The Implications of the Inflation Reduction Act and our Allyship with the EU

In the summer of 2022, the Biden Administration signed the Inflation Reduction Act (IRA) into law. This massive bill allocates federal spending towards reducing national carbon emissions, lowering healthcare costs, funding the Internal Revenue Service (IRS) and improving taxpayer compliance. One of the most significant aspects of this bill concerns clean energy and advancing climate technology. This aspect works in conjunction with the Infrastructure Investment and Jobs Act (IIJA) and the CHIPS and Science Act. All three of these bills invest spending in manufacturing, job creation, infrastructure, and research and development in clean energy. The Inflation Reduction Act directs nearly $400 billion in federal funding to clean energy via tax incentives, grants, and loan guarantees. Clean electricity and transmission received the largest sum, followed by clean transportation, such as electric vehicles. The goal of the IRA, in addition to the IIJA and the CHIPS Act is to improve U.S. economic competitiveness, innovation, and industrial productivity while considering advancing clean energy efforts and encouraging investment. Leaders of the European Union have voiced their disapproval of the U.S. enacting the IRA for fear that it will disrupt the clean energy market, driving investment away from EU member states due to incentives offered by the U.S. However, the EU’s fears have no real merit. The U.S.’s commitment to clean energy generates a net positive on the global scale in terms of addressing climate change and puts no significant dent in Europe’s clean energy economic sector.  

Europe’s biggest concern in the IRA are the incentives it offers for private investment. The majority of funding for the bill is in the form of tax credits which are going primarily to corporations, approximately $216 billion of the nearly $400 billion bill. To be eligible for the full IRA tax credits, corporations must meet a set of criteria. These include prevailing wage and apprenticeship requirements, domestic-production, or domestic-procurement requirements, and in some cases a percentage of critical minerals that have been recycled, extracted, or processed in North America or a country that has a free trade agreement with the U.S. as well as being manufactured or processed in North America. EU leaders believe these incentives will encourage European corporations to relocate to the U.S. and their worries are not entirely unfounded.

During the World Economic Forum in Davos, U.S. governors from Michigan, Georgia, Illinois, and West Virginia Senator Joe Manchin attempted to lure European clean energy businesses to their states, promising cheaper costs of production. German, French, and Belgian leaders all denounced the U.S. politicians’ attempts to strip Europe of their clean energy producers. In response,  French President Emmanuel Macron has indicated that he believes the EU should introduce a comparable spending package to the IRA to bolster clean energy corporations in Europe. Some potential issues with this reaction is that the EU is unable to provide tax credits in the way the U.S. can, as only nation states have this authority. Many nation states do provide tax credits and Germany is already operating under a similar model to the IRA, however it is unlikely it would make a significant impact due to the smaller scale of their clean energy production market. Other EU leaders, such as Dutch Prime Minister Mark Rutte, believe throwing money at their existing system would make no difference, rather they should redistribute funding that already exists in clean energy investment. 

If the EU is content with the current state of the clean energy market, which considering their reaction to any possible shift they are, then they are realistically making a mountain out of a mole hill. Almost half of the funds provided by the IRA will be spent on upgrading, repurposing, and replacing the energy infrastructure and will be used as loans rather than subsidies. The biggest sector the EU may have concerns with is electric vehicles, however the EVs they are already manufacturing will most likely qualify for subsidies. Germany is the only major exporter of cars to the U.S. and Volkswagen is the only corporation that produces large numbers of electric vehicles. Its best-selling model is already being produced in Tennessee, making it qualify under the IRA as a corporation who will receive subsidies. Other major European automobile corporations such as Audi, BMW, and Mercedes already produce in North America as well. Because they all produce in either the U.S. or a nation with a U.S. free trade agreement, they will also qualify for subsidies. 

Concerning our transatlantic allyship, any significant shift would be an overreaction. Although these new subsidies concern European nations, the primary focus should be on coordinating with the U.S. on how to approach the clean energy market. Europe’s trade commissioner, Vladis Dombrovskis said as a reaction to the IRA that the fight against climate change should be done by “building transatlantic value chains, not breaking them apart”. Importantly, the U.S. and the EU need to ensure that they do not battle to drive away business and investment through distortionary subsidies and place reasonable boundaries on the support they are able to give to corporations. 

At first glance, it is reasonable for Europe to approach the enactment of the Inflation Reduction Act with a degree of hesitancy. It appears to threaten their existing clean energy market and disrupt this sector of the economy. Their fears were validated by U.S. politicians attempting to lure these corporations stateside with the appeal of subsidies, tax credits, and easy access to loans. Upon further analysis, however, it is highly unlikely Europe’s clean energy market will be disrupted at all by the IRA. The corporations which draw the most concern are manufacturing in the U.S. and already qualify for most of the IRA’s benefits. It is necessary for European leaders to take a less reactionary stance on the bill and focus on further coordination with the U.S. on how to approach clean energy and climate technology efforts moving forward.

The Deficit the EU Should Really Worry About Is Not Fiscal – It’s Democratic

Earlier in February, the European Commission – the executive arm of the EU – published a report outlining a pessimistic economic outlook and persistent substantial market risks in the region, with the projected real GDP growth rate under 2 percent for 2020. The report came at a time the strength of European institutions is tested not only by poor macroeconomic indicators but also by declining citizen confidence in the ability of supranational governance to be transparent and accountable. According to a 2018 Eurobarometer poll, less than two-thirds of Europeans are satisfied with the opportunities for individual citizens to participate in political life. More alarmingly, voter turnout for the European Parliament elections has fallen by over 30 percent since 1980s and now constitutes only 40 percent of the EU population.

Weakening citizen trust – the main symptom of the EU’s growing ‘democratic deficit’ – and worsening economic performance are, however, not just coinciding with one another by chance. The perceived legitimacy of the EU, more so than that of the majority of political arrangements, is highly dependent on its delivery of satisfactory economic results to member-states. Economic self-interest, as illustrated by Britain’s break from Brussels, is a powerful driver of both regional integration and disintegration. Despite the limitations of examining the European project through a performance efficiency lens, the notion that a single common market – with standardized regulations and supervisory mechanisms – is good for member states continues to prevail in explanations of the EU’s emergence and survival.

