by Katinka Barysch
Now that Kosovo’s independence party is over, the hard work begins. Despite the efforts of the UN and the EU, the institutions of government remain fragile, corruption is rife, and organised crime is a problem. Although growth has picked up, the economy remains in a woeful state. Kosovars like to blame poverty and joblessness on politics. Many hope that, now that the status question has finally been settled, money will start flowing in, creating growth and jobs.
This may be true as far as official assistance is concerned: as an independent country, Kosovo hopes to be able to borrow from the IMF, the World Bank and other financial institutions. More aid will also be forthcoming, since the international community cannot afford to see Kosovo fail. The European Commission and the World Bank are planning to convene a donors conference over the next couple of months. The Commission expects the Europeans to drum up €2 billion, and the Americans say they will contribute $400 million.
However, the Europeans are also aware of the risk of turning Kosovo into an aid-dependent protectorate. Since 1999, the EU and its member-states have already given €2.6 billion to Kosovo. A lot of that went into rebuilding houses and roads after the 1998-99 conflict. But it has failed to build a viable economy. Even today, perhaps 20 per cent of Kosovo’s GDP directly depend on foreign aid.
Kosovo’s economic problems are not only the result of the sanctions of the 1990s and the 1998-99 conflict: when it was still part of Yugoslavia, Kosovo already relied on big transfers from Belgrade, and unemployment was much higher than in other parts of the federation. But in the 1990s the economy basically collapsed. And despite signs of recovery in recent years, the challenges remain huge.
Official unemployment stands at around 40 per cent. And even if black market activities and subsistence agriculture are taken into account, there are more Kosovars on the dole than in a job. Unemployment is particularly high among those under 25, who make up half of Kosovo’s 2 million people. Around half a million Kosovars have left to work in the EU, many of them illegally.
Of those who stayed at home, more than a third live below the poverty line, and social services only reach a tiny share of them. There are no industries to speak off, and little to export apart from scrap metal. The current-account deficit amounts to 50 per cent of GDP (although that is inflated by the big international presence). Although the EU claims that it has invested €400 million into the power sector alone, regular electricity blackouts remain the biggest problem for local businesses.
The news is not all bad: GDP growth has picked up despite a gradual reduction in international aid; household incomes have been rising; tax revenue has started to recover, and privatisation has provided the budget with an independent source of cash; and almost all children now go to school, at least some of the time.
Some foreign companies have started to look at the mining and power sectors: Kosovo sits on Europe’s second largest deposits of brown coal, and it also has sizeable resources of lead, zinc and nickel. Building up these sectors for exports would reduce the external deficit and bring in foreign exchange. But since energy and mining are capital rather than labour intensive industries, they will not create many jobs. The resolution of status alone will not be enough to attract foreign investment into other manufacturing sectors and services. Kosovo will need a more open and transparent business environment, an efficient state administration and skilled workers. Despite the EU’s help and promise of eventual accession, such reforms will take years.
The World Bank says that even with 6 per cent annual growth (twice what Kosovo manages at the moment), it would take ten years to cut unemployment by half, from 40 to 20 per cent. Persistent unemployment, in particular among the young, will fuel frustration, which would be bad for political peace.
There are two things that the EU could do to help Kosovo’s economy now, apart from giving money and advice. Both will be controversial. First, it should help the farm sector, which is where most Kosovars work. It is hugely inefficient but has potential for quick improvements. With EU farm aid and better market access, Kosovo could start selling fruit, vegetables and meat abroad. Second, the EU should keep its labour markets open: one in five Kosovo households relies on remittances from abroad, and they probably contribute more to Kosovo’s economy than all foreign aid put together.
Katinka Barysch is deputy director of the Centre for European Reform.
Friday, February 29, 2008
Monday, February 25, 2008
The EU in Kosovo: Learning to let go
By Tomas Valasek
Here’s a secret about Kosovo’s independence – it is not real; not yet anyway. Without outside help, Kosovo would not function today. But at the same time, the new EU mission will have to justify its presence in the eyes of the Kosovo people. It must make every effort to transfer responsibility for running the new country to the Kosovars.
