European Parliament called for tough sanctions against Turkey on Nov. 26
Members of the European Parliament on Thursday voted in favor of a resolution calling on the European Council to impose urgent sanctions against Turkey.
The measure was promoted by what the European Parliament called Turkey’s o”illegal activities in the Varosha suburb of the city of Famagusta” in Cyprus.
In 1974, the Turkish army fenced off Varosha, a beach resort immediately after the invasion of Cyprus. The Greek Cypriots who fled from Varosha were not allowed to return and with public entry prohibited, Varosha has effectively become a ghost town.
Turkey’s President Recep Tayyip Erdogan angered Cyprus when he visited Verosha on November 15. Ankara backed the partial re-opening of Varosha in a move criticised by the United States, Greece and Greek Cypriots.
Erdogan’s visit this month capped months of tensions between Turkey, Greece, and Cyprus, as well as Europe, when Ankara began exploring for natural resources off the coast of Cyprus. This prompted a military buildup on the Eastern Mediterranean, alarming other states such as Egypt.
Members of the European Parliament on Thursday warned that Turkey’s decision to partially open the town of Varosha, “weakens prospects of a comprehensive solution to the Cyprus problem, exacerbating divisions and entrenching the permanent partition of the island”.
They also called on Turkey to transfer Varosha to its lawful inhabitants under the UN temporary administration in accordance with UN Security Council Resolution 550 (1984) and to refrain from any actions that alter the demographic balance on the island through a “policy of illegal settlement.”
In response, Turkey’s Foreign Ministry condemned the resolution, saying: “We completely reject the non-binding resolution adopted by the MEPs on our country and the Turkish Republic of Northern Cyprus.”
“This decision, which is undoubtedly dictated by the Greek Cypriot administration, once again demonstrates how disconnected from reality and prejudiced the EP is on the Cyprus issue,” he continued.
Earlier this month, the European Union’s foreign policy chief, Josep Borrell, criticized Turkish President Recep Tayyip Erdogan’s visit to northern Cyprus during which he called for a “two-state” solution in the island.
“These [actions] will cause greater distrust and tension in the region and should be urgently reversed,” he said.
The island of Cyprus was divided in 1974. The island’s Greek Cypriots live predominantly in the south, and Turkish Cypriots in the north since the 1974 war. Several peacemaking efforts have failed and the discovery of offshore resources has complicated the negotiations.
Unfortunately, our website is currently unavailable in most European countries. We are engaged on the issue and committed to looking at options that support our full range of digital offerings to the EU market. We continue to identify technical compliance solutions that will provide all readers with our award-winning journalism.
Interview with Yves Mersch, Member of the Executive Board of the ECB, conducted by Marie Charrel and Eric Albert
28 November 2020
How do you feel about the euro today compared with your hopes and expectations at the time of negotiating the Maastricht Treaty?
At the time, it was a leap into the unknown. The international financial markets were sceptical. And we didn’t know whether citizens would embrace the new currency. Today, I am very satisfied with the outcome. First of all, the euro has won the wholehearted approval of more than 75% of Europe’s citizens. And even the most eurosceptic of political parties have changed their opinion on this given that Europe’s citizens do not want to “undo” what has already been accomplished.
What’s more, it’s a currency valued by the corporate sector and sought after by the financial markets. Only a few years ago, there were still concerns that the euro area might fall apart. The political response to the crisis and the steps taken by the European Central Bank quelled those concerns. Today, the differences in interest rates across countries, across firms in those countries, have been reduced. And there is heightened demand on the part of international investors for euro-denominated assets, even though we do not have the same financial market depth as other countries, such as the United States.
There is still scepticism surrounding the euro. Are you at all concerned by the mistrust of Monetary Union voiced in Italy at the start of the pandemic, or in Greece during the 2012-15 crisis?
It is always easier to blame Europe for what’s not working and attribute success to national policies, and that can fan the flames of this mistrust. In spite of all that, public support for the euro is strong. In some Member States, it is even close to 90%. We shouldn’t forget about the permanent transfers that flow within the EU from its more developed to its less developed members. If the latter were not in the euro area, their debt would undoubtedly not be financed at such low interest rates. Leaving the euro area would increase their debt servicing costs through interest rate levels and devaluations, which would mean less money for investment, research and education. And by the way, we can also ponder whether or not the younger Member States would remain intact if they left the single currency and the EU.