The 2010 crisis, low levels of growth, high unemployment, and Italy’s current standoff with Brussels over its 2019 budget all undermine result-based legitimacy of the EU and can leave lasting damage on its authority. National governments and the public might be prompted to question the economic desirability of staying in the Union. While unlikely to follow the path of the UK and withdraw completely, countries can potentially model their conduct after Italy and undermine the internal cohesion of the EU by disregarding its rules.

No less urgent are concerns about the transparency and accountability of the European system of governance, oftentimes perceived as an elitist, unelected technocracy. Many citizens believe that supranational decision-making is becoming only more inaccessible to them due to its increasing complexity. The worsening of regional democratic deficit manifests itself in lower voter turnout and overall weaker citizen support for the European project.

The perceived failure of regional institutions to provide member-states with clear and otherwise unattainable economic benefits and the unresponsiveness of EU governance to the concerns of ordinary citizens both pose a major threat to the continuous success and even survival of the European project. However, the debate surrounding these two shortcomings of the current institutional setup not only tends to overlook the interconnectedness of the two issues but oftentimes portrays democratization of regional governance and economically optimal outcomes as being at odds with each other. From the ancient Greeks to the modern-day libertarians, the ‘short-sightedness and ignorance’ of the masses are cited as the reasons institutional arrangements – especially in spheres so technical as fiscal and monetary policy – should be protected from excessive popular influence if they are to yield desirable results. In the sphere of European economic and financial governance, however, the opposite seems to be true.

The undemocratic procedures by which European budgets and money are managed erode not only citizen confidence but the performance efficiency of European institutions. Greece provides perhaps the most telling lesson in the importance of transparency and accountability in economic governance on the national level, which is no less applicable to supranational institutions. It was, after all, falsification of data on the levels of sovereign debt that triggered the country’s crisis in 2010 and its subsequent spillover into the rest of the eurozone. The Greek government’s failure to accurately report on the country’s financial standing led to dramatic downgrades of Greek government bonds and overall reduced the attractiveness of the country’s financial markets.

That same year, several EU audit institutions published a joined report that acknowledged the importance of fiscal transparency and proper oversight of public finance management in crisis prevention and mitigation. Following the financial turmoil of 2010, a new strategy for the development of the European Monetary Union (EMU) identified “democratic legitimacy and accountability” as one of the five building blocks forming a more robust monetary system. All in all, EU officials seem to be coming to the realization that democratic accountability is more than a just complementary dimension of political legitimacy. It is an essential component of a sound economic and financial structure, upheld by both voter and investor confidence.

The unwillingness of technocratic elites to introduce democratic controls to the procedures that govern EU’s financial and monetary affairs will only strengthen the appeal of populism. Arguments pointing out the benefits of a technocratic form of governance over national economies and public finance are typically underpinned by the assumption that the average voter cannot be trusted with control over her country’s power of the purse. Such contempt for the ordinary citizen is what gives validity to claims like that of Michael Grove, who, at the height of Brexit, announced that the UK people “have had enough of experts.”

What makes technocratic arguments more dangerous is their propensity to shy away from the evident need for greater economic and financial literacy among the populace. Aside from the established associations this form of literacy has with countries’ national prosperity, citizens with a clearer understanding of the issues discussed away from the prying eyes of the public have better chances of becoming legitimate participates in policy debates that affect their everyday lives. It is, of course, unreasonable to expect an ordinary European to acquire the technical expertise necessary to understand all the intricacies of fiscal and monetary affairs of their countries and the EU, yet unelected officials deliberating on vital issues behind closed doors out of an irrational fear of the masses should seem no less absurd.

Is This the End of a Free Internet in Europe As We Know It?

The Directive on Copyright in the Digital Single Market, also known as the EU Copyright Directive, is a proposed European Union directive intended to give the European Union a singular and universal copyright law, while moving towards a Digital Single Market. The Copyright Directive was first introduced by the European Parliament Committee on Legal Affairs on June 20, 2018. Just recently, as of  September 12, 2018, the European Union approved the directive and will enter formal discussions expected to conclude in January 2019. If ratified, each of the EU's member countries would then be required to enact laws to support the directive.

The EU says their main goal for pushing this directive through is to protect press publications, reduce the “value gap” between the profits made by internet platforms and content creators, and encourage collaboration between the two latter groups. This directive has gained a lot of media attention because of Articles 11 and 13.

Article 11, the “link tax,” and would require websites to obtain a license before linking to news stories. This specifically gives press publishers direct copyright over use of their publications by internet platforms like online news feeds. Some critics of Article 11 have said that this part of the law might stop ordinary web users sharing news stories, but the text of Article 11 does exempt individuals. It says that the new rights given to publishers “shall not prevent legitimate private and non-commercial use of press publications by individual users.” However, it’s not clear what counts as a commercial platform. What about blogs or RSS feeds that compile headlines like Google News does? What about a Facebook page that is followed by a lot of people? The other aspect of Article 11 that is unclear is what counts as sharing a news story? One amendment that was added to the directive says individual words or hyperlinks can’t be taxed, but how many words is that exactly and when do those words make up enough to be taxed?

Article 13, also known as the “meme ban,” requires websites which primarily host content posted by users to take “effective and proportionate” action to prevent unauthorised postings of copyrighted content and be liable for their users’ actions. The article further states that “storing and giving access to large amounts of works and other subject-matter uploaded by their users” are liable for copyright infringement committed by users. So, platforms and copyright holders must “cooperate in good faith” to stop this infringement from happening in the first place. The question now becomes how will this Article actually be enforced? The most effective, but controversial, enforcement would be implementing upload filters. Websites like Facebook and YouTube would be forced to scan every piece of content users share and checking it against a database of copyrighted material. The problems with having an upload filter are the filter would be subject to abuse, it would make millions of mistakes, and the technology for it simply doesn’t exist to scan the internet’s content in this way.

