VOL. 1 NO. 4 WEDNESDAY, MAY 13, 2015 POLITICO.EU The five DGs lobbyists love most People who want to influence legislation are heading right to the policy wonks By JAMES PANICHI and QUENTIN ARIÈS It’s a move right out of EU Lobbying for Dummies: If you need to influence a piece of legislation, you set up face-time with the European Commission directorgeneral in charge of the issue. The Commission’s 32 directors-general have the full skill set: They are policy wonks with strong political instincts who are in charge of important dossiers, manage large bureaucracies and have the ear of their commissioners. But these top staffers are not allowed to meet with just anyone. Under new transparency rules introduced by Commission President Jean-Claude Juncker in December, departmental chiefs have to follow the same rules that commissioners do when it comes to lobbyists: They can meet only with people and organizations listed on the EU Transparency Register. The new rules also require that directors-general disclose publicly the meetings they have with lobbyists — just as commissioners and their staff must do. It is now possible, by checking the public websites of the various departments, to see who is meeting with which lobbyists and when. “I have a better conscience,” said Jos Delbeke, the directorgeneral for climate action, of the new accountability. “We need order in the lobbying business in this town.” The openness means lobbyists have to consider the strategic value of a sit-down with a top director-general when the disclosure will let everyone in town know about it. But hundreds of Europe’s most influential lobby- A girl named Courage Migrants rescued from Mediterranean waters arrive at the Sicilian port of Augusta. POLITICO profiles one young woman, 17-year-old Courage Odafeh Loren, who survived the journey from Libya to European shores. MARE NOSTRUM: PAGE 12 ists, industry groups and NGOs are still choosing to meet with the EU’s top public servants, despite the new scrutiny. Here, we look at five influential directors-general who are taking the most meetings with lobbyists, according to their websites. The list is ranked in order of most lobbyists met since December 1, 2014. LOBBYING: PAGE 5 A lot of noise on the eastern front Russian threat forces Poland and Baltics to rearm By JAN CIENSKI and LINDA KINSTLER JURE ERŽEN/DELO TALLINN — At Estonia’s Tapa military base, Lieutenant Colonel Aron Kalmus spends much of his time dealing with the rotation of US troops bringing tanks, armored personnel carriers and training skills to boost his country’s tiny army. The Baltic countries, with no proper air forces of their own, also rely on their NATO allies to patrol their skies. But trusting in foreign military muscle is being seen as increasingly dangerous in an era of hybrid warfare, and countries across the region are beefing up their own defense spending. With western Europe reluctant to permanently base troops in the region, the Baltic countries, and even regional powers like Poland, are increasingly relying on their own resources — DEFENSE: PAGE 20 Europe’s chief operating officer Kristalina Georgieva wants to change how the EU works — or doesn’t work By RYAN HEATH Kristalina Georgieva is changing the way the EU functions EPA years of cynicism about how the EU spends money. She is shaping a new role focused on changing the way the EU functions internally rather than the legislation it adopts. She is effectively the EU’s chief operating officer. In a career spanning low-paid academic work behind the Iron Curtain in her native Bulgaria, to managing 186 national interests as vice president of the World Bank, to running the EU’s humanitarian aid agency in the last Commission, Georgieva has built a reputation as a tough administrator. “Every job I took I would revamp it, restructure it and leave,” Georgieva told POLITICO in an interview. “Fifteen years later it is still running pretty much the same.” That one of the most capable and reform-minded members of the current Commission comes from one of Europe’s most notoriously corrupt states is especially notable. GEORGIEVA: PAGE 21 Who’s up and who’s down on the continent? Ryan Heath and Tara Palmeri have the answer PAGE 3 TECHNOLOGY Why competition commissioner Margrethe Vestager gives telecoms deals a close look PAGE 7 FORUM British elections: Why the Queen is less inclined to retire than ever before PAGE 14 ISSN 2406-5250 The six-month-old Juncker Commission has promised a new way of running the EU — one more accountable to voters and more streamlined in its approach to regulation. Everything is supposed to be “smarter and better.” But while conventional Brussels wisdom is preoccupied with the European Commission’s allpowerful first vice president, Frans Timmermans, as the point man in the war on over-regulation and over-reach, there’s another person working a more nuts-and-bolts approach to reform. Vice President Kristalina Georgieva is hoping to reverse PLAYBOOK PLUS A yearlong series examining the politics and issues driving today’s energy and climate conversation in Europe. LAUNCH EVENT JUNE 2 DOORS AAT 6:00 P.M. POLAK ROOM RESIDENCE PALACE CONTINUE THE CONVERSATION AT: A @ENERGYVISIONSEU @EVENTSPOLITICO RSVP: WWW.POLITICO.EU/CARBONPRICE DRIVING THE ENERGY TRANSITION: WHAT ROLE FOR THE CARBON PRICE? SPEAKERS INCLUDE: MAROŠ ŠEFČOVIČ European Commission Vice President for Energy Union JOHN ABBOTT Downstream Director and Member of the Executive Committee, Royal Dutch Shell IVO BELET MEP, Member of the Environment, Public Health and Food Safety Committee MARCIN KOROLEC Secretary of State, Ministry of the Environment, Poland Presented by POLITICO WEDNESDAY, MAY 13, 2015 3 PLAYBOOKPLUS By Ryan Heath and Tara Palmeri COIN of the EU realm +++ Parliament’s LOGO rhythm +++ COMMISSIONER (low talker) ing without a Parliamentary Pass if you don’t have some other pass or invitation AND your passport or ID card. At the Commission, just bring your pass. At the Council, just get someone to vouch for you if you forget it all or never registered in the first place! WAS VAROUFAKIS’S WIFE THE INSPIRATION FOR PULP’S SONG “COMMON PEOPLE”? Tantalizing facts match. Like the character in the song, Danae Stratou is Greek, rich, and studied sculpture at Central Saint Martins college … at the same time as Jarvis Cocker, the musician who wrote the song about a rich student who disdained him. But another Greek artist claims to be the real inspiration. WE HEAR: Party groups at the Parliament are getting around the strict new rules on organizing events. The idea was to reduce the security risk; the effect was just to annoy everyone. Now that individual MEPs have been told they can’t organize events, they just do exactly what they intended but under their party’s name instead. GETTY PHRASE OF THE WEEK: “Taking stock” — a personal favorite of 12 finance ministers at this week’s Eurogroup meeting in Brussels. Commissioner Pierre Moscovici is especially keen. He wants to “take stock” of even “substantial progress.” PARLIAMENT’S NEW LOGO: The Parliament’s directorgeneral of communication, Juana Lahousse, explained to MEP Christofer Fjellner (in an email seen by Playbook) that “the new logo of the European Parliament, together with the accompanying graphical rules for its use, was designed and developed entirely using internal resources, with the help of the Publications Office of the European Union. No specific budget was therefore needed for this process.” What she means is no extra budget was needed. When the Commission changed its logo in 2012 it spent around €125,000 on the design alone. BUT WAIT, THERE’S MORE ... Lahousse does, however, concede that the Parliament’s officials authorized spending €120,000 “specifically for the physical replacement of the logo in places of high public visibility, essentially buildings, the plenary chambers and press conference rooms.” Look out for that logo! EUROVISION TRAFFIC LIGHTS: Inspired by Conchita Wurst, 2014 Eurovision winner and boundary breaker, Vienna’s traffic lights are getting a makeover ahead of the annual Eurovision Song Contest. They now feature same-sex couples, and love hearts, instead of red and green men. WE SEE: That despite having a shared accreditation system and being under the same level of security alert, the three big EU institutions all apply different conditions for gaining access to their buildings. At the Parliament don’t even think of enter- WE SEE: The suspiciously wrinkle-free forehead of David Cameron splashed everywhere after a sleepless night. Why all the crow’s feet but perfectly flat forehead? WHICH DISH: Which commissioner in Brussels is such a “low talker” that some of his staff are worried they will misunderstand his mumbling? (Was that millions or billions you said, Mr. Commissioner?). They’re WHO’S UP, WHO’S DOWN David Cameron (pictured) and Nicola Sturgeon — they’ve won their election battles, but now they’ll have to win their constitutional wars Election pollsters — they all got it wrong in the UK, sparking a collective global depression amongst psephologists. Ed Miliband and Nigel Farage. Peace — this week we’ve celebrated 70 years since the end of World War II in Europe, and 65 years since the Schuman Declaration, which led to creation of the EU. Russell Brand (pictured) — for first announcing that he wouldn’t be endorsing a candidate in the UK elections and then putting his money on Miliband, who then lost. Greece — who made good on its promise and actually paid the International Monetary Fund back €750 million back on Monday, one day early. Only about €25 billion more to go. Step by step. GETTY STATISTIC OF THE WEEK: European policymakers love to defend the “European Social Model” — often billed as the world’s best social safety net. Not for everyone it seems. Médecins du Monde (Doctors of the World) says 95 percent of pregnant women who presented to a Doctors of the World clinic in Belgium had no health care coverage. The European average is 81.1 percent. GETTY COIN COMPETITION: Yes, citizens, while you may not have any control over whether you pay for a Greek bailout, don’t worry! Instead, you get the chance to vote for which design you want on the next €1 coin. Surf to: www.coin-competition.eu Hungary — which may have to take in refugees who cross the Mediterranean from Africa under the Commission’s new migration plan after prime minister Viktor Orbán said he would fiercely defend its borders. GETTY EVERY VOTE COUNTS: Conservative Glyn Davies, from Montgomeryshire in Wales, is pleased to have won re-election to the UK House of Commons — with the help of some phallic graffiti by a voter. The MP wrote on Facebook: “One voter decided to draw a detailed representation of a penis instead of a cross in my box on one ballot paper. Amazingly, because it was neatly drawn within the confines of the box, the returning officer deemed it a valid vote. Not sure the artist meant it to count, but I am grateful.” too shy to confront him, but with the stakes in his portfolio this high, Playbook wonders what’s the price of a little embarrassment? SOMETHING’S ROTTEN IN THE STATE OF GREAT BRITAIN: A foul smell has been wafting through floor 70 of the Justus Lipsius building and some say it’s coming from the old rugs in the British offices. “The building as a whole just always has and probably always will have a slight reek of cigars and whiskey from the really old days,” a spry observer noted. It’s time for some spring cleaning UK. New government, new rugs! TOUGH COOKIE WINS JUNCKER’S HEART: Kudos to Commission spokesperson Natasha Bertaud for not missing a beat on the migration crisis while sporting a conspicuous pink cast on her left wrist. She broke the bone in a nasty fall while roller-blading. Commission President Jean-Claude Juncker is the only person who has signed the cast. He scribbled his name with a big heart. PRICEY DIGS: The EU’s foreign service arm leases one of the most expensive properties in the EU zone, according to market research data. The European External Action Service recently leased a property at RondPoint Schuman 6 for €275 per square meter, higher than others are paying in the neighborhood. 140 CHARACTERS OF BRILLIANCE: “I wonder why @pierremoscovici decides to speak about Greece in French and Cyprus in English, but #Eurogroup famously lacks transparency” — James Kanter of the International New York Times @jameskanter WORK-LIFE IMBALANCE: Want to work for Tesla? Well, don’t think the birth of your first-born is a good enough excuse to get the day off. Tesla founder Elon Musk sassed an employee for skipping a work day to see the birth of his child. According to an upcoming biography of the entrepreneur, Musk said: “That is no excuse. I am extremely disappointed. You need to figure out where your priorities are. We’re changing the world and changing history, and you either commit or you don’t.” [email protected] +++ @POLITICORyan +++++++++ [email protected] +++ @tarapalmeri Go to Politico.eu to sign up for Ryan’s must-read daily briefing on what’s driving the day in Brussels 4 News POLITICO WEDNESDAY, MAY 13, 2015 Greece pays IMF but gets no bailout cash A repayment has been made, but the question now is just how much time is left before Greece runs out of money By ZEKE TURNER The cash-strapped Greek government made a €750 million repayment to the International Monetary Fund this week, but the big question now is just how much money Greece has left to stave off a default that would throw both the heavily indebted country and the broader eurozone into chaos. The IMF payment didn’t signal a broader breakthrough in talks with creditors; Greece made little headway this week in getting finance ministers from the eurozone area to release a final €7.2 billion tranche of a second bailout package. Eurozone finance ministers issued a tepid joint statement after the meeting citing a “more substantial discussion” but added that still “more time and effort are needed to bridge the gaps on the remaining issues.” Changes to Greece’s pension system and reform to the country’s labor market haven’t reached sufficient clarity for the country to propose a concrete A return to the drachma hangs over Greece. GETTY reform package, said eurozone negotiators. Those key reforms are exactly the issue. Greece is being pressed to tackle them, but the anti-austerity Syriza government in Athens seems ideologically incapable of making the required movement. That yawning gap was underlined by Greek Finance Minister Yanis Varoufakis, who made nice by saying that differences between Greece and its creditors “have been narrowing consider- ably,” but then pointed out his government has issues of social fairness it will not touch despite outside pressure. “Red lines by necessity are inflexible,” he said. Those red lines come from Syriza’s overwhelming electoral victory four months ago based on a desire to overturn the austerity policies agreed to by past Greek governments. But so far Greek Prime Minister Alexis Tsipras and Varou- fakis have failed to finesse the issue. Polls now show that Greeks are becoming increasingly worried about their government’s hardball negotiating tactics, with only 54 percent backing the government’s strategy, down from 82 percent in February. But while Tsipras weaves between domestic and foreign political pressure, time is running out. Greece has until the end of June to get the remainder of the bailout and avoid a catastrophe. “There is no time to be lost,” Pierre Moscovici, the European commissioner for economic and financial affairs, said after the eurozone meeting. The problem is that the political and financial calendars aren’t meshing. “I don’t think it’s realistic to expect a deal on a new program for the end of June, not only because time is running out but also because there’s an intellectual divide between what the creditors want and what the Syriza government wants,” said Miranda Xafa, a Greek economist formerly on staff at the IMF and a senior scholar at the Center for International Governance Innovation. “I just cannot imagine the radical left Syriza government restarting privatizations and making a dedicated push to make Greece an attractive place to invest.” That’s not good news. The government has squeezed local authorities and state firms for cash, and there are questions over how it will handle the payment of increasingly overdue invoices as well as salaries and pensions. Greece owes the IMF a further €6.9 billion and must roll over more than €11 billion of short-term debt before mid-July. The country faces further repayments, including €3 billion to the European Central Bank in July and August. One estimate of just how much time is left comes from Varoufakis, who guessed Greece has “a couple of weeks” before facing a liquidity crunch. Some online traffic may be more equal than others Dispute over net neutrality jeopardizes a deal on mobile roaming surcharges By ZOYA SHEFTALOVICH and RYAN HEATH The European Parliament’s latest compromise on Internet traffic rules shows there is still a chasm between their negotiators and those in the Council and Commission, according to a leaked draft obtained by POLITICO. As the three sides gathered for meetings in Brussels this week, the debate over so-called net neutrality threatened to erode their progress on mobile phone roaming charges. MEPs from the Alliance of Liberals and Democrats for Europe, the European Conservatives and Reformists, and the Socialists & Democrats groups are threatening to walk away from talks on the telecoms single market. Those on the political left in the Parliament want all Internet traffic to be treated equally, barring exceptional circumstances. The conservatives, on the other side, want to revert to an earlier Council proposal that would allow “reasonable” discrimination based on service type (video versus e-mail, for example). The Commission sits in the middle of these warring parties. If the left wins the fight, telecoms companies say there will be disastrous consequences, with Europe’s competitiveness held back in areas such as connected cars, e-health and other “smart” devices and services. “It would jeopardize a wellfunctioning Internet with all the prescription and limitation,” said a top executive for a telecom company, who was not authorized to speak to the media. “The Parliament doesn’t understand how the Internet works … When I talk to my engineers they say it’s simply not in line with reality.” If the Conservatives win, telecoms operators could have more freedom to govern Internet access. “Telcos do not want transparency into their traffic management practices,” said Marietje Schaake, a Dutch MEP and ALDE member. “They want more freedom to manage traffic how they want to, but it becomes a slippery slope.” Neither side seems willing to budge. “The last group consensus was that maybe it is better to walk away than agree to a bad compromise. We don’t want net neutrality to be watered down,” said an ALDE insider, who was not authorized to talk to the press and requested anonymity. POLITICO.eu Printed on recycled paper by: Corelio Printing, Keerstraat 10, B-9420 Erpe-Mere, at the coldset printing department of VUM – GrootBijgaarden, Brussels. EXECUTIVE EDITORIAL John F. Harris................................................................................................EDITOR IN CHIEF Matthew Kaminski............................................................................ EXECUTIVE EDITOR Sheherazade Semsar de-Boisséson................................. MANAGING DIRECTOR Carrie Budoff Brown.......................... MANAGING EDITOR BUSINESS Jan Cienski.......................................NEWS EDITOR, ENERGY Gabriel Brotman.............. 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Neither this publication nor any part of it may be reproduced, stored in a retrieval system, or transmitted in any form by any means, electronic, mechanical, photocpoying, recording or otherwise, without the the prior permission of: POLITICO SPRL Dénomination sociale: POLITICO SPRL Forme sociale: SPRL Siège social: Rue de la Loi 155, 1040 Bruxelles Numéro d’enterprise: 0526.900.436 RPM Bruxelles Lobbying POLITICO WEDNESDAY, MAY 13, 2015 5 BRUSSELS BUBBLE The five DGs lobbyists love most 1 2 3 4 5 ROBERT MADELIN DOMINIQUE RISTORI DG Energy DANIEL CALLEJA CRESPO JOS DELBEKE DG Communications Networks, Content and Technology JOÃO AGUIAR MACHADO With 51 meetings with external stakeholders logged since the new transparency measures were adopted, Robert Madelin is the most popular directorgeneral in Brussels. This is hardly surprising. The 58-year-old Briton’s department is responsible for the digital single market strategy, one of the most heavily lobbied legislative packages in the EU’s history. The department also did well in the reshuffling of portfolios that came with the launch of the Juncker Commission last November. Madelin picked up copyright reforms, online services and media issues as well as the fight against pirating. Madelin told POLITICO that his popularity has more to do with his desire to be accessible than his portfolio. “My personal approach is that if I am free and in Brussels and there are appropriate interlocutors who want to meet me, then I find time for them,” he said. That determination to be available may not have served Madelin well last month, when he sat down with Sir Martin Sorrell, the high-profile British businessman who is the CEO of WPP, a multinational advertising and public relations company. Madelin disclosed meeting Sorrell and two WPP lobbyists on April 21 to discuss the digital single market, even though his guests were not listed on the transparency register. Asked by POLITICO about the encounter, Madelin said it was a “lean back, what’s the world looking like at this moment” kind of meeting, rather than something relating to the nuts and bolts of policy settings. But Madelin’s office conceded that Sorrell’s failure to sign up to the register was an oversight. When contacted by POLITICO, WPP said that “individual WPP operating companies that provide public affairs services are already listed on the EU Transparency Register” but that it would now “register WPP itself.” French veteran Eurocrat Dominique Ristori is another of the most accessible directors-general in town, logging 45 meetings with lobbyists since December 1, 2014. Ristori started working at the Commission in 1978 and joined the energy department in 1996, developing expertise in an area that has become one of the most politically sensitive around, taking in geopolitics and energy security. Not surprisingly, energy companies and associations top Ristori’s guest list, with BusinessEurope — which represents energy companies indirectly through its national associations — also getting some of the director-general’s time. One organization on Ristori’s list of meetings was the American-European Community Association (AECA), which counts among its members a number of prominent energy companies (those listed on the Association’s website are also listed separately on the EU’s lobby register). AECA’s CEO, Erik ter Hark, says such meetings are mainly a chance to invite policymakers to speak at their members’ gatherings, as well as an opportunity to gather information. “Our members can read about big policy statements in the press,” ter Hark says. “It is the technical details which are of interest” — which is why a meeting with the director-general was seen as the right move. EPA (4), EC DG Mobility and Transport DG Internal Market, Industry, Entrepreneurship and SMEs Not many senior public servants can claim to have met representatives from RollsRoyce the day after sitting down with a delegation from the European Cyclists’ Federation. Yet that’s what João Aguiar Machado, a Portuguese national, did in April with just two of the 42 groups and lobbyists he has met during the past five months. A College of Europe graduate, the 56-year-old Aguiar Machado was formerly at the World Trade Organization before joining the Commission’s trade department, where he was deputy director-general from 2008 to 2014. The main reasons for his popularity with lobbyists in recent months: first, he is new in the job — which inevitably creates a flurry of activity among those who had established links with his predecessor; second, this is a portfolio that covers a wide range of policy areas, from infrastructure to safety regulation. One of the organizations lobbying the director-general was German vehicle-safety inspection company DEKRA, which met with Aguiar Machado in February. DEKRA is the largest company of its kind in Germany; the third largest in the world. It spent between €500,000 and €600,000 on lobbying in 2016, with seven full-time lobbying positions. “Firstly, we wanted to introduce ourselves,” said the head of DEKRA’s office in Brussels, Oliver Deiters. “Of course, we do not only talk with the director-general — there are many others.” Now known as DG GROWTH, this is one of the largest departments in the Commission because it has aggregated all internal market competences of the institutions. Spaniard Daniel Calleja Crespo has been the director-general since 2012 and is well known to industry players. The sprawling portfolio means Calleja Crespo’s 34 meetings with lobbyists covered a wide range of interests. Société Générale had a meeting to discuss the banking sector; Italian electricity company ENEL, which reported spending over €2 million on lobbying in 2014, also met with the director-general on internal market strategy. Some of the lobbyists who met with the DG were reluctant to talk — and some only found out that the details had been made public when contacted by POLITICO. DigitalEurope, representing the digital technology industry and national trade associations, met Calleja Crespo to discuss the “digitalization and interoperability of chargers for mobile electronic devices” — a plan to standardize charges that the Commission has been working on since 2010. DigitalEurope declined a request for comment about the meeting. Cosmetics Europe, the “personal care association” of Europe, said its February meeting with the director-general was part of its “normal” lobbying efforts in Brussels. “Why do we meet? Simple: we talk to everyone who can help our organization,” said the association’s president, Loïc Armand, a former French public servant who is now president of L’Oréal France. Data retrieved on May 5, 2015 DG Climate Action It’s hard to find a stronger supporter of the new transparency rules than Jos Delbeke, the Belgian director-general of the department responsible for managing the EU’s response to climate change. Delbeke, who reported having 16 meetings with lobbyists over the past five months, says the new system makes his position much easier to defend. “In the past, I would meet many lobbyists and sometimes I would get questions about those meetings,” he said. “This kind of suspicion has now largely disappeared.” Delbeke, who has led the department since it was created in 2010, met with environmental NGOs and industry organizations. For example, he spoke with the Polish Electricity Association in December. He also met with Ford Motor Company, which in 2014 spent between €500,000 and €560,000 on EU lobbying. “Lobbyists want to meet me for two reasons,” Delbeke says. “For them, it is both a fishing expedition and a chance to plant their story. They want to find out policy details while also explaining what matters to them the most.” Delbeke also says that outsiders often underestimate how important these meetings can be for the Commission to glean information from the lobbyists. “We see this as an opportunity to press information out of them,” Delbeke says. “We push them for data — hard data. If they are clever, they can still make their point.” But could Delbeke, like Madelin, run the risk of meeting with unregistered lobbyists? “No,” he says. “My secretary has an instruction to check. If they are not on the register, we do not meet with them.” James Panichi and Quentin Ariès 6 News POLITICO WEDNESDAY, MAY 13, 2015 The power chancellor George Osborne is now the UK’s chief diplomat MISSED OPPORTUNITIES Osborne’s grip over the cabinet, and the lack of certainty over Johnson’s role in parliament, will leave many of his supporters wondering if he has for now missed his chance. Many of them fear that after stepping down as Mayor, Boris Johnson may see his popularity wane. Osborne’s party men are emerging as stars. Three of Osborne’s last four permanent private secretaries are now in the cabinet. Robert Halfon, the Tory MP for Harlow, emerged as an unexpected media star in the election by sitting by the roadside into London and waving at commuting drivers. Halfon, who walks on crutches, promotes a working class, not public school kind of George Osborne has been victorious in the cabinet reshuffle. EPA Conservatism, has now been promoted to deputy chairman of the party. Halfon, perhaps not entirely seriously, says he wants to rebrand the Conservatives as the “Workers Party” because it rewards work. He is not the only Osborne minister emerging. Sajid Javid, a former banker, is another new kind of Tory that Osborne has promoted. Javid is the new business secretary, and is the state- WEEKLY FACT CHECK +++ ALMOST ✓ school educated son of a penniless Pakistani immigrant. He looks set to slowly emerge as a big player in the government, and is already widely seen as a future Tory leader. By leading on London’s most important foreign policy objective, EU renegotiation, Osborne is now the country’s chief diplomat. Many Tories are already talking as if the reshuffle crowns Osborne as prime minister ARE POLITICIANS GETTING THEIR FACTS RIGHT? 50/50 EPA LONDON — Welcome to the Osborne ascendancy. David Cameron may have won the election, but George Osborne, his chancellor and partner in power, won the cabinet reshuffle. Osborne is now in position to be the most powerful chancellor in modern British history. He is already more influential in government than Gordon Brown was as chancellor under Tony Blair. Where Brown was Blair’s frenemy, Osborne is Cameron’s confidante. The reshuffle leaves him with octopus-like control over the cabinet, in which six of his close allies are now sitting. Cameron is letting Osborne lead the new government’s approach to its most pressing issue: the chancellor will be in charge of the UK’s renegotiation with the EU. Osborne hopes that delivering in the EU renegotiation will earn him the respect of the Tories’ Euroskeptic right, and help win Cameron’s promised referendum to stay in Europe. Cameron and Osborne sense momentum, which is why they are talking about moving the referendum forward to 2016. The scale of their election victory has already brought the Euroskeptic and Europhile wings of the party closer together. The Euroskeptics have long argued that the reason the Tories had not won a majority since 1992, when the party divided over Europe under John Major, was because it was too soft on Europe. That theory has now been disproved. After Cameron’s entry to parliament on Monday, accompanied by rapturous applause and table banging, Bill Cash, a Euroskeptic icon, pledged him “undying loyalty.” Bill Cash is more than a backbencher: he was the leader of the 1992 anti-Maastricht Treaty rebels that first split the Tories over Europe. This means that when Osborne eventually comes back from Brussels, renegotiation in hand, he should be able to unite the Tory party. Beyond Europe, Cameron is also empowering Osborne to actualize his vision of a “Northern Powerhouse.” The boldest promise in the Tory manifesto is a radical plan to decentralize power to Britain’s northern cities and link them together via high-speed rail. Osborne’s pet project now has its own minister. David Cameron is not standing for a third term. He made this clear during the election campaign, singling out Boris Johnson, the charismatic mayor of London, and Theresa May, the home secretary with a Thatcheresque demeanor, as potential successors, along with Osborne. Cameron has empowered Osborne at the expense of his rivals. Theresa May will remain home secretary, but her archrival Michael Gove has been promoted to the cabinet as minister of justice. Boris Johnson, who was widely touted as a potential successor to David Cameron if the Conservative party failed to win a majority in the elections, finds himself allowed to attend the “political cabinet,” but with no role as he wraps up his term as Mayor of London. This is not what Boris Johnson wanted. He is alleged to have hoped to play a major role in the EU renegotiation – a task now in Osborne’s hands. Johnson had also dreamed of running, and at times is alleged to have demanded, a super-ministry of infrastructure that would have allowed him to brand new “Boris” airports and “Boris” highways. EPA By BEN JUDAH “If you think back to 2010 — we could have been Greece. Our deficit was almost as big as Greece’s, our banking crisis was a whole lot worse.” “The Australians have not only stopped the boats from coming, they have also stopped people from drowning.” During the Leaders’ Election Special Question Time on Sky News, Nick Clegg justified his party’s choice to join David Cameron’s Conservative Party in government in 2010 with a reminder of what — he claimed — could have been. Is it true, as the former deputy prime minister claimed, that the UK was in the same dire straits as Greece in 2010? Greek and British deficit levels were indeed relatively similar in 2010 (11.1 percent of GDP vs 9.7 percent). The second part of Mr. Clegg’s statement — that the banking crisis was worse in the UK — is less straightforward to verify. Research by economists Laeven and Valencia indicates that both Greece and the UK were experiencing a systemic banking crisis in 2010. “Our banking crisis was a whole lot worse” is, however, somewhat of an exaggeration. “Almost” for Clegg. Europe’s migration policies have remained in the headlines since the deadly boat tragedy off the coast of Libya. While officials in Brussels and across Europe discussed the issue, UKIP Leader Nigel Farage suggested to colleagues in the European Parliament that we should learn from the Australian migration policy implemented