The euro nevertheless went through a major crisis between 2010 and 2015, which led to huge social upheaval…
The initial agreement was that we would have a single currency, but that fiscal, economic and structural policies would be kept at national level. We were aware that it was a source of tension, which still exists today. But we learned lessons from the last financial crisis. The response to the pandemic has led to much closer coordination, as it happens, between monetary policy and national fiscal policies. And the Stability and Growth Pact (which caps the budget deficit at 3% of GDP) has even been temporarily put on hold.
The EU has also reached an agreement on a €750 billion recovery package. Talks to finalise the package are ongoing. Is this a “Hamiltonian moment” for the EU in terms of taking a step closer towards federalism?
It is a very important step. Europe has shown that it is still capable of employing its political capital to respond with solidarity. This has had a considerable impact on non-European investor confidence. But the European recovery package is temporary in nature, for use only in response to the pandemic. To say that it marks the beginning of the “United States of Europe” is going a bit far. The situation is very different from when Alexander Hamilton advocated for US federalism in the 18th century in the wake of the civil war. At that time, there was a very clear financial benefit to consolidating the debt of the southern states funded by their northern counterparts.
From an economic perspective, has Europe fallen behind the United States since the 2008 crisis?
We can make up the ground that we have lost. The gap has come about due to structural factors. There are strong trends such as demographic change (moving at a faster pace in the United States) behind the difference in per capita GDP. There is also the proportion of funding to the economy provided by banks in Europe. When a banking crisis occurs in an already weakened sector, it has a knock-on effect on the entire economy, and the recovery takes even longer. We have learned from this, which is why we set up the banking union and insisted on the need for a capital markets union. Moreover, European fiscal policies have been excessively procyclical. As a result, countries that built up their reserves are currently in a much better financial position to deal with the pandemic crisis, whereas those with the highest levels of debt know that there are limits to the action they can take.
There is also the issue of private debt. At the beginning, it was higher in the United States, but it has been brought down much faster there than in Europe. Last of all, Europe needs to implement structural reform at national level. Recommendations have been made, but they haven’t resulted in action being taken. The same goes for the Stability and Growth Pact: the rules are not being complied with. To me, there is a significant lack of governance which needs to be fixed. To be master of its own destiny and compete with the United States, Europe needs to solve its structural weaknesses.
Since the euro area was created, it has remained an unfinished project, edging slowly towards completion, and only during times of crisis. Do you know why?
The differences across the economic, financial and political cycles, which are never aligned in the various Member States, are holding back progress. This poses a challenge to the task of building Europe, which, as Jean Monnet pointed out, only picks up speed in times of crisis. But once you’ve been working this way for 30 years, it becomes second nature! It is difficult to avoid these delays and complexities when you embark upon a project as colossal as building the European Union in peacetime. Similar projects in other countries have often been the result of civil wars.
In the long run, will the EU Treaties need to be amended?
We can already implement significant reforms without changing any Treaty, such as creating the capital markets union a must for us or completing banking union. Reform in other areas will be more challenging. Transferring some powers that have remained at the national level up until now, such as budgetary authority, or taxation – still subject to the unanimity rule – will thus be very difficult to do without transferring a degree of national democratic representation – sovereignty – to the European level. The issuance of common European debt is a sign of significant progress, but common budgetary capacity or a European budget worthy of the name are still a long way off. Currently, the European Parliament is above all else responsible for expenditure, but very little revenue: the system is therefore flawed. During the discussions held prior to the Maastricht Treaty, we were convinced that the single currency would act as a catalyst for European integration. We were hopeful that the markets would push in that direction. But in this respect, they have at the very least…been slow to respond.
Many people today are calling for a review of the Stability and Growth Pact at the very least – the target of 3% of GDP for the budget deficit and of 60% of GDP for debt – a target with which Member States are no longer able to comply. Should the Maastricht rules be reviewed? If so, in what way?
The less we have complied with these rules, the more complex and confusing they have become for the general public, which is not very democratic. However, it is true that they are a reflection of the situation in the 1990s when inflation and growth hovered around 2%. We can simplify and revise them to take into account the effects of globalisation, demographic change, and the fall in the equilibrium interest rate. But it is also worth noting that there is currently a debate in Germany to bring the budget deficit to below the 3% mark in 2022 or 2023. At the end of the day, compliance with the rules has nothing to do with the economy. It is more a matter of political science and law. Abolishing the Maastricht rules will not improve the functioning of our economies. For that to happen, we need to improve our capacity for growth, and therefore implement structural reforms.
