Merkel’s savaging of Orban is sadly all too necessary

“Honestly, I can’t understand what is meant by illiberal when it comes to democracy,” said Merkel at a joint press conference with Hungary’s Prime Minister Orban on Monday.  With demonstrations against the Fidesz government’s authoritarian streak, Merkel was right to raise these concerns with her fellow EPP premier.

Orban has famously said “not all democracies have to be liberal”, and has been the subject of EP debate over whether or not to invoke Article 7 sanctions against Hungary (essentially suspending its voting rights for breaching EU values) over his government’s meddling and restrictions in the judiciary and the media.

While voices from outside a country can inflame nationalist opinion, it’s important to voice concern over the health of Hungarian civil society, as Merkel has done. The health of Hungarian democracy affects us all in the EU as we are part of the same system – and one that has liberty and democracy written into its founding treaties as fundamental values.

Can Syriza build a debt forgiveness alliance?

The Syriza-led Greek government has launched into action, sending ministers across Europe to drum up support for a debt forgiveness conference and to sound out their negotiating partners. This week Tsipras will travel to Brussels and Paris. His finance minister, Varoufakis has already hit London and Paris – getting support from his French opposite number that France will help Greece settle with its creditors, but his British counterpart used the opportunity to warn about the uncertainties Greece was plunging the Eurozone into (which may have something to do with the upcoming UK election in May). With Merkel and various other European figures signalling that there will be no further debt relief for Greece, what are Syriza’s chances in building a coalition?

“Europe comes first”, Varoufakis says, but there may be some reticence in even the crisis-hit countries to do a deal. The governing parties in Dublin and Madrid are keen to not be seen as another Greece (in fact “we’re not Greece” is a constant refrain during the worst parts of the crisis), and are worried about giving political comfort to Sinn Féin or Podemos by letting what they see a brinkmanship politics succeed – or appear to succeed. Debt reduction could be a benefit, however. Ireland is looking for a retroactive direct bank recapitalisation, for instance. Since Ireland’s bailout was essentially spent on the banks (which in turn could use it to pay off their France and German banking creditors), this would shift the debt burden off the public purse.

The Irish approach has the advantage of being rooted in an earlier promise (although in 2012 it was also promised that further debt restructuring for Greece would be looked at), and isn’t as blatant as debt forgiveness. It fits more neatly into the banking union narrative, and the narrative that Ireland’s crisis was different.

France and Italy are more promising allies as they look to Greece as a catalyst to change the EU’s austerity course. Greece is crying out for debt relief – years of austerity have increased the debt burden to 175% GDP and shrunk the economy by 25%. To continue placing such burdens on a society is politically poisonous and counter-productive even for those who back reforms. The road to debt relief might be rockier than it first appears even in the other crisis countries, but debt and austerity will have to be revisited if Greece and the Eurozone are to grow again.

Juncker, Confidence votes and Parliamentary battles

The Juncker Commission easily survived this week's motion of censure in the European Parliament, with 461 against, 101 for and 88 abstentions. The motion was brought by a Euroskeptic bloc of the Europe of Freedom and Democracy with support from Front national (a particular point of controversy in the UK where UKIP said that they would not sit with FN in the Parliament but are working with them on this high-profile issue), on the basis that Juncker is unfit to lead the Commission in the light of the damaging Luxleaks scandal.

A majority of the EPP, S&D, ALDE and the Greens rejected the motion (the European Conservatives accounted for most of the abstentions) - the parliamentary majority that backed Juncker and his Commission so recently and after facing down the Council to put him there is unlikely to unseat him so readily. It would also be a very panicked response to ditch Juncker before the competition investigations (and perhaps one of the Parliament's own) is complete.

While the motion was at least in part a cynical ploy by the Euroskeptics - to paraphrase ALDE leader Guy Verhofstadt - it was important to have this debate in the European Parliament. No-confidence votes are held in many national parliaments every so often, particularly where there's a scandal affecting the head of the executive, so miffed Europhiles shouldn't take it too personally. After all, just having the debate is a reminder that in the case of the Commission, the Parliament can not only giveth, but also taketh away...

Darmstadt, Philae has landed

After 25 years of planning and working on Rosetta, the European Space Agency has managed to land a probe, Philae, on the surface of a comet – a feat never before achieved. The Rosetta mission is intended to take measurements on the composition of the comet to reveal its make-up and to provide new data, which could help us uncover new information in how solar systems like ours are formed and whether comets have a role in the origin of life on Earth.

Reading the news stories of the difficulty of landing the probe on the surface – and that there may yet be some danger from the probe’s “bounce” that it might not be fully secure on the comet – it’s hard not to be inspired. Touchdown was made at 17:03 CET on 67P/Churyumov-Gerasimenko after a 2 dayoperation.

The European Space Agency is a great example of European co-operation (it’s not an EU agency, though it receives financial support from the EU), but space exploration can’t be considered just a national, or even continental level, endeavour. Even on the Rosetta project, international help is given from other space agencies, such as when NASA helped track Rosetta from its Canberra station.