at the end of 2013, known as “No Way.” Is Farage right? While Australia received fewer boats in 2014 compared to 2013, the boats did not exactly “stop coming.” Instead, they were halted by Australian authorities and redirected to other countries or offshore processing centers. When it comes to drownings, there is not much data, especially since the Australian government has stopped updating its own numbers. However, the Monash University database does indicate a decrease between 2013 and 2014. The first part of Farage’s statement is seriously flawed, while the second presents some caveats. That’s “50/50” overall. Source: factcheckeu.org apparent: but he remains unpopular as the driver of austerity. This is why he is staking new ground. Success in the EU renegotiation, or in laying the groundwork for the “Northern Powerhouse,” would give him a new narrative. The Osborne ascendancy now looks as complete as it is unexpected. Wildly inaccurate polling predicted a hung parliament with both Tory and Labour neckand-neck right up to the exit poll on May 7. These polls were already eating into the chancellor’s credibility and the party’s choice to campaign not on a big vision for Britain but on its economic record. There was talk of the weakened liberal wing of the Conservative Party, from which Cameron and Osborne both hail, being forced to put up their own leadership candidate in the case of a hung parliament. Osborne’s emergence following the election now puts Britain back on course of an emerging historical trend. The centrality of finance to power in the twenty-first century has seen a seepage of power from prime ministers to chancellors. While Margaret Thatcher ruled with dispensable chancellors, both Tony Blair and David Cameron have ruled in tandem with Gordon Brown and George Osborne, who may now follow Brown as his prime minister’s natural successor. The reshuffle confirms Britain is also following another historical trend: the eclipse of foreign ministers in the EU. The eurozone crisis and the G20 finance ministers meeting have pushed foreign ministers to the sidelines, from Germany to Greece. The United Kingdom is no exception. Tech 7 POLITICO WEDNESDAY, MAY 13, 2015 Vestager gives telecoms deals a close look Antitrust regulator has dashed hopes she will go easy on telecoms mergers — a stand that may spark tensions with her boss Margrethe Vestager, the European commissioner for competition. EPA By NICHOLAS HIRST and FLORIAN EDER Just six months into the job, Europe’s top antitrust regulator has dashed hopes she will go easy on telecoms acquisitions, a stand that may spark tensions with her boss European Commission President Jean-Claude Juncker. As telecoms companies take advantage of their high stock prices and low interest rates to snap up rivals, they should prepare to appease Margrethe Vestager, the European commissioner for competition. She has already put a Danish deal on ice, pending an in-depth investigation, and will soon review a mammoth merger in the UK. In an interview with POLITICO, Vestager said she wants a more unified regulatory structure for the industry under the European Commission’s digital single market, unveiled last week. She is reviewing deals on a country-by-country basis, rather than pan-Europe, because she has seen how less competition locally can lead to price hikes for consumers. “Where you have 28 regulators, you have 28 markets,” she explained. The region’s fragmented telecom sector is the result of a “lack of regulation,” not over-zealous competition enforcement, she said, disputing the idea that Europe’s telecoms firms are too small. In December, TeliaSonera and Telenor forged a joint-venture partnership to combine their Danish units to create a market leader, but the companies are still waiting for Vestager to sign off. Next in her sights: a £10.3 billion (€14.3 billion) hook-up in the UK between leading operators Three and O2 announced in March. Europe’s 507 million citizens spend some €240 billion annually on telecoms, about half of which comes from mobile devices, according to ETNO, an industry association that represents the largest telcos. Europe has more than 100 telecoms firms, compared to four major players in the US, which has a market roughly the same size. Intense competition and divided markets constrict the industry’s ability to generate profits and spend on new infrastructure, operators say. Europe’s telecoms sector will need as much as €170 billion of additional investment by 2020, ETNO estimates. Of course there is a risk that Vestager could be overruled by Jean-Claude Juncker, the president of the European Commission. On the election trail last year, he argued for relaxing antitrust rules for Europe’s telecoms operators. “If we ask companies to offer their networks and services no longer only nationally but on a continental scale, we should in my view also apply EU competi- tion law with a continental spirit,” Juncker said during an April 2014 speech in Finland. He declined this week to expand on his comments. A spokeswoman for the Commission denied there was any contradiction between Juncker and Vestager’s remarks. “It is the role of EU merger control to make sure that company tie-ups do not lead to higher prices or reduced choice for consumers and do not restrict competition in the internal market,” said Mina Andreeva, the Commission’s deputy spokesperson. “At the same time, we want to encourage all companies to develop, invest and make the most out of a market… by offering their networks and services no longer only nationally, but on a European scale,” she added. Juncker’s remarks were echoed in October by Günther Oettinger, the European commissioner for the digital economy and society, who argued that European telecom companies should be more profitable and allowed to consolidate. Taken together, those statements created a bubble of expectation among telecoms investors late last year. Vestager is a walking pin prick to those hopes. She explained that a wholesale overhaul of Europe’s telecoms rules is a prerequisite to her approach. “We react to regulation made in other [arms of the Commission], when we see the effects on the markets,” she said. The country-by-country review was championed by her predecessor, Joaquín Almunia. Although he approved mergers that reduced the number of mobile network operators in Austria in 2012, and in Ireland and Germany in 2014, he demanded tough conditions that galled top executives. Nevertheless, research emerging from Austria, where Almunia allowed Three to buy Orange’s local business, indicates customers have suffered. Following the merger, “all [mobile] providers in a single month raised their prices,” says Daniel Zimmer, a consumer policy expert at the Vienna Chamber of Labour, who said customer bills increased between 29 percent and 78 percent, depending on the package of services. “The lowest offers disappeared,” she said. “Consumers were concerned and angry that changes were being made to their existing contracts.” Austria’s competition authority opened an investigation last year into the “significant price increases” in the wake of the merger. A spokesperson for the agency declined to comment on the ongoing probe, but said its conclusions will be published after the summer. Three operators are not enough to ensure vigorous competition and low prices, argues Antonios Drossos, managing partner of telecoms consultancy Rewheel. He warned that “political influence was key” to all three decisions that were approved under Almunia. “Will there be again someone who will again put pressure?” he asked. That analysis is hotly contested by the Commission, which maintains it reviews mergers in an “impartial and objective way,” as well as by the large telecom operators. “We were the first country in Europe to experience consolidation from four to three operators. We can see that we now deliver better products to customers,” Hannes Ametsreiter, the chief executive officer of Telekom Austria, said in a speech last week. “Furthermore, we almost tripled the level of investment after consolidation.” He renewed calls on the Commission to revise the way it reviews telecoms mergers. Vestager is likely to turn a deaf ear. “If the digital single market can bring the member states on-board to make pan-European or EU-wide regulation, well that makes room for companies which can be more trans-border because then the market will enlarge itself,” Vestager said. The Commission’s new digital strategy aims to overhaul Europe’s telecoms regulations. The Commission wants to harmonize Europe’s spectrum auctions, which are held nationally, as well as take other measures to reduce market fragmentation. Digital markets, Vestager continued, “will slowly but surely grow due to changes in consumer behavior, business behavior, regulatory issues and new regulation.” Seven EU countries put brakes on blind book treaty Commission and European Blind Union decry procedural delays in Marrakesh Treaty By DAVID MEYER Germany, Italy and the UK are among seven countries that have formed a minority voting bloc to stop the European Union from ratifying an international treaty to help the blind and visually impaired get access to books, POLITICO has learned. Those countries, plus another four whose identities remain unknown, don’t want the EU to ratify the Marrakesh Treaty on behalf of all 28 member states, despite the fact that 15 EU countries — including Germany and the UK — signed it. A total of 20 signing countries must ratify the agreement for it to be enforced across all the signatories. If the 2013 United Nations treaty goes into effect, signatories would have to make exceptions within their national copyright laws for the reproduction and distribution of published works in braille and audio. Less than 10 percent of the books published each year are available in such formats, according to the World Blind Union. The countries also would have to allow cross-border exchange of published material in these formats for educational institutions and associations for the blind. “The main impact is, of course, for countries that belong to the developing world. They have down to two percent of books that might be in some way accessible,” said Wolfgang Angermann, president of the European Blind Union (EBU). “You have vast lingual areas for English, Spanish, Portuguese and French. All these countries are dependent on an international treaty.” He said the Germans in particular are concerned that “the EU might claim more and more exclusive competence in terms of dealing with international treaties.” However, advisers to the European Commission, Parliament and Council have all weighed in with legal opinions that support the EU’s exclusive right to ratify the treaty. But formal negotiations within the Council are stalled and there is no debate scheduled before the current Latvian presidency ends in June. In addition, internal legal advice at the German justice ministry, which is handling the Marrakesh Treaty in the Council, says the treaty’s ratification “falls into the exclusive competence of the European Union,” according to information seen by POLITICO. “I hope that the member states blocking the compromise will review their position as soon as possible in the interest of the common cause,” Andrus Ansip, Commission vice president, said in an interview. Germany, Italy and the UK have taken the public position that the EU governs cross-border trade, but the copyright aspects are for member states to decide. Julia Reda, an MP for Germany’s Pirate party, said her country’s position made little sense because the EU has already claimed exclusive competence over copyright exceptions. She cited, for example, the exception for temporary copies included in the Information Society Directive, a 2001 attempt to harmonize parts of copyright law across the EU, and exemptions for libraries, museums and educational institutions added in the 2012 orphan works directive. The Latvian presidency, however, is still optimistic of reaching a deal. “This proposal is still open,” said a person with first-hand knowledge of the talks, who requested anonymity because of the sensitivity of the discussions. “We still hope that the blocking member states will come back to unblock this.” 8 Energy POLITICO WEDNESDAY, MAY 13, 2015 To appease regulators, GE weighs concessions on Alstom largest coal miner, the stateowned Kompania Węglowa (KW), is being accused of dumping its coal surplus in a frantic attempt to improve its cash flow. Two rival coal miners — Bogdanka and Katowicki Holding Węglowy — have accused KW of selling coal at below the cost of mining it, something that Kompania Węglowa management denies. Bogdanka, a rare privately owned coal mine, has seen its share price fall by a quarter in the last half year. By NICHOLAS HIRST MISSING INFORMATION The Commission had stopped its review of the bid for Alstom because it was missing information from the parties, said Ricardo Cardoso, a Commission spokesperson. Fourteen years ago, the Commission scuttled GE’s plans to acquire Honeywell International, even though US regulators had given the green light. Jeff Immelt, GE’s chief executive, was in Brussels on Tuesday and met with Vestager. He described the talks as “constructive.” GE contends that the market for heavy-duty gas turbines is global, with the same firms from Europe, the US, Japan and China competing for contracts worldwide. The company also argues any supposed European market for gas turbines is effectively dormant, with many power plants sitting idle. The review may now turn on whether GE can offer remedies that would resolve the Commission’s concerns. Philippe Nogues, a lawyer at the firm of O’Melveny & Myers, said the pause was probably positive for the parties: “The Commission is saying we need to stop the clock and give you more time to think about where this case is going.” Yet GE is concerned that the slow process is taking a toll. Alstom reported fiscal year earnings Tuesday, showing the businesses being sold to GE reported net income of €104 million ($116.8 million), down from €396 million in the prior 12-month period. “All sides need to get through this process and get the thing closed as soon as possible,” said Healy. RUINING THE COAL MARKET A miner, happily laughing, on a conveyor belt in the Murcki Staszic coal mine in Katowice. EPA/ANDRZEJ GRYGIEL Poland fights for coal, but Russia may benefit The measure of energy independence might actually be an asset to the Kremlin’s influence By JAN CIENSKI WARSAW — When he was Poland’s prime minister, European Council President Donald Tusk called coal “the strategic foundation” of his country’s energy security, and Polish diplomats have acquired a reputation as some of the EU’s toughest negotiators, doing battle in summit after summit to minimize restrictions on its use. But paradoxically, Poland’s dogged defense of coal, which generates almost 90 percent of its electricity, may now end up benefiting Russia. That is because cheap Russian coal is grabbing a growing share of Poland’s market, while local coal producers bleed red ink thanks to high production costs and very low prices. “Individual mines can still be saved, but what cannot be saved is the state-owned coal mining sector,” says Jerzy Markowski, a former deputy minister of economy and coal mining executive. Poland’s coal sector has long been a mainstay of the economy. In communist times, when Poland’s decrepit factories produced little that the West wanted to buy, coal was one of the country’s few “profitable exports” — even if it was sold abroad for precious hard currency at less than it cost to mine. The mines employed almost half a million people, and the power of the brawny miners prompted the communist regime to treat them with kid gloves. A quarter century and €25 billion in restructuring costs later, not all that much has changed. The mines now employ only about 100,000 workers, but their unions are still some of the toughest in the country. In 2005, angry miners wielding ax handles threatened to storm parliament, and the spooked politicians inside quickly voted through a generous pension program for them. MUCH LOWER GLOBAL PRICES The unions have also fought hard to retain a gilt-edged pay package that has miners earning some of the highest salaries in the country. A recent report by the Adam Smith Center, a Polish economic policy think tank, finds that the average miner earns about €1740 a month, 90 percent higher than the average Pole; retires at the age of 48 instead of 60 on a pension subsidized by the government; and benefits from an overall government subsidy of €16,000, while the average Pole gets nothing. Those fat checks and early pensions mean that labor accounts for about two-thirds of a mine’s operating cost. It costs about €77 to mine a tonne of hard coal, according to the Economy Ministry. However, last year the average sale price in Poland was only €69 a tonne. The cost of buying foreign coal, sold in Amsterdam and Rotterdam, is only about €60 a tonne. Global coal prices, battered by falling demand thanks to sluggish growth worldwide, by