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European Council

BRAMUN XIV

CHAIRS
Julie Z. Anto & Matheus C. Bevilacqua

Table of Contents
Historical Background & Scope of the Committee

European Migrant Crisis

Background Information

Position of Major Nations and Blocs

13

Timeline of Events

16

Definition of Key Terms

21

Guiding Questions

23

Further Research

25

Works Cited

27

European Economic Crisis

30

Background Information

30

Position of Major Nations and Blocs

37

Timeline of Events

38

Definition of Key Terms

45

Guiding Questions

48

Further Research

49

Works Cited

51

Integration of Turkey into the EU

53

Background Information

53

Position of Major Nations and Blocs

56

Timeline of Events

57

Definition of Key Terms

59

Guiding Questions

61

Further Research

62

Works Cited

63

EUROPEAN UNION

Historical Background & Scope of the Committee


The EU is a unique economic and political partnership between 28 European
countries that together cover much of the continent.
The EU was created in the aftermath of the Second World War. The first steps were
to foster economic cooperation: the idea being that countries who trade with one
another become economically interdependent and so more likely to avoid conflict.
The result was the European Economic Community (EEC), created in 1958, and
initially increasing economic cooperation between six countries: Belgium, Germany,
France, Italy, Luxembourg and the Netherlands. Since then, a huge single market
has been created and continues to develop towards its full potential.

FROM ECONOMIC TO POLITICAL UNION

What began as a purely economic union has evolved into an organization spanning
policy areas, from development aid to environment. A name change from the EEC
to the European Union (EU) in 1993 reflected this.
The EU is based on the rule of law: everything that it does is founded on treaties,
voluntarily and democratically agreed by all member countries. These binding
agreements set out the EU's goals in its many areas of activity.
MOBILITY, GROWTH, STABILITY AND A SINGLE CURRENCY

The EU has delivered half a century of peace, stability and prosperity, helped raise
living standards, and launched a single European currency, the euro.
Thanks to the abolition of border controls between EU countries, people can travel
freely throughout most of the continent. And it's become much easier to live, work
and travel abroad in Europe.
The single or 'internal' market is the EU's main economic engine, enabling most
goods, services, money and people to move freely. Another key objective is to
develop this huge resource to ensure that Europeans can draw the maximum
benefit from it.
HUMAN RIGHTS AND EQUALITY

One of the EUs main goals is to promote human rights both internally and around
the world. Human dignity, freedom, democracy, equality, the rule of law and
respect for human rights: these are the core values of the EU. Since the Lisbon
Treaty's entry in force in 2009, the EU's Charter of Fundamental Rights brings all
these rights together in a single document. The EU's institutions are legally bound
to uphold them, as are EU governments whenever they apply EU law.
TRANSPARENT AND DEMOCRATIC INSTITUTIONS

As it continues to grow, the EU remains focused on making its governing institutions


more transparent and democratic. More powers are being given to the directly
elected European Parliament, while national parliaments are being given a greater
role, working alongside the European institutions. In turn, European citizens have an
ever-increasing number of channels for taking part in the political process.

EUROPEAN COUNCIL
Established with the Treaty of Lisbon (2009), the European Council has become a
key player in the strategic direction of the various common European policies.
Including the 28 highest EU authorities, the European Council today represents the

best interests of the Union, coordinates the national political commitments in


financial, monetary, energy, economic, and most recently, security.
ROLE

Decides on the EU's overall direction and political priorities


Deals with complex or sensitive issues that cannot be resolved at lower levels
of intergovernmental cooperation
Sets the EU's common foreign & security policy, taking into account EU
strategic interests and defense implications
Nominates and appoints candidates to certain high profile EU level roles,
such as the ECB and the Commission

VOTING SYSTEM

The Council votes by qualified majority voting (QMV) which means that in order for
a resolution to pass 55% of member states must vote in favorin practice this
means 16 out of 28and the proposal must be supported by member states
representing at least 65% of the total EU population.
<http://www.consilium.europa.eu/en/council-eu/voting-system/qualified-majority/>
VOTING CALCULATOR

<http://www.consilium.europa.eu/en/council-eu/voting-system/voting-calculator/>
*The descriptions above contain extracts from the European Unions webpage, "The EU in brief," <http://europa.eu/about-eu/basicinformation/about/index_en.htm>, and European Council, <http://europa.eu/about-eu/institutions-bodies/european-council/index_en.htm>.

EUROPEAN MIGRANT CRISIS


Question of the European Migrant Crisis

Background Information
INTRODUCTION

The European Union is facing the worlds worst migrant crisis since the
Second World War, where wars in Iraq and Syria, unrest in the African continent,
and chaos in Libya have spurred an exodus of migrants and asylum seekers.
According to the United Nations High Commissioner for Refugees (UNHCR),
Antnio Guterres, by early 2015, over 300,000 migrants and asylum seekers have
tried to reach Europe via the
Mediterranean Sea and more than
2,500 of them died during the crossing.
By the end of 2015, the number of
total migrants had risen to over one
million according to the International
Organization for Migration (IOM). The
growing numbers of migrants and
asylum seekers fleeing turmoil in Africa
and the Middle East poses complex
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challenges for European policymakers still grappling with weak economic growth
and fractured national politics.
According to a 2015 report from the IOM, Europe is currently the most
dangerous destination for irregular migration in the world, and the Mediterranean
Sea the worlds most dangerous border crossing, where thousands have died from
perilous sea voyages to places such as Sicily, Lampedusa, and Greece.
Many argue that the European Union's collective response to its growing
migrant crisis has been ad hoc and more focused on securing the bloc's borders
than on protecting the rights of migrants and refugees. With nationalist parties
ascendant in many member states and concerns about Islamic terrorism looming
large across the continent, it remains unclear if political headwinds will facilitate a
new climate of immigration reform. Meanwhile, with the number of migrants fleeing
to Europe and the violence in their countries of origin continuing to increase, the
United Nations High Commissioner for Refugees urged the European Union to
speed up the formulation of an adequate collective response to this unprecedented
crisis.
With the large influx of irregular migrants constantly increasing and with
tragic incidents becoming more frequent by the day, there is no doubt that a
strong, renewed political response from the European Union is required in order to
address the matter.
ORIGIN OF MIGRANTS AND ASYLUM SEEKERS