At its birth on February 17th, the country lacked most ministries, or, for that matter, a sustainable economy (the official unemployment rate is around 40 per cent). A veritable who’s who of international organisations takes care of everything from sanitation to security. Some 17,000 NATO peacekeepers make sure that violence does not erupt between the Albanian majority and the 130,000 Serbs still living in Kosovo. UNMIK (the United Nation’s interim administration mission in Kosovo) took charge of most government business after the 1999 mission. As part of UNMIK, a group of officials and experts from various EU countries has run much of Kosovo’s economic policy, from devising privatisation to collecting customs revenues. About 20 per cent of Kosovo’s GDP directly depend on foreign aid. UNMIK has also negotiated regional and bilateral agreements for Kosovo, for example on trade, energy and transport. In addition, an army of volunteers working for 300-odd different NGOs look after Kosovo’s 2 million inhabitants.
So for the foreseeable future, Kosovo will need heavy international assistance, both financial and in the form of experts on the ground. But here’s the rub: staying too long may be equally, if not more, counterproductive than leaving early. And this holds especially true for the new EU mission: the 2,000 EU judges, administrators, and police, who will soon replace the UN in Kosovo. The EU gave them an ambitious mandate: they are to not only advise the new Kosovo authorities but also to ‘independently [if necessary]… ensure the rule of law”. They’ll even have the authority to reverse or annul decisions by Kosovo authorities. Kosovo may not quite be a protectorate like the one the EU runs in Bosnia. But no independent country outside the EU gives Brussels the right to annul its domestic legislation.
The EU’s extensive powers in Kosovo will be tolerated by the country’s government. Because its legal case for separation from Serbia will always be disputed, the government’s best chance for respect and recognition is to make a success of its independence. That means using EU money intelligently to build up the economy, guaranteeing the human rights of the Serbian and other minorities, instilling the rule of law and clamping down on organised crime and corruption. Pristina will need the EU’s assistance to accomplish all this, so it will strive to be on good terms with Brussels.
The people of Kosovo – that’s another story. They strove to be independent, not to end up in a situation where the EU administrators have the last say. If the EU mission is too heavy-handed, it will cause resentment among ordinary Kosovars. Already, anti-EU graffiti has appeared in the streets in Pristina. To makes matters even more delicate, the UN, from which the EU takes over, has a terrible reputation in Kosovo. In eight years of running this tiny country, the size of a small Baltic republic, it has not managed to guarantee basic services like around-the-clock electricity, despite multi-million dollar investments into the power sector. Kai Eide, formerly a high-ranking UN official, suggested in 2005 that the UN mission itself had become an obstacle to building Kosovo’s economy and governance, and he advised the UN to leave.
So the EU is marching into a quandary. Kosovo needs its help and assistance – and the EU needs Kosovo to succeed. But by trying too hard, the EU could make a bad situation worse. The only thing worse than a Kosovo poor and badly governed is a Kosovo poor, badly governed, and hostile to the EU. For the EU to make its Kosovo mission a success, it needs to treat Kosovo with caution and respect. It needs be firm with Pristina if the government fails to respect minority rights and root out crime and corruption. But otherwise, it should try to reduce interference and concentrate on building up local administrative capacity. At every step, the EU needs to make clear to the Kosovars that it is there to help with the transition, not to permanently set the agenda.
Lastly, the EU needs to demonstrate its usefulness to the Kosovars, to show that its presence there makes a material difference to their lives. The EU should not assume that Kosovo’s dependence on foreign aid and expertise in itself justifies its mission in the eyes of the local population. A couple of tangible successes would help. None would probably be more important than finally fixing the electricity grid, thus giving Kosovo’s economy a much needed boost.
Tomas Valasek is director of foreign policy and defence at Centre for European Reform
Here’s a secret about Kosovo’s independence – it is not real; not yet anyway. Without outside help, Kosovo would not function today. But at the same time, the new EU mission will have to justify its presence in the eyes of the Kosovo people. It must make every effort to transfer responsibility for running the new country to the Kosovars.
At its birth on February 17th, the country lacked most ministries, or, for that matter, a sustainable economy (the official unemployment rate is around 40 per cent). A veritable who’s who of international organisations takes care of everything from sanitation to security. Some 17,000 NATO peacekeepers make sure that violence does not erupt between the Albanian majority and the 130,000 Serbs still living in Kosovo. UNMIK (the United Nation’s interim administration mission in Kosovo) took charge of most government business after the 1999 mission. As part of UNMIK, a group of officials and experts from various EU countries has run much of Kosovo’s economic policy, from devising privatisation to collecting customs revenues. About 20 per cent of Kosovo’s GDP directly depend on foreign aid. UNMIK has also negotiated regional and bilateral agreements for Kosovo, for example on trade, energy and transport. In addition, an army of volunteers working for 300-odd different NGOs look after Kosovo’s 2 million inhabitants.
