Public discussion of the effects of automation and artificial intelligence (AI) often focuses on the productivity benefits for companies and the economy, on the one hand, and on the potential downside for workers, on the other. Yet there is a critical third dimension that should not be overlooked: the impact of new technologies on wellbeing.
Historically, technological innovation has had positive effects on wellbeing extending far beyond what is captured by standard economic metrics such as GDP. Vaccinations, new pharmaceuticals, and medical innovations such as X-rays and MRIs have vastly improved human health and increased longevity. Today, even countries with the world’s lowest life expectancies have longer average lifespans than did the countries with the highest life expectancies in 1800. Moreover, around one-third of the productivity gains from new technologies over the past century has been converted into reduced working hours, in the form of longer annual paid leave and a near-halving of the workweek in some advanced economies.
Now that a new generation of technologies is being adopted, the question is whether similar benefits to wellbeing will follow, or whether fears of technological unemployment will create new sources of stress, undercutting consumer confidence and spending.
In seeking to answer such questions, one should focus on two decisive factors. The first is the potential of innovation to improve welfare. AI, in particular, could increase people’s quality of life substantially, by raising productivity, spawning new products and services, and opening up new markets. McKinsey & Company’s research on the current digital transformation finds that AI applications are already doing precisely that, and will continue to do so.
Moreover, the firms that deploy AI for the purpose of driving innovation, rather than for labour substitution and cost-cutting, are likely to be the most successful; as they expand, they will hire new workers. In health care, for example, AI has empowered providers to offer better and earlier diagnoses of life-threatening diseases such as cancer, as well as personalized treatments.
The second decisive factor is the approach taken by companies and governments to manage the arrival of new technologies. AI raises important ethical questions, particularly in areas such as genomics and the use of personal data, and the need to gain the new skills needed to operate smart machines can cause stress and dissatisfaction. The migration of workers across sectors can be a source of significant friction, exacerbated by sectoral mismatches, mobility constraints, and the costs (temporal and financial) of retraining.
Critically, the labour-market frictions created by today’s frontier technologies may affect segments of the population that were immune to such risks in the past. To avoid major disruptions, policymakers should focus on providing large-scale retraining, to equip workers with “robot-proof” skills and ensure labour-market fluidity.
By directing the deployment of new technologies toward welfare-improving innovation, and by managing the labour-market effects of technological diffusion, we can boost not just productivity and incomes, but also lifespans, which itself may feedback into higher GDP.
Calculating the likely effects of welfare-enhancing innovation is a complex process. In our own assessment, we have built on methods of welfare quantification developed by economists Charles Jones and Peter Klenow of Stanford University, as well as others in the growing field of happiness research. Using a schematic constant risk-aversion model as a benchmark, we find that the United States and Europe could experience welfare gains from AI and other frontier technologies that exceed those delivered by computers and earlier forms of automation in recent decades. On the other hand, if the technological transition is not managed properly, the US and Europe could experience slower income growth, increased inequality and unemployment, and reductions in leisure, health, and longevity.
One revealing finding of our research is that the threat to incomes and employment is present in all likely scenarios, which means that it cannot be dismissed or ignored. If the foreseeable adverse effects of shifting to an automated knowledge economy are not addressed, many of the potential benefits could be squandered. Policymakers should be preparing for a retraining effort on the scale of the 1944 GI Bill in the US.
Among other things, governments today have a critical role to play in providing education and redesigning curricula to emphasize technical skills and digital literacy. They can also use public spending to reduce innovation costs for business and to direct technological development toward productive ends through procurement and open markets.
But business leaders must also rise to the challenge. If companies adopt an approach of enlightened self-interest with respect to AI and automation – what we call “technological social responsibility” – they can deliver benefits both for society and their own bottom lines. More productive workers, after all, can be paid higher wages, thereby boosting demand for products and services. To capture the far-reaching benefits of digital technologies, AI, and automation, we will need to strike a careful balance, fostering both innovation and the skills to harness whatever it unleashes.
The exchange rate of China’s yuan to the dollar hit the symbolic threshold of 7 to 1 at the start of the week, fuelling further speculation about a deliberate move by Beijing to boost support for its exports while engaged in a trade war with the US, the world’s largest economy.
The current exchange rate has not reached the 7 to 1 threshold for nearly a decade. The depreciation of the yuan came only four days after the US said it would sanction more Chinese products.
In a statement, the Chinese Central Bank said it had “the experience, confidence and ability to keep the yuan exchange rate at a reasonable and balanced level, while the markets were playing the yuan down, falling to nearly 7.11 to the dollar early in the day, before a recovery suggesting that the central bank would intervene to calm the markets.
The US has in recent years taken Beijing to task since for pursuing a longstanding policy of artificially devaluing its currency to support its exports, which has played a major role in increasing the United States’ huge trade deficit.
Washington has demanded that the Chinese Communist Party immediately enact structural reforms to ban subsidies for state-owned enterprises and to immediately halt the pirating of American intellectual property, while at the same time agreeing to open the Chinese import market to more American products, especially agricultural products.
China’s response to Washington’s demands has included an order to Chinese companies to stop purchasing American agricultural products and threats from the ruling Communist Party that it would target US farmers that are highly dependent on the Chinese market.