Throughout the past year, migration trends in Europe have been reshaped as
a result of political upheaval in the Middle East, Africa, and South Asia. In 2011,
Europe faced an initial surge in illegal border-crossing detections, as thousands
Tunisians, following the onset of the Arab Spring, crossed the Mediterranean Sea in
an attempt to reach the island of Lampedusa in Italy. Migration rates continued to
increase as, soon after, migrants from countries in Sub-Saharan Africa streamed
onto the European continent, having previously migrated to Libya and now fleeing
from the unrest in the post-Qaddafi era. The most recent surge in detections along
the European coast, however,
are attributed to the growing
numbers of Syrian, Afghan, and
Eritrean migrant and asylum
seekers (Park).
The
International
Organization on Migration (IOM)
estimates that, for the first nine
months of 2015, more than
464,000 migrants have crossed
into Europe by sea. Syrians
looking to escape the ongoing
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civil war in their country compose, with 39 percent, the largest group among these
thousands of migrants and asylum seekers. Afghans fleeing the ongoing war with
the Taliban (11 percent) and Eritreans fleeing forced labor (7 percent) compose the
second and third largest groups, respectively. Also contributing to the influx of
migrants is the deteriorating security and grinding poverty in the nations of Iraq,
Nigeria, Pakistan, Somalia, and Sudan (Park).
MIGRANT VS. REFUGEE

Many use the terms migrant and refugee interchangeably, and


distinguishing between the two is not always a clear process; however, they exhibit
important distinctions and are critical designations, seeing that, as stated by Jeanne
Park, deputy director at the Council on Foreign Relations, these groups are
entitled to different levels of assistance and protection under international law. An
asylum seeker is defined as a
person fleeing persecution or conflict
and
are
therefore
seeking
international protection under the
1951 UN Convention on the Status of
Refugees
(UNHCR,
Refugee
Convention). The term refugee is
used to refer to an asylum seeker
whose claim has been approved
although the United Nations considers
migrants fleeing from war or persecution to be refugees. Economic migrants,
contrastingly, are individuals whose primary motivation for leaving their country of
origin is economic gain. Finally, the term migrant is used as an umbrella term for
all three groups (Park).
Europe is now witnessing what is considered by many a mixed migration
phenomenon, where all three groups, which can and do overlap, travel together to
reach the European continent (UNHCR, Mixed Migration).
EU MEMBERS ON THE FRONTLINES

Serving as the main points of entry for migrants and asylum seekers into the
European continent are the EU member states hardest hit by the economic crisis,
Greece and Italy, due to their proximity to the Mediterranean Basin. Due to a recent
shift in migratory patterns over the past year, Hungary and other nations in the EUs
eastern border have also become exposed to an upsurge in irregular migration
(Park).
Greece: By 2012, Greece served as the entry point for approximately 51
percent of migrants entering the EU illegally (FRONTEX, Risk Analysis). After
Greek authorities enhanced border controls in 2015 with Operation Apsida, which

included the construction of a barbed wire fence on the Greek-Turkish border, the
trend shifted; however, by July 2015, Greece had once again become the preferred
point of entry in the Mediterranean, with Frontex reporting 132,240 illegal EU
border crossing by the end of June 2015, five times the number for the same period
in the previous year. Composing the bulk of these migrants are Syrians and Afghans
travelling from Turkey to Greece (FRONTEX, Number of Migrants Above
100,000).
Italy: With 170,000 illegal border crossings reported by Frontex from Libya to
Italy, the Central Mediterranean Passage connecting the two countries was the most
trafficked route for Europe-bound migrants in 2014 (FRONTEX, Central
Mediterranean
Route).
In
October 2014, Italys Mare
Nostrum
search-and-rescue
program, credited for saving
more than 100,000 migrants,
was replaced by Frontexs
Triton, a smaller border-control
operation with a third of Mare
Nostrums operating budget. In
April 2015, EU leaders tripled
Tritons budget, yet refused to
broaden its scope to include
search and rescue (Taylor).
While the number of border crossings remained high for the first half of 2015, a
rising death toll and deteriorating security situation in Libya have pushed many
migrants to search alternate routes to Europe through Greece and the Balkans
(IOM, Migrant Arrivals and Deaths).
Hungary: Rising numbers of Syrians and Afghans travelling from Turkey and
Greece through Macedonia and Serbia have made Hungary the latest frontline in
Europes migration crisis. According to Frontex, approximately 102,000 illegal
border crossings into Hungary have taken place between the months of January
and July in 2015, a surge which prompted Hungarian Prime Minister Viktor Orban to
erect a barbed wire fence in the border with Serbia in July 2015 (Szakacs).
DUBLIN REGULATION

Under the EUs Dublin Regulation, entry-point states bear unilateral


responsibility for migrants. Revised in 2013, it stipulates that asylum seekers must
remain in the first European country they enter and that country is solely responsible
for examining migrants' asylum applications (European Commission, Asylum
Application). Migrants who travel to other EU states face deportation back to the
EU country they originally entered (Park).