Most of the media attention facing Articles 11 and 13 is negative and widely critical. The Articles are opposed by over 200 academics from research centers, authors, journalists, publishers, law experts, internet experts, cultural institutions, internet users, civil rights organizations, and lawmakers. Google, which also owns YouTube, has opposed the directive since it was introduced. Executives from Google say the new rules would “turn the internet into a place where everything uploaded to the web must be cleared by lawyers.” In 2018 Google encouraged news publishers in its Digital News Initiative to lobby members of European Parliament on the proposals. Facebook is also opposed to the directive and released a statement expressing they believe the proposal “could have serious, unintended consequences for an open and creative internet.” A Change.org petition was also started to combat the directive and has gathered more than a million signatures. A few days before the parliamentary vote, Wikipedia also started a campaign against the directive. Members of the European Parliament who oppose the changes include Julia Reda (Germany, Pirate Party), Heidi Hautala (Finland, Green League), and Dan Dalton (UK, Conservative Party). Reda describes the law as large media companies trying to force “platforms and search engines to use their snippets and to pay for them.” Creators, however, are divided on this issue.

For the most part this directive is supported by mainstream newspapers, publishers, and the music industry. A campaign by the European Grouping of Societies of Authors and Composers collected a little over 50,000 signatures from creators in support of the directive, including one from world famous DJ David Guetta. Other famous musicians who support the directive include Paul McCartney and James Blunt. A different set of creators do not support this law - online creators. Cover artists and YouTubers like PewDiePie who use video games as part of their career, and artists who parody music. These are just a few of the creators who can be affected negatively from the directive and who have spoken out against it. YouTubers, like video gamer PewDiePie, used their platform to educate people on the directive and encouraging their viewers to get involved by calling their respective EU parliament members to vote against the law.

While Articles 11 and 13 have gotten the most attention so far, the new directive does also tighten up copyright in lots of smaller ways. There are concerns over how the directive treats text and data mining programs. This could apply copyright claims to automated scanners, for example. Another clause that was recently added to the directive would give sports leagues exclusive rights over any images or video of a game, making sports GIFs and photos taken by sports fans at games subject to copyright claims. This is the same for compilations, videos of people lip syncing to songs (like Music.lys), and many similar forms of media.

Alex Voss, a European Parliament member from Germany, is leading support for the bill in Parliament. Voss says companies like Google and Facebook are waging an unjust smear campaign against the directive. A coalition of European press publishers including the Press Association and the European Alliance of News Agencies issued a letter in support of the law. The publishers said the directive is “key for the media industry, the consumer’s future access to news, and ultimately a healthy democracy.”

The viability and constitutionality of versions of Articles 11 and 13 in the United States all depends on who you ask. Opponents of Articles 11 and 13 in the U.S. will be sure to cite the 1st Amendment as the reason why these articles would be unconstitutional. Putting these types of limitations on people’s creativity and on the press could set a dangerous precedent and it could definitely be seen as a violation of people’s right to free expression and free press. Proponents of the laws, however, would look to Article 1 Section 8, Clause 8 in our Constitution.  This clause is known as the copyright clause and it explicitly states the legislative branch has the power “to promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”

We also have specific copyright laws here as well. The Copyright Act of 1976 is our main foundation for a majority of U.S. copyright law and exceptions to copyright. The Act spells out the basic rights of copyright holders. The United States copyright law protects "original works of authorship," in a tangible medium including literary, dramatic, musical, artistic, and other intellectual works. This protection is available to both published and unpublished works. Our copyright law, however, is not as straightforward as people would think or want. For example, in U.S. copyright law there is this distinction called the idea–expression dichotomy. This protects the “expression” of an idea, but copyright does not protect the “idea” itself and this concept is fundamental to copyright law.

There is also the gray area of parodies and fair use. Fair use is the use of limited amounts of copyrighted material that does not qualify as copyright infringement. There are four factors that determine if something is fair use, but there really are no clear guidelines it really is a case to case basis. The four factors are: “purpose and character of the use, including whether the use is of a commercial nature or is for nonprofit educational purposes; “the nature of the copyrighted work;” “the amount and substantiality of the portion used in relation to the copyrighted work as a whole;” and “the effect of the use upon the potential market for or value of the copyrighted work.” There is also another unofficial factor added on to that list: is the material in question highly transformative? Meaning, is it so different from the original work that it is fair use and cannot even be qualified as copyright infringement since it is so different. Fair use and the transformative nature of copyrighted work comes into question when dealing with parodies. Many musical artists, for instance, do not always like when shows or YouTubers parody them and their music. Back in 2013, YouTube parody creator Bart Baker made a parody of Lorde’s song Royals. Lorde’s team did not like this, filed a complaint, and YouTube took the video down for a few weeks. This instance called into question the issue of fair use and many people were critical of both Lorde’s team and YouTube’s response to them. Eventually YouTube put the video back up but these things happen frequently whether it be on YouTube, Spotify, Music.ly, and more platforms. 

Recently, aside from issues of copyright, we now live in a world rampant with fake news, alternative facts, sensationalized news clips, and David Dobrik’s favorite - clickbait. Part of the EU’s reasoning behind the EU Copyright Directive was not just to protect artists, but they say also to protect people from buying into false news. Article 11 is intended to help prevent websites from using such false headlines that leave readers with the wrong impression once they scroll past it.

The EU Copyright Directive is still a long way from becoming law. The EU Parliament has to take it to the European Council, which represents the 28 countries in the Union, and then it goes to the EU’s executive body, the European Commission. The Commission will finalize the law and then send it back to Parliament, who will vote on whether or not to officially make it law in January. If it does pass, which seems likely right now, it then goes to each member state, each of whom have the right to implement the directive as it sees fit. It is possible that some countries may decide to implement it fully whiles decide to implement the law to minimize consequences. Nonetheless, free speech and free internet are at stake in this.