By aiming to comply with these fiscal rules at all costs, isn’t there a risk that we may make the same mistake we made in 2010 by reintroducing austerity policies too early?
Making public spending more efficient is not the same as austerity. The temporary budgetary support measures are not sustainable if there is no recovery in activity levels. From the outset, the Stability and Growth Pact required a balanced budget. Is that a bad thing? We need to find a common response to this issue. If it is the norm to have a budget deficit of, let’s say, 5% of GDP, this means that national as well as international investors need to be found to finance it. International investors like policies that are predictable, robust and sustainable over the long term. We have the benefit of a stable currency that has the backing of our citizens. This should not be undermined by an unsustainable fiscal policy.
Over the next few years, what changes would you like to see within the EU?
Structurally, we need to continue with our efforts in education and research which are crucial for our future. But we also need to provide a more tangible response to the issues that are of major concern to our fellow citizens. How will Europe deal with matters of internal and external security? How will it deal with healthcare? Are we convinced that the response to the pandemic should be purely domestic, as should the response to terrorism? The problem is that as the Treaties currently stand, we cannot respond at the European level.
You have attended more than 500 Governing Council meetings. Do you have any regrets or are there any particular success stories that come to mind?
Before joining the ECB, I also attended several hundred ECOFIN meetings and around a hundred EU Council meetings. Europe is part of who I am, so please forgive me. The success stories are always collective, never individual. At the ECB, a young institution, we have always favoured a more federal-style and consensus-based decision-making process. It works very well. And it also makes it possible to overcome the all-too-often intergovernmental approach to European decision-making.
World Economic Forum, CC BY-SA 2.0 , via Wikimedia Commons
Interview with Luis de Guindos, Vice-President of the ECB, conducted by Petri Sajari on 24 November 2020
28 November 2020
What are the key risks for the euro area recovery at the moment?
The fourth quarter of 2020 will be marked by the measures taken by euro area governments to deal with the new wave of coronavirus (COVID-19) infections that started after the summer. While these containment measures are generally not on the same scale as those taken in March or April, they will have an impact on the economy. We had a welcome surprise in the third quarter, but our quarter-on-quarter growth projection for the fourth, which was slightly above 3%, will not be met. Looking at leading indicators such as the purchasing managers’ index, negative quarter-on-quarter growth is now the most realistic scenario for the end of the year.
The main issue in the near future will be the availability of the vaccine and the precise details of how and when it is to be rolled out. The news is having a positive impact on market sentiment, but the implementation of the vaccine warrants our attention. Hopefully, a very high percentage of the population will soon be vaccinated and the nightmare of this pandemic will begin to draw to a close.
According to the International Monetary Fund, the pandemic will have the largest impact on the eurozone economy. What do you think the long-term damage of this crisis will be?
There are indeed factors that cause concern. The first long-term consequence of the pandemic is that public debt-to-GDP ratios will increase by between 15 and 20 percentage points. Similarly, leverage in the private, mainly corporate, sector will also increase. And there is a risk, which we need to avoid, of long-term scars in the labour market. Currently we see a decoupling between the drop in economic activity and the evolution of the labour market, i.e. unemployment levels have not risen by as much as you would expect with such a deep decline in activity. This is because the temporary work schemes implemented by governments across Europe are avoiding a sharp increase in unemployment.
We believe the economy will start to recover in 2021 and continue its revival in 2022. It will be essential that those who are currently on furlough schemes continue to belong to the labour force, and that those who have lost their jobs can rejoin the labour market. We can then not only recover the level of economic activity we had before the pandemic, but also the level of employment.
If the crisis gets worse, which now seems inevitable, what more will the ECB be able to do?
As I’ve mentioned, the fourth quarter will be worse than forecast, but the medium-term outlook – mainly because of the ray of hope brought by news of the vaccine – looks brighter. However, when we assess our instruments we do not only look at economic output. We also look at the evolution of inflation, which is our primary mandate. Inflation will be negative until the end of the year and we expect that it will turn positive next year because some drivers of this negative inflation will be reverted, for instance the reductions in value added tax or the sharp decline in oil prices caused by the lack of economic activity. All in all, we expect inflation to be close to 1% in 2021 and to see it moving up towards 1.2% or 1.3% in 2022.