So for the foreseeable future, Kosovo will need heavy international assistance, both financial and in the form of experts on the ground. But here’s the rub: staying too long may be equally, if not more, counterproductive than leaving early. And this holds especially true for the new EU mission: the 2,000 EU judges, administrators, and police, who will soon replace the UN in Kosovo. The EU gave them an ambitious mandate: they are to not only advise the new Kosovo authorities but also to ‘independently [if necessary]… ensure the rule of law”. They’ll even have the authority to reverse or annul decisions by Kosovo authorities. Kosovo may not quite be a protectorate like the one the EU runs in Bosnia. But no independent country outside the EU gives Brussels the right to annul its domestic legislation.
The EU’s extensive powers in Kosovo will be tolerated by the country’s government. Because its legal case for separation from Serbia will always be disputed, the government’s best chance for respect and recognition is to make a success of its independence. That means using EU money intelligently to build up the economy, guaranteeing the human rights of the Serbian and other minorities, instilling the rule of law and clamping down on organised crime and corruption. Pristina will need the EU’s assistance to accomplish all this, so it will strive to be on good terms with Brussels.
The people of Kosovo – that’s another story. They strove to be independent, not to end up in a situation where the EU administrators have the last say. If the EU mission is too heavy-handed, it will cause resentment among ordinary Kosovars. Already, anti-EU graffiti has appeared in the streets in Pristina. To makes matters even more delicate, the UN, from which the EU takes over, has a terrible reputation in Kosovo. In eight years of running this tiny country, the size of a small Baltic republic, it has not managed to guarantee basic services like around-the-clock electricity, despite multi-million dollar investments into the power sector. Kai Eide, formerly a high-ranking UN official, suggested in 2005 that the UN mission itself had become an obstacle to building Kosovo’s economy and governance, and he advised the UN to leave.
So the EU is marching into a quandary. Kosovo needs its help and assistance – and the EU needs Kosovo to succeed. But by trying too hard, the EU could make a bad situation worse. The only thing worse than a Kosovo poor and badly governed is a Kosovo poor, badly governed, and hostile to the EU. For the EU to make its Kosovo mission a success, it needs to treat Kosovo with caution and respect. It needs be firm with Pristina if the government fails to respect minority rights and root out crime and corruption. But otherwise, it should try to reduce interference and concentrate on building up local administrative capacity. At every step, the EU needs to make clear to the Kosovars that it is there to help with the transition, not to permanently set the agenda.
Lastly, the EU needs to demonstrate its usefulness to the Kosovars, to show that its presence there makes a material difference to their lives. The EU should not assume that Kosovo’s dependence on foreign aid and expertise in itself justifies its mission in the eyes of the local population. A couple of tangible successes would help. None would probably be more important than finally fixing the electricity grid, thus giving Kosovo’s economy a much needed boost.
Tomas Valasek is director of foreign policy and defence at Centre for European Reform
Wednesday, February 13, 2008
Time for the Export-Weltmeister to start consuming
by Simon Tilford
Too many Europeans are blaming the US for the economic slowdown in Europe, as if everything would have been fine if only the Americans were not so irresponsible. This is complacent. The European economy would have faced a tricky rebalancing irrespective of the credit crisis. It is not sustainable for one group of EU economies to provide a disproportionate share of EU domestic demand while others run ever bigger current account surpluses.
Europeans are right to highlight the fact that the EU economy is a comparable size to the US one. However, European policy-makers and central bankers are on somewhat shakier ground when they queue up to claim that the EU economy is fundamentally more balanced that its US counterpart. Europeans should ask themselves the following question: would a US economy growing at the same pace as the EU economy did in 2007 be as easily rattled by a financial crisis in Europe and fall in the value of the euro as the European economy has been by the credit crisis in the US and the fall in the dollar? The answer is clearly no.
The European economy as a whole has become more flexible in recent years. Labour markets are now more efficient, employment rates (those employed as a percentage of the working age population) are up and many product markets are now much more competitive. These developments have helped accelerate the diffusion of new technologies. However, a look at the structure of EU economic growth demonstrates why the current recovery is so fragile, and why Europeans are wrong to focus so strongly on external shocks for explanations.