China’s lackluster expansion and falling oil and gas prices, are unlikely to rebound any time soon. As a result, exports of Polish coal have plummeted and imports steadily risen. Poland imported 10 million tonnes of coal, about 6.5 million tonnes coming from Russia. A decade ago, Poland imported only 3 million tonnes but exported 20 million. In all, last year the country’s coal companies sold 70 million tonnes of coal, but dug up 72.5 million tonnes. That has added to growing coal mountains — at last count holding more than 8 million tonnes of unsold coal. In an echo of the self-defeating economic policies of communist times, Poland’s (and Europe’s) MINERS ARE BETTER OFF Age of retirement 59,5 48,3 years years Average worker Monthly salary € 900 € 1720 Benefit * €0 € 16.000 Average Miner *average government subsidy per workplace ADAM SMITH CENTER The European Commission on Tuesday extended its review of GE’s €12.4 billion bid for Alstom after GE signaled it was prepared to make concessions to allay regulators’ concerns. “We still believe in the merits of the case and we continue to argue them,” said Jim Healy, a GE spokesman. “We are willing to explore remedies to get the deal done, but only remedies that preserve the economics of the deal and the strategic value.” However, he said it was too early to speculate on what kind of remedies the company would offer to regulators who are worried about the loss of competition in Europe’s gas turbine industry. GE announced its bid for Alstom’s energy business in April 2014. The deal was met with an immediate backlash from France’s socialist government, which rushed through a law to block a takeover and played an active role in later negotiations. It eventually gave its blessing after GE committed to bolstering Alstom’s rail business and hiring more employees in France. But Paris’s blessing offered no guarantee the deal would be approved in Brussels. The Commission has extended its deadline to August 21, after a pause of almost three weeks. “They are ruining the coal market,” Markowski says of Kompania Węglowa. “They’ve also ruined the coal market for themselves, because buyers are going to insist on these below market prices in the future.” Hit by falling demand, lower prices and high costs, Poland’s coal mines are losing a fortune. The government estimates that the sector as a whole lost a net €325 million last year. The main problem is that in the mines in Silesia, where coal has been extracted since the Middle Ages, the cheapest layers of deposits have been tapped out. Miners have to dig ever deeper to get at geologically complex seams, something that demands enormous investments the companies are too cash-strapped to afford. In some mines, the coalfaces are so far from the shafts down which miners travel that they must spend two hours getting there and two hours getting back, leaving only three hours a day for actual mining. The sector’s funk is becoming a political problem for Ewa Kopacz, Donald Tusk’s successor as prime minister, who is trying to lead the ruling Civic Platform Party to its third consecutive victory in parliamentary elections slated for this fall. Kompania Węglowa ran into such deep trouble at the beginning of this year that the government was forced to cobble together a rescue plan. The idea was to close four of the company’s costliest mines, which would have reduced production costs and cut overproduction. POLAND IS NOT RETREATING Instead, unions went on strike and Kopacz balked at becoming Poland’s Maggie Thatcher. Rather than confront the miners, she gave way, agreeing to sell the four worst mines to private investors (who have yet to be found) and put the rest into a new, and hopefully profitable, company. The whole operation is expected to cost at least €575 million and still needs to be approved by the European Commission. Despite coal’s problems, the Polish government continues to battle in Brussels against measures that would reduce its use. After a recent EU summit dedicated to constructing the energy union, Kopacz declared that despite pledges to decarbonize Europe’s economy “Poland is not retreating from coal.” One of the reasons Poland is such a strong advocate of coal is that it provides a measure of energy independence from Russia, its old imperial master. Russia supplies two-thirds of Poland’s natural gas and almost all of its crude oil. But if the country cannot figure out a way to rebuild a competitive coal sector, those hard-won victories in EU energy talks may end up with Polish power stations being fueled at least in part with Russian coal. Health care 9 POLITICO WEDNESDAY, MAY 13, 2015 Drug buying plan may disappoint ISTOCK Limits of joint EU system are laid bare in Luxembourg: a far cry from enthusiasm when scheme was launched By PETER O’DONNELL Hard-pressed state health systems hoping to cut their drug bills through new bulk-buying arrangements may see their hopes dashed. European Commission officials now publicly acknowledge that limits to the so-called joint procurement pact — touted as a way for authorities to stand up to big pharma — may not lead to a much better deal. Twenty member states have signed up and most others are set to join, but the scope is restricted to health care assets to counter cross-border threats. Only Belgium, Croatia, Cyprus, and Malta have tried to use the process so far, with plans to buy protective clothing for handling infectious patients. It’s a far cry from the ambitions of some health ministers, MEPs and officials when the deal was ratified in July 2014. “The Commission can further explore the use of the joint procurement mechanism to obtain better prices from the pharmaceutical industry,” said the European health commissioner at the time, Tonio Borg. Vytenis Andriukaitis, the current health commissioner, has also talked up making wider use of the scheme for medicines as well as vaccines: “This is a good opportunity to move forward using enhanced cooperation, encouraging member states to use procurement in all fields,” he said on taking up his post last November. But Dirk Van Steen, an official in the Commission’s Estonia has been an exception, and its president wants EU neighbors to do more Tiny Estonia is not above some boasting to the rest of Europe when it comes to e-health. President Toomas Hendrik Ilves used a European summit on e-health in Riga this week to attack his neighbors over their failure to seize opportunities in information technology to improve health care. Estonia has been a frontrunner in e-health: nearly all prescriptions are issued electronically, and twothirds of hospitals use e-health technologies in some way. Spending is on the increase: EU governments and health care providers will spend more than €12 billion a year on health IT by related health issues (anti-microbial resistance and healthcareassociated infections related to communicable diseases), and biotoxins or other harmful biological agents not related to communicable diseases.” It makes no mention of treatments for chronic conditions such as hepatitis C or diseases such as cancer — the categories currently posing the toughest financial challenges to states paying for health care. Some non-governmental advocates say the MEPs may have oversold the idea. Yannis Natsis of campaigning group TransAtlantic Consumer Dialogue told POLITICO that the meet- ing, which he attended, had confirmed the limitations of the system. “We didn’t have very high expectations of this scheme from the outset,” he said. But he still believes in the value of such initiatives and the recent Belgian-Dutch plan for joint negotiation of drug prices. “They are steps towards breaking through the secrecy about what prices are being paid in each member state.” Richard Bergström, directorgeneral of Europe’s main drug industry body, EFPIA, said companies are ready to consider a “fundamental rethinking of pricing.” But he insisted that the focus should be on getting medi- They also claim that it could be valuable for the pharmaceutical industry by reducing administrative burdens and costs, providing predictability of turnover and revenues, and improved planning of capacity. Right now, the only other moves beyond procuring protective equipment relate to vaccines. Croatia and Lithuania face imminent shortages of pertussis vaccines and have sought help in procurement, Jean-Luc Sion, an official in the Commission’s health department, told the Luxembourg meeting. He said clarification was needed as to whether the problem lay in production or in difficulties seeking offers of supply. The Commission is mulling whether the joint procurement mechanism can be used for these products. Similarly, Latvia, Lithuania, Cyprus and Estonia face difficulties in acquiring the BCG vaccine, which treats a type of tuberculosis and of which the World Health Organization says there is a shortage of 65 million tons. The Commission has been asked to consider using the joint procurement mechanism here too. The agreement has generated its own complex bureaucracy, with a cascade of steering committees to oversee each stage of a procurement procedure, down to the detailed technical specifications and the criteria for selection — for instance whether to choose on the basis of the lowest price or the best value for money. “We must seize these market opportunities to fulfill a vision for healthcare in the 21st century.” The Commission has been struggling for years to bring greater coherence to EU development of health IT — to potentially drive economic growth, as well as improve individual health and ease strained health care budgets. Greater use of e-health services was pegged as central to the EU’s 2011 directive on crossborder care, helping free movement of patients, and improve access to quality care in remote or underserved areas. The conference is addressing many obstacles identified in recent Commission consultations — notably privacy and security, safety and transparency, interoperability of systems, and web entrepreneurs’ access to the market. It is also exploring how far large-scale deployments could be supported by EU funds from its Connecting Europe Facility that backs new cross-border infrastructure and services. Pēteris Zilgalvis, a senior Commission official with direct responsibility for health IT, who is also in Riga, told POLITICO: “Digital solutions can increase the dynamism of the European economy and deliver benefits to EU citizens.” For him, the conference promises the chance to explore how mobile health and e-health can help EU citizens manage their own health by empowering them, as well “ensuring the sustainability of our health care systems.” But the challenges also emerged clearly from other speakers at the meeting, particularly from health professionals, patient groups and companies. Walter Azori of the European Patients Forum said he backed patient empowerment through IT, but questioned whether Europe was yet able to achieve that. The concept “is still not clearly understood across Europe,” and is even perceived as a threat by some doctors, he said. He said the EU needs a strategy to promote greater commitment from health professionals, education and support for patients, and quality of data to help patients to make informed choices. Paul De Raeve, secretarygeneral of the European Nurses’ Federation, warned against a simplistic top-down approach. There is a role for IT in health, he said, and particularly in ensuring continuity of care. But he added: “The Commission and member states need to talk with stakeholders ... and not about stakeholders.” Discussions on clearing the way for more mobile health applications in Europe provoked concerns in some industry participants. Martin Wrigley of the Application Developers Alliance said progress on agreeing on a data privacy code of conduct was too slow. A Commission working group began last month, but the timeline set is too leisurely for an industry that moves so fast, and risks holding up innovation, he said. Dee O’Sullivan, director of myhealthapps, may have been the most pessimistic. She said the meeting revealed “a disconnect between all stakeholders — patients, doctors, app developers, industry” on mobile health, with disagreements over how and where health apps should be certified or regulated, and “a lack of understanding of each group’s key needs and problems.” THE CHALLENGES E-health success elusive in most of Europe By PETER O’DONNELL VALUABLE TOOL health department, noted the limits at a closed-door meeting in Luxembourg of government and industry officials late last month, according to documents and officials who attended the meeting. He pointed to questions that still need to be answered over how even the current limited scheme might deal with pricing. “Can there be several joint purchase agreements for a given product, clustering member states by purchasing capacity?” he asked, illustrating his question with slides seen by POLITICO, which underline the wide variations between purchasing power across the member states. The practical challenges temper the earlier enthusiasm, typified by Italian Health Minister Beatrice Lorenzini’s proposal, when she was president of the EU health council last September. She called for joint procurement to play a role in “cooperation on prices of health technologies,” amid repeated calls from MEPs for leveraging drug prices downwards using joint procurement. Officials in Luxembourg outlined the pact’s limits, with detailed references to the underlying legislation. Joint procurement must relate to the advance purchase of medical countermeasures for serious cross-border threats to health — and these must be hazards that can spread across national borders, said officials. The legislation specifies “communicable diseases, 2018, according to industry estimates. But the benefits outside a few countries are hard to find. Ilves touted Estonia as a model of how IT in preventive and treatment services can “improve both the welfare of patients and the health care system in general.” But more widely across Europe, “health care is lagging ten years behind when compared to other industries,” he said. The conference comes a week after the EU released its digital single market strategy, which stressed that “digital technologies for health and care offer opportunities for citizens, health and care providers and industry.” Health commissioner Vytenis Andriukaitis told the meeting: cines to patients, and that cutting prices should not be an end in itself. Pharmaceutical companies want to retain the right to negotiate prices in confidence, he said. Commission officials still defend the agreement as progress. They suggest that participating member states might gain better access to the market, more equitable access to pandemic vaccines and some treatments, improved security of supply, and more balanced prices. 