Many policymakers agree that reforming the Dublin Regulation is an


important step to establishing a common European asylum policy. Under the
current system, the burden of responsibility falls disproportionately on entry-point
states with exposed borders. In practice, however, many of these frontline countries
have already stopped enforcing Dublin and allow migrants to pass through to
secondary destinations in the north or west of the EU. Germany and
Sweden currently receive and grant the overwhelming majority of asylum
applications in the EU (Park).
CONDITIONS FACED BY MIGRANTS

Migrant detention centers around the European continent, such as the ones
in France, Greece, and Italy, have all received charges of abuse and neglect over
the years (Povoledo). Numerous claims have been made by human rights groups
with regard to many of these detention centers violating Article III of the European
Convention of Human Rights, which prohibits inhumane or degrading treatment
(Park).
In nations such as Italy, Hungary, and Greece, migrants face great hardship
under what are considered by many rights groups harsh and cruel laws, which focus
on fining and deporting illegal migrants
and making it illegal and punishable by
prison time for citizens of these
countries to aid illicit migrants in any
way (Povoledo).
In many of these entry-point
states, most of which have been hit the
hardest by the economic crisis, the
budgets allocated for migration and
asylum issues have not kept up with
growing demands and needs of the crisis. In August 2015, the European
Commission approved a 2.4-billion-euro emergency aid package, with 560 million
euros allocated for Italy and 473 million euros for Greece to subsidize their
migrant-rescue efforts for the next six years (Saeedy). In spite of that, many
policymakers say that these funds still fall short of the growing magnitude of the
crisis (Park).
THE EUROPEAN UNIONS RESPONSE

As with most larger all-encompassing issues concerning the European Union


in its entirety, national interests have consistently trumped a common European
response to the influx of migrants and the ongoing crisis, having led to an
increasingly polarized political climate in the European continent, in which many
nationalist and anti-immigration parties are ascendant (Bershidsky). Also, after the

Paris and Copenhagen terrorist attacks in 2015, security concerns have often been
utilized by nations such as Denmark and France as justification for their reluctance in
accepting migrants form North Africa and the Middle East (Eddy). These combined
factors are, as many analysts argue, largely responsible for many states muted
humanitarian response (Park).
Certain EU member states, mostly from the Eastern European bloc, such as
Hungary, Poland, Slovakia, and the Czech Republic, have recently expressed a
strong preference for non-Muslim migrants (Rettman). These declarations and the
selection of migrants based on religion, however, are, many argue, in clear violation
of the EUs non-discrimination laws, yet these countries leaders continue to vouch
for their policies, using their constituencies discomfort with growing Muslim
communities as a central argument (Park).
With the large influx of migrants from the north of Africa and the Middle East
generating more heated political debate and occupying most of the space in the
media, many tend to forget about how the recent economic crisis has spurred a
demographic
shift
across
the
continent, where citizens of crisis-hit
member states have been migrating
north and west in record numbers in
search of work and employment. This
issue of intra-EU migration, though
less emphasized, has sparked great
anxiety over social welfare benefits in
recent months and continues to be a
matter the EU aims to address
(Dominiczak).
In direct contrast to many of
the nations of Eastern Europe, the
countries of Germany and Sweden
have presented migrants with some
of the most generous asylum policies
in
the
EU.
With
Europes
demographic trajectory of declining
birth rates and aging population,
many experts argue that open immigration policies such as the ones proposed by
these two nations make economic sense. Migrants, they argue, could boost
Europe's economies as workers, taxpayers, and consumers, and help shore up its
famed social safety nets. But others caution that EU citizens might come to regard
migrants as economic competitors, not contributors (Park).

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SCHENGEN AREA

The movement of migrants who evade their first country of entry, in direct
violation of the Dublin Regulation, has placed enormous strain on the EUs freemovement Schengen Area, which eliminated border controls between twenty-six
European nations. Considered by many as one of the signature achievements of
European integration, the Schengen Area has recently come under heightened
scrutiny in light of the current influx of migrants and the resulting security concerns
(European Commission, Schengen Area).
Fissures between EU member states first surfaced in April of 2011 when
France temporarily reintroduced border controls in response to the influx of
thousands of Tunisian and Libyan refugees arriving from neighboring Italy. Denmark
soon followed in May 2011, briefly reintroducing controls in its borders with
Germany and Sweden (BBC, Reform of Schengen Treaty).
In August 2015, Germany suspended the Dublin Regulation for Syrian asylum
seekers, putting an end to the deportation of thousands of Syrians back to their
country of entry into the EU. This move
by Germany, the blocs largest and
wealthiest member, was seen as an
important solidarity gesture with entrypoint
states.
However,
German
Chancellor Angela Merkel also warned
that the future of Schengen was at risk
unless all EU member states did their
part to find a more equitable distribution
of migrants (DeutscheWelle).
After receiving more than forty
thousand migrants over one weekend in
September 2015, Germany reinstated
border controls along its border with Austria on the eve of an emergency migration
summit (Eddy et al.). Seen by experts as a signal to other EU members about the
pressing need for an EU-wide quota system, Germanys actions were soon
followed by Austria, the Netherlands, and Slovakia, which also implemented border
controls, developments which have been called the greatest blow to Schengen in
its twenty-year existence (Eddy and Bilefsky).
Schengen regulations permit that member states erect temporary border
controls under extenuating public policy and national security circumstances, yet
many fear that a sustained influx of migrants could more EU members to suspend
borderless travel for more extended periods of time (Park).