The UK and Spain, but also France and the new member-states have accounted for a very large share of the growth in EU domestic demand this decade. Consumption in these economies has grown more rapidly than output. The result has been a steady increase in their current account deficits. Spain’s hit an estimated 9 per cent of GDP in 2007, the UK’s 4 per cent, whereas deficits in Italy and France were around 2.5 per cent 1.5 per cent respectively. External deficits across the new member-states are big, in some cases startlingly so.
Over this period, another group of member-states led by Germany, but also including the Netherlands and Sweden, have seen their output expand much more rapidly than domestic consumption, with the result that their surpluses have ballooned. Germany’s and Sweden’s stood at 6 per cent of GDP in 2007, and that of the Netherlands was 7 per cent. Much of the rise in their combined surplus since 2000 has been with other members of the EU. In effect, these economies have been a huge drag on the European economy, and have not been, as they are sometimes erroneously portrayed, drivers of economic growth.
Economies cannot rely indefinitely on exports for economic stimulus, as other economies cannot run huge deficits indefinitely. A number of the countries that have generated strong growth in domestic demand must now rebalance their economies. The construction boom in Spain that has done so much to drive investment and private consumption in that country has ended and will depress Spanish consumption, perhaps for many years. For its part, the build-up of debt that contributed considerably to the strong performance of the UK economy in recent years has now run its course. France and Italy are in no position to take up the slack, not least because of their weak fiscal positions but also because they need to hold down wage settlements in order to prevent any further loss of competitiveness to the Germans. Neither are the new member-states, whose imbalances are starting to attract the attentions of the financial markets.
The countries that have relied on exports to the rest of the EU for a big chunk of their overall growth are going to have to rebalance and contribute to EU growth rather than being a drag on it. The prospects are not good. For example, for years German economists and politicians have been saying that Germany needed to regain competitiveness by ruthlessly holding down costs. This, they argued, would boost exports and feed through into investment and jobs. There has been a pick-up in investment and expansion of employment, but both remain vulnerable to a downturn in external demand because there has been no recovery in consumption. German private consumption actually fell in 2007 and domestic demand grew at half the pace of GDP. German real wages are likely to rise this year for the first time since 2003, but consumer confidence remains exceptionally low.
The EU needs to recognise that one of its core economic challenges is the excessive dependence of Germany and a number of other economies on exports to drive growth. The growth strategies of these countries should not be held up as examples for others to emulate. A huge current account surplus does not necessarily indicate an economy is ‘competitive’. It can also point to the weakness of domestic demand.
Simon Tilford is chief economist at the Centre for European Reform.
Too many Europeans are blaming the US for the economic slowdown in Europe, as if everything would have been fine if only the Americans were not so irresponsible. This is complacent. The European economy would have faced a tricky rebalancing irrespective of the credit crisis. It is not sustainable for one group of EU economies to provide a disproportionate share of EU domestic demand while others run ever bigger current account surpluses.
Europeans are right to highlight the fact that the EU economy is a comparable size to the US one. However, European policy-makers and central bankers are on somewhat shakier ground when they queue up to claim that the EU economy is fundamentally more balanced that its US counterpart. Europeans should ask themselves the following question: would a US economy growing at the same pace as the EU economy did in 2007 be as easily rattled by a financial crisis in Europe and fall in the value of the euro as the European economy has been by the credit crisis in the US and the fall in the dollar? The answer is clearly no.
The European economy as a whole has become more flexible in recent years. Labour markets are now more efficient, employment rates (those employed as a percentage of the working age population) are up and many product markets are now much more competitive. These developments have helped accelerate the diffusion of new technologies. However, a look at the structure of EU economic growth demonstrates why the current recovery is so fragile, and why Europeans are wrong to focus so strongly on external shocks for explanations.
The UK and Spain, but also France and the new member-states have accounted for a very large share of the growth in EU domestic demand this decade. Consumption in these economies has grown more rapidly than output. The result has been a steady increase in their current account deficits. Spain’s hit an estimated 9 per cent of GDP in 2007, the UK’s 4 per cent, whereas deficits in Italy and France were around 2.5 per cent 1.5 per cent respectively. External deficits across the new member-states are big, in some cases startlingly so.
Over this period, another group of member-states led by Germany, but also including the Netherlands and Sweden, have seen their output expand much more rapidly than domestic consumption, with the result that their surpluses have ballooned. Germany’s and Sweden’s stood at 6 per cent of GDP in 2007, and that of the Netherlands was 7 per cent. Much of the rise in their combined surplus since 2000 has been with other members of the EU. In effect, these economies have been a huge drag on the European economy, and have not been, as they are sometimes erroneously portrayed, drivers of economic growth.