As President Lagarde indicated after the last Governing Council meeting, we will recalibrate our instruments in December and this recalibration mainly involves our targeted longer-term refinancing operations (TLTRO), which is an instrument to inject liquidity into the banking sector, and the pandemic emergency purchase programme (PEPP), which right now comprises an envelope of €1.35 trillion to be implemented until mid-2021.These are the two main tools if the situation gets darker, although the arrival of the vaccines brings hope regarding the medium-term outlook.
Is there a risk that low interest rates, combined with the asset purchase program and the PEPP, are creating zombie companies that would not have survived under normal financial conditions and are therefore an obstacle to creative destruction?
The interest rate environment is not only a consequence of monetary policy decisions. It is also the consequence of a combination of other factors, such as globalisation, digitalisation and demographics. These have made the natural interest rate, which is a real variable rather than a monetary variable, decline over time. This, combined with very low inflation expectations, has created a situation where nominal interest rates, which are the ones we observe in the markets, are very low. But this is not only a result of monetary policy – it also reflects a decline in the natural interest rate.
Furthermore, low rates have been very useful in sustaining economic activity. Without them, the process would most likely not just have been one of creative destruction but one of simple destruction of companies and a decline in GDP.
Some might also say that the high debt levels in the economy will lead to zombie banks and zombie companies that constrain growth because of extraordinary debt burdens. What is your assessment of this?
As I mentioned earlier, there will be a legacy of debt after this crisis, in both the public and the private sector, and we will have to take this into consideration. But there is no alternative in the short term. The first line of defence against the consequences of the pandemic has been, and had to be, fiscal policy. The alternative – doing nothing – would have had much worse consequences in the short term and also in the medium and long term.
Regarding private debt, when you experience a decline in revenues as substantial as that experienced by many European companies, you need to try to bridge the gap and survive until the pandemic is over. And to do that you need to take on debt. There’s no alternative. Once the pandemic is over, issues such as fiscal sustainability and private lending will come to the fore, but in the short term there is no alternative.
Let’s move to the banking system. What are the main vulnerabilities in the eurozone banking system?
European banks have more capital and are more liquid and resilient than before the global financial crisis. But their weak point is very low profitability, which is reflected in very low valuations. This is not trivial, as it has an impact on their capacity to raise capital in the markets or generate it organically. It also makes it challenging to achieve an adequate level of provisioning that is in line with developments in the economy. Profitability was already the key weak point before the pandemic, and the crisis has aggravated it. Banks will also suffer a decline in revenues and the level of non-performing loans (NPLs) will go up. We expect the bulk of the NPL wave to come in the first half of next year.
Do you believe there will be consolidation via mergers and acquisitions in the eurozone banking sector?
We have started to see some consolidation, for instance in Italy and Spain. So far it’s domestic consolidation. It would be good if we also saw some cross-border consolidation. Consolidation is not a target in itself, but it could be a way to reduce excess capacity and costs.
The ECB started its asset purchase programme in early 2015 and abandoned it in late 2018. In autumn 2019, it was started again, but inflation remains very low. What are the key factors behind this extraordinarily low inflation?
Both headline and core inflation have been low over the last ten years and, as I mentioned, there are some structural factors, such as digitalisation, globalisation and demographics, that help explain why. In 2015 and 2016, there was a clear risk of deflation and the ECB acted to avoid it and to anchor inflation expectations. It remains to be seen what will happen with some of these factors. For instance, globalisation will likely not be as intense as it has been in recent decades, as the pandemic could make value chains more regional, which might have an impact on inflation. However, according to our projections inflation will remain low, and we will therefore keep monetary policy accommodative so that inflation can converge to our medium term aim.
In July 2020 the European Union introduced a recovery plan worth €750 billion. What is your take on that? Is there a risk that States may use it in a manner that does not promote structural changes?
The Next Generation EU fund is a very positive response, not only because of its size but also because it sends a very clear signal of the common willingness to defend Europe and the euro area. And regarding the funds, indeed, it’s not about spending but about spending properly, through programmes that can transform the European economy and accompany the structural reforms needed to improve productivity and enhance competitiveness. The European Commission will monitor this spending. If this money is not spent properly, we will be missing a great opportunity to make the European economy greener, more digital and more competitive.