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MAIN PROPOSALS FOR MANAGING THE CRISIS

Despite vocal objections by Hungary, Slovakia, the Czech Republic, and


Romania, EU ministers approved, in September 2015, a plan to resettle 120,000
migrants, which compose only a small fraction of those seeking asylum in Europe.
Building upon a previous established quota system that called on EU members to
resettle forty-thousand migrants from Greece and Italy over a two-year period, the
recent agreement determines that migrants from these same two countries be
resettled across 23 EU member states, which do not include the already overlyburdened nations of Italy and Greece as well as the states of Denmark, Ireland, and
the UK, which are exempt from EU asylum policies under provisions laid out by the
2009 Lisbon Treaty (Ponomarev).
In addition to taking in large numbers of asylums seekers, numerous experts
argue that the European Union and global powers must also provide more aid to
Middle Eastern countries like Turkey, Lebanon, and Jordan, which have borne the
primary responsibility for Syrian refugees (Park). According to the UN High
Commissioner
for
Refugees
(UNHCR), since the start of the
conflict in Syria in 2011, Turkey has
taken in 2.3 million refugees,
Lebanon 1.1 million, and Jordan
630,000. This large influx of migrants
into these host nations has
significantly
altered
their
demographics and their economies,
and has caused them to face, due to
funding shortages, serious struggle
in providing basic food and shelter to
these refugees (AP News).
Some policymakers, such as
European Council president Donald
Tusk, have called for the construction
of asylum centers in North Africa and
the Middle East to allow migrants to
apply
for
asylum
without
undertaking perilous journeys across the Mediterranean, as well as to [cut] down
on the number of irregular migrants arriving on European shores (Park). Certain
critics of this proposal argue, however, that the sheer number of applicants
expected at such hotspots could further destabilize already fragile states (Lenoir).
Among the major actions taken by the European Union with regard to influx
of migrants and many of its resulting issues are the April-2015 10-point plan on
migration and the October-2015 17-point plan on migration, both of which took
important steps in addressing the migrant crisis (Park).
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CONCLUSION

Though quota plans and naval operations, such as the ones adopted by
numerous EU member states, play an important role in managing the crisis, these
proposals alone, experts caution, are incapable of stemming the tide of migrants.
For that, European leaders must address what are seen by experts as the root
causes of migration: helping to broker an end to Syria's civil war, restoring stability
to Libya, and upping aid to sub-Saharan Africa (Park). Without a definitive political
solution to these regional crises, Europe will continue to struggle with inflows of
migrants.
Meanwhile, the absence of a coordinated and proportional EU response to
irregular migration could continue to feed sentiments that push individual countries
to place greater emphasis on national
security rather than on international
protection, possibly turning closed
borders, barbed-wire fences, and
maritime pushbacks into the norm for
domestic policy rather than the
exception
(Graham-Harrison
and
Smith).
For Heather A. Conley, director
of the European program at the
Center for Strategic and International Studies (CSIS), such practices would not only
endanger migrants and asylum seekers, but also the very ideals upon which the
European Union was established, "The political response of countries pushing
migrants out or incarcerating them for long stretches runs counter to the very values
that the EU promotes, like protecting human life and the right to asylum (Park).

Positions of Major Nations and Blocs


EASTERN EUROPE

The Eastern bloc of European states has recently received great attention for
their governments anti-migration policies and their resistance to accept refugees
(Lyman). Hungarian Prime Minister Viktor Orban has headed the opposition to the
ongoing migrant influx, calling Hungary a bulwark against Islamic influence on
Europe (Mackey). As recent large protest rallies in numerous countries in the region
have demonstrated, Eastern Europe displays some of the strongest anti-migration
sentiment in the EU. Slovakias Prime Minister, Robert Fico, announced, in midSeptember 2015, that only Christian refugees would be allowed passage into his

13

country (Lyman). Eastern Europes sentiment with regard to the issue can be traced
back to a history quite different to that of Western Europe.
Former Soviet satellite states have never dealt with a large influx of migrants,
and enjoy a fairly undisturbed set of traditional values, being, overall, ethnically and
religiously unified nations. Many argue it would be both economically and socially
unfeasible for the bloc to accommodate the amount of migrants and asylum seekers
required by EU quotas; compared to the West, the Eastern bloc has far fewer social
transition and healthcare systems designed to integrate and settle migrants as well
as inferior infrastructure (Gross).
As Lech Wasa, human rights activist and the leader of Polands
independence movement, stated of the modern crisis, People must remember that
Poland has been transitioning from
communism for only 25 years. Our
salaries and houses are still smaller
than those in the West. Many people
here dont believe that they have
anything to share with migrants.
Especially that they see that migrants
are often well-dressed, sometimes
better than many Poles (Lyman).
Polands new president, Andrzej
Duda, for instance, has criticized and complained about the European Unions
dictates to accept migrants entering the continent from Africa and the Middle
East (Lyman).
Furthermore, many eastern European nations such as Hungary continue to
face the effects of a previous migration crisis, where huge numbers of migrants and
refugees from Ukraine flooded the nations in the region. And while the new wave of
migrants might aid Eastern Europe with its riding unemployment levels, faltering job
base, and decreasing population (Bulgarias population, for instance is estimated to
decrease 28% by 2050), most migrating into Europe are heading to the prosperous
central and northern nations of Europe (mainly Austria, Germany, and the
Scandinavian countries) (Zaborowski).
WESTERN EUROPE