Economies cannot rely indefinitely on exports for economic stimulus, as other economies cannot run huge deficits indefinitely. A number of the countries that have generated strong growth in domestic demand must now rebalance their economies. The construction boom in Spain that has done so much to drive investment and private consumption in that country has ended and will depress Spanish consumption, perhaps for many years. For its part, the build-up of debt that contributed considerably to the strong performance of the UK economy in recent years has now run its course. France and Italy are in no position to take up the slack, not least because of their weak fiscal positions but also because they need to hold down wage settlements in order to prevent any further loss of competitiveness to the Germans. Neither are the new member-states, whose imbalances are starting to attract the attentions of the financial markets.
The countries that have relied on exports to the rest of the EU for a big chunk of their overall growth are going to have to rebalance and contribute to EU growth rather than being a drag on it. The prospects are not good. For example, for years German economists and politicians have been saying that Germany needed to regain competitiveness by ruthlessly holding down costs. This, they argued, would boost exports and feed through into investment and jobs. There has been a pick-up in investment and expansion of employment, but both remain vulnerable to a downturn in external demand because there has been no recovery in consumption. German private consumption actually fell in 2007 and domestic demand grew at half the pace of GDP. German real wages are likely to rise this year for the first time since 2003, but consumer confidence remains exceptionally low.
The EU needs to recognise that one of its core economic challenges is the excessive dependence of Germany and a number of other economies on exports to drive growth. The growth strategies of these countries should not be held up as examples for others to emulate. A huge current account surplus does not necessarily indicate an economy is ‘competitive’. It can also point to the weakness of domestic demand.
Simon Tilford is chief economist at the Centre for European Reform.
Friday, February 08, 2008
The Slovak roadblock for the Lisbon treaty
by Tomas Valasek
Fear the unknown unknowns, the former US defence minister Donald Rumsfeld once said (before falling victim to his own adage). There is a lesson in his words for the framers of the Lisbon treaty. The document unexpectedly encountered trouble in Slovakia. Twice this week, the country's parliament came close to voting it down. A third scheduled vote on Thursday 7th February was postponed indefinitely.
Until the end of January, little in Slovak politics hinted at the coming storm. The Lisbon treaty enjoys robust support in the parliament, with only one smallish party, the Christian Democrats, saying they would vote against it. In fact, Slovakia is one of the 18 countries that had ratified the previous, more controversial, constitutional treaty.
Then, however, the Lisbon treaty got caught up in an unrelated political controversy, something that has happened to other EU treaties in the past. In this case, the government submitted the Lisbon treaty alongside a disputed media law. The opposition has insisted that it would reject both pieces of legislation unless the media law was changed.
The law in question is indeed problematic. Its wording is so convoluted that it could easily be abused to restrict the freedom of speech. The European Federation of Journalists has criticised the legislation, and the OSCE has urged the Slovak foreign minister, Jan Kubis, to convince his government to change it.
But that still does not explain why the Lisbon treaty had to be taken hostage. What underlies the Lisbon treaty controversy in Slovakia is a complete breakdown in communication between the opposition and the government. The three-party coalition headed by Prime Minister Robert Fico has a comfortable majority, which it has used over the past year to roll back many of the previous government's reforms. Fico’s coalition barely disguises its contempt for the opposition, and there is precious little debate, much less co-operation, on any new legislation.
The leaders of the opposition a coalition of three conservative parties know that they'd be powerless to stop the media law if it was put to a straight up-or-down vote. Worse, they fear that the media law will be used to further weaken them by muzzling sympathetic journalists. So they have decided to stop it the only way left open by linking it to the Lisbon treaty. Under Slovak law, the ratification of EU treaties requires a constitutional majority and hence the opposition's co-operation. The treaty is the only piece of legislation which gives the opposition leverage over the government so it has seized this opportunity to stop the media law.
Over the past two weeks, Slovakia's political leaders repeated the same routine several times: the government and the opposition talk, they fail to make any progress, the government puts the treaty to a vote, the opposition walks out, the government withdraws the treaty, it talks to the opposition again, and on it goes. The longer the confrontation drags on, the more nervous observers in Brussels and EU capitals become. Over the weekend, European Commission president José Manuel Barroso called the opposition leader, former Prime Minister Mikulas Dzurinda, to voice his concerns.