Finding Hell in Libya: The Failure of the EU’s Human Rights Regime

It is six years since the fall of Gaddafi, and there is still no strong functioning central government in Libya. Instead, Libya is divided between armed warlords and militias, all of whom commit human rights abuses that particularly target refugees. Entering Libya through other countries on the way to Europe, refugees are mistreated, raped and sold as slaves. Jean-Claude Juncker, the President of the European Commission, said “I cannot sleep soundly at the thought of what happens to those people in Libya who have been looking for a better life and have found hell in Libya.” The EU’s response to the refugee situation in Libya is hypocritical, because it ensures that, through cooperation with the Libyan Coast Guard, refugees are not able leave Libya for Europe.

Up to a million migrants reside in Libyan camps, where they run the risk of being sold into slavery or later dying on their journey to Europe. The EU’s involvement in the containment of refugees in Libya raises the question of whether the EU is committed to upholding human rights in formulating and implementing foreign policy. The current situation of EU involvement in Libya, combining security policy with human rights concerns, brings the role of the EU in the international human rights regime into question. The EU itself is not legally included in the international human rights regime, despite the commitment of EU Member States to the United Nations human rights doctrine. In this article, I first examine the EU’s global normative role and the existing legal instruments (or lack thereof) institutionalizing human rights within the EU. This is done with a specific focus on external or “third country” dimensions of the issue. Then, I will examine the situation of EU migration policy in relation to Libya and the international human rights implications of EU policy-making. Finally, I will discuss the fallacy of the EU as a “global champion of human rights” as a result of institutional inability in the case of Libya.

In the Treaty of Lisbon, the European Union expresses oreign policy as an interplay of politics and values. On the common foreign and security policy, the Treaty’s Article 21 of Chapter 1 emphasizes the key role of human rights:

“The Union’s actions on the international scene shall be guided by… the universality and indivisibility of human rights and fundamental freedoms, respect for human dignity, the principles of equality and the solidarity, and respect for the principles of the Charter of the United Nations and international law… It shall promote multilateral solutions to common problems, in particular in the framework of the United Nations.”

As the first article in the chapter on “External Action of the Union,” this message shows a picture of a humanitarian organization, as many see it. In addition to the already established close ties to human rights organizations, the European Commission is also discussing the integration of human rights principles into the EU’s external development policy. According to the “EU Action Plan on Human Rights and Democracy 2015-2019“, the EU will place human rights at the heart of the EU Agenda, focusing in particular on cooperation with the UN and other human rights groups. Yet, are there any pre-existing structures to implement the EU’s international human rights objectives in foreign policy actions?

The 1953 European Convention on Human Rights saw the creation of the European Court of Human Rights, which is now the most active human rights enforcement body in Europe, and is an essential example of the collapse of international human rights. Since the court only handles cases of abuse amongst member states, it reflects the issue of human rights institutionalization and the exclusion of extraterritorial human rights obligations in Europe. This trend is also reflected in other EU human rights commitments, such as the Maastricht Treaty, the Charter of Fundamental Rights of the EU, and the Treaty of Amsterdam. The Treaty of Maastricht, in agreement with the European Convention on Human Rights (ECHR) and the constitutional traditions of the Member States, was an introduction to ensuring human rights in Europe. In 2000, with the adoption of the EU Charter of Fundamental Rights (GRU), the European Union placed democracy and human rights at the heart of EU internal and external policies. This charter should preserve and strengthen the rights of the European Convention on Human Rights, but it is does not have the strength of a treaty that has been signed by each EU member state, and it only applies within the European Union. As a result, a disconnect developed between European human rights law and international human rights, and the obligations of the member states to the UN rights regime is not included in European law. The EU is generally seen as a Western normative power, but with a growing role in international economy and politics on the world stage, the problem of institutional human rights structures becomes increasingly evident, especially on the issue of migration controls.

The 1997 Amsterdam Treaty extended human rights in the European Union to protection against racism, xenophobia and discrimination based on sex, ethnicity, religion, age or disability, but only within the European area. This also consolidated EU cooperation on migration and asylum under the supranational first pillar and entrusted the Commission with the task of negotiating migration with third countries. Lavenex argues that this submission to the internal authority to enact and implement common laws on border control and asylum has led to an extension of standards to third countries. The EU’s common external migration policy has focused on external border control and has sought to restrict migrants’ access, particularly through cooperation with third countries to carry out migration controls. Through border controls, combating smuggling of migrants, and displacing migrants into third countries, the approach reflects a preventive approach to controlling migration flows. Another preferred method of the EU is the targeted use of development assistance to support the reception and support of refugees in third countries, which has been criticized by human rights activists as a “milder alternative to migration control measures” with its own humanitarian problems. It essentially enables the EU to restrict the flow of migration without rejecting internal normative legitimacy.

The EU implemented these external migration control methods in Libya through the EU marine and development aid of “Operation Sophia”. As a humanitarian endeavor of the EU, Operation Sophia was initiated in 2015 as a response to the humanitarian crisis of refugees drowning off the Libyan coast on the smuggling route to Europe. Sophia is one of three other EU operations in the Mediterranean that aim to disrupt smugglers and prevent the loss of life at sea. With the approval of the United Nations, the EU provided assistance and training to the Libyan Navy and the Coast Guard to combat smuggling, stop departures, dispose of ships and return refugees to Libya. The problem was and is that the migrants in Libya are face arrest, brutality, and persecution, trapped between traffickers and the Coast Guard. As a result of this policy, migrants in Libya face continued poor living conditions, and the number of deaths at sea has not declined, but rather has led to the use of more dangerous vessels.

