Dutch Values and Ukraine's Association Agreement with the EU

We Dutch know something about living next to a large, dangerous neighbour that tries to manipulate, conquer or control us. We know something about the importance of being able to trade with the neighbours and the broader world to maintain our independence and standard of living. And we also know something, luckily a little more than most, about the importance of the rule of law, of democracy, of freedom and of human rights. We can rightly be proud of what we've accomplished in our own country and what we stand for. We can be even more proud when others copy us and ask us coach them. There is nothing pie-eyed about this. The Dutch are a sober and realistic bunch. When they set their minds to it, they can accomplish great things. Others can do the same by emulating them. 

The European Union was created to prevent war, promote prosperity, and advance the human condition. It largely does that by copying much of what the Netherlands has already achieved for itself and demands it from its members. The formula resonates so strongly with the human drive for freedom that other countries use it as well. It goes without saying that the EU demands this of its members. But it also seizes opportunities to help neighbouring countries that want to bring themselves up to European levels of democracy, justice and human rights without becoming members. 

This is in the Netherlands' own interest. There has never been a war between democracies. There has never been a civil war in countries where basic human, legal and political rights are respected. The EU has no army and relies primarily on promoting a ring of democracies around it. In rare cases where the neighbouring country wants to really change itself, Association Agreements can be used to help that change along.

Association Agreements like the one that the EU has with Ukraine are like 12 step programs for recovering addicts. They are hard work. They have to admit their problems, they have to make amends to those they have harmed, they must put the ways of the past behind them, and they must live the rest of their lives with courage and integrity. They need help to keep on the right path and to break with the people that would drag them down into the abyss once again. Being a role model and a coach for an addict doesn't mean the addict comes to live with you. Keep that in mind.

The Post-Soviet world--countries like Ukraine that were once part of the Soviet Union and the Russian Empire before it--now have a young generation that has not grown up under Russian rule, does not learn Russian in school, learns English instead, travels west on vacation and looks toward Dutch and European values and standards as what they want for their own futures. A little older than them are the ones who fought the revolutions that brought them their formal independence, and the chance to live in freedom. But political revolution did not put an end to the old politics of economic and political corruption. The Association Agreement is designed to make that corruption a thing of the past. In return for accepting the cost and pain of rooting that corruption--the links to the people that feed the addiction-- we accept each other as trading partners. That is initially painful for Ukraine because our companies are so competitive. Dutch engineers, manufacturers and investors will earn more than they lose from the free trade agreement. But this can only work for them if they can operate in a Ukraine where a contract is a contract, a judge is honest, where politicians don't give jobs to their friends and informal masters, lurking in the shadows, and where judges, bureaucrats and politicians can't be bought.

 All of that is easier said than done. Just like the junkies trying to claw back one their own who has decided to go clean, Russia has reached out with various means to prevent Ukraine from building a new future for itself. The Agreement was negotiated by  a government with a democratic mandate for change--the change initiated by the Orange Revolution. It was halted when Russian president Vladimir Putin bribed the new Ukrainian President to reject the deal and join the Eurasian Union instead. People went to the streets in Maidan Square, and we saw what it meant to fall back into the crack house of Russian influence. Obedience or death instead of democracy and free speech, and a return to corruption instead of an honest chance for  young Ukrainians to build an economy and society that reflects who they are and want to be. I was there in the European Parliament as the first shots fell and the first Ukrainians started dying at the hands of government forces. I listened to leaders from Parliament, Commission and the Council of member states confer directly and join in support of those protesting. In the face of those horrible actions, I felt a sense of hope, as I think many did, that if Europe continued to do the right thing, that Ukraine could overthrow that government and resume its path to reform.

It did, and thankfully the EU and its member states supported that effort with the Association Agreement. As we know, that was not the end of Russia's efforts to reincorporate Ukraine into it's 'rightful sphere of influence' (imagine if Germany did the same thing to the Netherlands today). It invaded and annexed Crimea, it invaded and installed a puppet regime in Luhansk and Donbas, murdered and displaced civilians living there, kidnapped and sentenced the Ukrainian pilot Savchenko to 22 years on bogus charges, and as the Netherlands is all too aware, shot down a civilian airliner with 182 Dutch nationals and others on board to show you they could, and to make it clear whose property the Ukraine was. Nevertheless, Ukraine, with the EU's help, has stayed the course to reforms.