10 DC Digest POLITICO WEDNESDAY, MAY 13, 2015 Waiting for Jeb Bush to jump By GLENN THRUSH By the end of last week, almost everyone had jumped into the pool. Almost everyone except John Ellis Bush, who still sits at the water’s edge of the 2016 presidential campaign, suit dry except for the stray splash thrown his way by his jostling Republican rivals Mike Huckabee, Marco Rubio, Ted Cruz and Rand Paul. It wasn’t clear at the time, but is increasingly so now, that Jeb Bush’s decision last December to signal, but not formally announce, his candidacy was a short-term logistical masterstroke befitting his family’s reputation for mastering the mechanics of elections. His undeclared status has freed him to raise what aides are saying will be as much as $100 million from rich patrons and outside groups (the second he files presidential paperwork, he’s prevented from requesting big super political action committee checks), and it has temporarily shielded him from being the target of shots many of his would-be opponents are leveling at Hillary Clinton. (Aside, that is, from lots of hand-wringing about the increasingly hereditary nature of American politics, and mockery of his insistence that he’ll be his “own man” on foreign policy.) MODEL CAMPAIGN This inversion — building a campaign on the back of a super PAC instead of vice versa — is novel and could be a model for the future, but it also puts a lot of pressure on an opaque candidate who publicly has done little more than a set of sporadic, lowoctane speeches with few specifics to offer. Given his fundraising focus, he’s already dogged by the notion, eagerly pushed by his enemies among the party’s tea party hard-liners, that he’s a bankroll in search of a soul. Which is why we’ll see the media coverage of the Republican presidential race coalesce, and soon, around a single question: Is Bush actually the front-runner, or just a guy with a lot of money trying to buy the nomination? A dozen or so Republican operatives and donors I spoke with last week, most of them open to a Bush candidacy, didn’t have a clue how that question will ultimately be answered, but it’s a decisive one, and they are antsy to find out. The early polls, which show Jeb getting clobbered in Iowa, barely ahead — if at all — in New Hampshire, and trading a narrow lead nationally with his fellow Floridian Marco Rubio, are predicting a ferociously competitive campaign. But who knows how it will play out when Bush actually announces? “A month ago, the whole story was that Hillary was rusty, that she hadn’t been out there doing anything,” said a veteran GOP operative who worked on one of George W. Bush’s campaigns. “Well, she’s been out there taking hits for a month. Jeb hasn’t. It’s time to get this thing going.” “Bush’s campaign is slowly, inevitably pushing him into the water, nudging him into more highstakes situations” Nicolle Wallace, a White House communications director to George W. Bush who started her political life as a 25-year-old adviser to Jeb Bush in Florida, also sees undeniable parallels with the Democrats’ presumptive nominee, Hillary Clinton. “I think some of their strengths are parallel. Some of their strengths are on the policy side, not the retail political side. I think some of their strengths are in a room, not on a stage,” she told me during a taping of last week’s POLITICO podcast. “I think they have some of the same weaknesses, too. They’re both in a constituent-free zone. Neither of them represents anybody right now. Neither of them is advocating on anyone’s behalf, except their own campaigns. And I think it’s awkward, frankly, for both of them.” Bush’s campaign is slowly, inevitably pushing him into the water, nudging him into more Jeb Bush leaps on stage at the First In The Nation Republican Leadership Summit. GETTY high-stakes situations ahead of a formal announcement that could come as early as mid-June. People close to the campaign tell me he plans to do some press-the-flesh retail campaigning on a trip to New Hampshire in late May — and his Liberty University commencement address on Saturday was a risky operation, considering the rock-star reception conservative fire breather Ted Cruz received at the Jerry Falwell-founded school when he announced his candidacy there in March. Bush, a midlife convert to Roman Catholicism, used the speech to emphasize that he is a man of deep belief — a key signifier in a party that values faith. But he also sought to differentiate himself from other candidates who more explicitly bring their religious fervor to their politics, namely Huckabee and Cruz, warning against feeding into Democratic arguments that the GOP is turning into a party of religious rigidity. “The mistake is to confuse points of theology with moral principles that are knowable to reason as well as by faith,” Bush said, pointedly refusing to bash the move toward legalizing same-sex marriage that Cruz has embraced as an affront to his faith. “And this confusion is all part of a false narrative that casts religious Americans as intolerant scolds, running around trying to impose their views on everyone.” That Bush is increasingly, inevitably, becoming a focal point of 2016 came as welcome news in the utilitarian, poorly air-conditioned warren of re-purposed bank back offices that serves as Hillary Clinton’s headquarters in Brooklyn. There was a clear feeling, for the first time, among Clinton’s inner circle last week that she won’t be alone in the firing line for long. “The whole dynamic of the race changes when the Republicans start attacking each other, when Jeb gets in,” Tom Nides, a former Clinton State Department aide close to the campaign, told me. This article was first published on POLITICO.com. New Hampshire poll shows muddled GOP field By STEVEN SHEPARD A new poll portrays the Republican presidential primary field as a muddled mess in the first-inthe-nation primary state of New Hampshire, with the four leading candidates separated by only one percentage point. The survey, conducted by the bipartisan, DC-based firm Purple Insights for Saint Anselm College and Bloomberg News, shows Kentucky Sen. Rand Paul and Wisconsin Gov. Scott Walker atop the field, each with 12 percent. Right on their heels are former Florida Gov. Jeb Bush and Florida Sen. Marco Rubio, who are at 11 percent. While the top four candidates are the only ones to earn doubledigit support, a number of other contenders (and possible contenders) follow close behind. Selfpromoting real-estate magnate Donald Trump, who is again toying with a presidential bid, earns 8 percent of the vote. Embattled New Jersey Gov. Chris Christie is at seven percent, and Texas Sen. Ted Cruz is at six percent. Rounding out the bottom, retired neurosurgeon Ben Carson is at five percent, former Arkansas Gov. Mike Huckabee is backed by four percent, and former Hewlett-Packard CEO Carly Fiorina is at three percent. A handful of other candidates — Louisiana Gov. Bobby Jindal, former Texas Gov. Rick Perry, South Carolina Sen. Lindsey Graham, former Pennsylvania Sen. Rick Santorum and Ohio Gov. John Kasich — each got one percent. There is greater clarity in the Democratic primary, where former Secretary of State Hillary Clinton remains the prohibitive favorite. But Vermont Sen. Bernie Sanders is far and away the leading Clinton alternative, earning more than three times the support of any other potential rival to Clinton, including Vice President Joe Biden. The poll shows Clinton with an overwhelming 62 percent of the vote. But Sanders earns 18 percent, outpacing Biden, who’s at five percent; former Maryland Gov. Martin O’Malley, at three percent; and former Rhode Island Gov. Lincoln Chafee and former Virginia Sen. Jim Webb, both at one percent. New Hampshire will also be a contested, if small-haul, swing state. In the battle for the Granite State’s four electoral votes, Clinton posts 2-point leads over Bush and Rubio, three points over Paul and six points over Walker. The poll was conducted May 2-6. For the general election, 500 likely voters were surveyed, for a margin of error of plus or minus 4.4 percentage points. There were oversamples of 400 likely voters for both primary fields; results for each party carry margins of error of plus or minus 4.9 percentage points. This article was first published on POLITICO.com. 12 Forum POLITICO WEDNESDAY, MAY 13, 2015 MARE NOSTRUM S The staggering challenge migrants face begins in the scorching depths of the Sahel. 17-year-old Courage Odafeh Loren, who fled fighting in Nigeria and Libya, tells her story By BOŠTJAN VIDEMŠEK SIRACUSA, Sicily — Sometimes the name says it all, and 17-yearold Courage Odafeh Loren from the Edo state in Nigeria couldn’t have a more appropriate one. Indeed, you’d have to look far and wide to find a braver, more courageous human being — or a clearer example of the human toll that Europe’s immigration crisis has taken on desperate refugees from Africa. Two years ago, Courage decided to join her mother, who had migrated to Libya a few years before the outbreak of first the civil war — and before the international military intervention that turned the country into a failed state. Just fifteen at the time, Courage was living in Nigeria with her aunt, who had taken her out of school, imprisoned her in her house and made her a virtual slave. She couldn’t take that any more, so she decided to contact her mother in Tripoli. She could not rely on her father, since she had grown up without one. * With some savings at her disposal, Courage’s mother hired a Nigerian woman to serve as her daughter’s protector on the long and arduous smuggler’s route leading from Nigeria through Niger and eventually into southern Libya, where borders are virtually non-existent. Both in the Libyan desert and in the no man’s land of Niger, there is no such thing as federal authority. These dark and perilous places are controlled by rival militias, and the organized criminal alliances that specialize in smuggling people, drugs and guns through the Sahel, one of the hottest and driest places on the globe. For some time, smuggling people has been the most profitable venture of all — and little wonder, since the entire region has been consumed by chaos, while legions of desperate men and women are also fleeing north from countries like Somalia, Ethiopia and Eritrea in the Sub-Sahara and the Horn of Africa. It took Courage a month and a half to get from Edo to the Libyan capital. The woman her mother hired proved a resourceful and steadfast ally. Yet on a journey as rough and hazardous as this, women are always a weak and open target. On a daily basis, the deserts of the Sahel still produce gruesome tales of mass rape, torture and people disappearing without a trace. This part of the refugees’ odyssey is often over- looked, yet the staggering challenge faced by the refugees — so callously abetted by the European Union’s inaction — normally begins in the scorching depths of the Sahel. Courage was lucky. All the potential sexual predators she encountered on her journey somehow opted to leave her alone. Her protector, A Nigerian compatriot named Vivian proved to be a very powerful, influential one. In the end, Courage’s safe passage was the exception that proves the rule — a minor miracle. “I was not afraid — not at all,” she told me in Siracusa, on the island of Sicily, where she is now living under the twin protections of Italian immigration law — and Vivian. “Yes, it was hard. It was so hot! But I was looking forward to seeing my mother after such a long time. It was all I could think of. It was what kept me going. I couldn’t wait to leave Nigeria behind.” When Courage reached Tripoli, the city was in turmoil. Powerless Libyan authorities had little control over a country that had been taken over by tribal militias and crime syndicates in the wake of Colonel Muammar Gaddafi’s demise. For four years, these groups had been grappling for control of practically everything, from oil to water, from gun-running to people trafficking. Today the center of some of the most sordid forms of disaster capitalism. It didn’t take long for Courage to grasp the full precariousness of her situation. “When I got to Libya, I was very happy,” she said. “All I cared about was getting together with my mother again. But the situation was far from safe… My mother was worried about me, so very worried.” * Sitting next to me, drinking a cup of coffee that had been sweetened several times, Courage spoke haltingly. At times, just when I got the impression she was about to open up, something seemed to force her to cut herself off again, barricading herself behind a brave smile. Courage knew all too well that in Tripoli, sexual violence against women — especially against dark-skinned refugees and immigrants — was the norm. So she wisely spent all her time behind the four walls of her mother’s rented flat. The fighting in the streets was only getting worse. Her mother decided to send her teenage daughter off to Europe, A girl named Courage Italian officials greet incoming coast guard vessels carrying rescued migrants. JURE ERŽEN/DELO no matter the cost. Their first choice destination was Italy, so they got in touch with some seemingly reliable traffickers. In Libya, this was far from difficult, since the traffickers’ lavish lifestyle made them all but impossible to miss. And so it was that on April 9, 2014, after a little less than seven months of hiding in her mother’s apartment, the sixteen-year-old Courage embarked on a supposedly sturdy old boat manned by several supposedly reliable characters. The destination was Lampedusa — the Italian islet that, due to its proximity to North Africa, has become the traffickers’ favourite point of entry. Courage, who even now looks at least three years younger than her actual age, was the only female passenger among the 150 souls bound for Europe, all making their last desperate bid for a better life. This time, she cast off without a protector, alone and chillingly vulnerable. This time, she recalled wistfully during our conversation, she had only God to turn to in times of trouble. * “We sailed off around two in the morning,” she remembered. “Apart from the Nigerians, there were many people from Somalia and Eritrea on the boat, and some Egyptians as well. I remember it was very dark. I was so terribly afraid … I prayed all the time. This was my first time on a boat — my first time at sea, actually. And it was such a small boat, you know. We were pressed against each other, it was like being stuffed inside a can of sardines. We were out in the open, but it was still so hard, trying to get some air.” Courage’s ocean crossing was typical of the brutal passage that has claimed over a thou- POLITICO WEDNESDAY, MAY 13, 2015 13 Courage Odafeh Loren. JURE ERŽEN/DELO shy and reserved girl instantly gave way to someone very different. Her thespian aspirations, it turned out, were far from pure fancy. On May 15, she is to make her debut at the local theatre in Siracusa, which is staging a production on the vagaries of the immigrant life. The very mention of the play made Courage’s eyes dance with glee. * The small ship that brought Courage to Europe — hardly bigger than a boat, really — soon got into trouble. The traffickers didn’t find it necessary to furnish the ship with a captain, only with someone able to man the engine and keep an eye on the basic course. First the compass broke down, then the engine developed an ominous cough. For refugees like Courage, who book passage through the black market, this is far from an uncommon occurrence, and when the engine sputters out for good, the passengers are usually left at the mercy of the Italian or Maltese coast guard. Yet those organizations are so strapped and understaffed that, despite their best efforts, they are unable to save everyone in need. * Refugees arrive at the Sicilian port of Augusta. JURE ERŽEN/DELO sand lives in the last four weeks alone — and nearly 23,000 since the turn of the century. Hers is a tale of bitter struggle, yet as I sat talking with her, her tone never wavered. She spoke quietly, dispassionately, and at times seemed almost unable to finish her sentences. Every word was an effort, and sometimes she had to take in an extra lungful of air just to muster the will to keep going. At a certain point, she simply decided to leave the rest of the tale to Vivian, her Nigerian-Italian guardian angel who had arrived in Europe in the 1990s. As Vivian summed up the unending bureaucratic battle her young ward had faced upon reaching the European Union, Courage kept fiddling with her fashionable sunglasses. At such moments, the glaze of utter alienation in her eyes could still give way to flashes of childish vivacity, even if only for a moment or two. “Someday I am going to be an actress,” she said at one point when I pressed for details of her ordeal. “In movies or in the theatre, I don’t really care. Oh, and I’m also very much into music.” The moment Courage got talking about her future acting career, she was transformed. The This has been especially true over the last few months, following the demise of the Mare Nostrum operation — an efficient rescues program that should have been a beacon for EU bureaucrats. But since continuing the program would cost more money, EU officials simply scrapped it, effectively turning the Mediterranean into a mass grave, with hardly a flicker of hope for real change anytime soon. The situation is worsening. At the moment, as many as 200, 000 men and women are waiting along the shores of North Africa and the Middle East — waiting for safe passage to the ever more elusive European fortress. Most of the would-be refugees are in Libya. While these poor desperate souls are drowning en masse, an increasingly racist and xenophobic Europe is putting up more barriers and spouting “us v. them” rhetoric. * “For some time, we sailed in a circle,” Courage said “No one knew where we were or where we needed to be. They told us we got lost. That someone was bound to come pick us up. This was after we’d already spent two days at sea. We had no food or water. I was badly afraid for my life. I couldn’t stop thinking about death. All I could do was pray.” After another day of waiting, the 150 despairing souls were rescued by an Italian coast guard vessel, part of the Mare Nostrum operation. But instead of taking the refugees to their original destination on Lampedusa, the Italian sailors took them to Augusta, on the eastern shore of Sicily. Before they reached shore, Courage spent another three days on the military ship, as it scoured the sea in search of other refugees. “They treated us well,” she remembered. “They gave us both food and water. And I was finally able to get some sleep. When we landed in Sicily, they put us on a bus and took us to some abandoned old building in Augusta. I spent about a week there. All the time I wanted to call my mother, but they wouldn’t let me. Not even once. They never told me why.” After a week, Vivian — who is employed by one of the immigration centres in Siracusa — arrived at the facility, accompanied by a couple of Italian humanitarian workers and activists, who had learned that an underage Nigerian girl was also residing at the center. One of the humanitar- should be, Vivian told me. Then Courage’s life was upended by a single phone call. Last August, word came from Libya that her