The migration crisis challenges the core values of the EU, and some have even said its existence. Within the EU, there is little success at reaching a cooperative solution to refugee distribution, but there are certain guaranteed rights for those refugees. Yet, are these same rights present when implementing migration policy internationally?  EU policy at work in Libya represents a legal grey area of human rights law, where the jurisdiction of the European Court of Human Rights may not extend and the application is thus “nonexistent at worst, and uncertain at best.” The response with Operation Sophia allows a method of migration control that is consistent with human rights law, but at the same timeprevents situations in which the EU would be formally obligated to apply human rights law. In terms of EU human rights law, the Operation is not in line with two principles of the European Convention on Human Rights: the non-refoulement principle and the right to life. Under the non-refoulement principle, which is also a part of the UN human rights regulations, an individual may not be returned to a place where he faces persecution. As a result of Operation Sophia, refugees may be deprived of the right to life as “collateral damage” during the disposal of smuggling vessels.

Scholars argue that the EU’s militarization of foreign policy, particularly in the case of migration policy, creates tension with third countries and also undermines the EU’s normative power and legitimacy. As a response to the situation in Libya, the German government has promised to give 120€ million to go to the improvement of the situation of refugees. This is simply a continuation of the economic development support of the EU to the end of keeping the refugee population in Libya. Since Libya is what could be called a weak state with little central control, it has little capacity to carry out and commit to the intended programs. The dispersal of monetary resources does not foster the internalization of norms and human rights protections, which is especially problematic in countries with deep socio-economic struggles and political instability like Libya. Also, under UN human rights criteria, internationally coordinated security maneuvers to support developing countries military capacity, such as those of the the Libyan Navy and Coast Guard, does not qualify as development cooperation. Although financial support is not very effective in the case of Libya, it is still more legitimate in terms of human rights.

In a report on the EU and International Human rights law, the UN called out the Charter of Fundamental Rights of the EU for not encompassing all of the rights protected in UN treaties, as well as lacking a competence to develop and implement a human rights policy outside of Europe. The internal legal order of the EU makes a point not to infringe on human rights when it acts, but does not have the capacity to protect and promote the realization of human rights when dealing with third parties. The gap between rhetoric and action in the EU’s commitment to human rights has become particularly apparent in the case of European migration policy in Libya, which highlights the lack of institutionalization of human rights and weakens the legitimacy of the EU’s status as an international normative power.  In the meantime, we will see if Juncker’s rhetoric about Libya turns into a more humanitarian policy towards Libya, but it is more likely that we will see a continuation of financial and military support for Libya.

On the Brink of Collapse: The European Union’s Transition as it Strives to Survive

The recent vote for the United Kingdom (UK) to leave the European Union (EU), commonly called Brexit, was a manifestation of Euroskepticism, a term coined to describe resistance to European integration or involvement in the EU within the UK but which has now spread to other countries. Before the establishment of the EU, the UK, Luxembourg, Belgium, the Netherlands, France, and Germany came together to form the European Coal and Steel Community (ECSC), which bound France and Germany’s coal and steel industries together, the two industries absolutely necessary to wage a war, hoping to bring lasting peace to Europe. The ECSC has since expanded to encompass other policies and countries, transforming over time into the EU as it is now. However, the EU is now seen as a failed utopia, and Euroskepticism, encompassing everything from uber-nationalist political parties and their supporters to those providing constructive criticism with a goal of reform, is on the rise in many European countries. The recent struggles the EU has faced began with the acceptance of poorer nations without strong democratic histories, a principle on which the EU was founded, and is culminating in peripheral countries such as Greece, Portugal, Spain, and Italy, which were formerly pro-EU, succumbing to Euroskepticism. Euroskepticism is also rising in countries like Germany and other solvent members of the EU because they now have lacking finances and little willpower to bail out financially struggling members. Euroskepticism is the manifestation of problems in the EU like economic stagnation, the Euro crisis, conflict over migration, and Russian threats and pressures, many of which stem from the much-enlarged, poor, and diverse EU. Overall, the EU is struggling with overall coherence, policy, and solidarity, and while the majority of young people feel they have a European identity, many others feel a European identity is overshadowing and threatening to their national identity and sovereignty. Additionally, there is a tendency to blame Brussels as the head of the EU for problems that may or may not be covered under national responsibilities. Throughout this uncertain period in EU history, there have been many options for the EU: to disband altogether, to remain as it is, to strengthen the binding ties between EU member states, to leave the Euro and keep the EU intact, or have members pick and choose which parts of the union to adhere to. Given all the potential solutions for the EU’s future, the most effective solutions would be to establish a “two-speed Europe”, a pick and choose system.

One factor sparking a call for change in the EU’s operation like a two-speed system is the normalization of far-right political parties in Europe and around the world, marking the first time that far-right groups have been widely popular since World War Two. If far-right parties succeed in key upcoming elections in Europe, they will restrict freedom of movement in the EU, potentially catalyzing the breakup of the Eurozone and the EU as a whole. The upcoming elections in Italy and particularly France have led to uncertainty surrounding the future of the EU and the Euro. The Front National’s Marine Le Pen sees political conflict in Europe as populists, or Euroskeptics, against globalists, or pro-EU thinkers. Le Pen sees the Euro as a political move, rather than a currency, in order to get countries to follow EU protocol and rules. Additionally, Le Pen, claiming that the EU has an authoritarian nature, supports Frexit, the French exit from the EU, if France cannot gain control over their border, currency, sovereignty, economy, and laws (in other words, everything that the EU was created for: linking France and Germany together to prevent another war in Europe).  A Le Pen victory could signify the end of the EU, as France was a founding member of the EU. While Le Pen is most certainly the most conservative and controversial candidate in the French election, Francois Fillon, a conservative candidate, is also Euroskeptic, anti-Euro, and anti-migrant. While the French election won’t be finalized until May, the Dutch general election held in March resulted in a win for the ruling liberal party (VVD) with the second most seats going to the far-right party (PVV); however, all other parties have stated that they will not collaborate with PVV to form a government. The UK will also be holding local elections at the beginning of May, and the pro-EU party, the Liberal Democrats, is strong in the polls. Finally, October will mark important elections for the EU as Chancellor Angela Merkel seeks another term and is likely to succeed, but the far-right party AfD is polling well and is likely to take several seats in the Bundestag. AfD is campaigning on a platform that is anti-EU, opposed to funding for Greece and Italy, and anti-migration. The Brexit vote illustrates the importance of the upcoming elections, as any further dissolution could be disastrous for the future of the EU.