As a result of Ukrainian and European determination, domestic support for reforms has remained strong and Russia's attempt to establish NovoRussia out of a larger invasion of Ukraine was stopped. It will remain a dream rather than a reality as long as Ukraine has the chance to build its own future. Those within Ukraine who want to turn the clock back, with corruption and with arms will not get their chance. That is what the Orange Revolution was about. That is what the Agreement is about. We can be proud that Dutch and European values are what they aspire too. But that will only survive if we vote on April 6th to stand by them as they do that.

Vote on April 6th. And vote Yes

Nederland, de EU en Oekraïne

Nederlanders waarderen zeer de rechtsstaat, de democratie, de vrijheid, de mensenrechten en de gelijkheid. We kunnen met recht trots zijn op dat wat we hebben bereikt in ons eigen land en waar we voor staan. We kunnen nog trotser zijn omdat de EU deze normen en waarden vertegenwoordigd in overeenkomsten met buurlanden zoals Oekraïne.

Associatieovereenkomsten kunnen verandering op weg helpen. Net als 12 stap programma's voor verslaafden, eisen ze hard werk. Landen moeten hun problemen toegeven, zich verbeteren en daarna met moed en integriteit leven. Overeenkomsten helpen landen op het rechte pad te blijven en te breken met degenen die verandering niet willen. De rol van de EU als coach in deze relatie vergt ook afstand. Een associatieovereenkomst heeft dus niets met lidmaatschap te maken.

De overeenkomst eist het aanvaarden van Europese wetgeving en waarden naast de vrije handel, om corruptie te bestrijden en een level playing field te creëren. Dat zal Oekraïne in het begin ook veel kosten, omdat Nederlandse ingenieurs, fabrikanten, en beleggers sterker zijn in vergelijking. Maar we hebben er alleen baat bij als we zaken kunnen doen in een Oekraïne waar de politici geen vriendjespolitiek plegen, en waar de rechters, bureaucraten en politici niet kunnen worden gekocht.

In de post-Sovjet-wereld is een jonge generatie opgegroeid die Russisch bewind niet kent, die Engels op school in plaats van Russisch leert, die het westen op in vakantie reist en die naar Nederlandse en Europese waarden en normen kijkt als model voor hun eigen toekomst.

Maar Rusland heeft geprobeerd met verschillende middelen om te voorkomen dat Oekraïne erbij succes heeft. De overeenkomst werd onderhandeld door een regering met een democratisch mandaat voor verandering - geïnitieerd door de Oranje Revolutie. Poetin kocht Oekraïense president Janukowitsch om op het laatste moment om de deal te torpederen. Mensen gingen de straat op in Maidan Square, en we zagen wat het betekende om terug onder Russische invloed te vallen. Een terugkeer naar geweld en corruptie in plaats van een eerlijke kans voor jonge Oekraïners om een ​moderne, Europese ​economie en samenleving op te bouwen. Ik was er in het Europees Parlement toen de eerste schoten vielen en de eerste Oekraïners begonnen te sterven. De leiders van het Parlement, de Commissie en de Raad besloten direct ondersteuning te geven aan de betogers. Ik had een gevoel van hoop, omdat Europese leiders besloten het juiste te doen—aan Nederlandse en Europese waarden te houden.

Gelukkig konden de democraten uiteindelijk uit de crisis de overhand winnen. De EU heeft hun inspanning ondersteund met de associatieovereenkomst. Zoals we weten, viel Rusland Oekraïne in de Krim, Luhansk en Donbas binnen om uit Oekraïne een NovoRossia te maken. Dat is hun dankzij Europese ondersteuning niet gelukt. Hoewel Rusland verder probeert, Oekraïne weer in haar 'rechtmatige invloedssfeer' te halen. Het misachten van de Minskovereekomsten, en het neerschieten van MH-17 met 182 Nederlandse slachtoffers aan boord om duidelijk te maken wiens eigendom de Oekraïne was, een hoe ver ze ervoor wilden gaan, laten dat zien.

Als gevolg van de Oekraïense en Europese vastberadenheid, is de binnenlandse steun voor hervormingen sterk gebleven. Degenen in Oekraïne en Rusland die met corruptie en wapens de hervorming van Oekraïne willen terugdraaien, zullen hun kans niet krijgen als we vol houden. Dat is wat de Oranje Revolutie heeft begonnen. Dat is wat de overeenkomst ondersteund. We kunnen er trots op zijn dat ze streven naar Nederlandse en Europese normen en waarden. Maar dat zal alleen lukken als we ze op 6 april een hart onder de riem steken en vóór de associatieovereenkomst stemmen.

