jueves, 14 de mayo de 2015

Federalism, Closer Every Day





Back in the late fifties, a few European States joined forces forming the EEC (European Economic Community). Throughout the last decades, many other countries have joined this highly attractive club due to the innumerable advantages that creating a common European culture ought to bring. Being able to enjoy freedoms in the areas of trading, transport and cultural exchange is a reality that was an unthinkable luxury not so long ago.

Some of the biggest advances towards a European complete unification were made thanks politics that had convenience in mind. For instance, it is thanks to the Schengen Agreement that us Europeans have been able to seamlessly travel across any EU member’s frontiers for three decades now. This facilitates free trade and transit of people by an unconceivable amount. On top of that, the creation of the common currency, the Euro, crowns the project of a common European market. Currency exchange was confined to the pages of history.

It must be pointed out that the European alliance is not only a matter of comfort and convenience: it is also very clearly a necessity. Being unified in a European Federation (the United States of Europe, if you will) would bring a new chance of confronting the future world powers. It is a known fact that Asia will basically rule the markets in a few decades, that’s why it is decisive to act collectively in order to avoid economic incompetence. A European Federation would be the home of more than 450 million citizens, more than the USA and Russia combined. On top of that, it would produce 25% of the world’s wealth and therefore could get to be considered a heavyweight in world trade and economic influence. It seems like a perfect plan, doesn’t it?

The list goes on. There are many issues that cannot be fought efficiently by each country individually, but that can be actively eliminated under a joint venture of powers. For instance, energetic dependence is one of the biggest problems our nations are facing. We simply cannot afford to depend on foreign unstable States for such important concern. Also, it must be pointed out that Islamic terrorism currently supposes a considerable threat to our freedoms and liberties. An imminent reaction is required, and the most powerful it is, the better. Finally, immigration: an issue that not only concerns the southernmost States but also Europe as a whole. These are only a few of the obstacles that an alliance of States could help eradicate. If union makes strength, then federalism makes invincibility.

As the Spanish Secretary of State for the European Union, Íñigo Méndez de Vigo recently stated on a visit to the University of Navarra, during the harsh years of recession the EU members have given up some of their sovereignty in exchange for stability. By yielding power to Brussels, it is true that governments lose some of their power. However, central supervision has proven to be quite positive in terms of security and therefore it has been proven that the upper European government can handle major issues such as economic policy. The next predictable evolution will be a unification of the members’ fiscal policies in order to simplify legal issues by a great amount.

The final step towards definitive federal centralization is still a long time away. There are countless sharp edges that need being taken care of, especially in the social and cultural side. However, we will most likely see a time in history when the citizens of the European Union decide to face the rest of the world together as a team, forgetting about our differences and focusing on competence and prosperity. How does that sound?


martes, 7 de abril de 2015

Broad treaty could establish new global trading norms




The European Union has been determined to achieve a level playing field in economic relations with each of its trading partners. Given China's growing importance on the international scene, European companies' trade with and investments in China has risen exponentially over the years, especially since China's entry into the World Trade Organization in 2001.

Since 2013, China has been the world's largest trading nation and the second-biggest consumer nation in the world. It is now the EU's second-largest trading partner (after the United States), while the EU is China's biggest trading partner. Under the leadership of Xi Jinping, China is striving to modernize its economy by liberalizing government-controlled areas - the upcoming liberalization of interest rates, authorization for private banks to be owned entirely by private investors and the contribution of Internet financial services to free up the financial market are just some examples.

Still, investment flows show untapped potential. Although bilateral trade in 2012 accounted for almost 1 billion euros ($1.1 billion) a day, Chinese investments into the EU represented only 2.6 percent of total FDI flows into the EU.

The recent settlements to disputes between the EU and China in the solar panel and wine industries show a willingness on both sides to strengthen relations. The wine industry agreement includes a pledge by the European wine industry to help China develop its domestic wine production and helping the nation better understand the EU wine market. In return, China will organize tastings of European wine in China.

Twenty-six EU member states have already signed individual bilateral investment treaties with the world's second-biggest economy in an aim to lower protectionist measures that often prevent European companies from fairly competing in the Chinese market. Since the 2009 Treaty of Lisbon granted the EU the exclusive rights to negotiate new investment treaties, the union has had the opportunity to negotiate an overarching agreement that would replace the 26 existing BITs. The idea of such an agreement emerged in 2010 and China and the EU wrapped up their fourth round of negotiations in January.

Over the past few years, China has adopted a different economic strategy worldwide, shifting from "ordinary" pacts that focus on trade in goods - primarily with Asian countries - to deals involving investment and trade in services. Both the BIT with the EU and the proposed talks on a Free Trade Area for the Asia-Pacific are signals of this change, likely triggered by two key trade agreements involving the US that will introduce new norms to the global economy: the Trans-Pacific Partnership and The Transatlantic Trade and Investment Partnership.