The most likely outcome of this drama is rather anti-climatic: the government will probably put off the vote on the Lisbon treaty until later in the spring. There is no special reason to hurry: the UK parliament is not expected to vote on the treaty until the summer at the earliest. By then, it is hoped, relations between the opposition and the government in Slovakia will have improved sufficiently to allow for the treaty's passage. The opposition, after all, likes the treaty; they negotiated its predecessor, the constitutional treaty.
But the broader message to European capitals and to Brussels is clear: the fact that the Lisbon treaty will be approved by parliamentary votes rather than referenda (with the exception of Ireland) does not make the document immune to domestic politics. Parliaments everywhere can and will play political football with it. Such controversies will not be about the content of the treaty itself (much as its opponents would like to believe). But it does mean that Barroso and other supporters of the treaty could be facing many a sleepless night over the coming months.
Tomas Valasek is director of foreign policy and defence at the Centre for European Reform.
Fear the unknown unknowns, the former US defence minister Donald Rumsfeld once said (before falling victim to his own adage). There is a lesson in his words for the framers of the Lisbon treaty. The document unexpectedly encountered trouble in Slovakia. Twice this week, the country's parliament came close to voting it down. A third scheduled vote on Thursday 7th February was postponed indefinitely.
Until the end of January, little in Slovak politics hinted at the coming storm. The Lisbon treaty enjoys robust support in the parliament, with only one smallish party, the Christian Democrats, saying they would vote against it. In fact, Slovakia is one of the 18 countries that had ratified the previous, more controversial, constitutional treaty.
Then, however, the Lisbon treaty got caught up in an unrelated political controversy, something that has happened to other EU treaties in the past. In this case, the government submitted the Lisbon treaty alongside a disputed media law. The opposition has insisted that it would reject both pieces of legislation unless the media law was changed.
The law in question is indeed problematic. Its wording is so convoluted that it could easily be abused to restrict the freedom of speech. The European Federation of Journalists has criticised the legislation, and the OSCE has urged the Slovak foreign minister, Jan Kubis, to convince his government to change it.
But that still does not explain why the Lisbon treaty had to be taken hostage. What underlies the Lisbon treaty controversy in Slovakia is a complete breakdown in communication between the opposition and the government. The three-party coalition headed by Prime Minister Robert Fico has a comfortable majority, which it has used over the past year to roll back many of the previous government's reforms. Fico’s coalition barely disguises its contempt for the opposition, and there is precious little debate, much less co-operation, on any new legislation.
The leaders of the opposition a coalition of three conservative parties know that they'd be powerless to stop the media law if it was put to a straight up-or-down vote. Worse, they fear that the media law will be used to further weaken them by muzzling sympathetic journalists. So they have decided to stop it the only way left open by linking it to the Lisbon treaty. Under Slovak law, the ratification of EU treaties requires a constitutional majority and hence the opposition's co-operation. The treaty is the only piece of legislation which gives the opposition leverage over the government so it has seized this opportunity to stop the media law.
Over the past two weeks, Slovakia's political leaders repeated the same routine several times: the government and the opposition talk, they fail to make any progress, the government puts the treaty to a vote, the opposition walks out, the government withdraws the treaty, it talks to the opposition again, and on it goes. The longer the confrontation drags on, the more nervous observers in Brussels and EU capitals become. Over the weekend, European Commission president José Manuel Barroso called the opposition leader, former Prime Minister Mikulas Dzurinda, to voice his concerns.
The most likely outcome of this drama is rather anti-climatic: the government will probably put off the vote on the Lisbon treaty until later in the spring. There is no special reason to hurry: the UK parliament is not expected to vote on the treaty until the summer at the earliest. By then, it is hoped, relations between the opposition and the government in Slovakia will have improved sufficiently to allow for the treaty's passage. The opposition, after all, likes the treaty; they negotiated its predecessor, the constitutional treaty.
But the broader message to European capitals and to Brussels is clear: the fact that the Lisbon treaty will be approved by parliamentary votes rather than referenda (with the exception of Ireland) does not make the document immune to domestic politics. Parliaments everywhere can and will play political football with it. Such controversies will not be about the content of the treaty itself (much as its opponents would like to believe). But it does mean that Barroso and other supporters of the treaty could be facing many a sleepless night over the coming months.