Hopefully this will inspire future scientists and scientific endeavours.

Juncker and the Luxembourg Tax Scandal

Last week it came to light that there were serious tax avoidance practices in Luxembourg that allowed companies to funnel profits through the Grand Duchy in order to avoid paying tax in the countries the profits were generated.  After avoiding commenting on the scandal for a week the “cool” Commission President Jean-Claude Juncker has denied that he was involved in anything illegal in Luxembourg, and says that everything was done in “compliance with national legislation and international rules that apply in this matter”.

The new Commission President was prime minister of Luxembourg for 19 years (as well as finance minister for most of that time), so the denial is hardly going to silence his critics. Juncker himself said that he was politically responsible for what happened throughout Luxembourg during his time in office. In an extraordinary debate on tax avoidance in the European Parliament, Juncker admitted that “there probably was a certain amount of tax avoidance in Luxembourg, as in other EU countries. We find this everywhere in Europe because there is insufficient tax harmonisation in Europe”.

The International Consortium of Investigative Journalists is releasing 548 “comfort letters” (effectively private tax rulings that clarify for specific companies on how their corporate tax will be calculated) between 2002 and 2010 which Luxembourg provided to corporations for favourable tax treatment. The investigation that Juncker’s own Competition Commissioner Vestager will be looking into is whether or not Luxembourg’s support for these corporations through the tax system amounts to illegal state aid (earlier in October the previous Commission launched an investigation into the taxation of Amazon in Luxembourg). In the case of the FedEx Corp, the ICIJ found that Luxembourg agreed to tax only 0.25% of FedEx’s non-dividend income that flowed through the country through its tax arrangements.

There are two aspects to this: whether comfort letters for specific companies constitute illegal state aid (and the extent to which Luxembourg was using these), and the extent to which there is legal tax avoidance through tax competition. Europe has gone through years of austerity and it is politically poisonous to have tax avoidance at such levels where companies are only paying 0.25% corporation tax through certain Luxembourgish tax arrangements. If illegal state aid is found, then it will dramatically increase the pressure on Juncker.  If no illegal state aid is found then there could still be significant political damage – “how could such practices be allowed to continue?” would be the question in most Europeans’ minds.

In the European Parliament Guy Verhofstadt, leader of the Liberals, proposed setting up a special investigative committee into tax evasion by the Parliament, saying “This is also a clear case where we need more Europe – to set up common tax compliance legislation and a convergence code not general harmonisation, because we don't know at what level to harmonise.” Such an investigation would require the backing of the Economic and Monetary Affairs committee and would probably look into the various ways companies limit their tax bills. Juncker wouldn’t have any say in such an investigation as it would be purely run by the Parliament.

This scandal is so toxic because it has a highly political idea of tax fairness at the heart of it. Juncker will probably be able to hang on in office if there are no or only limited infringements on state aid rules, but the first political Commission would be politically stunned if it could not properly address the tax avoidance issue. The Commission President has already stated that Commissioner Moscovici will “initiate proposals for an automatic exchange of information regarding national tax rulings”, but Junker, and the Commission, needs to go further.

Tax is a sensitive issue, and it would be difficult to bring Member States along with even mild proposals on tax systems, but Juncker needs to display political initiative by pushing forward on tax transparency and by articulating a position on corporate taxation in the EU. Juncker's political Commission could very easily be undone by politics and his own record as Luxembourg's premier - if he's to survive, Juncker has to show that his Commission can take a political lead that will address citizens' concerns on tax fairness.

Farage's EFDD Group collapses

The Euroskeptic Europe of Freedom and Direct Democracy Group in the European Parliament has collapsed after the Lativan MEP Iveta Grigule withdrew from the group. This means that the group no longer has MEPs from the minimum 7 EU Member States required to be recognised as a political group within the Parliament (it has more than the 25 MEPs required as the second criteria). Having group status wins the group more resources, claims on positions within the Parliament and speaking time, so the collapse of the EFDD will hurt its member parties, the biggest of which are UKIP and the 5 Star Movement.

There has been speculation over what induced Grigule to withdraw her support from the EFDD.  Farage and the EFDD have claimed that it's part of a scheme by the bigger pro-European parties to deprive the Euroskeptic group of a bigger say in the Parliament. They say that Grigule was bribed with a post on the Kazakhstan parliamentary delegation. However others have said that she left the EFDD due to differences with Farage over his pro-Russian stance (Farage has said that he admires Putin). Grigule's Latvian Farmers' Union is currently in coalition talks for a Latvian government.

Some of the main Europarties have acted to squeeze the Euroskeptics from prominent parliamentary positions, which is indefensible after the elections saw a boost in the Euroskeptic vote (no EFDD member holds a chair of an EP committee, while the United Left holds the chair of one committee).  there may be a parliamentary majority for a Juncker Commission, but the Euroskeptic voice should be heard within the EU; the pro-EU Europarties only shoot themselves in the foot by denying the Euroskeptics a say proportionate to their weight in the EP.