The White House plans to extend its already existing tariffs on imports from China on 1 September.
A report released on 5 August by an United Nations fact-finding mission on Myanmar, found that, money earned by the Myanmar military from international and domestic business deals, “substantially enhances its ability to carry out gross violations of human rights with impunity”.
The mission called on the international community to impose targeted sanctions and arms embargoes on the Myanmar military.
According to the UN, the country’s military uses its own businesses, foreign companies and arms deals to support “brutal operations” against ethnic groups, such as forcibly deporting more than 700.000 ethnic Rohingya to Bangladesh, and the construction of a barrier fence along the Myanmar-Bangladesh border, that “erases evidence of Rohingya belonging to Myanmar.”
The fact-finding mission will present its final report to the UN Human Rights Council in September.
A drone air strike on 5 August by eastern Libyan forces on the southern Libyan town of Murzuq has killed at least 43 people, a local official said. Local and international media have reported that the attack targeted a wedding ceremony.
The European Union urged all parties to end the crisis: “We expect all Libyans to support the United Nations Special Representative’s attempts to relaunch political negotiations and implement a truce on the occasion of the Eid al-Adha”, the statement reads.
The European Union’s foreign policy chief Federica Mogherini, visited Vietnam’s capital Hanoi on 5 August for a bilateral visit, during which she met with Vietnam’s minister of National Defence General Ngo Xuan Lich and other government officials.
Both sides discussed the development of a Defence and Security cooperation partnership based on international law and a shared commitment, in which they commit to work together in addressing shared security challenges, both in Asia and elsewhere. They also agreed to step up cooperation in UN peacekeeping operations, as well as cooperation in cyber security.
The visit follows the Union’s participation in the EU-ASEAN Post-Ministerial Conference and the ASEAN Regional Forum in Thailand, where strengthening EU-ASEAN cooperation was on the agenda.
A new Eurobarometer public opinion survey released on 5 August shows a strong increase in the citizens’ positive perception of the European Union, from the economy to the state of democracy.
In particular, the survey shows that trust in the EU is at its highest level since 2014 and remains higher than trust in national governments or parliaments. The proportion of respondents who have a positive image of the EU (45%) has increased, and a majority of Europeans agree that “their voice counts in the EU”.
Support for the euro reaches a new record high,with more than three-quarters of respondents in the euro area in favor of the currency, while some of the main concerns that remain are immigration, climate change and unemployment.
These are the best results since the June 2014 Eurobarometer survey conducted before the Juncker Commission took office.
After tapping IMF chief Christine Lagarde to head the European Central Bank, the EU has put forward another powerful woman’s name to take the reigns at the International Monetary Fund with the official nomination of Bulgarian economist Kristalina Georgieva.
Georgieva beat out Jeroen Dijsselbloem, a former Dutch finance minister whose candidacy had the backing of both the governments of Germany and the Netherlands. Her nomination is a major victory for France’s President Emmanuel Macron, who had spent a great deal of political capital lobbying on her behalf. The French government had been vocal about pushing the EU to nominate a candidate that was to their liking after having the French-born Largarde head the Washington-based IMF since 2011.
A noted economist who did her post-graduate research and studies in natural resource economics and environmental policy at the London School of Economics and the Massachusetts Institute of Technology in the late 1980s, the 65-year-old Georgieva has been Chief Executive of the World Bank since 2017 and previously served as Acting President of the World Bank Group from February to April of this year.
Georgieva previously served as Vice-President of the European Commission under Jean-Claude Juncker from 2014 to 2016.
She is now the favourite to become the next head of the IMF when the fund’s governing board votes on candidates in October as no other candidates from major economies have declared their candidacy.
If she succeeds in securing the position, Georgieva would join European Commission President-elect Ursula von der Leyen and Lagarde as the third European woman to be in a top job on the world stage.
Under a convention with the US, a European leads the IMF while an American heads the Washington DC-based World Bank.
The European Union and the United States signed an agreement on 2 August in the US capital Washington DC, reviewing the functioning of an existing quota to import hormone-free beef into the EU.
The agreement will see 35.000 tonnes of hormone-free beef allocated to the US from a previously-agreed quota.
The agreement was approved by EU states in the Council on 15 July and will be presented for approval to the European Parliament before it can enter into force.
This is a result of the cooperation fostered by the Joint Statement Issued by Presidents Juncker and Trump in July 2018, establishing a positive EU-US bilateral trade agenda.
The European Union welcomed Sudanese parties reaching agreement on a constitutional declaration on 4 August.
“At this historic moment, we commend the determination and sense of responsibility of the two parties as well as the longstanding efforts of the African Union/Ethiopian mediation. “, the Union said in a statement.
Sudan’s military rulers and the main opposition coalition will sign the declaration on 17 August.
“The EU is committed to support Sudan on its way towards peace, democracy and prosperity and will work with the civilian-led transitional government to that end”, the statement concludes.
Italian energy major ENI and Kazakhstan’s state oil and gas company KazMunayGas (KMG) have signed a contract for the exploration and production of hydrocarbons at the Abay block in the Caspian Sea.