Tomas Valasek is director of foreign policy and defence at the Centre for European Reform.
Monday, February 04, 2008
The Egypt-Gaza border breach: a wake up call?
by Clara Marina O'Donnell
Events on the ground in Israel and Gaza have taken a new turn for the worse. But the latest crisis could lead to a more constructive approach in solving the Middle East stand-off. On January 23rd, after Israel further strengthened its siege on Gaza by closing its borders completely, Hamas blew up sections of the border with Egypt. During the following two weeks hundreds of thousands of Palestinians streamed back and forth into Egypt uncontrolled. Most Gazans bought badly needed food and other supplies. But Palestinian militant groups also took advantage of the chaos to stock up on weapons and some tried to infiltrate Israel through the Egyptian border.
The cost for Israel has been high. This morning (February 4th) two suicide bombers killed one and injured over ten in the southern Israeli city of Dimona. The bombing was the first suicide attack in Israel in a year and the attackers (reported as Fatah-allied militants) are suspected to have taken advantage of the border breach to reach Israel.
Potentially, the Gaza-Egypt border crisis could actually be salutory for Palestinian politics and the wider conflict. International players, including the EU, the US and Egypt, are now supporting a plan from the Palestinian Authority (PA), which governs the West Bank, to re-open not only the Egypt-Gaza border, but all of Gaza’s borders. Most outsiders, including the EU and the US, disapprove of Israel’s border closures. They believe the humanitarian cost is too high. So in efforts to lift the siege outsiders are backing President Abbas’s team in the PA who have suggested that PA forces should take charge of all of Gaza’s crossing points (Israel refuses to deal with Hamas border guards). In support of the PA initiative the EU has even offered to reinstate its own border monitors on the Egypt-Gaza border crossing (the EU withdrew its monitors when Hamas took charge in Gaza).
The internationally backed PA plan not only has the potential to alleviate the humanitarian crisis in Gaza, it could also be a useful first step to a wider reconciliation between Hamas and Fatah. For PA border guards (and EU monitors) to function at Gaza’s crossings, some form of agreement will be necessary between Abbas’s Fatah movement and Hamas, whose forces are in control on the ground in Gaza. Since June leaders from Hamas and Fatah have not spoken to each other. But Hamas has been keen to talk in principle and lower-level intermediaries in both parties have been reaching out in attempts to end the current crisis. The border breach could be the catalyst for co-operation.
The border breach confirmed that Hamas cannot be eclipsed or ignored. Despite being shunned for two years by the international community, Hamas is still standing, and it is undermining Israeli sanctions. Only with its cooperation can Gaza’s border crossings be opened, and ultimately, it will also have to play a role in any meaningful peace agreement.
The EU and the US are presumably aware that sending PA border guards to Gaza will require some form of cooperation with Hamas. So by supporting the initiative, the EU and the US are, in effect, making a first step towards ending their own policy of isolating Hamas. Egypt has already crossed the rubicon. Having realised the need to involve Hamas in solving the Egypt-Gaza border crisis, Egyptian President Hosni Mubarak invited Fatah and Hamas leaders to Cairo last week to encourage a reconciliation between the two groups.
An agreement on opening Gaza’s borders is far from a done deal. Despite Egyptian efforts, both Hamas leaders and Abbas (in particular) have so far been unwilling to be conciliatory. And even if a Fatah-Hamas deal is reached, Israel will still need to be convinced to re-open its side of Gaza’s borders.
Israel will certainly protest. But the government will be in a difficult position and might see the potential advantages to such a deal. The suicide bombing has showed Israel the costly unintended consequences of strict sanctions. Israel might want to re-consider its boycott policy. In addition, if Israel refuses to accept a PA-Hamas deal, the government will face the uncomfortable prospect of seeing Egypt and Hamas reaching an agreement on the Egypt-Gaza border alone or Hamas continuing to breach the Egypt-Gaza border violently. Either way, Israel’s boycott and security will be undermined.
There is a sense of urgency. The attack on a wall speaks volumes about the misery and passions bottled up in Gaza. The human suffering is increasing radicalisation among its residents, and reducing support for President Abbas amongst the Palestinians in general. While Hamas is isolated and no border agreement is reached, Israel is vulnerable to further border breaches and penetrations by Palestinian militants through Egypt. Today’s suicide bombing will make it harder for conciliatory forces to gain the upper had, but outsiders, including the EU, should take advantage of every opportunity to encourage a change in the current course of events.