In a globalized environment where a growing number of international challenges are addressed with "soft" instruments, such as decrees or joint plans of action, it is up to mega/multi-regional trade and investment agreements to establish global standards for the future.

China is ready to take on high-quality commitments and shake off its "non-market economy" status, although considerable concern remains over China's compliance with its WTO obligations and international trade rules generally. After the fourth round of BIT negotiations, European Commissioner Cecilia Malmstrom called for China to ensure that a pair of closely watched negotiations - expansion of the WTO's Information Technology Agreement and Environmental Goods Agreement - are brought to fruition within the WTO framework.

The EU is going to pursue an ambitious BIT that not only involves a high level of investment protection, but also market access, removals of transfer of technology requirements and a more transparent and predictable market. This treaty can serve both parties as a crucial stepping stone toward better economic and cultural understanding and hopefully further more agreements.

MORE NEWS:

miércoles, 25 de marzo de 2015

Winners



Pablo Zalba Bidegain is a vice-chair of parliament's economic and monetary affairs committee and a vice-president of SME Europe. His nomination recognises his work as rapporteur across a range of economic issues. 

miércoles, 11 de marzo de 2015

Parliament agrees to card caps



the European Commission proposed a revised Payments Services Directive (PSD2) and submitted a proposal for regulation on interchange fees for card-based payment transactions.

The payments, known as multilateral interchange fees or MIFs, are charges during transactions between the merchant and buyer’s banks. Member states can lower the charge ceiling if they wish.

The European Parliament voted to cap interchange fees at 0.2% of transaction value for debit cards and 0.3% for credit cards.

Member states have the discretion to exclude three party schemes in certain circumstances - for example when they license others to issue their cards - rather than making their inclusion compulsory.

Meanwhile, although the domestic interchange fee on debit cards is capped at 0.2%, this may represent a weighted average, the annual transaction value of all domestic debit card transactions, rather than a cap on each individual transaction.

"This legislation, combined with the upcoming Payment Services Directive, will establish a level playing field for payments across Europe. It should enhance fee transparency, stimulate competition and enable both retailers and users to choose the card schemes that offer them the best terms,” said Spanish MEP Pablo Zalba Bidegain (European People’s Party), who steered the proposal through Parliament with ease, carrying the law by 621 votes to 26, with 29 abstentions.

Exemptions: Commercial cards and “three party” schemes

The new rules will not apply to so-called “three-party” card schemes such as Diners and American Express (involving only one bank) provided the card is both issued and processed within the same scheme. Commercial cards used only to pay business expenses will also be exempt.

After three years, the rules will also apply to three-party card schemes that licence other parties to issue cards and thus circumvent the law by effectively operating as four-party ones.

The capping rules do not affect ATM cash withdrawals.

Positions: 
Competition Commissioner Margrethe Vestager said: "For too long, uncompetitive and hidden bank interchange fees have increased costs of merchants and consumers.Today's vote has brought us another step closer to putting an end to this. This legislation will put a cap on interchange fees, make them more transparent and remove a hurdle to rolling out innovative payment technologies. It is good for consumers, good for business and good for innovation and growth in Europe. As cards are the most widely used means of online payment, this Regulation is also an important building block to complete the European Digital Single Market."

Commissioner for Financial Stability, Financial Services and Capital Markets Union, Jonathan Hill said: "I welcome this vote which will bring transparency and legal certainty for the credit card market. It also paves the way for more innovation and competition in the field of online and mobile payments. Crucially, merchants will see the costs of payments fall, which should in turn drive down prices for consumers."

MasterCard trusts that this agreement will provide the necessary legal certainty for all players. MasterCard looks forward to working in partnership with the European institutions and other stakeholders to continue building a world beyond cash for the benefit of governments, business and Europeans everywhere,” the card company said in a statement.

“At the same time, whilst efforts have been made by policy makers towards ensuring equal treatment of all market players, we remain concerned about the negative impact this may have on cardholders due to the Regulation’s one-size-fits-all approach and by the possible exclusion of some card schemes for another 3 years. We therefore encourage all Member States to respect the principle of equal treatment by ensuring that all schemes remain included in the Regulation’s scope, in particular where flexibility is provided for,” the statement concluded.

"I strongly welcome the capping of these fees, which could save consumers and businesses at least €6 billion annually and help to provide a vital level playing field across the European Union. For too long, shoppers and businesses have had no choice but to accept opaque, unreasonably high fees charged by banks and card providers," said Dutch MEP Sophie In't Veld MEP, 1st Vice President of the ALDE Group and shadow rapporteur for the legislation.