“According to the signed contract, the main minimum obligations are drilling one exploration well and carrying out 3D seismic exploration at the Abai offshore section of the Kazakhstani sector of the Caspian Sea,” KMG said in a press statement on 29 July.
In early July of this year, the Protocol of direct negotiations was signed, under which the parties reached an agreement on the payment of a signature bonus to Kazakhstan – an one-time fixed payment subsoil user for the acquisition of subsoil use rights in the contract area – and on the obligations of the subsoil user by share local content.
“This project for both companies is an important step in expanding the resource base,” KazMunayGaz said.
NUR-SULTAN, Kazakhstan – The states-guarantors of the Astana Process agreed on 2 August to take specific measures to ensure the safety of civilians in Idlib city, according to a a joint statement by Russia, Turkey and Iran following an international meeting on Syria in Nur-Sultan.
“The results of the 13th high-level meeting within the framework of the Astana process are very satisfying, as this is an important component of multilateral efforts to establish peace in Syria. Today’s high-level meeting is a manifestation of efforts directed by the guarantor countries,” Kazakhstan’s deputy Foreign Minister Roman Vasilenko said, reading out a joint statement on the results of Astana-13 on 2 August in the Kazakh capital.
The states — guarantors responded positively to the participation of the delegations of Iraq and Lebanon as new observers of the Astana format and expressed their belief that they would contribute to the establishment of peace and stability in Syria.
Russia, Turkey and Iran examined the situation in the Idlib de-escalation zone in the Kazakh capital as part of the 13th round of negotiations. The parties stated that all agreements on Idlib city should be implemented. First of all, the memorandum of 2018 – the agreement on the creation of a demilitarized zone in Idlib city.
“(Russia, Turkey, Iran), expressing regret over the casualties among civilians, agreed to take specific measures based on previous agreements to ensure the protection of civilians … and the security of military personnel of guarantor countries located inside and outside the Idlib de-escalation zone,” Vasilenko said.
States — guarantors are concerned about the increasing presence of the terrorist organization Kheyat Tahrir al-Sham in the region.
Russia, Turkey and Iran have confirmed that they will continue to cooperate in the interests of the final elimination of the so-called ISIS, Jabhat en Nusra and other terrorist organisations.
The guarantors of the Astana process held consultations in a trilateral format, as well as with representatives of the Office of the Special Envoy of the UN Secretary General Geir Pedersen. They discussed the completion of the formation and launch of the Constitutional Committee in Geneva in accordance with the decisions of the Congress of the Syrian National Dialogue in Sochi city.
“The guarantor countries expressed satisfaction with the progress made in finalising the composition and rules of procedure of the body and confirmed their readiness to facilitate the early convening of the committee,” the declaration read.
The creation of a Syrian constitutional committee is also nearing completion. The first meeting of the committee may be held in September.
The head of the Syrian government delegation, Bashar Jafari, was pleased with the negotiations in Nur Sultan, but stressed that the agreement should be implemented.
Commissioner for Justice, Consumers and Gender Equality Věra Jourová joined the commemoration ceremony on 2 August in Auschwitz-Birkenau to mark the 75th anniversary of the extermination of the Roma in the concentration camp of Auschwitz-Birkenau.
The event, held by the Central Council of German Sinti and Roma, with the Association of Roma in Poland and in cooperation with the Auschwitz-Birkenau State Museum, brought together more than 1.500 Romani people from all over Europe, as well as representatives from governments, delegations, international organisations and civil society.
“Even though Roma are Europe’s largest ethnic minority, antigypsyism, hate crime, as well as hate-motivated harassment and discrimination still plague many Roma across the EU”, warned the European Union Agency for Fundamental Rights, and underlined the need for all EU states do more to counter antigypsyism and improve the living standards for Roma.
In 2015, the European Parliament declared 2 August as the annual “European Roma Holocaust Memorial Day” to commemorate the 500.000 Roma murdered in Nazi-occupied Europe.
According to estimates from Eurostat, in June 2019, compared with May 2019, industrial producer prices fell by 0.6% in both the euro area (EA19) and EU28.
In May 2019, prices decreased by 0.1% in the euro area and remained unchanged in the EU28.
The full estimates are available on the Eurostat website.
The first two decades of the twenty-first century are beginning to cast a long shadow over the Western world. We have come a long way since the turn of the century, when people everywhere, but particularly in Europe, indulgently embraced the “end of history.”
According to that illusory notion, the West’s victory in the Cold War – the last of the three great wars of the twentieth century – had given rise to a global order for which there could be no alternatives. Thenceforth, it was thought, world history would march steadily toward the universalisation of Western-style democracy and the market economy. The new century would merely be a continuation of the previous one, with a triumphant West extending its dominion.
The world is wiser now. The web of alliances and institutions that sustained the West’s dominance is proving to be a product of the twentieth century, its future now in doubt. The global order is undergoing a fundamental change, as its centre of gravity shifts from the North Atlantic to the Pacific and East Asia. China is on the threshold – economically, technologically, and politically – of becoming a world power and the sole challenger of the incumbent hegemon, the United States.