In September 2015, German chancellor Angela Merkel announced that


Germany would be taking in 800,000 refugees over the next year, which would
ultimately constitute 1% of Germanys population, a necessity in the eyes of many
Germans in the face of population decline (Horn). Germanys decision to suspend
the Dublin Accord in August 2015 was seen as an important gesture of solidarity
with entry-point states; however, since then, Germany has reinstated border
controls to try and stem the flow (Park).

14

In the UK, Parliament recently agreed to accept 20,000 refugees from Syria
by 2020 (BBC, UK to accept refugees). In France, however, where over 50% of the
population remains wary of the
admission of refugees, in light of the
attacks suffered in 2015, most people
support a military solution to the
problem: many believe a French
intervention in Syria would address the
ultimate cause of the crisis, bringing
stability to Syria and thus helping
prevent further emigration (RT, French
oppose softer rules on refugee status).
Ultimately, though most Western European nations have adopted a policy of
slow acceptance, division remains and decisive action in the EU has not yet been
reached (Jeong).
MEDITERRANEAN

The Central Mediterranean Passage, a water route from Libya and Tunisia to
Italy via the island of Lampedusa has served as a common route for many migrants
and asylum seekers. The Italian coast guard, initially with Italys Mare Nostrum
search-and-rescue program and now with FRONTEXs Triton program, has
undergone
numerous
rescue
operations (Park). Italy has adopted a
policy where migrants, if qualified, are
permitted to pass through to other
national destinations, yet although the
number of border crossings remained
high in the first half of 2015, the rising
death tolls from crossings coupled with
the deteriorating security situation in Libya have pushed many migrants to search
for alternate routes to Europe through states in the Balkans and Greece (Park).
Greece carries a significant portion of the burden resulting from the crisis; by
the end of the first half of 2015 Frontex had reported 132,240 illegal border
crossings into Greece, where Syrians and Afghans compose the bulk of migrants
travelling from Turkey to Greece (Park). In August 2015, a ship was sent by the
Greek government to the island of Kos to act as a temporary processing center in
order to alleviate the growing concentration of people on the island. Moreover,
government officials are looking to assist the largely scattered and displaced
migrants in Athens who have little access to public housing (Smith-Park). However, a
lack of public services and the means to finance them, especially after the European
economic crisis, ensures that Greece may have to look for assistance from other
wealthier EU member states (Jeong).
15

Timeline of Events
1951: UN Convention on Refugees is adopted.
1967: Protocol to the Convention is adopted, revoking the constraints and making
the Convention truly universal.
1985: Schengen Agreement is adopted by the EU (EU internal borders are opened
and external borders fortified).
1999: The Schengen Agreement is integrated into the EU Treaty Framework
through the Treaty of Amsterdam.
1999: The Tampere European Council lays the foundation for the Common
European Asylum System (CEAS) and the Charter of Fundamental Rights of the
European Union is adopted (art. 18 postulating a right to asylum).
October 31, 2014: Italy terminates Operation Mare Nostrum, a search-and-rescue
operation off the coast of Libya for migrants and asylum seekers at risk of drowning.
EUs Operation Triton commences the next day with a small budget and fewer
resources.
December 31, 2014: Asylum applications reach record numbers. The EU declares
that it received 626,000 applications for asylum in the year of 2014, the highest
number since 1992.
April 19, 2015: More than 800 migrants and asylum seekers are killed after their
boat capsizes in the Mediterranean.
April 20, 2015: Following increased international criticism, the EU enacts a ten-point
plan to increase financial resources for expanding the search area of naval rescue
missions.
April 23, 2015: Following the tragic events in the Mediterranean in April 2015, EU
heads of state and government meet and agree to mobilize all efforts to prevent
more people from dying at sea and to address the root causes of migration.
April 28, 2015: The International Organization for Migration declares April the
deadliest month on record for migrants lost at sea.
May 13, 2015: The European Council agrees to reinforce the scope of the EU
civilian mission in Niger to support the Nigerien authorities in preventing irregular
migration and combating associated crimes.