Mandatory Migrant Quotas in the New Europe

Yesterday, the Member States of the EU voted to force the relocation of migrants streaming in from Africa and the Middle East across EU member states. This happened despite the fierce opposition of Slovakia, Romania, Hungary and the Czech Republic. How could this happen?

The EU is a messy international organization that has gradually moved from requiring unanimity among the Member States to pass legislation and policy to adopting some of its decisions by supermajorities--called qualified majority voting, or QMV. The threshold is 55 percent of the 28 Member States representing 65 percent or more of the population. Resorting to QMV is something of a nuclear option, a filibuster-busting move when consensus can't be reached.

But until this point, QMV had never been used in such a sensitive area as asylum and migration. So how could it happen? Three components came together--two legal, and one political. Legally, the EU agreed in the 2001 Nice Treaty to open up the possibility of QMV in asylum matters in the future. At that future date, the Member States would first have to agree unanimously to allow QMV in the future. That happened when the Dublin Regulation was agreed two years later. That Regulation was designed to prevent migrants landing in Southern Europe from travelling onward to the richer countries of the North. But it also opened up the possibility of using QMV in the future to regulate the finer details of its application. After that point in 2003, changes could be made without unanimity.

While those legal changes were in place, there was no political impetus to consider a change in the rules. Europe could have maintained that the Dublin Regulation be applied. However, German insistence that refugees be relocated forced the issue of upending the Regulation. In the Old Europe, Member States would not have been cornered and overruled this way. But Germany's capacity to steer European events in the New Europe is once more on display.

From a humanitarian perspective, this simply had to happen. But the way that it was done signals that German power matters  in ways that traditional thinking on the international relations of Europe has yet to internalize.

Hanging together and hanging separately in Europe

Greece, the euro and Europe

We can bang on all we want about what should have been. The narratives are well known by now. The orthodox rules for euro membership should have been strictly applied from the beginning. The orthodox rules for euro membership should have been accompanied by the stabilizing effects of a fiscal union as in other large currency areas (meaning countries). The orthodoxy itself was a mistake that has brought the euro zone to its knees in a lasting depression since 2008. Or that despite the failure to do one of those things originally, better late than never: Europe can still get it right once the tensions build up and the internal contradictions of the euro start hurting the citizens it was supposed to benefit. The current proponents of one path over the other now reflect the same divisions as 20 years ago, when the Stability and Growth Pact was fought over and adopted.

But those choices are an illusion. Europe cannot retroactively enforce orthodoxy on Greece now without destroying the country, its citizens and democracy. And it cannot force Greece out of the euro without destroying the EU and its reason for existing. Either the other critics of orthodoxy will follow suit and the euro will become a repeat of  Bismarck's kleindeutsche Loesung, or the eurogroup will set about suppressing democracy in other states as it has in Greece to keep the voters in line. The kind of gold standard European order that the eurogroup leadership is now trying to retroactively impose on its members has never been attempted before, and no democracy has ever survived the downward spiral that the imposition of such hardhip entails. The long persistence of the historical gold standard was only possible because regular people could not vote. We can't go back there, and so that path is a road to nowhere, at least for Greece. If the remaining members follow Germany, Finland, the Netherlands and Slovakia down that path, it will damage European democracy extensively. The old saying will become reality, that if it were possible to vote to change the system, it would be illegal.

If Europe had any smarts, it would find the courage to introduce a  fiscal union that would help keep the currency union together without the debilitating demise of the euro zone periphery, both economically and politically. It needn't be that big a transfer. But it would soften the internal divisions of a continent sufficiently to keep it together and prevent a far worse future.

As Franklin once said, we all hang together, or we all hang separately.

Europe was once about promoting and protecting democracy on the continent by supporting 

Grexit, Grimbo, Brexit and Kicking Countries out of International Organizations

The European Union is in trouble. One of its most confrontational and egotistical member states has finally isolated itself so badly inside the euro zone and the EU that the relationship with its fellow member states has been damaged beyond repair. Although it might reasonably be argued, as the Tsipras government does, that the rules of membership in the euro zone are unreasonable and require revision, it is another matter to expect that Greece can continue to remain a member and refuse to abide by the rules. Euro zone membership involves relinquishing a good deal of sovereignty. Greece refuses to accept this, and its unwillingness to accept the price of cooperation is not only a problem for the Greeks, but for the euro zone, and the EU as a whole. Current thinking has moved on from Grexit, in which Greece would either leave the single currency voluntarily (which it won't) or be forced out (for which there is no legal precedent) to Grimbo, in which Greece defaults on debt and membership obligations without leaving the organization.