Currently the speculation is swirling around the former EFDD member parties: will some be poached by the Front Nationale and Geert Wilders' PVV in a new attempt to form a far-right grouping? Will the 5 Star Movement be lured off to the Greens (unlikely given the 5SM's anti-EU views)?

Pro-EU Europarties should beware of gloating too much at the EFDD's demise. Regardless of how easily it (or how difficult it will find it to) reforms, playing games with representation in the EP is hardly worthy political action. Rather, the arguments of the Euroskeptics should be tackled head on.  This way, the larger parties risk portraying themselves as childish (or worse, blundering if this paves the way to a more far-right grouping). They may not have been involved in this case (I think it could be a combination of dissatisfaction with Farage's pro-Russian stance and the parliamentary arithmetic of getting the delegation post), but the Euroskeptic representation deserves more representation in the Parliament than it currently has.

Federalism in the UK?: the Flexible Constitution warped

The referendum in Scotland was a great example of democracy, with high levels of engagement over a fundamental issue dealt with peacefully (though I suspect that if the result had been a Yes for independence, the negotiations for separation would have been less civil). The morning after the result, UK Prime Minister David Cameron said that Scotland would get the extra powers the pro-Union parties promised, but that devolutionary measures for England would have to be brought in in tandem. Linking the two means that great constitutional change has to be brought about in the UK before the next election, which is a mind-boggling task.

Given the short time frame, the Conservatives were quick to promote their idea of "English votes for English laws". Since the Scottish Parliament will have wide powers on most domestic matters, such as health and education, the argument is that Scottish MPs in the UK Parliament should not be allowed to vote on draft laws that only affect England. It's a neat idea as, the Tories argue, it can be brought in quickly and without the need for more politicians, as the English members of the current UK Parliament can simply sit as the English Parliament for a day or two each week. However, the Labour Party, traditionally strong in Scotland, is suspicious that this is simply a plan to rob the Labour Party of a workable majority after the next general election if it wins by essentially disqualifying their Scottish MPs (the Conservatives are a very minor party in Scotland).

It's not just the worrying party-political nature of the proposal that's concerning, but there are other problems that carving a part-time English Parliament out of the UK Parliament would have.

First of all, it causes a problem with how the government is to be formed, since ministers are generally drawn from MPs (some ministers are brought into Parliament by being made Life Peers who sit in the unelected House of Lords). If the ministers of Education and Health work on an England-only basis, then there will be pressure for those ministers to only be drawn from English MPs. And these ministers would be accountable to the English Parliament within the UK Parliament, while other ministers would be responsible to the UK Parliament as a whole. There would need to be a "double majority" of English and UK-wide MPs to form a stable government. It seems odd that a Tory party that largely opposed the Alternative Vote on the grounds that First Past the Post produces (generally) stable governments, now want to introduce a divided government with loyalties to a divided Parliament.

It's not just that it would complicate the government, but that no real thought has gone into the powers and policies that need to be looked at from a UK-wide and a national or regional level. The NHS - the National Health Service - is supposed to be a UK-wide institution, and as England makes up the vast majority of the population and spending power within this, English decisions would have a bigger impact on the other parts of the UK without the Scottish, Welsh or Northern Irish having much of a say. If certain policy decisions on health were located at national and UK level this would be less of a problem, but it's a tougher question for taxation and spending if there isn't a divide between different pots of money (UK and English), which would cause plenty of government divides and tensions in itself. (Just as people have drawn parallels between the unionist case for Scotland staying in the UK and the UK's in-or-out debate on the EU, maybe we'll see some more being drawn if and when it's argued that the Eurzone MEPs should be the only ones permitted to vote on Eurozone matters).

Ironically for a proposal supposedly designed to strengthen the union by giving the English more powers, having a UK Parliament where large parts of the UK government are English-only would be a great symbol of English dominance within the union that won't help its image in the Celtic nations. Surely for devolution - or a federal arrangement - to work and really mean something, there should be a Union Parliament and government at one level, and state governments below it, with a thought-out division of responsibilities and powers?

Sadly in comparison to the Scottish referendum, little debate engaging civil society is taking place as Westminster MPs try to rush this to their Scottish timetable (to get Scottish devolution measures passed before the general election in May). Would the simple division of MPs into English MPs and the rest actually mean much more democracy for England? Hardly. There is no opportunity to explore the idea of English regions as states, empowering, say Yorkshire (which is about the same population size as Scotland), to make its owns decisions and rebalancing England as a whole away from the over-dominant South East and London. Regional parliaments may not be a hot topic in England at the moment, but the fact that there is no debate or discussion over it at all when English devolution is supposedly the topic is damning in itself.

The British constitution's strength is said to be its flexibility. Unfortunately this is a clear example of how such flexibility works in practice: (part of) the Westminster elite spots a potential constitutional issue, tries to quickly turn it to its advantage and shape reform according to its own interests, while closing out proper public debate. It's hard to see how this can result in good decision-making, never mind good constitutional reform, for either England or the whole UK - and harder to imagine that these decisions are really being taken in the best interests of the citizens in whose name they are being made.