parliament would mean a power transfer to the newly acceding European Radicals, the European Left, the Greens or Verhofstad’s federalism-leaning liberals is, however, not yet clear. Still, the post-Brexit order would definitely mean the creation of an opposition movement, aimed at rebuffing the ideas of the red-green-yellow political spectrum, as already attempted by Varoufakis’ DiEM25. The most important players in such a game, especially as Europe is build on the ashes of the Second World War, will be most potentially the European Left as the traditional counterweight to the block of populist radicals. The question is whether the Left would adhere to the already established central coalition, or whether it will attempt to reunite the rest of the forces in the European transnational political order.

The second would be the rethinking of the financial governance of the EU, which has so far had two branches – the German tradition of post-war austerity and the British tradition of deregulating financial affairs. The existence of such a poli-centric, states embedded policy creation has only fed the actual decomposition of the European statehood into a multi-level architecture, where regions and transnational movements are increasing their relative importance. It is therefore important to see under whose leadership the currently existing sub-federal macro-regions will be turned will channel their will. We could therefore speak not of three, but four-level governance consisting of cities and their regions, member states, macro regions and EU’s machinery.

Region Countries
Norden Finland, Sweden, Denmark, Finland, Estonia
Central France, Germany, Switzerland
Roman Italy, Spain, Romania
Visegrad Poland, Hungary, Czech, Slovakia
Balkan Western Balkans, Bulgaria, Croatia, Greece

 

Figure 1. Regional Blocks (by Author)

 

integration-rings

Figure 2. Integration Rings (by Author)

 

The highest burden would fall on the peripheral countries on the external borders of the EU, which will have to attempt to both integrate themselves in all integration rings, while competing for influence in the Western Balkans and the Neighbourhood. Currently, as a result of numerous opt-outs and renegotiations, the European polity is shaped into concentric integration rings. These must be gradually swept away by means of ensuring the Member States’ full participation. Instead, they must become the driving engines of EU’s conditionality behind its external borders and be used to establish competition for integration leadership in its adjacency.

The Council Presidency

The United Kingdom was to be the leader of the Council trio together with Bulgaria and Estonia. Potentially, the synergies amongst these three countries would have possibly invoked a focus on anti-corruption and good governance, e-government and digital single market, consumer protection and on the external side – the Eastern Neighbourhood. For its descent, now the two countries have a couple of options at hand – either begin their presidencies earlier and seek partnerships with the countries before and after them, or seek guidance through the establishment of a team by a large member states. Due to both of the countries’ strategic interests in the Eastern Neighbourhood – notably Estonia’s capacity to defend itself against cyber and hybrid security threats emanating from Russia and Bulgaria’s policy of reuniting the remains of the Proto-Bulgarian nomadic tribes in the Caucasus and southern Ukraine through support for their integration the most appropriate expertise would come from the Germany-Poland-Sweden trio, which could provide the necessary guidance.

That would be especially helpful in view of uploading certain policies on the EU’s policy-making agenda, as well as to reinvigorating the national administration capacity to set mid-term priorities. From a Bulgarian perspective these must be the decomposition of the horizontal networks existing in the judiciary, the achievement of transparency in assets ownership, the accession to the Baking Union, the sustainable rebuff of the economy through energy and resource efficiency, the preservation of cultural and historical sites around the Black Sea basin, creating professional, educational and policy networks with the Neighbourhood countries and reviving the old partnerships with Laos, Vietnam and Central Asia. Thus, Bulgaria would be able to engage itself in a comparative rethinking of its communist past, which is quintessentially the only way to adjust its governance structures and rethink its politico-energy partnership with Russia.

Conclusions and Policy Recommendations

The United Kingdom has embarked on a self-destructive pathway of isolationism and extremism, which it has already started to regret due to the signals of the financial markets. Its disunity is alongside cleavages of educational census, belongs to certain classes and age range and is not shared by 75% of its youth. These are expected to seek retaining their rights to participate in EU’s educational and scientific networks. The precedent would possibly give new hopes for the radicals in the European Union, which will have to be countered by achieving symmetry of information. There leave of the United Kingdom leaves a vacuum created by its presence. Previously filled by inter-governmental sentiments it’s highly probable that it will now result in a broad coalition of supporters of federal developments.  For the European Parliament the readjustment could potentially mean the creation of a viable opposition, while in terms of financial governance the remaining institutions in the London City would potentially have to be relocated. For a potential rethinking of EU’s statehood to take place the full participation of all of the member states and the transcendence of the multi-speed integration onto EU’s surroundings must be ensured. Internally, EU’s (macro-) regionalization can potentially turn into the driving force for channeling ideas and preferences for its future development. Last, but not least, the descent of UK’s from the common presidency with Bulgaria and Estonia could mean seeking alternative recipes for an expert-guided presidency under the auspices of Germany, Poland and Sweden. This would allow the two countries, Bulgaria and Romania to retain their national priorities and successfully upload them onto the EU’s policy-making agenda.

Recommendations to EU:

  • Maximize the communication of the negative effects of potential further “exits” to minimize potential spill-overs onto Netherlands and Denmark
  • Retain strong position on UK’s membership by retaining tariff barriers, but allow for the free movement of workers back to the continent and the participation of youth in EU’s policies, while conditioning those on budget support
  • Carefully consider potential net benefits of having British participation in certain networks, such as transportation, internet and communication, education and science, etc.
  • Bargain the relocation of the financial and development institutions based in London back to Continental Europe for UK’s participation in some of the policies that lead to net benefits for EU
  • Ensure European Parliaments’ gradual transition to a hearing chamber for national parliament’s ideas on the future of the EU and the creation of an opposition to ensure platform-driven policy-making
  • Set the coherent participation of all Member States as one of the defining priorities of the Future Union, while exporting the multi-speed integration onto all the neighbouring countries with the help of conditionality
  • Alleviate the creation of an expert group from large member states that will guide the two small countries’ Presidency of the EU

 

Recommendations to UK:

  • Reconsider its role in the European Union and the readiness to participate as a full-fledged member with no opt-outs and rebates or alternatively a Neighbour with the right to support certain EU policies for the right to partake in them (education and science, energy transportation, emissions trading, etc.)

 

Recommendations to Bulgaria:

  • Seek guidance for the common presidency of the Council of EU under the leadership of Germany, Poland and Sweden, so as to ensure the uploading of national priorities
  • Engage in policy dialogue with Estonia to effectuate learning from its successes in the establishment of an e-Government, accession to the monetary union and cyber security
  • Create a working group on the transparency of assets’ ownership and the accession to the Banking Union with the participation of experts from the European Banking Authority, the ECB, the German Banking system and the Commission (ECOFIN).
  • Begin establishing regional policy, science and education, business and cultural networks with the countries from the Black Sea region, so as to ensure ties and partnerships are already present at the advent of the Presidency
  • Engage in dialogue with the Netherlands in order to ensure that the block on the accession to Schengen is removed, while ensuring that the loss of the own visa policy would not harm the national budget
  • Engage swiftly in a dialogue with the United Kingdom to ensure that the security and labour rights of Bulgarian seasonal and migrant workers would be kept to highest standards
  • Prepare to defend strong positions for the protection of the Bulgarian minorities in Besarabia, Crimea, North Caucasus and Tatarstan

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