One option for mitigating problems in the EU is to create a “two-speed Europe,” or a pick-and-choose system of membership. In other words, this system would allow groups of members to continue integrating while others continue as they are. This solution would have eased the concerns in Britain over losing sovereignty in the EU, which may have prevented Brexit had this been in place to begin with. Some pro-EU thinkers believe that this system is the best option. For example, Greece should not have been able to join the Eurobecause it wasn’t ready; however, as part of accession to the EU, new member states agree that they will one day join the Euro. Likewise, states that are not ready or are resistant to certain policies should not have to or should not be allowed to partake in those programs, as they won’t gain anything by participating in a program they don’t agree with. These ideas are cemented by the fact that the EU member states are very diverse, which should encourage flexibility rather than uniform convergence. However, some countries like Hungary and Poland fear marginalization through this two-speed system. Even though EU membership is still popular in many periphery countries, as citizens have benefitted from EU funding and the freedom of movement, many politicians fear that Western liberalism is eroding their identities.

Dissolution of the Euro is another option, as much of the strain on these countries stems from the financial obligations and burdens of carrying member states with struggling economies that use the Euro. Britain, Scandinavia, and Switzerland never joined the Euro, and now developing members not on the Euro yet, like Poland and the Czech Republic, are reluctant to join because of its economic shortcomings. In order to make the Euro work, the EU would need to streamline policies like taxation, spending, and banking, which would create a super-state weighted toward Southern Europe. A super-state Europe is out of the question, as many countries are disenchanted as it is now and believe that they are losing sovereignty and identity. Thus the only feasible solution to making the Euro work, creating a super-state, is out of the question and would only aggravate current political conflicts.

The final option for the EU is its complete dissolution, meaning every member state would become completely sovereign once more. These countries would have complete autonomy over their economies and policies, which is appealing to many nationalist or populist political parties and supporters across the member states. However, Germany is the powerhouse of the EU and has held the EU and Euro together for many years, meaning it has the most to lose if the EU or Euro failed. Therefore, Germany would not let the EU fail and would try its best not to let the Euro fail. Many other member states still enjoy the benefits of the EU and would want to keep it from failing as well. Finally, since the EU was created to prevent another war in Europe from breaking out, some politicians and citizens understanding the significance of this union would need to find another solution to prevent another war in Europe or make peace with the fact that there is no longer a safeguard. The complete dissolution of the EU is not a realistic option for the future of Europe.

When determining the best course of action for the future of the EU, we must take into account both the current political situation in many of the key countries like France, Britain, and Germany and the options for the future of the EU. Considering politics in the decision between creating a “two-speed Europe” and just dissolving the Euro, countries would still be unhappy even if the EU dissolved the Eurozone because it would not solve the problem of sovereignty, national identity, border security and migration, and a plethora of other controversial subjects. When taking all of this into account, creating a “two-speed Europe” is the best option for the future of the EU. In order to keep countries content, the EU must offer options and the member states can choose which best suits their needs, preparedness, and willingness. Countries will participate in programs that are suited for what they are prepared for. Despite the concerns of some peripheral countries, this option would be the best system for each individual country because they would be able to keep their national identity, have say over their sovereignty, and hold referendums on issues that are important to them or controversial in their country rather than being forced to participate in programs that they don’t agree with. Creating a “two-speed Europe” would ensure that member states are content with their membership in the EU and would make justification for leaving the EU more difficult, meaning another Brexit would probably not happen. Thus, a “two-speed Europe” is the best option for the continuation and future of the EU.

The EU Single Market and the Economics of Brexit

The future of the United Kingdom’s relationship with the European Union is unknown, though there has been much speculation on what the details of Brexit will entail. In regards to the Single Market, which guarantees free movement of people, goods, services, and capital among member states, some experts have called for a special deal to be made with the EU to uphold as many of these provisions as possible. While a unique agreement with the EU will help the UK maintain economic stability, it must also be met with many domestic and transnational policy reforms, as well as new trade negotiations. In light of the UK’s decision to leave the EU, it must be willing to forfeit all benefits and privileges currently enjoyed by EU agreements, including the Single Market. As such, the UK must develop a new plan to ensure continued economic growth and secure trading partners.

Prime Minister Theresa May has been clear on her position, stating in a speech, “It is not going to be a ‘Norway model.’ It’s not going to be a ‘Switzerland model’. It is going to be an agreement between an independent, sovereign United Kingdom and the European Union.” She went on to say that, “We will seek the best deal possible as we negotiate a new agreement [on the single market] with the European Union.” Currently, Norway and Switzerland, although not members of the EU, enjoy certain benefits of the union on an opt-in basis as established through various treaties and agreements. However, May’s statement underlines the UK’s increasingly isolationist position, and its determination to forge its own path in the international community. By insisting creating its own ‘model,’ the UK will have more opportunity to craft an agreement it sees as ideal; however, it also gives the remaining members of the EU more leverage in designing it as they see fit as well.

Regardless of the exact details of the new agreement, which will not be seen until well after Article 50 is triggered by March 2017, the UK will not have the same access to the EU Single Market that it does now. Even if the government secures some benefits of the current arrangement, the UK’s economy is likely to suffer from increased transaction costs in trade and limited access to the open market. In order to look for the best possible deal in the future, as May stated, it is important to understand how the UK’s economy currently interacts with the Single Market.

The UK’s economy is intrinsically linked to the EU Single Market. Half of the UK’s trade and foreign investments are involved with the EU, with 53 percent of imported goods and services originating in other member countries, and 44 percent of exports going to the EU. Like most developed countries, the UK primarily exports services, and this sector makes up over 75 percent of the country’s economic output. Additionally, the UK has maintained a trade surplus of about 5 percent of GDP, meaning that more is exported than imported. When the UK loses access to the Single Market, it will become more difficult to export to the EU due to higher trade barriers. Unless the UK can tap into a different export market, they are likely to lose this trade surplus and experience a decrease in economic output, leading to a higher deficit and cuts in government spending.