At the same time, the US is growing tired of its global leadership role. It began to step back under former President Barack Obama; but under Donald J. Trump, it has accelerated its withdrawal in a chaotic and dangerous manner. America’s abdication of leadership poses a threat to the very existence of the transatlantic West, which rests on a foundation of shared values and political institutions. In the absence of any reasonable alternatives, the structure is crumbling.
Russia, meanwhile, is confronting the future by looking to its twentieth-century past. Like the Soviet Union, it is placing its bets entirely on nuclear weapons. Yet in the twenty-first century, power will be determined not by one’s nuclear arsenal, but by a wider spectrum of technological capabilities based on digitization. Those who aren’t at the forefront of artificial intelligence (AI) and Big Data will inexorably become dependent on, and ultimately controlled by, other powers. Data and technological sovereignty, not nuclear warheads, will determine the global distribution of power and wealth in this century. And in open societies, the same factors will also decide the future of democracy.
As for Europe, the Old Continent entered the new century in anything but optimal form. Living under the cosy post-historical illusion of everlasting peace, the European Union failed to complete the project of integration (though it did manage to expand eastward). The implicit withdrawal of the US security guarantee under Trump has struck Europe like a bolt from the blue.
The same could be said for the digital revolution. The first phase of digitization – consumer-facing platforms – has been led almost entirely by the US and China. There are no competitive European platform firms to speak of, nor are there any European cloud-computing companies capable of keeping up with the behemoths in Silicon Valley and China.
The most important issue facing the new European Commission, then, is Europe’s lack of digital sovereignty. Europe’s command of AI, Big Data, and related technologies will determine its overall competitiveness in the twenty-first century. But Europeans must decide who will own the data needed to achieve digital sovereignty, and what conditions should govern its collection and use. These questions will determine the fate of democracy in Europe, and whether the Old Continent’s future will be one of prosperity or decline. As such, they must be decided at the European level, not by individual nation-states. Equally important, these questions must be answered now. Europe needs to get the digital ball rolling – or be run over by it.
In the years ahead, automotive design and manufacturing, mechanical engineering, medicine, defence, energy, and private households will all be disrupted by digital technologies. The data generated from these sectors will largely be processed through the cloud, which means that control of the cloud will be vital to countries’ long-term economic and strategic fortunes.
To safeguard its digital sovereignty, Europe will need to make massive investments in cloud-computing capacity and the other physical resources underpinning the digital revolution. Europe has been far too slow and indecisive in this respect. Its challenge now is to catch up to the US and China, lest it be left behind permanently.
Europeans should not harbour any illusions that the private sector will take care of things on its own. Europe’s competitive disadvantage calls for a fundamental change in strategy at the highest level. The EU institutions will have to lead on setting regulations and, together with the member states, on providing the necessary financing. But securing Europe’s digital sovereignty will require a much broader effort, involving businesses, researchers, and politicians.
Following the recent 50th anniversary of the first Moon landing, there has been much media discussion about a potential manned flight to Mars. For Europe, though, space travel can wait. The top priority must be to establish and safeguard digital sovereignty and to do whatever is necessary to arrest its own decline and protect democracy. For better or worse, the twenty-first century is well underway.
The European Investment Bank will provide up to €385m to Alfanar, successful bidder in Spain’s third renewable energy auction, to make one of the biggest wind power infrastructure projects in Spain: the construction of 21 wind farms in Andalusia, Asturias, Castilla-La Mancha, Castilla León, Galicia and Navarra.
The new facilities will have a total capacity of 547 MW and will generate approximately 1.491 GWh of energy a year, energy equivalent to the power use of 360.000 homes.
The two entities signed the first phase of the operation, under which the EIB is providing €44.2 million to build the first four wind farms.
The project will help create 1.900 jobs during the implementation phase and 170 permanent positions.
During a meeting between Czech Prime Minister Andrej Babis and future EU Commission President Ursula von der Leyen, the former continued to push for Vera Jourova, the European Commissioner for Justice, Consumers and Gender Equality, to remain on the Commission once von der Leyen takes the reigns of Europe’s top job.
Jourova is known to want a “different, stronger portfolio,” on the incoming Commission, preferably connected to the “economic department because we are an export-oriented country,” Babis said, adding, “She was successful as an EU Commissioner and she is a woman.”
Ursula von der Leyen, the European Commission’s President-elect, is continuing her tour of the bloc’s capitals has visited Zagreb to meet with Croatia’s Prime Minister Andrej Plenkovic.
“Following my visits to Berlin, Paris and Warsaw last week, I’m excited to travel to Croatia …and to Spain and Italy later this week. Croatia is the youngest member of our Union and a true European success story,” said von der Leyen, who will replace current Commission President Jean-Claude Juncker in November.
“My political goal is to rebalance the EU,” said von der Leyen. “Between the East and the West, the South, the North, the small and the largest countries, the young and the old (members of the bloc),” she told the press.
Croatia, which joined the EU in 2013, is to take over the rotating presidency of the union in January 2020. Von der Leyen has promised to support Croatia’s membership in the Schengen and Euro zones.
Federal Police President Dieter Romann said the Eritrean, whom he named only as “A”, had previously applied for asylum in Switzerland in 2006. Romann added that “A” had been known to hold a steady job and was considered “well-integrated”, but had recently caught the attention of Swiss police through a series of violent incidents.