mother had died in bomb blast so powerful that no body remained for identification. Fighting between militas smashed Courage’s world was to pieces, and she was utterly alone. According to Vivian, she became hopelessly alienated. And so Vivian decided to take her under her wing. “There was no other way,” Vivian explained. Together with her husband, who works as a lighting technician in Siracusa’s renowned Greek theatre, they did everything they could to help their ward get back on her feet. This June, when Courage celebrates her 18th birthday, she will be granted official permission to stay in Italy with all the ben- EU UNVEILS MIGRATION AGENDA The European Commission will unveil Wednesday the details of its long awaited agenda on migration. Expectations are high after the death last month of 800 migrants in a boat disaster off the coast of Sicily. Commission President JeanClaude Juncker has made clear, during a debate in the European Parliament, his ambitions: “If we don’t open the door, even partly, you can’t act surprised when the unfortunate from across the planet break in through the window” — and he has the backing of the German government. These are the main points on the migration policy as debated so far: A quota system: Juncker suggested binding quota for taking in refugees across all 28 EU member countries. Under the proposal, the distribution ian workers, Carla Trommino, made sure the Italian authorities placed Courage under so-called humanitarian protection, since she had entered the country underage and unaccompanied, and her repatriation was not possible. As soon as she was permitted, Courage let her mother know she was alive and “safe”. For a while she lived with some nuns in one of Siracusa’s many churches, where refugees and immigrants can still get help. Then she took up residence with an Italian family back in Augusta in a sort of informal foster care arrangement. She started going to the local school. She was quick to learn basic Italian, and she is now proud to report she can also speak some English, French and Spanish. She says she only has problems with math. But Courage’s stay with the Italian foster family lasted just two months. They argued and fought, and nothing was as it of migrants among EU states would use a formula that takes into account, the strength of the economy and unemployment rates in each country, the size of the population as well as the number of refugees they have taken in so far. A resettlement program: According to the drafts that POLITICO has seen, the Commission will propose also an EU-wide resettlement program to take up to 20,000 refugees a year from camps outside the Union (for example in Lebanon or Turkey). The exact target should be proposed by the end of May and be funded with €50 million in 2015-2016. A Blue Card: for highly skilled migrants, similar to the US Green Card program. Jacopo Barigazzi efits that entails, beginning with health and social insurance. * “It’s hard,” Courage told me. “My wish is to stay living here in Italy. I have nowhere else to go. There is no one for me back in Nigeria. I don’t want to go back. I barely even follow the news about what’s going on there. I want to make friends here in Italy. But I find it very hard to make a connection. I go to school in Augusta, while I live all the way back in Siracusa. I don’t get to meet many new people. I hope things get better once I join the drama class. I hear some people there are older than me. “But then so what,” she said. “ I did say I wanted to be an actress, didn’t I?” Boštjan Videmšek is a foreign correspondent at the Slovenian daily DELO and author of 21st Century Conflicts: Remnants of War(s). 14 Forum POLITICO WEDNESDAY, MAY 13, 2015 ROYAL REALM One’s never been less inclined to retire Never was there a person more wedded to the duties of her office than Her Majesty the Queen. She is even more so after the hurricane of the general elections I By THOMAS KIELINGER It was Shakespeare who reminded us what could happen in the lovely month of May when all our senses turn to blossom and beauty, growth and glory. “Rough winds do shake the darling buds of May,” he averred in one of his most famous sonnets, reminding us of what unexpected weather nature might have in store when we are least prepared for it. On May 7 Great Britain’s “rough winds” turned into a gale force of change. The general election was a tornado that all but devoured the Labour party in Scotland and reduced the Liberal Democrats to a rump party of no more than eight MPs. Out of the destruction emerged a new political force to reckon with, the Scottish Nationalist Party (SNP). Having grown almost overnight into the Incredible Hulk of the British polity, the SNP is now the third-largest party in the House of Commons, with 56 members — 50 more than it had in the previous government. But wait a minute, was there not another major event preceding May 7 — didn’t something happen on May 3? Indeed it did, and what a welcome antidote it provided to the gloom and doom of the election campaign. Another royal baby was born, the second child of the Duke and Duchess of Cambridge and the fifth great-grandchild of Her Majesty, the Queen. Baby Charlotte held Great Britain spellbound, causing uniform excitement. In a country ridden with centrifugal forces that call into question the very foundation of the United Kingdom, the monarchy holds the divers members of the British Isles together. In her 90th year the Queen is at the pinnacle of her reputation. Love, respect and awe envelop this most iconic of public figures. Come September 10, she will have surpassed Queen Victoria as the longest-reigning monarch in the history of Great Britain, with exactly 63 years, seven months and four days on the throne. One of the most astonishing phenomena of contemporary Britain is the resurgence of the monarchic idea. Twenty-five Queen Elizabeth II will become the longest-reigning monarch in British history on September 10, 2015. EPA years ago, when the appeal of the House of Windsor languished at an historic low following an apparently endless series of scandals, who would have put their money on the safe future of the British monarchy? Today you would have to be a fool or an unreconstructed anti-monarchist to harbor such doubts. What turned it around for the Windsors was the luck of the order of succession falling to the Queen’s grandchild William. By marrying a commoner from an unsullied middle-class background the Duke of Cambridge added an element of normalcy to an almost dysfunctional royal family. In addition, Catherine (“Kate”) Middleton delighted everybody with her charm and good looks. Here was and unforeseeable in the Queen’s “annus horribilis” of 1992. Now she is reaping the reward for her longevity and constancy of service. Nothing has ever occupied English kings and queens more than making sure that the institution they embody is made immune against the slings and arrows of outrageous instability. At a time when public confidence in many traditional pillars of society — in banks, media, politicians, and the church — has dramatically eroded, the Crown emerges as an island of calm in stormy waters. It is no surprise that since her diamond jubilee Elizabeth II, while visibly older today, exudes almost preternatural serenity and composure. The same The Duke and Duchess of Cambridge present baby Charlotte Elizabeth Diana to the world. EPA a young couple with the ability to kindle a new sense of affection amongst their contemporaries for royals and the monarchy. More importantly, since the birth of Prince George, the Queen has been able to look forward to a stable succession of three generations — Charles, William, George. It’s almost as if posterity has appeared in the here and now. Such prospects were totally unforeseen goes for her husband, the Duke of Edinburgh, who will be 94 in June. British doggedness and the “keep calm and carry on” attitude may stand the Queen in good stead as she surveys her realm today. In Scotland, the allure of nationalism has raised its head: “The lion has roared,” ex-First Minister Alex Salmond asserted when the final tally of 56 SNP members of the House of Commons emerged. Elizabeth II did not originally warm to the idea of devolution. In the year of her Silver Jubilee, 1977, when this issue was muted she received a group of parliamentarians and reminded them confidentially — a confidentiality soon broken — that she was crowned “queen of the United Kingdom of Great Britain and Northern Ireland.” Never mind that the Scots keep repeating that even as a sovereign country they would prefer the Queen as their head of state. That would be no consolation for losing them as part of the United Kingdom. Given so much uncertainty it is even more unlikely that the Queen will ever abdicate. Abdication is an absolute anathema to her ever since she lived through the turmoil caused by the abdication of her uncle, King Edward VIII, in 1936. Never was there a person more wedded to the duties of her office than the current queen, who has been “current” since 1952. Nor is there any thought of letting her retire, allowing Charles to take over as “Regent.” The Queen’s programme of engagements ahead of her 90th birthday in April next year will undoubtedly be cut back so that Charles and Camilla can share more of the daily burden. After the end-of-June state visit to Germany the new softer regime will undoubtedly kick in. But she will not let go of the reins in the business of reigning. Scotland, so she will tell David Cameron, must continue to be part of the realm. Try your best. She breathed a sigh of relief when the referendum for Scottish independence failed last year. She would be even more relieved if the threat of a break-up of the Union could be lifted once and for all. But panic she will not. Panic is not part of the Elizabeth II the world knows and holds dear. Besides, if longevity teaches you anything it is calmness in adversity, and the conviction that things rarely turn out as predicted. The change she has witnessed in public perception of the monarchy has been dramatic, making her appear unruffled amidst all the doomsayers. She probably doesn’t see the end of the United Kingdom heralded by the simple advent of 56 SNP members of parliament in Westminster. As one former Tory leader told me, the SNP’s bluff will be called — they have to be careful not to overplay their hand. Could a federal solution for Britain be the answer? Compared to Scotland, the question of UK-EU relations ranks somewhat lower down the ladder of the Queen’s priorities. Not because she is not intrinsically aware of the dynastic ties between herself and Prince Philip with the continent, or of the value of a functioning European Union. Rather, like many of her subjects she is likely to suspend judgment about what the future might hold for Britain inside or outside the community. She has visited the European Commission in Brussels only once. Closer to her heart is the Commonwealth and, of course, the unity of her realm at home. The monarchy has long been part of Britain’s constitutional reality. As a symbol of constitutional permanence above the ebb and flow of party politics it allows the British to rest assured that not all is lost in their country. The Queen admirably personifies continuity and stability. Let the new government begin its arduous journey, while the Queen, in the words of the national anthem, may “reign happy and glorious” for many a month yet. Thomas Kielinger has been a London correspondent for Die Welt since 1998 and is the author of the biography “Elizabeth II: das Leben der Queen.” 16 Forum POLITICO WEDNESDAY, MAY 13, 2015 POWER STRUGGLE An aerial view of the landscape of Svalbard. EPA/BERIT ROALD The tip of the iceberg Arctic island Svalbard is at the center of a new global power race – for influence, and oil S By ELISABETH BRAW Svalbard isn’t a convenient location. With its 2,500-odd residents, living in towns accessible only by plane, boat or snowmobile, this Arctic archipelago is Norway’s northernmost outpost of human habitation — halfway between the mainland and the North Pole. But when Deputy Prime Minister Dmitry Rogozin of Russia provocatively defied the EU’s travel ban on Russian officials by descending on Svalbard last month, he didn’t choose his destination at random. In fact, Svalbard is at the center of a new global power race — for influence, and oil. “The Russians are trying to find ways of increasing their presence on Svalbard,” says Katarzyna Zysk, an associate professor at the Norwegian Defense University College. Officially, some 500 Russians live in Barentsburg, the predominantly Russian town that’s also home to a Russian-owned coal mine, but observers say it looks deserted. Besides, the mine is highly unprofitable. Moscow’s unorthodox solution is tourism. Last month the coal company Trust Arktikugol, which operates the mine, registered itself as a tourism company. And Russia opened a tourist camp in Longyearbyen, Svalbard’s capital, last year. “Russia has plenty of Arctic towns to promote as a tourist destination, so in focusing specifically on Svalbard it’s making a political point,” notes Pavel Baev, an ex-Soviet defense expert who now serves as research professor at the Peace Research Institute Oslo. Some 100 Russian tourists visited Svalbard last year. But in this unlikely arena of international power politics, Russia has a new competitor: China, which first opened an Arctic research station on Svalbard eleven years ago. Now, Norwegian media report, a Chinese buyer is interested in purchasing a large swath of land outside Longyearbyen currently owned by a local family. With over 99 percent of Svalbard owned by Norwegian government companies or organisations in which it has a controlling stake, this is an exceptional opportunity to park oneself in a strategic location. TESTING THE WATERS “Nobody is sure what’s going on,” reports Arild Moe, a senior research fellow at the Fridtjof Nansen Institute, which specialises in Arctic affairs. “Is the buyer a private investor? Is it the Chinese government? Or is it just a ploy by the owner to raise the price?” In any event, China’s new attention to Svalbard isn’t sitting well with Russia. “Its position is that the Arctic belongs to the Arctic nations, but China feels it’s open to everyone,” notes Baev. China’s keen interest makes perfect sense. The breathtakingly beautiful archipelago’s unique legal status has made it a perfect stage for global power-wrangling. In 1920 Norway, Sweden, Denmark, the United Kingdom, Japan, the Netherlands, Italy, France and the United States signed a treaty that gave Norway sovereignty over the islands but granted every country that signed the treaty unfettered access to them. A colourful mix — currently 42 nations, including Russia and Monaco — have signed the trea- ty, and for the past nine decades, Norwegians, Russians and a scattering of Swedes and other nationals have lived in civil coexistence here. The Norwegians mostly work for the state-owned mining company or in research or tourism, while Russia operates its own loss-leading coal mine. Germany, Britain, Poland, Japan and Italy, too, have research stations in Svalbard. Greenland the shelf, the shelf’s ownership has taken on sudden significance. “There are many areas around Svalbard that are ice-free year round, and climate change will increase that,” notes Moe. Norway claims it owns Svalbard’s continental shelf, while Russia argues that Svalbard as a unique legal entity has its own continental shelf. “Sweden prefers to back Norway’s interpretation because imagine what would happen if every one of the signatories would send ships to drill for oil off Svalbard,” observes Bo Theutenberg, a retired Swedish diplomat who served as the Swedish foreign ministry’s top legal official. “It would be complete chaos.” DISPLEASURE REGISTERED The World War I-era diplomats who signed the Svalbard Treaty had no way of predicting that climate change would cause the Arctic ice to start melting, thereby making the Arctic Ocean more attractive for shipping and oil exploration, or indeed that there was oil off the Norwegian coast at all. According to US government estimates, the Arctic holds 20 percent of the world’s undiscovered oil and gas resources. But the otherwise meticulous Svalbard Treaty predates such knowledge, and makes no mention of the continental shelf, the seabed protruding from any country. With oil available underneath But while China’s presence on Svalbard irks Russia, Moscow’s main adversary right now is Norway itself. The Svalbard Treaty forbids a permanent military presence on the archipelago, but according to Russia, Norway, a NATO member, has secretly placed equipment suitable for military use on the islands. According to research by Zysk of the Norwegian Defense University, Russia has made a host of claims: that satellites belonging to Norway’s stateowned telecommunication company, Telenor, can be used to transmit military signals; that Norway’s atmospheretracking radar station Eisat and the weather rocket test site “Svalbard is extremely vulnerable, and Putin’s Russia is very good at exploiting any vulnerability it can find.” Pavel Baev Peace Research Institute Oslo SvalRak can be used to track ballistic missiles from Russia’s Northern Fleet; and that the communications line between Longyearbyen and the town of Ny-Ålesund is compatible with NATO systems. A spokesman for Norway’s Foreign Ministry calls the claims unfounded, and Niklas Granholm, an Arctic expert at FOI, says he’s seen no evidence supporting them. “In the past, Russia has used claims of this nature in order to justify its own actions: ‘Look what the others are doing. We have a right to do the same,’” he explains. Until now, Norway has been reluctant to stand up to its Svalbard challengers. But faced with Deputy Prime Minister Rogozin’s outspoken scorn, shared via Twitter, the Norwegian foreign ministry had no choice but to register its displeasure to Russia’s ambassador to Oslo. But Rogozin’s mission (conducted by charter plane, perhaps in a nod to potential tourists) may have had the opposite effect from the one he intended. “Svalbard is extremely vulnerable, and Putin’s Russia is very good at exploiting any vulnerability it can find”, says Baev. “Rogozin has brought Svalbard’s situation to the attention of the general public in Norway.” That’s putting it mildly. “The Norwegian public was quite surprised, and even shocked, when they realised that the Russians were using Svalbard as a part of their hostile rhetoric toward neighbouring countries,” explains Trine Eilertsen, news editor at the daily Aftenposten. “This is an arena where we’ve developed a fairly good relationship and cooperation with Russia.” Elisabeth Braw is a correspondent for Newsweek, which she joined following a fellowship at the University of Oxford. 