Clara Marina O'Donnell is a research fellow at the Centre for European Reform
Events on the ground in Israel and Gaza have taken a new turn for the worse. But the latest crisis could lead to a more constructive approach in solving the Middle East stand-off. On January 23rd, after Israel further strengthened its siege on Gaza by closing its borders completely, Hamas blew up sections of the border with Egypt. During the following two weeks hundreds of thousands of Palestinians streamed back and forth into Egypt uncontrolled. Most Gazans bought badly needed food and other supplies. But Palestinian militant groups also took advantage of the chaos to stock up on weapons and some tried to infiltrate Israel through the Egyptian border.
The cost for Israel has been high. This morning (February 4th) two suicide bombers killed one and injured over ten in the southern Israeli city of Dimona. The bombing was the first suicide attack in Israel in a year and the attackers (reported as Fatah-allied militants) are suspected to have taken advantage of the border breach to reach Israel.
Potentially, the Gaza-Egypt border crisis could actually be salutory for Palestinian politics and the wider conflict. International players, including the EU, the US and Egypt, are now supporting a plan from the Palestinian Authority (PA), which governs the West Bank, to re-open not only the Egypt-Gaza border, but all of Gaza’s borders. Most outsiders, including the EU and the US, disapprove of Israel’s border closures. They believe the humanitarian cost is too high. So in efforts to lift the siege outsiders are backing President Abbas’s team in the PA who have suggested that PA forces should take charge of all of Gaza’s crossing points (Israel refuses to deal with Hamas border guards). In support of the PA initiative the EU has even offered to reinstate its own border monitors on the Egypt-Gaza border crossing (the EU withdrew its monitors when Hamas took charge in Gaza).
The internationally backed PA plan not only has the potential to alleviate the humanitarian crisis in Gaza, it could also be a useful first step to a wider reconciliation between Hamas and Fatah. For PA border guards (and EU monitors) to function at Gaza’s crossings, some form of agreement will be necessary between Abbas’s Fatah movement and Hamas, whose forces are in control on the ground in Gaza. Since June leaders from Hamas and Fatah have not spoken to each other. But Hamas has been keen to talk in principle and lower-level intermediaries in both parties have been reaching out in attempts to end the current crisis. The border breach could be the catalyst for co-operation.
The border breach confirmed that Hamas cannot be eclipsed or ignored. Despite being shunned for two years by the international community, Hamas is still standing, and it is undermining Israeli sanctions. Only with its cooperation can Gaza’s border crossings be opened, and ultimately, it will also have to play a role in any meaningful peace agreement.
The EU and the US are presumably aware that sending PA border guards to Gaza will require some form of cooperation with Hamas. So by supporting the initiative, the EU and the US are, in effect, making a first step towards ending their own policy of isolating Hamas. Egypt has already crossed the rubicon. Having realised the need to involve Hamas in solving the Egypt-Gaza border crisis, Egyptian President Hosni Mubarak invited Fatah and Hamas leaders to Cairo last week to encourage a reconciliation between the two groups.
An agreement on opening Gaza’s borders is far from a done deal. Despite Egyptian efforts, both Hamas leaders and Abbas (in particular) have so far been unwilling to be conciliatory. And even if a Fatah-Hamas deal is reached, Israel will still need to be convinced to re-open its side of Gaza’s borders.
Israel will certainly protest. But the government will be in a difficult position and might see the potential advantages to such a deal. The suicide bombing has showed Israel the costly unintended consequences of strict sanctions. Israel might want to re-consider its boycott policy. In addition, if Israel refuses to accept a PA-Hamas deal, the government will face the uncomfortable prospect of seeing Egypt and Hamas reaching an agreement on the Egypt-Gaza border alone or Hamas continuing to breach the Egypt-Gaza border violently. Either way, Israel’s boycott and security will be undermined.
There is a sense of urgency. The attack on a wall speaks volumes about the misery and passions bottled up in Gaza. The human suffering is increasing radicalisation among its residents, and reducing support for President Abbas amongst the Palestinians in general. While Hamas is isolated and no border agreement is reached, Israel is vulnerable to further border breaches and penetrations by Palestinian militants through Egypt. Today’s suicide bombing will make it harder for conciliatory forces to gain the upper had, but outsiders, including the EU, should take advantage of every opportunity to encourage a change in the current course of events.
Clara Marina O'Donnell is a research fellow at the Centre for European Reform
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