Less than a week before killing the young boy and his mother, “A” had threatened one of his neighbours with a knife; an episode, Romann suggested, that may have been the reason why he had travelled to Germany, as he had subsequently been the subject of an arrest warrant in Switzerland.
Japan’s Ministry of Education, Culture, Sports, Science and Technology (MEXT) and the European Commission have teamed up to offer three Erasmus Mundus Joint Master Degree Partnerships.
“I am confident that the three Joint Master Programmes we have selected, part of our new EU-Japan cooperation model in higher education, will bring superb results by nurturing students’ talents, fostering excellence and boosting science, technology and innovation. I am looking forward to seeing their positive impact in the months and years to come,” said the Commissioner for Education, Culture, Youth and Sport Tibor Navracsics.
Top students from around the world will be able to study in at least two of the universities represented in each programme, with at least one of the universities having to be located in Japan. At the end of their studies, the students will receive either a joint, double, or multiple graduate degree, including a Master of Science in Imaging and Light in Extended Reality from the University of Eastern Finland and Japan’s Toyohashi University of Technology; Master of Advanced Robotics from the École Centrale de Nantes in France and Keio University from Japan; and a Master of History in the public sphere from Budapest’s Central European University and Tokyo University’s foreign studies faculty.
The European Union’s foreign policy chief Federica Mogherini visited Bangkok, Thailand, on 1-2 August, to co-chair the EU – Association of Southeast Asian Nations Post-Ministerial Conference and to represent the Union at the 26th ASEAN Regional Forum.
At this meeting, the EU and ASEAN agreed to upgrade their relations to a Strategic Partnership. Mogherini underlined the need for enhanced connectivity between Europe and Asia, the need to support the rules-based international order, and effective multilateralism.
She also held a number of bilateral meetings with top government officials in the margins of the ministerial, including with the Prime Minister and Foreign Minister of Thailand, and the Foreign Ministers of China, the Republic of Korea, Japan, Canada, Indonesia and New Zealand.
The President-elect of the European Commission Ursula von der Leyen met with Hungary’s Prime Minister Viktor Orban in Brussels where the two discussed her plans for climate protection, economic, migration policy, and the role of the EU in the world.
“We have made a good decision so far,” Orban told Hungary’s public broadcaster after the meeting and described von der Leyen as a politician “who has the same thoughts about the future” regarding “children and families, security, and a common European force and the development of the military industry.”
Hungary under Orban has come under increasingly intense criticism from current Commission President Jean-Claude Juncker for the former’s crackdown on political opponents, as well as attacks on the rule of law and civil society. Juncker has, himself, personally chastised members of Fidesz, the ruling party in Hungary.
Orban supported von der Leyen’s candidacy to succeed Juncker and later described her with his MEPs votes in the European Parliament. Orban had at the time described her victory as an important development that would help strengthen the 28 member bloc.
However, the political guidelines of the von der Leyen will be no different to those of Juncker, while the First vice-president for the rule of law, Frans Timmermans, is set to remain as a deputy head of the College of Commissioners.
After von der Leyen’s election, Orban said it was a good decision to keep “ideological gorillas” – in reference to Juncker’s First Vice-President Frans Timmermans – away from the Commission presidency and nominate someone with a “pragmatic instinct”.
In response to the ongoing dengue outbreak in the Philippines, the European Union is providing €100.000 in humanitarian aid funding to assist the most affected communities, as part of the EU’s overall contribution to the Disaster Relief Emergency Fund of the International Federation of Red Cross and Red Crescent Societies.
The aid will directly and indirectly benefit 300.000 people in some of the hardest hit areas, by strengthening of public health services and the provision of nursing staff. In addition, potential mosquito breeding grounds, as water sources, will be cleaned and treated with a biological control agent to eliminate mosquito larvae.
The European Border and Coast Guard Agency, in partnership with the Hellenic Coast Guard, has launched on 31 July a one-month trial of an aerostat and other equipment for border surveillance on the Greek island of Samos.
Amid heightened tensions between opposition campaigners and Sudan’s military rulers, 8 people, among which 5 schoolchildren, were shot dead when security forces broke up a student protest in the city of El-Obeid on 29 July.
The European Union’s Cohesion Fund invests almost €68 million in northern Portugal, to upgrade the 92-km section of the Minho single-track line between Nine and Valença, on the Spanish border.
The European Commission has approved on 31 July €300 million of public support for Greece’s Ultrafast Broadband Infrastructure Scheme.
According to figures published by Eurostat on 31 July, the euro area (EA19) seasonally-adjusted unemployment rate was 7.5% in June 2019, down from 7.6% in May 2019 and from 8.2% in June 2018. This is the lowest rate recorded in the euro area since July 2008.
The EU28 unemployment rate was 6.3% in June 2019, stable compared with May 2019 and down from 6.8% in June 2018. This remains the lowest rate recorded in the EU28 since the start of the EU monthly unemployment series in January 2000.
More informaition is available on the Eurostat website.
NUR-SULTAN, Kazakhstan – All participants of the process toward a peaceful settlement in Syria, also known as the Astana process confirmed their participation in the 13th round of talks on Syria, which will be held in the capital of Kazakhstan, Nur-Sultan, on 1-2 August, Kazakhstan’s Foreign Ministry said on 31 July.
