Euro Summit 2018

Member states of the European Union (EU) engaged in talks which lasted through the night during the Euro Summit on 28th June. Important topics for deliberation includes the refugee crisis, Brexit, sanctions on Russia and measures for greater economic prosperity.

Member states of the European Union (EU) engaged in talks which lasted through the night during the Euro Summit on 28th June. 

Important topics for deliberation includes the refugee crisis, Brexit, sanctions on Russia and measures for greater economic prosperity. 

Background 

The European Union was set up with the aim of ending the frequent and bloody wars between neighbours, which culminated in the Second World War. As of 1950, the European Coal and Steel Community (ECSC), founded by  Belgium, France, Germany, Italy, Luxembourg and the Netherlands,  united European countries economically and politically in order to secure lasting peace. The 1957 Treaty of Rome sought to create European Economic Community (EEC) for a single common market. The European Union was formally established when the Maastricht Treaty—whose main architects were Helmut Kohl and François Mitterrand—came into force in November 1993. 

The EU has since strengthened relations while opening up to prospective members like Macedonia, Albania, Serbia and so on. The most stable and economically advanced union in the world, the bloc now faces a refugee crisis and the withdrawal of a key member: Britain. According to figures released by the International Organization for Migration (IOM), 98,072 people came from Africa to Italy from January 2017 to August 2017. Italy is followed by Germany and France in refugee acceptance, with Germany facing a coalition crisis owing to opposing political agendas. 

Populist politics has gripped the continent with democracies succumbing to the pressures of anti-immigrant, nationalist groups. By 2016, the countries viewing the EU most unfavourably were Greece, France, Spain and the UK. Structural deformities and failures have limited the bloc’s progress, however, for economic cooperation or joint defence purposes, the Pan-Europa ambition lives on. 

Since 2011, the EU has agreed to meet at biannual summits to discuss pressing domestic, bloc-level and international matters. 

Analysis 

The EU summit dragged late into the night as European leaders debated to reach an agreement regarding the refugee problem. Although details were scarce, the agreement sought to create ‘regional disembarking platforms in North African countries like Algeria, Egypt, Libya, Niger, Tunisia and Morocco. They also agreed to increase investment in these countries in order to support the migrant processing centres. They are yet to receive support of the countries. Dutch PM Mark Rutte pushed for greater support to the Turkey plan to stem flow of refugees. 

At the end of the first day of talks, the Euro increased by 0.6% points. Italy had threatened to veto the proceedings if an agreement was not reached regarding refugees. Greece and Italy currently host overcrowded refugee camps. Central European countries, like Hungary, rejected an EU scheme to 16,000 refugees. These countries were criticised for their internal measures which undermines not only the bloc’s refugee policy, but also the principles of the Schengen Area. However, the bloc was in favour of reforming the current EU asylum policy, especially the ‘Dublin Regulation where refugees must be considered for asylum in the first country of arrival. 

Brexit was another pressing topic of consideration set aside for the second day. Besides reallocation of seats from the withdrawing member, the EU sought to convene Ireland and Britain for an intergovernmental conference on July 25th to formulate a framework acceptable for both countries of the UK. European Commission President Jean-Claude Juncker expressed his frustration about the lack of progress on Brexit, particularly on the lack of British government consensus. 

Since March 2014, the EU has progressively imposed restrictive measures against Russia which include economic sanctions, restrictions on economic relations with Crimea and Sevastopol, asset freeze and travel restrictions on individuals as well as diplomatic measures. European Union leaders agreed to extend their economic sanctions against Russia for annexing Crimea from Kiev and backing rebels fighting government troops in east Ukraine, an EU official said. 

On the other hand, Italy called for de-escalation of EU sanctions on Russia so as to restart investment in Russian SME’s which both the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD) had halted in 2014.  “There should be nothing automatic about the renewal of sanctions,” Italian PM Guiseppe Conte told the European Parliament, adding that the knock-on effect of the sanctions has been particularly damaging for Italian firms, a fact that has been exacerbated by the ongoing economic crisis. Prior to Russia’s retaliatory sanctions on agricultural products, Italy was one of the largest European exporters of agricultural and luxury goods to Russia. 

The bloc has stood united in their retaliation against US protectionist policies and the looming trade war. In a letter to leaders, EU Council President Donald Tusk laid it out: “Trans-Atlantic relations are under immense pressure due to the policies of President Trump. While hoping for the best, we must be ready to prepare our Union for worst-case scenarios.” 

Assessment 

Our assessment is that the summit’s consensus on the influx of refugees is central to maintaining domestic political stability. We believe that it is imperative for the continent to establish a renewed framework which caters to nationalist concerns as well as the refugees. Unity in retaliation against US tariffs emphasises a strong European defence against protectionism. However, we feel that it is in favour of struggling economies to re-address Russian sanctions to prevent any escalation.

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