Since introducing the PEPP in March, the ECB has definitely been able to calm the markets, but many people might still wonder how the programme has supported the real economy and households. What is your answer?
Calming the situation in the sovereign debt markets also brought reassurance to other markets, which has had a positive impact on the financing conditions that banks offer to their clients, households and companies. By avoiding fragmentation in the sovereign debt markets, we also avoided a credit crunch. Furthermore, PEPP also includes corporate sector purchases such as bonds or commercial paper.
Do you believe the attitude towards public debt has changed for good? Or is this change temporary, based on the fact that extraordinary times require extraordinary actions to support the economy?
Fiscal policy has to be the first line of defence, and fiscal deficits will be the consequence of the measures that governments have taken and will continue to take to address the impact of the pandemic. Public expenditure has to focus on the pandemic, for instance on furlough or public guarantee schemes, healthcare, etc. As a result, we will see larger public debt ratios. But in the medium term, once the pandemic is over, the situation will need to be addressed to ensure the sustainability of public finances.
So, basically, your answer is that you don’t believe that there has been a major shift in attitude towards public debt?
The big change is that the pandemic has caused a public health crisis which demanded a fiscal response. There was no alternative and, in the medium term, we will see higher public debt ratios. We will have to deal with that once the pandemic is over.
The response to this crisis has been quite different from what it was ten years ago, when the eurozone crisis began, because then the constant narrative was that we cannot allow public debt to increase.
This time is different. This crisis hasn’t been triggered by banks or financial stability troubles, as was the case in 2008. This is an exogenous shock of a magnitude we have not seen since the end of the Second World War. The policy response was the only one available: fiscal measures as the first line of defence, accompanied by monetary policy. Not acting rapidly on the fiscal side would have provoked an even deeper decline in GDP, and fiscal policy would also have had to react to that.
Former liberal-turned-conservative author David Horowitz called the U.S. Supreme Court’s ruling that prohibited New York Gov. Mario Cuomo’s COVID-19-justified limits on religious gatherings ”refreshing” because the ”Democrat Party has abandoned America.”
”The most troubling thing about all the troubles we’re going through is how the Democrat Party has abandoned America,” the 81-year-old Horowitz said on Newsmax TV’s ”The Chris Salcedo Show” on Friday.
”They’ve forgotten the fundamental principles. It’s refreshing to see the Supreme Court reassert them. But it should have been a 9-0 vote. You can’t defend the freedom of liquor stores to open and not churches and synagogues.”
Horowitz was reacting to the Supreme Court’s 5-4 decision issued late Wednesday that barred Cuomo from enforcing his ”cluster initiative” that placed limits on church services to ostensibly limit the spread of the novel coronavirus.
The ruling appeared to overturn two previous rulings this summer, the most recent in July regarding a case out of Nevada in which a 5-4 court approved much stricter state regulations on churches than casinos.
The Nevada case, and an earlier one out of California, came with Ruth Bader Ginsburg on the court. She died in September and was replaced by Amy Coney Barrett.
”The most basic freedom we have as Americans is religious freedom, freedom of conscience,” said Horowitz, whose book, ”Blitz: Trump Will Smash the Left and Win” released in June has been listed on the bestsellers list of The New York Times, The Wall Street Journal, and USA Today.
”It’s how the country was created. It was created by religious refugees from religious persecution.”
Important: See Newsmax TV now carried in 70 million cable homes, on DirecTVCh. 349, Dish Network Ch. 216, Xfinity Ch. 1115, Spectrum, U-verse Ch. 1220, FiOS Ch. 615, Optimum Ch. 102, Cox cable, Suddenlink Ch. 102, Mediacom Ch. 277, or Find More Cable Systems – Click Here.
In a statement released by the Holy See Press Office on Friday evening, Pope Francis voiced his concern for the situation in Ethiopia’s Tigray region, as well as surrounding areas.
Matteo Bruni, Press Office Director, said the Pope is following news of the conflict closely.
“Because of the violence, hundreds of civilians have died and tens of thousands of people are forced to flee their homes to Sudan,” the statement read. “During the Angelus on 8 November, Pope Francis, referring to the ongoing conflict in Ethiopia, said: ‘While I urge that the temptation of an armed conflict be rejected, I invite everyone to prayer and to fraternal respect, to dialogue and to a peaceful resolution to the disagreements.’”