Iran, Turkey and Russia, as well as representatives of the Syrian government and the opposition will join the international high-level meeting on Syria, the ministry said.
At the moment, all previously invited parties have confirmed their participation. Russia’s Special Envoy to Syria Alexander Lavrentiev will attend the session while the Turkish and Iranian delegations will be led by Deputy Foreign Minister Sedat Onal and Foreign Minister’s Senior Aide for political affairs Ali Asghar Khaji, respectively, the Kazakh Foreign Ministry said. In addition, both parties to the conflict in Syria – a government delegation headed by Syria’s UN Envoy Bashar Jaafari and an armed opposition led by Ahmad al-Touma will be attend the planned meeting, the Kazakh Foreign Ministry said.
For the first time during the upcoming meeting, the delegations of Iraq and Lebanon will take part as observers. A decision to join the negotiation process was taken on the basis of the previous meeting in Astana.
The UN Secretary-General’s Syria envoy, Geir Pedersen, is not going to attend the Syrian talks in Nur-Sultan, due to health reasons, Kazakhstan’s Foreign Ministry said on July 31. “We regret to say that the UN Secretary-General’s Special Envoy for Syria, Geir Pedersen, will be forced to skip the upcoming talks. The UN delegation will be led by his deputy,” the ministry said in a statement.
US representatives will not attend the 13th meeting on Syria in Nur-Sultan.
In addition, representatives of the International Committee of the Red Cross and the Office of the UN High Commissioner for Refugees will arrive in Nur-Sultan to participate in the regular meeting of the working group on the release of detainees/hostages on the fields of inter-Syrian talks.
Russia, Iran and Turkey launched the Astana Process in January 2017 in Kazakhstan to bring all parties in the Syrian conflict to the table to find a peaceful solution to the crisis.
The European Union’s Mission in Somalia donated a radar scanner to the Maritime Police Unit of Bossasso, on the northern Somali coast, to enhance the port authorities’ capability to observe maritime activity in the near waters on the Gulf of Aden.
In recent months, the Greek Competition Authority (HCC) has been in turmoil over the appointment of Vassiliki Thanou at the helm of the Agency, amid heavy criticism that her selection was politically-motivated. And while things initially seemed to run smoothly despite the politicization of the theoretically independent authority – simply because government and regulator were under the same political banner, independent regulatory authorities must be able to transcend national electoral cycles and guarantee interest-free continuity. This is especially true of the all-powerful competition authority which can make or break entire markets, or even act as a political tool for governments and opposition.
Critics of the focus particularly on Thanou’s close ties to ex-Prime Minister Alexis Tsipras and the SYRIZA party, while drawing attention to the fact that the selection of vice-president in early 2017, Anna Nakou, was also politically-driven. As a result, critics say, trust has broken and the perception is that the Competition Commission cannot perform its tasks in an impartial and effective way.
We launched a fact-finding exercise, based on publicly available records, to determine whether these concerns hold true.
Thanou claims that both she and other Board Members act independently in the performance of their duties. But research reveals a disconcerting pattern of top management appointments within the Agency in recent months (both at the level of the Board, the body that decides competition cases, and the level of the Directorate-General, the body that investigates cases) which justifies the deep skepticism expressed around the questions of independence, impartiality and effectiveness of the Greek competition regulator.
Recent appointees for top management posts in the competition agency indeed appear to have close political ties with members of the SYRIZA government and, most of them, relatively limited or no prior management experience before their appointment. Findings also cast doubt as to whether recently enacted EU legislation meant to empower national competition authorities is sufficient and capable of protecting the independence and effectiveness of competition authorities in Europe.
The Hellenic Competition Commission Board Members appointed by the SYRIZA Government
Thanou, a former Supreme Court Chief Justice, was appointed as President of the Hellenic Competition Commission on 3 January 2019, prompting protests from opposition politicians and commentators that she was too enmeshed with the SYRIZA government to be able to carry out her duties independently and impartially. In a letter addressed to EU Commissioner Vestager at the time of her nomination, then centre-right party leader, Kyriakos Mitsotakis, now elected prime minister, warned that Thanou’s candidacy is absolutely incompatible with the role and mission of an independent regulator. Transparency International has also criticised the Greek Government at the time, finding that her appointment ultimately challenged the independence of the institution.
Indeed, during his time as prime minister, Tsipras appointed Thanou to a string of influential posts, inciting each time vocal criticism as to the circumstances leading up to her selection. After being appointed to head the Supreme Court, a selection amongst more senior peers that also gave rise to controversy, she served as caretaker Prime Minister of Greece from 27 August to 21 September 2015, in the run-up to the September 2015 snap elections. Her later judicial career was accompanied by controversy and allegations of interference with ongoing investigations. Upon retirement from the bench, Tsipras appointed her on 11 July 2017 as Head of his Legal Office (Legal Office of the Secretariat-General of the Government), a position she subsequently left to take up her new role as President of the HCC.