16

The European Commission adopts an European agenda on migration. It underlines


the need for better management of migration and stresses that it is a shared
responsibility.
May 18, 2015: The European Council agrees to establish an EU military operation,
EUNAVFOR Med, to break the business model of smugglers and traffickers of
people in the Mediterranean.
May 27, 2015: Following the European agenda on migration presented two weeks
before, the European Commission puts forward a first package of measures to
address the migration crisis.
May 30, 2015: The Mayor of Lesbos asks the Greek government for immediate
support as the number of asylum seekers reaching the island each day rises to 600.
June 17, 2015: Hungary announces plans to build a fence along its border with
Serbia.
June 22, 2015: The Council launches EU NAVFOR Med, a naval operation against
human smugglers and traffickers in the Mediterranean.
June 25-26, 2015: Based on the Commission agenda and on discussions at the
Council, EU leaders agree on a series of measures covering relocation and
resettlement, return and readmission, and cooperation with third countries.
July 28, 2015: Some 2,100 people storm the Channel Tunnel between France and
the United Kingdom, many being migrants and asylum seekers attempting to cross
over into the UK.
August 7, 2015: The UNHCR notes that 50,000 migrants and refugees had arrived in
Greece via the Mediterranean Sea in July alone. In addition, Greek PM Alexis
Tsipras says his country cannot accommodate the thousands of migrants and asylum
seekers arriving in Greece, asking for EU aid. UNHCR declares the situation totally
shameful.
August 10, 2015: EU pledges 2.4 billion euros of aid over the next six years to
countries dealing with large numbers of refugees and migrants.
August 16, 2015: Greece charters a ferry to transport Syrian refugees from the
Greek Islands to Athens.
August 20, 2015: Macedonia allows thousands of migrants and asylum seekers to
enter the country so that they may continue onwards into Europe.

17

August 28, 2015: More than 70 migrants and asylum seekers are found dead in an
abandoned refrigerated truck on their way from Budapest to Vienna. Europe has
opened 1,400 new human smuggling cases and identified almost 30,000 people
suspected of smuggling in 2015 alone.
September 1, 2015: The number of migrants and asylum seekers arriving in Lesbos
exceeds the islands population. The UNHCR reports that over 300,000 people have
crossed the Mediterranean in 2015 so far.
September 2, 2015: Hungarian police close the Keleti train station in Budapest,
preventing hundreds from boarding trains headed for Germany. In addition, photos
of a young boy lying facedown in the sand in Turkey spark international outrage.
September 4, 2015: An estimated 1,200 migrants and asylum seekers decide to
walk from Budapest to Vienna, after being blocked from boarding trains in Hungary.
September 5, 2015: German Chancellor Angela Merkel announces plans to add 6
billion euros to the state budget in order to help relocate thousands of migrants
and asylum seekers.
September 7, 2015: French President Franois Hollande announces that France will
take in 24,000 refugees over two years and British PM David Cameron pledges to
accept 20,000 Syrian refugees over five years. Germany, on the other hand, expects
to take in over 800,000 refugees in 2015.
September 9, 2015: European Commission President Jean Claude Juncker
announces a plan for an emergency quota system that would relocate 120,000
refugees. Furthermore, delivering on the European agenda on migration presented
in May, the European Commission puts forward a second package of proposals to
address the refugee crisis.
September 13, 2015: Germany temporality suspends its train service and conducts
highway checks on the German-Austrian border.
September 14, 2015: Following Germanys move, Austria, Slovakia, and the
Netherlands reinstate temporary border controls. In addition, the European Council
establishes a temporary and exceptional relocation mechanism from Italy and
Greece to other member states, applying to 40,000 persons in clear need of
international protection. The Czech Republic, Hungary, Slovakia, and Romania
oppose the deal. The Presidency also draws up a set of conclusions presenting a
course of action to deal with the migratory crisis. Finally, German Vice Chancellor
Sigmar Gabriel declares Germany is expecting one million asylum seeker in 2015.

18

September 16, 2015: Hungarian riot police use teargas and water cannons to
prevent migrants and asylum seekers from crossing Hungarys border with Serbia.
September 18, 2015: Thousands of migrants and refugees cross into Croatia in
order to subvert Hungarys Serbian fence.
September 20, 2015: Thousands of migrants and asylum seekers arrive in Austria
after being moved from Croatia, Hungary, and Slovenia.
September 22, 2015: The European Council adopts a decision establishing a
temporary and exceptional relocation mechanism from Italy and Greece to other
member states applying to 120,000 persons in clear need of international
protection. The Czech Republic, Hungary, Slovakia, and Romania oppose the deal.
September 23, 2015: After UNSG Ban Ki Moon urged European leaders to show
compassion to refugees and migrants, an EU summit of the European Council
adopts a quota system, despite a lack of a unanimous vote. In spite of that, a
common policy on migration was not agreed upon, and those objecting the new
quota system vowed to stand against it.

EU leaders also agree on a series of priorities for action: responding to the urgent
needs of refugees through assistance to the UNHCR, World Food Program,
Lebanon, Jordan, Turkey and other countries; assisting the Western Balkan
countries in handling refugee flows; addressing the root causes of irregular
migration in Africa; tackling the situation at the EU external borders; and supporting
front-line member states through the establishment of hotspots and ensuring
relocation and return
October 3, 2015: Thousands of migrants and asylum seekers enter Slovenia after
Hungary closes its border with Croatia. The Slovenian Army is mobilized to assist
local police with the influx.
October 8, 2015: The EU organizes a conference to address the Eastern
Mediterranean - Western Balkans route. EU ministers for home affairs and for
foreign affairs meet with their counterparts from Turkey, Lebanon, Jordan and the
Western Balkans. The associated countries, Switzerland, Norway, Liechtenstein and
Iceland also attend.

The conference aimed to enhance engagement among all partners, increasing


solidarity and ensuring an orderly management of refugee and migration flows. It
adopted a declaration.
October 8-9, 2015: The Council discusses the future management of the EU's
external borders, and adopts conclusions on the future of the return policy.