In the statement, the Pope also lamented the worsening humanitarian situation.
“The Holy Father, in calling for prayer for this country, appeals to the parties to the conflict to stop the violence, to protect all lives, especially those of civilians, and to restore peace to the people.”
Meanwhile, Prime Minister Abiy Ahmed has received three African ex-leaders working on behalf of the African Union. Joaquim Chissano of Mozambique, Ellen Johnson Sirleaf of Liberia, and Kgalema Motlanthe of South Africa all arrived in Ethiopia for talks on Friday.
The AU called for an immediate halt to hostilities on 10 November, but the conflict only spiralled further out of control.
Final offensive
Now, Abiy’s army is currently poised for a final offensive against regional forces in the Tigray region. Three weeks ago, he deployed the national Army on an offensive against local troops in Tigray after accusing them of attacking federal troops.
He said the military would bring an end to the fighting in the region and remove its leadership, which his government regards as illegal.
Standing firm
As it stands, the Tigray People’s Liberation Front (TPLF), which holds control of the northern region, still refuses to surrender its rule.
Abiy’s forces are currently near Mekelle, a city of 500,000 people. The TPLF said its forces would stand firm, as soldiers dug trenches and prepared fortifications.
Humanitarian emergency
Over the last few weeks, thousands have died and more than 30,000 refugees have fled to Sudan. Reports suggest this conflict is already spilling into Eritrea and destabilising the wider Horn of Africa.
On Friday, the UNHCR said nearly 100,000 Eritrean refugees in Tigray could run out of food as early as next week if supplies cannot reach them.
The UN are hoping to raise US$200 million to cover food, shelter and the other urgent needs of refugees, with plans to help 200,000 people over the next six-months.
EU member states want to ensure that EU tax policy remains fit for purpose and results in fair and effective taxation in the increasingly globalised and digitalised economy of the 21st century.
The Council today approved conclusions setting out its comprehensive assessment of the main tax policy issues to be addressed over the coming years, to shape the EU policy agenda in the field of taxation. The conclusions outline the Council’s priorities and provide guidance to the Commission in different areas of EU action, including addressing the challenges of the digitalisation of the economy, enhancing administrative cooperation between member states’ tax authorities and promoting tax good governance in the EU and beyond.
In the conclusions, the Council underlines that fair and effective taxation systems in member states are central to the sustainable recovery of the EU from the COVID-19 crisis, requiring tax policies that generate revenues for both national and EU budgets. Such systems can also support a smooth transition towards the policy goals of sustainable competitiveness, the European Green Deal and full use of the potential of digitalisation in a global economy.
The Council welcomes the significant progress made at the level of the OECD Inclusive Framework on Base Erosion and Profit Shifting (BEPS) on updating the international corporate taxation framework and confirms its continued support for this work, aimed at reaching a global consensus-based solution at the latest by mid-2021. It expresses the willingness of the EU and its member states to look into the possibilities for implementing the global agreement as soon as possible and recalls that the European Council will assess the issue in March 2021. It asks the Commission to engage on that basis in the relevant preparatory work in the Council on the way forward in line with EU law, in order to address the tax challenges of the digital economy, including in the absence of an international consensus by mid-2021.
EU member states are sending a powerful signal in support of a multilateral solution for taxing the digital and globalised economy. The Council fully supports the work of the OECD Inclusive Framework. I am confident that we can reach a global agreement by summer next year. All corporations should pay their fair share of taxes, including corporations in the digital economy. This is a question of justice and fair competition. This is also a question of sovereignty and state capacity to take action. Member states need proper financial resources to counter the coronavirus crisis effectively and to facilitate the digital and green transitions.
Olaf Scholz, Germany’s Federal Minister of Finance and Vice Chancellor
The Council also underlines the important progress made under the Council’s Code of Conduct for Business Taxation in promoting tax good governance standards in the EU and beyond, including with the use of the EU list of non-cooperative jurisdictions for tax purposes. It reiterates its readiness to continue to discuss the scope of the mandate of the Code of Conduct Group (Business Taxation) as soon as there are relevant developments at international level, but no later than by the beginning of 2022.
Another important work stream concerns administrative cooperation on tax matters, where the new EU rules on exchange of information on revenue generated on digital platforms will set an example globally. The Council welcomes the Commission’s intention to propose further amendments to the Council directive on administrative cooperation in the field of taxation, in particular with regard to the exchange of tax-relevant data for new alternative means of payment and investment, such as crypto-assets and e-money.