18 Opinion POLITICO WEDNESDAY, MAY 13, 2015 Lessons to learn from the US on cyber security Europe would be foolish not to follow the example of the world’s cyberspace leader BY JARNO LIMNÉLL T he United States Department of Defense released a new cyber strategy on April 23, revealing how the US views cybersecurity in the postSnowden era. One trend is immediately clear: The strategic use of cyberspace to pursue political goals and seek geostrategic advantage is rapidly increasing in today’s world. The new cyberstrategy represents a big step forward in the global cyber policy and military debate. It is far more comprehensive and transparent than its predecessor, which debuted in 2011. The world’s most technologically advanced nation wants to be more transparent about its military doctrine, policy, roles, and missions in cyberspace, which makes the strategy interesting to read and evaluate — outside of the US. The US is ahead of Europe when it comes to integrating cybersecurity into its foreign and security policies. Europe would be foolish not to follow and learn from its example. As with most security issues, there are signs that in cybersecurity the default behavior for most European countries seems to be to follow Hard drives can be vulnerable to low and moderate level cyber attacks. ISTOCK cybersecurity is more holistic and strategic than ever before. The US intelligence community’s annual threat assessment once again identified cyberattacks as the most serious threat to national security. The same IN THE LOOP New episodes of IN THE LOOP in English are available on POLITICO.eu every Friday POLITICO’s weekly podcast covers the latest news and debates shaping politics in the European Union. This Wednesday’s Italian language version features POLITICO reporters James Panichi, Sara Stefanini and Florian Eder, managing editor of expansion, on migration, energy and Dalli-gate. the US approach. For the US, the biggest challenges at the moment are: updating all legal frameworks, strengthening cyber rules of engagement for the military, building cyber deterrents, and clarifying the roles and cooperation of the government and private sector. Europeans can learn from five main take-aways from the US’s new cyber strategy. 1) Cybersecurity must be taken more seriously and planned strategically in Europe. The US’s strategy emphasis is not present in European countries, even though US Director of National Intelligence James Clapper has estimated that the Russian cyber threat is more severe than was previously thought. 2) Europeans have been aware for many years that the US is worried about a “cyber Pearl Harbor” or “cyber 9/11” that would cause physical destruction and loss of life. But cybersecurity is rarely discussed in those terms on the Continent. The new US cyber strategy contains no “cyber 9/11” alarmism. Europeans should take heed of US estimations that cyber attacks will focus on low and moderate levels. These consist primarily of cyber espionage, information operations, denial of services and degradation of information integrity. These are not dramatic attacks, but rather longer-term threats that aim to influence the target country’s economic competitiveness or social mood. 3) The digital domain has become an arena where strategic advantage can be won or lost, the latter being more likely without serious indigenous cyber capabilities. The new US strategy is the first public indicator that the US plans to use cyberwarfare in conflict. This means that Europe must also place more emphasis on offensive cyber capabilities, which are increasingly becoming the norm. In most European countries, it is not popular to publicly discuss offensive cyber weaponry. But it is necessary to explain the necessity of offensive cyber capabilities to the general public. Increased transparency with regard to offensive weapons requires that cyber command structures must be made clear; the US strategy clearly stipulates when and by whom they should be used. The guidelines also mean that the speed and significance of the digital arms race will accelerate. 4) US cyber strategy can be understood as a strategy of cyber deterrence. It emphasizes the US’s capability to identify cyber attackers, the creation of well-resourced cyber force, and readiness to punish attackers in cyberspace. The US hopes to send a clear message: Don’t mess with us in the digital domain. Historically deterrence has required three elements: attribution, signaling, and credibility. These are at the Europeans should pay attention to US estimations that cyber attacks will be focused more at low and moderate levels. heart of the new US cyber strategy. 5) But even though the US is the most advanced country in the world when it comes to cyber, its new cyber strategy emphasizes that cybersecurity is ultimately a team sport. No one can succeed by themselves. Governments need to cooperate with the private sector and to practice basic cyber-hygiene, the most cost-effective way to increase cyber security. International cooperation is essential, and Europe is a key partner for the US. Most importantly, the new US cyber strategy emphasizes that we have to stay alert to activity in the digital domain. Nation-states, non-state actors, as well as skilled terrorist groups and individuals are all players in the digital domain, and their operations are becoming increasingly sophisticated. European nations should take a queue from US Defense Secretary Ashton Carter, who, when presenting the new cyber strategy, cautioned, “In cyber I worry about what we don’t know.” Jarno Limnéll is a professor of cybersecurity at Finland’s Aalto University and VP of cybersecurity in Insta DefSec Ltd. Opinion BY MIKHEIL SAAKASHVILI P ost-Maidan Ukraine is at war. Not only against Russian invaders, but more generally against sovietism. This war has a military front in the East, but as important is the political, economic, social frontline in the rest of the country. Resisting the invaders and reforming the nation are two fronts of a same fight: the struggle for the emergence of a new, democratic, European Ukraine. While receiving the chairmen of the Council of the EU POLITICO WEDNESDAY, MAY 13, 2015 Ukraine has huge human potential, but who would invest in a war torn country that does everything to discourage you from investing? Licenses and permits are going to be erased and reshaped according to European standards. First steps had already been taken by the government, with the ministries of economy and justice scrapping a number of required licenses and permits, but it is only the beginning of the process and a vast amount of work still needs to be done. of Ukrainian bureaucrats will be replaced by a young, dynamic, well-paid and clean public service. “Public service” is the key word here and implies a mental revolution: Bureaucrats have to serve the public and not enslave it. DEOLIGARCHIZATION Oligarchs are the pleas of a post-Soviet system. Oligarchy is the main enemy of democracy, liberalism, and pro-market reforms. In a nutshell, why did Poland succeed in the 90s and Ukraine for 20 years and this time has come to an end. New laws will be passed to separate business interests from politics and anti-monopolistic regulations will be enforced. Independence from Moscow and integration into the Euro-Atlantic space will never be achieved unless there is a radical change in the socio-economic structures in Ukraine. Western decision makers should have no illusions about it: No matter how much an oligarch spends on PR to convince them that he is pro-European, he will never gracefully accept the 19 tremendous opportunity rather than a threat. The emergence of Ukrainian national identity during the Maidan protests and the war should translate into a less centralized system rather than a more centralized one. A common European and patriotic vision should unite every region, but every region should be allowed to rule itself without having to rely on Kiev to build a road or change the roof on a school premises. From Lviv to Donbass or Odessa, the rule of law is non-negotiable, but local self-governance is the key to economic success and political stability. Every Ukrainian should finally feel they have a stake in the future of their nation. Poroshenko’s EPA/BERND VON JUTRCZENKA and the Commission, Donald Tusk and Jean-Claude Juncker, for a key summit in Kiev, President Poroshenko announced an ambitious plan, which he summed up as the Four Ds of a new Ukraine: deregulation, debureaucratization, deoligarchization, decentralization. DEREGULATION Overregulation is an essential characteristic of Soviet legacy, a powerful killer for investors and a perpetual generator of corruption. Today, getting a construction permit is an impossible challenge unless you bribe half a dozen useless agencies. According to World Bank Ease of Doing Business Ranking, you need a minimum of 21 days to open a company, you have to go through one of the longest custom procedures in the world and you’re expected to wait an average of 270 days to get electricity to your business. The Ukrainian president outlines the roadmap to “a new, democratic, European Ukraine” DEBUREAUCRATIZATION One of the main features of post-soviet societies is the inability of a plutocratic bureaucracy to take decisions. Built to implement orders coming from Moscow, the Ukrainian bureaucracy was left purposeless in 1991 and started to serve a local elite behaving as if it owned the state. Bureaucracy used to be an instrument to colonize the people. It is built according to the logics of feudalism. Every agency is a separate fiefdom that refuses to share its information with the others. There is no common database or decision-making process. The fiefdoms will be destroyed and the services merged. The Mexican Army did not? Poland had no oligarchs, and Ukraine has plenty of them. Poland built stable, transparent institutions and a booming market economy while Ukraine has an unstable political landscape and a shrinking economy. Oligarchs have turned elections into a farce by dividing candidates among themselves. The very idea of statehood has also become a joke since public servants are on their payroll rather than a budget. Maidan was a revolution for Europe, but also — first and foremost — an anti-oligarchic uprising. Nobody should forget it, or history might repeat itself. Oligarchs have taken advantage of ministers, parliamentarians, policemen, journalists, and tax inspectors DECENTRALIZATION Putin’s primary target in invading Ukraine is to prevent the Maidan revolution from turning into a successful experience of democratic, social and economic reforms on his doorstep. The only way to defeat his neo-imperialistic ambitions is precisely to make sure it happens. President Poroshenko understood it very well, which is why he keeps stressing that the war in the East cannot be a pretext to postpone reforms. Radical changes are the best way to counter Russian aggression. On this front too, Ukraine and its leadership needs Europe’s full support. Ukraine is a very diverse country consisting of many different groups. We should look at this diversity as a Mikheil Saakashvili, the president of Georgia from 2004 to 2013, is chair of the International Advisory Council on Reforms for the president of Ukraine. radical changes involved in European integration, first of which is the equality of all citizens under the law. Recently, Poroshenko started to take realistic steps towards diminishing the influence of oligarchs in the energy sector, the largest black hole of the Ukrainian economy. This has traditionally been a sector, divided between several oligarchs who controlled government subsidies with their political leverage, and refused to pay taxes or allow any competition in the field. 20 News POLITICO WEDNESDAY, MAY 13, 2015 Poland and the Baltics rearm DEFENSE FROM PAGE 1 although a NATO base with German, American and other allied troops permanently located in the region remains the goal. Because Poland has by far the largest military in central Europe — and has a well-justified historic wariness of Russia — in the event of a crisis the hope is that Polish tanks and APCs will rumble north to protect the Baltics. “There are contingency plans. It’s clearly spelled out who does what,” says a Polish foreign ministry official. “These plans will be carried out.” The danger is there. Russian warplanes aggressively approach the airspace of the Baltic countries and are a frequent presence over the Baltic Sea. Russian forces stage war games in the area. Eston Kohver, an Estonian intelligence officer, was kidnapped by the Russians last year and is being held in Moscow despite EU protests. In Russia’s Kaliningrad region, sandwiched between Lithuania and Poland, forces have more than doubled in recent years. There are reports that Russia is again putting nuclear capable Iskander missiles, which have a 500 km range, into the district. The Estonians, for one, are realistic about what kind of firepower a military budget of €412 million (a tiny fraction of Russia’s annual spend of 3.2 trillion rubles, or about €55 billion) can buy. “The deterrence force really needs to be long-term — no one wants to say the p-word, ‘permanent,’ but we can use whatever euphemisms we can find,” said Sven Sakkov, undersecretary for defense policy in Estonia’s Defense Ministry. “I have openly joked that we would like allied forces to be stationed in Estonia eternally, but if that is not possible, permanently is alright.” Until that happens, Estonia is taking matters into its own hands. It is one of a handful of NATO countries to actually follow through on its commitment and spend 2 percent of its GDP FRENCH REGIONS MERGER PANIC: It’s a topsy-turvy world in which even French regional public servants need to start worrying about job security. Yet from January 1, 2016, France is undertaking a regional purge which will reduce the governments from the current 22 to 13. This is creating restlessness among staff of the regions’ offices in Brussels — it goes without saying that all 22 currently have delegations to the EU. Brussels Influence is told that RhôneAlpes and Auvergne are already merging into one office but there is uncertainty about what will become of the rest — and staff are getting worried. REGIONAL RESISTANCE: Because regional offices are able to lobby for local industries without having to appear on the EU Transparency Register (governments are exempt from the transpar- DEFENCE BUDGET PLANS FOR 2015 in selected EU and NATO states Belgium 5,9 % Bulgaria — 5,4 % Czech Republic 3,7 % on defense. Neighboring Latvia, just as exposed to the Russians and also harboring a large ethnic Russian minority, spends an alliance record low of 0.9 percent, although it recently made a commitment to reach 1 percent this year. “Boosting national defense capabilities is our priority,” said Raimonds Vejonis, the defense minister. Denmark — 5,5 % WEAKEST PART OF NATO Lithuania 50 % “Unfortunately, the Baltic states are militarily the weakest part of NATO, because we have a small population, flat terrain, we’re exposed, with very long lines of communication with our allies,” said Sakkov. “Our defense forces are not very strong, for objective reasons, because we started to build up just 20 years ago.” The Estonians are increasing their defense spending by 7.5 percent this