19

October 12, 2015: EU foreign ministers discussed the external aspects of migration.
The Council adopted conclusions to feed into the discussions of the European
Council meeting on 15 October.
October 15, 2015: EU leaders agree on a series of priorities, including the
cooperation with countries of origin and transit, the strengthening the EU's external
borders, and the improvement of legislation on return and readmission.
October 25, 2015: Leaders representing Albania, Austria, Bulgaria, Croatia, the
former Yugoslav Republic of Macedonia, Germany, Greece, Hungary, Romania,
Serbia and Slovenia agree on a 17-point plan of action to improve cooperation
between the countries along the Western Balkans migration route to tackle the
refugee crisis in the region.
October 26, 2015: EU Ministers have an in-depth debate on migration, focusing on
development cooperation. They agree to strengthen cooperation with third
countries to address the common challenges currently facing Europe and its partner
countries.
November 9, 2015: Ministers adopt conclusions defining further measures to handle
the refugee and migration crisis.
November 12, 2015: EU heads of state or government meet with their counterparts
from African countries to discuss migration issues in the Valletta Summit on
migration. They agree on an action plan focusing on five priority domains:
addressing the root causes of irregular migration and forced displacement,
improving work on promoting and organizing legal migration channels, enhancing
protection of migrants and asylum seekers, tackling the exploitation and trafficking
of migrants, and improving cooperation on return, readmission and reintegration.

Furthermore, in an informal meeting, EU leaders discuss the latest developments in


the migration crisis and how to accelerate the implementation of the measures
agreed in September and October. They particularly focus their discussions on
cooperation with Turkey. President Tusk also reiterates the need for the EU to
regain the control of its external borders and to effectively proceed to the
registration of migrants.
November 29, 2015: The EU and Turkey adopt a joint action plan to deal with the
refugee crisis created by the situation in Syria, in which the EU and its member
states will step up their political and financial engagement to stem the migration
flow coming to the EU via Turkey. The EU is also committed to provide an initial 3
billion of additional resources to help Turkey improve the situation of Syrian
refugees currently in the country. The action plan also includes increased
cooperation regarding migrants who are not in need of international protection.

20

Furthermore, the EU-Turkey readmission agreement will be fully applied from June
2016. The EU and Turkey are also aiming to complete the visa liberalization process
for Turkish citizens in the Schengen zone by October 2016.
*The timeline above contains extracts from the European Unions webpage, "Timeline Pressures." <www.consilium.europa.eu/en/policies/migratory-pressures/history-migratory-pressures/#40802205029>

Response

to

Migratory

Definition of Key Terms


ASYLUM SEEKER

Defined as a person fleeing persecution or conflict, and therefore seeking


international protection and the right to be recognized a refugee under the 1951
Refugee Convention on the Status of Refugees (Park). They may receive legal
protection and assistance while their formal status is determined (Archick and
Margesson).
REFUGEE

An asylum seeker whose claim has been approved. Note: the UN considers
migrants fleeing war or persecution to be refugees, even before they officially
receive asylum (Park). Once granted refugee status, a person has certain legal rights
and protections under international law (Archick and Margesson).
ECONOMIC MIGRANT

Person whose primary motivation for leaving his or her home country is economic
gain and escaping poverty (Park). They do this legally or illegally, for the long term
or temporarily (Archick and Margesson).
MIGRANT

Seen as an umbrella term for asylum seekers, refugees, and economic migrants
(Park).
COMMON EUROPEAN ASYLUM SYSTEM (CEAS)

System intended to ensure that the rights of refugees under international law are
protected in its member states. The system sets out minimum standards and
procedures for processing and assessing asylum applications, and for the treatment
of both asylum seekers and those who are granted refugee status (Open Society
Foundations, "Understanding Migration and Asylum in the EU).

21

FRONTEX

Agency of the European Union established in 2004 to facilitate and improve the
application of existing and future EU measures relating to the management of
external borders. It complements EU States'
border
management
systems
and
contributes to the freedom and security of
EU
citizens
(European
Commission,
Agencies).
FRONTEX also coordinates EU States' actions in the implementation of EU border
management measures. Thus, it contributes to the efficient, reinforced, and uniform
control of persons and surveillance of EU States' external borders (European
Commission, Agencies).
EURODAC

Short for European Dactyloscopy. Is the European fingerprint database for


identifying asylum seekers and irregular border-crossers. Asylum applicants and
irregular border-crossers over the age of 14 have their fingerprints taken as a matter
of European Community law. These are then sent in digitally to a central unit at the
European Commission, and automatically checked against other prints on the
database. (European Commission, Identification of Applicants (EURODAC)).
This enables authorities to determine whether asylum seekers have already applied
for asylum in another EU member state or have illegally transited through other EU
member states ("principle of first contact"). The automated fingerprint identification
system is the first of its kind on the European Union level and has been operating
since 2003. All EU member states currently participate in the scheme, plus three
additional European countries: Norway, Iceland and Switzerland.
DUBLIN REGULATION

European Union (EU) law that establishes that entry-point states bear unilateral
responsibility for migrants under the Dublin Regulation (European Commission,
Asylum Application). Revised in 2013, this EU law stipulates that asylum seekers
must remain in the first European country they enter and that country is solely
responsible for examining migrants' asylum applications. Migrants who travel to
other EU states face deportation back to the EU country they originally entered
(Park).
Many policymakers agree that reforming the Dublin Regulation is an important step
to establishing a common European asylum policy. Under the current system, the
burden of responsibility falls disproportionately on entry-point states with exposed
borders. In practice, however, many of these frontline countries have already
stopped enforcing Dublin and allow migrants to pass through to secondary
22

destinations in the north or west of the EU. Germany and Sweden currently receive
and grant the overwhelming majority of asylum applications in the EU (Park).
SCHENGEN AREA

The area created in the Schengen


Agreement of 1985 comprising 26
European countries that have abolished
passport and any other type of border
control at their common borders (internal
borders). It mostly functions as a single
country for international travel purposes,
with a common visa policy. The Schengen
Area is named after the Schengen
Agreement, where countries have agreed to
eliminate border controls with the other
Schengen members and strengthen border
controls
with
non-Schengen
states
(European Commission, Schengen Area).