The conclusions also set out the Council’s views on other tax policy issues, such as modernisation of the EU value added tax (VAT) rules and further assessment of cross-border administrative cooperation in the VAT area, excise duties, and tax administration and tax compliance.
The conclusions respond to the Commission’s communications on an action plan for fair and simple taxation supporting the recovery strategy and on tax good governance in the EU and beyond, presented in July 2020.
The role of young people in shaping society will be central in the world that will emerge from the coronavirus pandemic. We can only emerge better from this crisis if we overcome individualism and include those who are most vulnerable and marginalized, such as migrants and refugees.
These are amongst the considerations raised by Cardinal Michael Czerny, undersecretary of the Migrants and Refugees Section of the Dicastery for Promoting Integral Human Development, in his speech during an online conference at the Catholic Jesuit Center of Sophia University in Tokyo.
The event took place one year from Pope Francis’ apostolic visit to Japan and included a series of meetings to reflect on the Pope’s words – in particular, on the connection between “protecting all life” and the challenges the world is facing with Covid-19.
Taking inspiration from the Pope’s reflections of the past months and the encyclical letter Fratelli tutti, Cardinal Czerny on Friday invited his audience to think “of how the COVID crisis affects migrants, refugees, displaced peoples, and victims of human trafficking. It has shone an unusual light on these populations. Even ‘normal’ times are not normal for them. They are accustomed to enduring months and typically years of uncertainty, acute anxiety, precarious nutrition and lodging, poor health, legal limbo, and either unemployment or the risk of exploitation and abuse if they do find paid work.”
They cannot go back to their countries of origin because of the closure of borders and they find themselves with even fewer means to survive. Governments seek solutions for their citizens and migrants and refugees risk being doubly – and sometimes deliberately – forgotten. This happens while their contribution to society in this period has been crucial: think of farm labourers or those in charge of distribution and delivery, many of whom live in shantytowns without social distancing, in camps or detention centres.
The “virus” of injustice
Cardinal Czerny noted that the pandemic has struck a society in which there is already widespread injustice – a “big virus” in addition to the “small but terrible virus” of COVID-19, and for the “larger virus” of social injustice, inequality of opportunity, marginalization, and the lack of protection for the weakest.
He recalled the Pope’s definition of injustice as a virus from which one can defend oneself with the antibodies of justice, clarity and solidarity. The pandemic, he said, has highlighted both our vulnerability and our interdependence.
This is not necessarily a bad thing, because these are two factors that unite us and, if we emerge better from these crises, it will be by not falling into the temptation of individualism, be it personal or collective, often expressed in the form of political nationalism and narrow economic interests.
The teachings of Fratelli Tutti
The Cardinal said the answer to the crisis can be found in some ancient teachings of the Christian tradition, as is made clear in Fratelli tutti, where the Pope asks us to establish fraternity and social friendship among all peoples and nations. This, Czerny explained, has clear implications for vulnerable populations such as migrants and refugees.
He also called for the right not to migrate that implies the right of all men and women to obtain self-realization and not be forced to flee tragedies such as hunger, war and climate change to seek new opportunities and to dream of a better future. He decried the many obstacles they face, starting from nationalist and populist regimes that try to exclude migrants, entrenched behind defensive walls and a xenophobic mentality that, he said, is not compatible with Christianity.
Young people
The decisive role in creating a culture of fraternity, solidarity and gratuitousness will be played by young people. Respect for history, for the elderly, for creation and a commitment to social dialogue between generations and to solidarity, Cardinal Czerny said, are the founding values for a better society, always going forward with openness, towards migrants and refugees.
“The pandemic,” he concluded, “has put us all in crisis,” but as Pope Francis says: “Let us remember that after a crisis a person is not the same. We come out of it better, or we come out of it worse. This is our option.”
Hungary’s and Poland’s leaders are furious over the European Union’s efforts to link funds’ allocation to respect for the rule of law. EU critics have singled out both countries for their perceived efforts to limit the media’s independence and the judiciary and their alleged trampling on human rights.
The dispute has seen Poland and Hungary block 1.8 trillion euros (more than $2.1 trillion) worth of EU funds. That includes hundreds of billions in coronavirus relief to be disbursed to those suffering most under the pandemic’s weight.
