Kremlin in Frankfurt

Derk Jan Eppink // Wed, 19. Mar 2014

As a student in Amsterdam I once took Russian studies to become an expert in Kremlinology: the study of the balance of power in the Soviet Union. I particularly remember the musty smell of piles of Russian newspapers in the Eastern Europe Institute. The Soviet Union collapsed and I had little use for Kremlinology, until as an MEP I got a little insight into the European Central Bank (ECB). The ECB doesn't publish minutes, doesn't really explain itself, doesn't give access to internal affairs and forces us to read between the lines. The Italian ECB president, Mario Draghi, speaks in a code language which - having been educated by Jesuits - he masters like no other.

The ECB is based on the model of the German central bank, the Bundesbank. Its main task was the taming of inflation. The first president, Wim Duisenberg , did just that; and at first, so did his successor, the Frenchman Jean-Claude Trichet did. This changed after 2008. The EU didn't see the euro crisis coming. In 2010, José Manuel Barroso, President of the European Commission, called the euro the 'protective shield' against the crisis, while the euro had fuelled the debt crisis with low interest rates. By the end of 2011, the euro stood on the brink of collapse, so the ECB injected €1.1 trillion into the banking sector. When that proved insufficient, Draghi stated in mid-2012 that he would do "whatever it takes" to save the euro. He became the monetary James Bond, albeit with a 'license to print'.

The ECB is no longer the brainchild of the Bundesbank and is going beyond its statutory mandate. That provoked a struggle within the Governing Council of the ECB, which consists of a Board of six people along with the governors of central banks of the euro zone. The majority advocated an expansionary monetary policy. A minority, led by the Bundesbank, is critical of such action. Draghi stands on the side of the majority, but the ECB is nothing without the Bundesbank, the main shareholder of the ECB.

All Roads Lead To Moscow

Derk Jan Eppink // Wed, 5. Mar 2014

Recently, I had the pleasure of sitting next to Herman Van Rompuy, President of the European Council. I asked him why European foreign policy is so 'naive', like the misplaced courtship with Libyan leader Gaddafi and deposed Egyptian President Morsi. Van Rompuy reacted irritably and praised soft power: being nice, starting up dialogue and financing under certain conditions. This approach runs upon its limits in the Ukrainian crisis. The Kremlin only knows hard power.

The difference between the EU and Russia is that the first can make vague, often unattainable promises such as EU membership, while the second has instant, tangible coercive measures. Ukraine has to (re)pay 24 billion euro of loans and unpaid gas bills to Russia this year. Ukraine is on the verge of bankruptcy. According to Dutch Minister Timmermans it will take at least another 30 years before Ukraine joins the EU. Ukrainian EU membership in 2044 versus Putin who has the fate of the Ukrainian economy in his hands: who is the strongest?

A bankruptcy of Ukraine returns to roost in the face of the EU; who will need to pay the 35 billion euro to keep the country on its feet? The EU is struggling with low growth and high unemployment. Citizens need to tighten their belts and are not keen on financing Ukraine - a sort of Great Greece. European leaders are calling for help from the International Monetary Fund (IMF) that only comes up with loans under strict conditions. These will lead to a deeper recession at the expense of heavy industry and mining in the Russian-speaking part of Ukraine. This reinforces the divergent forces in the country.

Do not put our exports at risk

Derk Jan Eppink // Wed, 19. Feb 2014
 

Last year I was invited to a dinner with Roger Bootle. He was presented to me as a 'respected voice' in British financial circles. I was looking forward to it. During the meal, Bootle held a fanatical plea for British withdrawal from the EU. I confronted him with counter-arguments, such as the impact on British exports to the EU. Bootle got irritated and became increasingly angry. The dinner turned unpleasant and I left early, which rarely happens, so as to avoid a fight.

Roger Bootle is managing director of Capital Economics, which published a report on the Netherlands and the EU. In the same way as Bootle wants a British withdrawal (Brexit), he advises the PVV to pursue a Dutch exit from the EU, the so-called NEXIT. Instead of sounding like a 'respected voice', Bootle actually sounds like chief economist for the UK Independence Party UKIP, led by Nigel Farage, which preaches Brexit. The recipe is more drastic for the Netherlands than for Britain. By exiting, the Netherlands would not only leave the single market, but also the Eurozone and the Schengen zone for free movement of people.

According to Bootle there would be some 'transitional problems', but the Netherlands would then have more advantages than disadvantages from 2035 on. Britain and The Netherlands wouldn't pay any more money to the EU budget, abolish unnecessary EU legislation, conduct their own immigration policy, re-introduce the Dutch guilder, and the EU would offer both countries a favourable trade agreement. The Netherlands would then turn into a Switzerland at the North Sea.

Baudet is off the mark

Derk Jan Eppink // Wed, 5. Feb 2014

Historian and legal philosopher Thierry Baudet deserves a prize for his efforts in the EU debate, but he is off the mark. After collecting 63,000 signatures, he presented his citizen's initiative to the Dutch House of Representatives demanding a referendum on any future transfer of Dutch sovereignty to the EU. This is a variant of the British law of 2011: "any future treaty change transferring powers to the EU is automatically subject to a referendum." The British have many exceptions. They are neither in the euro zone nor in the borderless Schengen Area. The Netherlands are. Virtually every ministry is affected by Brussels. Most policies are in one way or another part of the European treaties. More is hardly possible, which means a referendum remains a distant vision. Baudet should turn the question around. What powers can be retrieved from Brussels and how can Parliament be a watchdog against unnecessary EU legislation?

Europe's elite and anti-elite

Derk Jan Eppink // Fri, 24. Jan 2014

Rachida Dati, the French former Justice Minister and MEP with the European Christian Democrats group (EPP), threw the cat among the pigeons. At a conference in London organised by the think tank Open Europe, she launched an attack on the 'European elite', of which the EPP is the flag ship. "There is the world of technocrats who want more Europe with a federal myth before their eyes." She accuses the Christian Democrat leaders of forming 'Un Club' and calls herself a euro-sceptic. Dati called for a reality check: une révolution réaliste.

Dati's speech is striking. Her leader Joseph Daul, a farmer from the Alsace region of France, has only one mantra: more Europe. His group is by far the largest in the European Parliament and the EPP sees itself as the naturally dominant force. Over the past five years, Christian Democrats have been the leading faction in Europe, with Commission President Jose Manuel Barroso, European President Herman Van Rompuy and former Eurogroup chairman Jean-Claude Juncker.

This dominance is the life work of former Belgian Prime Minister Wilfried Martens, who recently passed away. Martens, an affable person, followed a very important rule when he was President of the Christian Democrat family: the EPP had to be the largest group in the European Parliament under all circumstances. Each party was welcome, Christian or not. He took the party of Silvio Berlusconi in, as well as the party of the Hungarian authoritarian leader Victor Orban. Parties were lured by all the temptations of human existence. Group formation was not about Christ, but about money, power and jobs. "We have become a ruling class over the people we represent", said Dati.

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