year, according to the Stockholm International Peace Research Institute, the Latvians are up by 15 percent, the Lithuanians by 50 percent and the Poles are ramping up their spending on helicopters, tanks, rockets and rifles by 20 percent. “The political and military crisis in Ukraine has led to a major reassessment of threat perceptions and military strategies in much of Europe,” notes SIPRI. The Poles have started a €32 billion modernization program, and the bulk of new weapons systems — from anti-missile systems to helicopters and tanks — will be deployed by 2018. The Poles have even formulated a defense policy called the “Komorowski Doctrine” after President Bronisław Komorowski, which calls on the country to be able to defend itself without immediate allied assistance. “The longer we observe NATO’s reluctance to support Ukraine — a country that was recently considered likely to integrate with the alliance — the more we are aware that we have to count on ourselves,” said Zbigniew Pisarski, head of the Casimir Pulaski Foundation, a Warsaw-based security think tank. But until the Poles get rid of their rusting Estonia 7,3 % Finland — 2,3 % France — 3,4 % Germany — 0,5 % Greece 2,7 % Italy — 4,9 % Latvia 15 % Netherlands 1,4 % Norway 5,6 % Poland 20 % Portugal — 11 % Romania 4,9 % Slovak Republic 7% Spain 0,5 % Sweden 5,3 % Turkey 7,8 % MILITARY SPENDING 2015 Russia $ 66.000.000.000 Poland $ 9.900.000.00 Lithuania $ 450.000.000 Estonia $ 436.000.000 Latvia $ 269.000.000 Source: SIPRI / Infographic: POLITICO Soviet-era equipment, and with western Europe reluctant to permanently base troops in the region, the three Baltic republics are pressing hard for support from the US. Originally built as a Red Army air base, Tapa is now a central training ground for Estonia’s armed forces — which need all the help they can get to strengthen their militaries. Tapa has hosted American soldiers as part of NATO’s Operation Atlantic Resolve, which brought battle tanks and Stryker armored personnel carriers to Estonia, part of a broader mission involving Latvia, Lithuania and Poland. Tapa was also the starting point of Operation Dragoon Ride, which sent a column BRUSSELSINFLUENCE ency regime), there is no shortage of them. According to Germany’s official representation to the EU, there are 15 delegations in Brussels for 16 Bundesländer (states) — the only two states who are prepared to share facilities are Hamburg and SchleswigHolstein (it’s called the “HanseOffice”). Italian regions are also immune to cost-cutting, with all 20 regions lobby-ready. OLAF, THE JUDGE AND THE WHISTLEBLOWER 1: The recent decision by the EU’s anti-fraud office OLAF to open an investigation into the case of Romanian whistleblower Cornelia Trentea is hardly surprising. It is not the first investigation OLAF has opened into what has become of US APCs wending through six central European countries in a bid to reassure them that the NATO alliance and the US would protect them in the event of a Russian attack. “Until last year, Estonia and Poland were known as the annoying Russophobic nations in NATO,” says Lieutenant Colonel Jaak Tarien, commander of the Estonian Air Force. “Now, everybody is saying, ‘oh, that’s what you meant.’” But after decades in which war seemed to disappear as a realistic threat and the countries of central Europe allowed their defense potential to atrophy, the scramble to rebuild military muscle is going to be long and very expensive. Tarien commands a force of only four helicopters and two By James Panichi and Quentin Ariès a sprawling, logic-defying legal case and it may not be the last. Yet OLAF’s latest foray into the matter (the office’s statement has been seen by Brussels Influence) indicates just how complex it has all become. According to the documents, what started off as a runof-the-mill story of an EU institution clashing with an internal auditor after she raised concerns over a procurement process has now descended into the plot of a spy novel, with Trentea claiming her home address was passed on to a private eye who twice banged on her door late at night demanding that she sign documents in a language she did not speak. The documents suggest that when Trentea was fired from her role with the Vienna-based Fundamental Rights Agency (FRA), she took her case to the Civil Service Tribunal (CST). There, as she alleged in a subsequent written submission to the European Court of Justice (ECJ), her case was handled by a court judge who was also being paid by the FRA for legal advice. In short: Trentea alleges (relying on documents she has obtained) that there was a conflict of interest. The response of the ECJ was to say that its code of conduct did not cover such an eventuality, so its hands were tied. OLAF, THE JUDGE AND THE WHISTLEBLOWER 2: It gets weirder. SECESSIONIST FOOTBALL: The European Commission usu- cargo planes. The whole Estonian military, with 6,400 APG (half of them conscripts) doesn’t have a single tank, although it can field about 80 armored personnel carriers, enough for two battalions. Estonia has ordered a battalion’s worth of CV90 tracked fighting vehicles from Sweden, said Andres Sang, a spokesman for the Estonian Defense Ministry. Estonia is also buying Javelin anti-tank missiles; both systems are expected to come into service next year. Estonia is also spending €113 million to buy 44 infantry fighting vehicles from the Dutch. “If it’s war, so be it,” says Brigadier General Meelis Kiili, commander of Estonia’s volunteer defense league. Lithuania reintroduced military conscription earlier this year, something President Dalia Grybauskaitė said was needed in light of “new geopolitical circumstances.” Lithuania also recently agreed to a deal to buy 12 German PzH 2000 self-propelled howitzers — giving the Lithuanian military a punch it currently lacks. Latvia is the only Baltic country without conscription, and has no plans to reintroduce mandatory military service. Last year, it had only three ancient Soviet era tanks as its armored forces, but is buying 123 CVR tracked combat vehicles from the UK, as well as anti-tank missiles and more vehicles from Norway. Although the permanently based NATO troops the region wants are still a distant prospect, the alliance has been beefing up its presence, creating a “very high readiness” spearhead force that performed its first exercises last month. The US sent a rotating crew of 3,000 soldiers to the Baltic in March, along with 750 tanks. But the worry is that because of the growing danger posed by an aggressive and unpredictable Russia, the new equipment being brought into service across the region may see use. “No doubt there will be a fight,” said Raivo Vare, an Estonian businessman and former politician. “Estonians are stubborn people, and they’re still living through their traumatized memories of 1939-40 (when the country was incorporated into the USSR). They can’t afford it a second time.” With reporting by Ben Judah ally runs a mile from anything resembling an unrecognized state, fearing the ire of the EU’s 28 member countries who like to pretend their separatist movements don’t exist. This reluctance to mingle with sub-state actors will be put to the test when lobbyists from the Confederation of Independent Football Associations (CONIFA) start to swan around the Berlaymont. CONIFA, established in 2013, is the grouping of football leagues (football is what Americans call soccer) from non-states. There’s a Romani team; Padania (northern Italy) is represented; Occitania (southern France) is ready to take to the pitch. To sign up for a complimentary trial of the weekly Brussels Influence email newsletter, sent on Mondays, go to Politico.eu/ registration News POLITICO WEDNESDAY, MAY 13, 2015 21 She wants to explain how every euro is spent GEORGIEVA FROM PAGE 1 Georgieva is clearly proud of her native country — she organizes an annual folk-dancing event in Brussels — but even she recently joked that 96 percent of Bulgarians don’t trust their judiciary and that the other 4 percent must be judges. Her first appointment to the Commission, in 2010, came after an earlier Bulgarian candidate was accused of corruption. Her fast-rising trajectory has many wondering whether Georgieva might seek to lead the United Nations when Ban Ki-moon leaves office at the end of 2016. The job of secretary-general has been expected to go to a candidate from Eastern Europe, but a UN diplomatic source says the eastern bloc countries have yet to mount an efficient campaign to secure the post. “They aren’t ready for all the necessary vote swaps” to win approval in the UN assembly, a second diplomatic source said. “They couldn’t answer basic questions about whether any bipartisan consensus had been reached internally, or across the eastern bloc.” Another obstacle: Bulgaria already has a candidate for the post in UNESCO head Irina Bokova. So Georgieva would have to defeat an insider from her own country. But the UN source said an important consideration was that a successful candidate would have to be “amenable to both Russia and the US.” Georgieva’s successful stint at the World Bank included four years in Moscow managing Russia’s funding portfolio. Georgieva herself refused to comment on her future plans, focusing instead on the challenge of reforming at EU level. But if she succeeds in shaking up the Brussels bureaucracy, she will be well placed for another big international role. “You have no idea how big my current job is,” Georgieva said. Unlike the Commission’s six other vice presidents, who have only small central teams supporting them, Georgieva has thousands of staff in 10 departments reporting to her. Among the changes she’s trying to implement: end the attitude of entitlement to taxpayer money that has gripped the Commission and Parliament for decades; subject officials to tougher performance reviews; and reorganize Commission departments so their structure and goals match President Juncker’s political priorities. “EXTREME SPORTS” Scrutiny of EU spending is higher than ever. National governments facing their own tough economic times continue to pressure Brussels — the UK’s David Cameron recently called cutting the budget his signature EU achievement, and his re-election victory has given his Brussels reform message new momentum. Georgieva’s predecessor as budget commissioner, Janusz Lewandowski, called the job “extreme sports.” Former Commissioner Neelie Kroes, who visited Georgieva last week, highlighted the unwieldy nature of EU spending as another challenge. “Not even Stalin had seven-year Kristalina Georgieva opens the “Grand Horo Dance” at the Grand Place of Brussels. The event took place for a third year in a row at the initiative of the vice president as part of the “Balkan Trafik!” Festival 2015 for music and arts. EC / AUDIOVISUAL SERVICES plans,” she said. Georgieva is betting that her focus on discipline — rather than making the traditional pleas for “more Europe” and the money that requires — will prove politically acceptable. The approach won an early victory in December, when Georgieva successfully shepherded a €3.5 billion budget for 2015 through a process that required agreement from the European Parliament and 28 member states. “She didn’t ask for a euro she didn’t need,” said one of the negotiators in the process. “She was playing an honest broker role.” A spokesperson from one of the EU’s budget-hawk member states said: “She doesn’t wag her finger at countries like us. She listens and that goes down well.” Adds one director-general who reports to Georgieva, “She is perceived as a very serious partner for both Parliament and Council. She’s respected because she has a past of authority based on discipline.” She’ll need it. Georgieva, among other goals, wants to create an app that explains how every euro is spent by the EU. There is already concern that such openness will only invite more scrutiny. One recipient of EU funding, who requested anonymity, said that EU processes are so complicated, and reviews of funding reports so weak that “in the end we completely lie” about how the organization uses the EU money it receives. A full-disclosure app could simply make it easier to spot the abuses throughout the system. senior aide to President Juncker, who likened the Commission’s processes to the French civil service of 30 years ago. Georgieva said that first among her changes is the rollout of “360 degree” performance reviews, in which Commission officials will be subject to feedback from junior staff as well as bosses. Alongside this, all departments are undergoing rapid macro-reviews that Georgieva wants to complete by the end of summer. The reviews are being performed by a mix of in-house and external consultants, and closely resemble an overhaul she managed during the last Commission, when she ran the humanitarian aid department. “What I want to do is first look at the horizontal services,” she said. “Increase the ratio of staff to one HR officer, same in IT. I want to do it first with HR — I want [the TWEET STREET By JULES JOHNSTON @SpiegelPeter: URGENT: @J_ Dijsselbloem speaks in Dutch. Mid-sized country in northern Europe listens. A SELLABLE STORY @BBCJLandale: Politics can be so brutal. Tory MPs have taken over the Lib Dems’ table in the Commons tea rooms. @Unnamedinsider: Lord Sugar has quit Labour, he’s also deleted his MySpace page and closed his Blockbuster account. @mark_johnston: :) #Gazprom versus renewable energy. #eu2030 #energyunion @JamesMelville: The Tories have begun cleaning up the mess they inherited from the last government... @BrunoBrussels: After a weekend ‘festival of leaks,’ @MargSchinas and @NatashaBertaud ‘advise caution’ on texts SUBJECT TO FEEDBACK Along with changing the EU’s spending culture, Georgieva is intent on upending its management culture. “Change is now permanent. We have to learn to adjust,” Georgieva said, adding that the Commission’s 33,000 staff will just have to live with the consequences. “If you want to reform the EU you have to start with HR,” said a @DanJamesReed: A new candidate has come forward for the #UKIP leadership #GE2015 @mvanhulten: I’m hereby starting a campaign to replace the #Brexit hashtag with #EUreform, because despite what you may think IT’S NOT ALL ABOUT YOU, UK. other] people to know I am not after them.” But official spokespeople confirmed she is also guided by Juncker’s all-consuming priority of aligning departmental agendas with the “10 political priorities” he presented to the European Parliament in 2014. That means other departments are facing cuts as early as June. Georgieva has already won approval from colleagues to move or effectively demote seven directors at DG GROW— the directorate-general for internal market, industry, entrepreneurship and small businesses. Internal Commission documents seen by POLITICO indicate that DG GROW will end up losing around 200 staff. @NBCNewYork: Pope Francis named an honorary Globetrotter http://4.nbcny.com/wC0K60v Georgieva’s spokesperson Alexander Winterstein said she started with GROW because of the “high potential for rationalization” — Commission code for a bloated department. It’s a recurring problem that partly explains why Georgieva has created the post of “Chief Economic Analyst of the Commission.” While trade unions physically blockaded Georgieva’s predecessor in 2013 for not doing more to win them salary increases, none of the three unions contacted by POLITICO were willing to criticize the current plans. The vice president herself claims “everyone is ready for change,” based on a listening tour she conducted during her first weeks in office. Ultimately though, Georgieva will need the College of Commissioners united behind her. She is relying on their political instincts rather than their affection to carry the day. “I tell them and they know it, I would only be credible and I would only carry water for you if you help me … help me to have a story that is a sellable story to the taxpayer,” she said. “If people don’t know what we do with their money, why would they support us?” 22 POLITICO WEDNESDAY, MAY 13, 2015 Cartoon Carousel By Tom Janssen Published in Caglecartoons.com, May 11, 2015 By Petar Pismestrovic First published in Kleine Zeitung, February 21, 2015 By Petar Pismestrovic First published in Kleine Zeitung, February 1, 2015 By Chris Riddell — First published in The Guardian, May 10, 2015 POLITICO WEDNESDAY, MAY 13, 2015 By Nate Beeler First published in The Columbus Dispatch, May 7, 2015 By Matt Wuerker — First published in POLITICO.com, May 1, 2015 By Paresh Nath — First published in The Khaleej Times (UAE), May 7, 2015 By Adam Zyglis — First published in The Buffalo News, May 8, 2015 By Rick McKee — First published in The Augusta Chronicle, May 6, 2015 23 T:8” S:7” S:10” TO SOMEONE WHO NOT ONLY REACHED FOR THE SKY, BUT ALSO WENT THERE. GE congratulates Jim McNerney on winning CEO of the Year. From serving as CEO of GE Aviation to his current position as Chairman and CEO of Boeing, Jim’s vision and leadership has allowed him to reach incredible heights.
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