Heard through an interpreter in Budapest, Hungarian Prime Minister Viktor Orbándefended their decision to veto the new EU budget. “We are going to unify our arguments and join forces in this debate,” he told reporters. “Hungary will not accept such a proposal, which is unacceptable for Poland. What is on the table under the name of the rule of law is not the rule of law but rather the rule of the majority,” he added.
Orbán said his nation debated many issues with other EU member states, “regarding migration, national sovereignty, and gender.” Therefore, “I can’t put Hungary at risk of being restrained by a simple majority on such issues that Hungarians cannot accept,” he stressed.
Standing next to him was Polish Prime Minister Mateusz Morawiecki, who shares Hungary’s concerns. “We are standing in front of a new challenge, in front of a totally new mechanism,” the Polish leader explained. “Due to its political implementation, which is motivated by political decisions, and could even lead to the EU’s disintegration.”
At odds with Merkel
On Friday, the Polish prime minister also confirmed to German Chancellor Angela Merkel that Poland was ready to veto the new European Union funding.
In a statement on social media, he said a veto is necessary as Brussels must first a solution that, in his words, “is good for the EU as a whole, not just for some of its members.”
Hungary and Poland were once seen as an example of democratic changes following the collapse of Communism. But in recent years, they have been criticized for perceived autocratic tendencies and anti-migration policies.
Both governments have denied wrongdoing saying the EU should not become an empire but respect nation-states’ sovereign will.
Behavioural insights surveys conducted by the WHO Country Office in Georgia have led the way to better understanding the needs of key audiences in the country.
WHO/Europe directly supports 17 Member States and territories in conducting behavioural insights surveys, using a standard but adaptable tool, to gain the kind of insights into peoples’ perceptions that can help target how information is shared. The WHO Country Office in Georgia was the first country in the Region to conduct these surveys and continues to innovate in using the data they collect.
“The behavioural insights tool helped us to target the information and guided us on how to share it,” said Kakha Gvinianidze, WHO National Professional Officer in Georgia, who explains that the results from the first 3 rounds of data collection at the national level led them to conduct a 4th round, focusing on 2 specific regions, Kvemo Kartli and Samtskhe-Javakheti.
“We had an idea that the people in these regions would need information in Azerbaijani and Armenian, but the survey results confirmed this for us, along with many other important aspects, including the fact that people there were less aware about the virus and had lower risk perception,” reported Mr Gvinianidze. The team also learned that national television, where many campaigns are broadcast, was less popular, and overall satisfaction with the information received was lower than in the national-level surveys.
Language, local influencers and inclusivity
These insights allowed the team in Georgia – led by WHO, the National Center for Disease Control and Public Health (NCDC) and the United Nations Children’s Fund (UNICEF) – to target their actions to the specific needs of people living in these regions.
Using the results from the behavioural insights tool, the team in Georgia identified 3 key areas for specific focus: 1) using the language that people use; 2) engaging with local influencers and networks; and 3) creating messages that inspire inclusion, such as “No one is 100% safe from the virus” and “Let’s defeat COVID-19 together”.
Next, the WHO Country Office shared their behavioural insights findings with the municipal authorities in Kvemo Kartli and Samtskhe-Javakheti, as well as with the Ministry of Health and NCDC. These key stakeholders then provided feedback on how best to translate this data into actionable messages and interventions.
No-rules fighter and a singer promoting COVID-19 messages
A famous “no-rules” fighter agreed to appear in posters in the Samtskhe-Javakheti region, wearing a facemask and reinforcing COVID-19 safety messages. Similarly, in the Kvemo Kartli region, a well-known singer joined with many respected writers, teachers and other cultural figures to create and adapt COVID-19 messages.
The WHO Country Office, with financial support from the United States Agency for International Development (USAID), created a short video featuring these local influencers, who also feature in a television clip and on digital billboards in the cities of Marneuli, Bolnisi and Gardabani, Akhalkalaki and Ninotsminda. In addition, bilingual posters have been put up on public transport, at tea houses, bazars and bus stations, and in other public settings.
Silviu Domente, WHO Representative in Georgia, says the initiative was very well received. “The behavioural insights tool helps us to better target the information campaigns and more efficiently use the available resources,” he says, noting that the project in Georgia is funded by WHO, UNICEF, and the European Union Solidarity for Health initiative in 6 countries of the Eastern Partnership.