Already in April 2017, Nakou had been selected and appointed by the SYRIZA Government as Vice-President of the Agency. Nakou entered the HCC service in 2011 and has never held a management position (e.g. Head of Unit or Director) in the Directorate-General of the HCC. Her appointment at the top management position raised a lot of political controversy at the time, with opposition parties claiming that her only credentials for the job have to do with her close political affiliation with the SYRIZA government and, in particular, with the second most powerful man in the then SYRIZA-led government Minister Nikos Pappas. This is because, before taking up her duties, she had been seconded for a number of years to the political office of Pappas as his adviser:
- On 13 May 2015, only a few months after the SYRIZA Government took office, Nakou was seconded to the political office of Pappas, then Minister of State.
- Following the September 2015 General Elections, she was re-seconded (12 October 2015) to the political office of Pappas, again Minister of State (SYRIZA).
- Following a Government reshuffle in 2016, Nakou was again seconded (1 December 2016) to the political office of Pappas, then Minister of Digital Policy, Telecoms & Media (SYRIZA).
- She continued to be a secondee adviser to Pappas up until her appointment as Vice-President of the HCC on 6 April 2017 – her secondment to the Minister actually being repealed 2 months after her appointment to the HCC Board, on 2 June 2017, with retroactive effect.
- While at the service of Pappas, she worked on a highly controversial legislative initiative of the SYRIZA Government regarding the auctioning of TV licenses, which effectively limited the number of free-to-air nationwide licenses to only 4. The Law was eventually challenged at Greece’s Supreme Administrative Court and was struck down as unconstitutional.
- Recently, Nakou’s participation in the adjudication of cases in the media sector attracted new criticism, because her former boss, Nikos Pappas, exercised oversight precisely over the media sector while she was at his service.
Moreover, Ioannis Pavlovits, another SYRIZA appointee, held various advisory posts within the General Secretariat of the Government, immediately before being appointed to serve as Board Member of the HCC on 7 January 2019:
- On 6 March 2015, only a few months after the SYRIZA Government took office, he was appointed by the prime minister to serve as a special advisor to the General Secretariat of the Government.
- On 7 October 2015, he was appointed by the prime minister as Head of the Office for Administrative and Financial Support of the General Secretariat of the Government, a position he held until 4 January 2019.
- That same date, the prime minister accepted his resignation and relieved him from his duties, only to assume a few days later, on 7 January 2019, the position of Board Member of the HCC, appointed by the Minister of Economy and Development (SYRIZA) Mr Dragasakis.
- There is no indication that Pavlovits had no prior knowledge and expertise in competition law or economics.
Selections subsequently made by the new HCC Board Members for top management posts within the Directorate-General
In the course of the first 5 months after taking office (Jan – May 2019), the new HCC Board filled 3 vacancies for top management posts within the Directorate-General of the HCC: one post of Director-General and two posts of Directors (out of four directorship posts in total).
The selections again exposed the politicization of the HCC and raised concerns about its impartiality and effectiveness. In particular, at least 2 appointees have similarly served until recently as advisors to Ministers or advisors to other high-ranked members of the SYRIZA government. The pattern is the same: they were both HCC officials who have left the Agency soon after SYRIZA came into power in January 2015 to be seconded to serve at the executive branch, and later returned to the Agency to take up top management posts. They had no prior management experience, or relatively very limited management experience, within the Directorate-General. Meanwhile, other applicants with several years of management experience and honourable service within the Directorate-General (consecutive terms as Heads of Units or Directors) were ignored. A 3rd appointee is also said to have had connections with the SYRIZA government.
These findings cast a political shadow over the independent agency’s recent management changes. Without taking a stand on whether these changes may be affecting the investigation or outcome of pending cases, appearances do matter. The said pattern of top management appointments could undermine the perception and trust of stakeholders and the society at large that the competition regulator performs its duties in an impartial and effective way.
Greece’s HCC is independent only in name, and the EU has long turned a blind eye to such situations, choosing to focus on the big picture and leave internal clashes for power to the local players – even in the organizations made to protect citizens free of political dependence.
It is an uphill climb for the newly elected government of Kyriakos Mitsotakis, and he is called upon to fight decades of such models of governance in Greece. Restoring the independence of such regulatory authorities, for the long-term good of the country rather than his political party, is an important battle that sooner or later he will have to fight if he seeks to recreate Greece’s paradigms of democratic governance, and reach European levels of functionality and efficiency in the administration.
Energy ministers of the East Med Gas Forum (EMGF) met in Egypt on 25 July, agreeing to access the possible upgrade of the forum to the level of an international organisation, the first of its kind in southeast Mediterranean, and form a committee with the natural gas industry, which would include the participation of state and private companies from the forum member countries.
Egyptian Energy Minister Tariq el-Mulla and his counterparts Greece’s Costis Hatzidakis, Cyprus’ Yiorgos Lakkotrypis, Israel’s Yuval Steinitz, Jordan’s Hala Zawati, and Italy’s Deputy Minister Andrea Cioffi attended the forum, which is supported by the United States and the European Union.
US Energy Secretary Rick Perry and Assistant Secretary of State for Energy Resources Frank Fannon attended the session on 25 July, which follows the joint declaration of the 20 March 2019 summit between Cyprus, Greece, and Israel, with the participation of the Secretary of State Mike Pompeo. At that session, Pompeo underlined Washington’s support for the trilateral mechanism and noted the importance of increased cooperation.