Europe can escape this trap by developing the equivalent of divorce in international relations. Like divorce,  it should neither bring up the topic nor take action lightly, but divorce for actors who have grown apart is a legitimate and helpful alternative to stalemate and the prospect of never-ending conflict. For all of the negative connotations, and despite the fact that one party often does not want it to happen, divorce opens the door to each of the parties making its own choices, making its own mistakes, and learning its own lessons. Europe can and should discuss whether it should eject a member state from the euro zone, and (apart from the euro zone aspect) from the EU entirely. It should not be only up to one partner to decide whether they want to end the relationship. True self-actualization, for good or for bad, requires the power to choose for oneself. That is as true for an individual state as it is for a group of them that want to pursue something special.

Those who oppose the idea might have two arguments--that there is no legal basis for international divorce, and that the alternative is anarchy, which is far worse than committing the members of an organization to a future of unending conflict. But these arguments are misguided. The power of international organizations to do things is claimed as much as inherited by precedent. Yes, the euro zone ejecting Greece, or the EU ejecting the UK, or the UN ejecting a rogue state breaks with tradition. But tradition does not a good life make, and traditions were once decisions. True power over one's own destiny lies in taking those decisions, in acting to shape one's future.

The argument that international divorce promotes anarchy is also misguided and incomplete. It assumes that the status quo is institutionalized relations between consenting states in the absence of outright coercion. But institutions need to adjust to the realities of those they are designed to serve, or anarchy takes over anyway. The reality of the euro zone are that it increasingly reflects the dominance of one state over the others, based on a particular view of right and wrong, of what the organization and its member states are there to do, and what it takes to be a member in good standing. It also uses international agreements outside the EU to buttress the demands of its most powerful member. Greece disagrees, and continued membership serves no one well. So it will find ways to further undermine the institutional order of the euro zone, as discussions of a new drachma alongside the euro and defiance against EMU budget rules underline. The euro zone, and the EU as a whole will suffer more damage to their integrity and waste more of their respective futures if this happens. 

Banking Union and Greece: a European firewall

Europe can now afford to let Greece collapse and exit the euro. Although this is not the scenario anyone would prefer, it is now not only thinkable but feasible and an active part of strategic thinking in European capitals. Greece's most recent elections demonstrate further unwillingness to take further measures to cut spending, raise taxes and restructure the economy, and even the German Chancellory doesn't rule out the possibility. Preparing this next phase of the euro zone crisis has been made possible by selective construction of banking union--the ECB supervises the biggest EU banks, but national supervisors are responsible for the rest, and they can and do insist that all banks reduce their exposure to foreign investments. Balance sheets have been renationalized. National authorities also remain responsible for dealing with insolvent banks, whether bailing them out, insuring deposits or outright closing them down, some moves to coordinate at the Europeaan level for the biggest banks. The resources of the European Stability Mechanism, a kind of European IMF, are in place for Europe's creditor states to prevent one country's collapse from spreading throughout the euro zone.

Neither side, Europe nor Greece, actually prefers a Grexit. But in this year of political chicken, Europe has the tools to blink last and to use a Greek failure as an example to any others.

A new euro zone crisis in the making? The Bank of Italy's omen on stress testing

Today, the Bank of Italy proposed a bad bank for non-performing loans for the banks it supervises. The government is denying that there is a need for such a bank, that would have to have state guarantees for the loans the bank holds.

On November 4th of this year, the ECB is supposed to take over supervision for the EU's 128 largest banks. Before that happens, the ECB will undertake stress tests and identify amongst other things, non-performing loans that need to be cleaned up.

If the Bank of Italy's proposals were taken on board by the government, it would be a sign of economic responsibility in Italy to cleaning up its banking sector, but the political mentality appears to be twofold in Italy--that the state couldn't pay if it wanted to, and therefore that what you don't know won't kill you. But it will, and that will unleash a new crisis in the euro zone as the markets guess the level of the damage.