The Single Market also guarantees job mobility and free movement of people. There are currently 1.2 million Britons living abroad in the EU, with about 800,000 of them working. Furthermore, there are currently 3.3 million EU citizens living in the UK, with 2.1 million of them employed. Immigration concerns were a main cause of Brexit, so it seems unlikely that the UK will negotiate for the free movement of people in a new agreement with the EU. While proponents of Brexit might call this a success in taking ‘British’ jobs back from immigrants, the high employment rate of EU citizens in the UK is a sign of national economic prosperity, not a race to the bottom for limited jobs with low wages. Large companies located in UK cities will also look to relocate to other EU commercial centers in order to continuing benefiting from the free movement of their workers, goods, and services. The loss of both large employers and vast numbers of workers will lead to further depressed economic output in the UK.

Under the threat of stagnated or decreased economic growth and trade, the UK is already looking to potential new trade partners. At a state visit in early November, the president of Colombia said that a new agreement with the UK had the potential to be better than the current deal the South American country has with the EU. Colombia is part of the Pacific Alliance, a trade bloc composed of three other historically strong Latin America economics – Chile, Peru, and Mexico – which would provide an even larger opportunity for new UK trade.

May also visited India in early November, in her first bilateral meeting outside Europe, to discuss, among other things, a new potential trade relationship. Unlike Colombia, India does not currently have a trade deal with the EU, and any attempts to create over the last decade have ultimately been unsuccessful. As discussed earlier, the UK must secure partners that are interested in service sector exports; however, India has tough restrictions on importing professional services, such as business, banking, and legal sectors. Immigration is also a controversial issue between the two countries, and India wants more temporary student and work visas to the UK in exchange for allowing more business. However, since a main component of Brexit involves reducing the number of immigrants in the country, this seems to be an unlikely concession.

Finally, the UK also recently hosted China for trade talks, announcing several new agreements to strengthen investment and business between the two countries. China has committed to investing in the London Royal Albert Docks project, while the UK will reciprocate with an investment in the Asian Infrastructure Investment Bank. UK Chancellor Hammond remarked that the UK’s “trade relationship with China is now more important than ever.” Unlike India and Colombia, China will carry out this agreement before UK negotiations with the EU are finalized, signaling that China will remain a reliable trade partner regardless of the outcome of the UK’s involvement with the Single Market.

The decision to leave the EU, and thus the Single Market, could have devastating effects on the UK’s economy, unless it seeks new markets for service sector exports. Colombia, India, and China all represent opportunities to connect with robust economies that will provide the UK with the exit strategy it needs. However, similar to the question of Indian immigration, there are likely to be challenges along the way, especially as most countries will not negotiate a new trade until after the UK has triggered Article 50 and has completed talks with the EU. While the possibility remains that the UK will successfully negotiate to retain provisions of the current Single Market, it is extremely unlikely that the EU will let the UK cherry-pick only the parts they want. No matter what deals are struck with any country, concessions will have to be made. Thus, the UK’s economic plan moving forward must be pragmatic, as well as diplomatic.

A Tale of Two Memberships: Scotland and Northern Ireland’s Possible Paths to EU Membership as Independent States

The Brexit referendum on 23 June 2016 brought 30 million voters (with a 71.8% voter turnout) to the polls to decide whether the United Kingdom (UK) would stay in the European Union (EU). The “Leave” campaign narrowly won with 52% of the vote; however, when split by countries in the UK, Wales and England voted to leave while Northern Ireland and Scotland voted to remain by much larger margins. Additionally, demographics with a higher income, more education, and younger age generally voted to remain. Although the referendum was not legally binding, the new Conservative UK Prime Minister, Theresa May, stated that she has committed herself to the will of the people and will guide the UK leaving the EU. However, Prime Minister May also said that she will not invoke Article 50 of the Lisbon Treaty, which gives the country two years to negotiate its exit with EU members, before the end of 2016. Thus, the UK would remain a full member of the EU until Article 50 is invoked and the UK begins negotiations to leave. Once negotiations are fully over, the UK will officially no longer be a part of the EU; however, until that time, the UK is a full-fledged member. When the UK leaves the EU, it will need to negotiate a new trade deal because it will no longer be a part of the EU single market. Thus, there is a possibility that the EU would instate trade tariffs because the UK would not be part of the single market.

Since Scotland and Northern Ireland both voted overwhelmingly to remain, one or both of the countries may leave the UK in order to stay in the EU. However, there are two paths for the different countries. Scotland only has one option if it wants to remain in the EU: secede from the UK and join the EU as a separate country. Northern Ireland has two options: it can unite with the rest of Ireland in the EU and become part of the EU by joining an EU member state, or it could leave the UK and try to become a member of the EU member. The best option for Northern Ireland to remain in the EU is unification. Otherwise, Ireland would go through the same accession process as Scotland, which will have a long, difficult road to EU membership, if it gets in at all.

Accession Process

As the UK now has to negotiate its exit from the EU, there are talks of Scotland and Northern Ireland leaving the UK to join the EU. If Northern Ireland were to join independently, it would join Scotland in the EU accession process.

The EU has strict criteria for membership: a country must have stable institutions that represent and ensure democracy, human rights and minority protection, and rule of law, a functioning market economy capable of dealing with competition in the EU market, and the ability to effectively implement membership obligations and to adhere “to the aims of political, economic and monetary union”. The first step to membership is an application for candidacy. Negotiations can only begin with a unanimous decision in the EU Council.