Hydrocarbons Company CEO Charles Ellinas told New Europe on 29 July that the meeting formalised the setting up of the EMGF and agreed to set up committees to take its objectives forward. “However, it was useful in terms of regional politics but vague and lacking on practicalities, especially given the region’s burning problems in need of urgent resolution,” he said. “It is a talking shop and as such it will help improve cooperation among its members, but it will not have a direct effect on the development and export of hydrocarbons from the region,” Ellinas said, adding that is still subject to the commercial challenges of global markets and the effects of the global shift to clean energy.
Greece, Cyprus and Israel to meet in Athens on 7 August
The European Commission announced in Egypt on 25 July that the EC would support the Forum’s activities with significant financial assistance while the ministers also approved the first study to be conducted on behalf of EMGF in cooperation with the World Bank to examine the potential of the region’s natural gas and possibilities for natural gas development and export, the Greek Energy Ministry said in a statement.
Hatzidakis also has a bilateral meeting with Perry and Fannon in Egypt where they discussed US-Greek energy relations and their geopolitical significance. The Greek Energy Minister highlighted the importance of the EastMed gas pipeline for Europe’s energy security and called for the need to overcome the current delay due to the pending signing of the intergovernmental pipeline agreement between Greece, Cyprus, Israel and Italy, the Greek Energy Ministry said, adding that Fannon will lead the US delegation to the trilateral meeting of the energy ministers of Greece, Cyprus and Israel in Athens on 7 August. That meeting, according to Ellinas, is a continuation of previous tri-partite meetings between these countries with US support. “It will probably concentrate on the East Med gas pipeline, but the project can progress only if it can provide gas to Europe at prices that can compete with existing gas prices. This is where the challenge lies,” he said.
Ellinas noted that Washington would like to see East Med gas exported to Europe to lessen dependence on Russian gas. But this can happen only if East Med gas can compete with prices prevalent in Europe, which is a challenge. However, LNG from Egypt’s existing LNG plants at Idku and Damietta may be exported to Europe because very low liquefaction costs make it commercially viable, but other potential gas exports from the region cannot benefit from this advantage. This does not need the cooperation of Turkey,” Ellinas said.
Turkey’s role in the East Med
He noted that Turkey’s impact is on what happens with exploration and export of gas from Cyprus’ Exclusive Economic Zone (EEZ). “The EMGF cannot help with such problems, especially as Turkey is not a member of EMGF,” Ellinas argued. “The EU and US might have been able to use their influence, but pressure and sanctions so far have not had any impact. It anything, it would appear that they have lessened their ability to influence Turkey, which says that it no longer sees the EU as an independent arbiter,” he said.
At the Forum on 25 July in Egypt, Hatzidakis also discussed Greek-Egyptian energy cooperation with el-Mulla, focusing on marketing, exploration and production of hydrocarbons, regional cooperation in the gas sector as wells as investments in renewables and electricity.
El-Molla and Perry also met in Egypt with the latter reportedly stressing the role of Egypt as a reliable source of energy, pointing out the US readiness to provide all the expertise and technologies to Egypt to enhance its natural position as an important energy hub in the region, and highlighting Egypt’s role as a cornerstone of energy cooperation in the eastern Mediterranean.
El-Molla said that the fact that Cairo is the permanent host for the newly found forum, confirms its centrality as a regional centre for trading of gas and oil.
Ellinas noted that Egypt is becoming a major player in its own right. “Not only it has become self-sufficient in gas, but it is fast promoting renewables and by removing subsidies it is containing its growing domestic energy demand. This has freed gas for exports from its existing liquefaction facilities. With increasing gas discoveries and production, it expects these to reach full utilisation be next year,” he said, adding that some gas from its neighbours, Israel and Cyprus, may reach Egypt if prices make it commercially viable.
Russia, Turkey mull joint exploration in Mediterranean
Meanwhile, Russian oil companies could roll out exploration in offshore Mediterranean in cooperation with Turkey, Anadolu news agency quoted Russian Energy Minister Alexander Novak as saying in an interview on 26 July. Russian state oil giant Rosneft is working at Zohr gas field in Egypt.
Asked if Moscow is trying to involve Ankara in order to get a foothold in the region, Ellinas said at present such cooperation is for exploration in Turkish waters. “It is difficult to see how this can provide Russia with a foothold in the region, if indeed it wants to. Russian companies had chances to complete for blocks in Cyprus EEZ but did not use them,” he said, adding “And (Russian gas producer) Novatek is in Lebanon already.”
At least 35 people, including women and children, lost their life when a bus transporting civilians was the target of an attack on 31 July in the Farah province of Afghanistan.
The European Union expressed in a statement its condolences to all those affected, as well as its support to the Afghan people in their desire for peace:
“Such an indiscriminate attack on civilians, which follows an attack on a vice-presidential candidate three days ago, undermines current efforts to achieve a durable peace, and mars the positive achievements of the intra-Afghan dialogue held in Doha earlier this month, where Afghan representatives, including of the Taliban, agreed on the need to reduce the number of civilian casualties to zero.”