Accession involves 35 chapters relating to policy areas such as environment, rule of law, human rights, energy, and transportation. These chapters are non-negotiable, but candidates can determine how and when to adopt and implement them. Meanwhile, the EU receives guarantees on completion and effectiveness from the candidate country and from the Commission, which monitors implementation and benchmark requirements. Outside the 35 chapters, candidate countries also negotiate financial and transitional arrangements. The negotiations occur between representatives and ministers of the EU and the candidate country at what is called an intergovernmental conference. For each chapter, in a process called screening, the candidate country must meet the opening benchmarks before the chapter can be opened. Then, for each chapter, the candidate country must submit a position for negotiation while the EU adopts a common position and sets closing benchmarks for the chapter, which must be met before closing negotiations for that chapter. Some chapters have interim benchmarks that must be met. Thus, the length of negotiations may vary depending how prepared the country is to join the EU.

In closing negotiations, all negotiations for individual chapters must be finished. Details of membership, arrangements and deadlines, financial arrangements, and potential safeguard clauses are all in the Accession Treaty. The treaty has three steps to becoming a binding agreement: it must have the support of the EU Council, EU Commission, and European Parliament; the candidate and all EU member states sign it; the candidate country ratifies it according to their constitution. Once ratified, the candidate becomes an acceding country and will become a full member on the date agreed in the Treaty.

Scotland

In the event that Scotland secedes from the UK, the EU headquarters in Brussels stated that Scotland has to exit the EU with the UK and cannot remain on its own. Additionally, if Scotland were to secede before the UK leaves the EU, it would be leaving an EU country and thus be leaving the EU. Therefore, Scotland will have to go through the accession process as an independent country.

The accession process poses a number of problems for Scotland, mainly the length of the negotiations and its financial burdens and obligations. Due to the lengthy negotiations, Scotland would be on its own, neither in the UK nor the EU, for some time, which would hinder trade and investment. Additionally, Scotland’s projected country deficit is three times that of the UK, and Scotland would have a higher deficit than the UK does now. The EU limits the amount of debt and deficit its member states can have, and since the economic crisis and the Eurozone crisis, it will likely oversee these requirements more closely and ensure that its members adhere to them. Thus, Scotland might have to reduce their deficit in order to become a member of the EU. Additionally, as reported in 2015,, Scotland has 6.2% unemployment, compared to the UK’s 5.1%, and GDP growth of 1.9%, compared to the UK’s 2.3%. In addition to these potential economic problems, EU membership would be vastly more expensive for Scotland than it was under the UK because Scotland would lose the UK membership contribution opt-outs that Margaret Thatcher negotiated during her time as Prime Minister.

Another potential problem for Scotland’s EU membership is the potential problems regarding its referendum to leave the UK. The EU values democracy, rule of law, and human rights; however,many Scots were ineligible to vote in the referendum. Anyone who is a citizen of a Commonwealth country, the EU, or the UK living in Scotland was able to vote; however, Scots residing outside of Scotland were unable to register to vote. This could call into question whether the process was truly democratic, as some Scottish citizens could not vote in the referendum. This issue must be addressed during negotiations, and Scotland would have to comply with EU democratic ideals, as many Scots were unable to vote in a decision. Thus, looking at all of the problems with Scotland’s independent path to EU membership, it would take years, if not over a decade, to negotiate membership.

Northern Ireland

Given the difficulties that Scotland will face if they try to become an EU member on its own, Northern Ireland’s best path to EU membership is through unification with the rest of Ireland. Using the case of German unification after the fall of the Berlin Wall as a precedent for EU accession, if Northern Ireland becomes part of Ireland, it will enter the EU as part of a member state.

When East Germany and West Germany united, East Germany gained from joining the EU because it “could rely on the tried and tested rules and institutions, the West German social market economy and immediate access to large amounts of financial resources”. Unification inspired high expectations, and East Germany gained advanced, sophisticated institutions and administrators. Unification eliminated most of the legal barriers regarding sovereignty, which usually delay establishment of institutions and full EU membership. However, there was a cultural difference between the two Germanys, and institutions were established on top of East Germany’s previous institutions.

There is still a divide between the two sides of Germany in terms of economic prosperity. After ten years of membership, labor productivity was still 60% of that of West Germany. There has been moderate improvement since unification, though. In 1991, East German income per capita compared to West Germany was 40%, and in 2016, East German income per capita compared to West Germany reached two thirds. Due to Soviet occupation for over forty years, East Germany has a higher level of social distrust than its Western counterpart, which plays a role in its development and integration in the EU. Overall, the economic gap between Germany and East Germany has significantly decreased despite remaining differences.

Although the German unification was successful, it highlights potential problems for Northern Ireland to light. Aside from cultural, religious, and historic tensions between Ireland and Northern Ireland, Northern Ireland might not be as developed because it would not go through the negotiation process or receive EU funding for meeting set benchmarks. However, Northern Ireland has been a part of the EU as long as the UK has, so it has the infrastructure required. Additionally, Northern Ireland was not under Soviet rule and has been developing alongside the rest of the UK and Ireland. Given the minor economic differences between the two countries, Irish unification would be the best option for Northern Ireland to remain in the EU.

Conclusion

Although Brexit will likely have a negative economic effect on the United Kingdom, the country is large and developed enough to thrive regardless of its EU membership status. However, if Scotland opts for independence, it will struggle while if Northern Ireland unites with the rest of Ireland, it will continue on its path in the EU. In particular, Scotland trades more with the rest of the UK than any other country, dwarfing its exports to non-UK countries by comparison. Looking at other economic indicators like deficit and debt, Scotland’s independence would likely increase borrowing and decrease economic stability and security. As Scotland relies heavily on its robust banking sector, the decrease in stability would lead to less investment and fewer banks in the country. As a result, Scotland would regret leaving the UK because the UK would remain stable and prosperous, as it could get products that usually come from Scotland elsewhere. In addition to economic instability, the likely lengthy amount of time it would take to join the EU, if at all, should dissuade Scotland from independence. With neither the UK nor the EU, Scotland would be a small country of just over 5 million with an unstable economy and decreased trade, investment, and movement of human capital. These consequences should, if Northern Ireland were to pursue independence, persuade Northern Irelanders to unite with the rest of Ireland and join the EU upon unification. Northern Ireland has a simpler path out of the UK and into the EU than Scotland, so it would likely not have a major effect on the economy other than changing currency.