Guiding Questions
GENERAL QUESTIONS

1. Should European countries have to take in migrants and asylum seekers?


2. Should migrants and asylum seekers be relocated evenly among EU member
states?
3. How can the EU improve the safety of migrants and asylum seekers crossing
the Mediterranean?
4. How can the EU improve the conditions of the migrants and asylum seekers
travelling through Europe?
5. Should the EU send some of the refugees and migrants back to their
countries of origin?
6. How can the EU make sure terrorists and members of radical groups are not
getting into Europe?
7. How can the EU create a unified approach to this crisis in spite of the huge
amount of disagreement among European states?

23

FURTHER QUESTIONS

1. What are your nations demographic and economic projections for the near
future? In what ways do these contribute to your countrys policies regarding
the current migrant crisis?
2. What measures has your country taken to integrate the refugees it has
accepted? What are the major short and long term effects of these actions on
your nation, the European Union, and the migrant crisis as a whole?
3. To what extent is the association between the influx of refugees and a threat
to Europes security a factor in your nations current refugee policies? How
has this association affected other member states responses to the ongoing
crisis? How do different interpretations of this association hinder the creation
of a common European framework for addressing the crisis?
4. According to the 1951 United Nations Refugee Convention, what are your
countrys legal obligations with regard to the migrants and asylum seekers
fleeing conflicts in North Africa and the Middle East? To what extent has your
nation fulfilled its legal obligations thus far? Has it taken any actions to stop it
from having to comply with such obligations?
5. What are the major conflicts generating the large influx of refugees into
Europe? Is your nation somehow involved in any of these conflicts? Has the
migrant crisis impacted its involvement in any way?
6. How does the reestablishment of border controls relate to the Schengen
Agreement? Have any nations infringed such agreement thus far? How would
the dissolution of the Schengen Area impact the idea of a common European
identity? What are some probable long-term effects of such actions on the
European Union (consider the EUs values, economic system, demographics,
etc.)?
7. How do your nations interests with regard to the migrant crisis and the large
influx of migrants and asylum seekers into Europe compare to the ones of
other member states? How do they compare to the interests of the European
Union as a whole? What actions can your country take in order to promote
the establishment of an enhanced European framework to deal with the
crisis?
8. What measures has the European Union (European Council and Council of
the European Union) taken in order to address the ongoing migrant crisis? To
what extent and in what ways is your nation affected by such actions? Has
your country endorsed or opposed the adoption of these measures?
9. The complex nature of the crisis signifies that there is no simple answer, yet a
combination of methods can offer a feasible long-term solution. In what ways
would the establishment of a quota system based on the level of
24

demographics and economics of every member ease the burden on the


countries in the Southern and Eastern borders of Europe and aid the EUs
response to the crisis? Should the quotas proposed by in such a system be
mandatory? What would be the effect of imposing them upon member
states?
10. Many Middle Eastern countries, such as Turkey, Lebanon, and Jordan, have
accepted millions of asylum seekers and borne the primary responsibility for
most refugees, having been stretched incredibly thin as a result. In what ways
would aiding non-European countries in regions such as North Africa and the
Middle Eastern in their efforts to take in refugees by easing the burden
through the provision of funds to create better living conditions for the
refugees give them less incentive to leave for Europe and improve the crisis
as a whole?

Further Research
Official European Council overview of the EUs response to the migration crisis:
http://www.consilium.europa.eu/en/policies/migratory-pressures/
BBC article Migrant crisis: Migration to Europe explained in graphics presenting
and discussing a series of graphics concerning the crisis multiple facets:
http://www.bbc.com/news/world-europe-34131911
BBC article Migrant crisis: Five obstacles to an EU deal discussing five of the
major challenges faced by the EU in finding a solution to the migrant crisis:
http://www.bbc.com/news/world-europe-34105989
BBC article Migrant crisis: How can EU respond to influx? discussing the major
means through which the EU can achieve a common response to the migrant crisis:
http://www.bbc.com/news/world-europe-34139348
The New York Times article The Migrant Crisis in Europe: Readers Questions
Answered answering and discussing relevant questions concerning the crisis:
http://www.nytimes.com/2015/09/28/world/europe/refugee-crisis-europesyria.html

25

CNN article European migrant crisis: A country-by-country glance looking at the


involvement of certain individual nations with regard to the crisis:
http://edition.cnn.com/2015/09/04/europe/migrant-crisis-country-by-country/
The New York Times article Seeking a Fair Distribution of Migrants in Europe
presenting extremely relevant data concerning migrant distribution in Europe:
http://www.nytimes.com/interactive/2015/09/04/world/europe/europerefugee-distribution.html
The New York Times article Closing the Back Door to Europe containing
extremely relevant information concerning border controls and the building of
fences in Europe:
http://www.nytimes.com/interactive/2015/09/15/world/europe/migrantborders-europe.html
Extremely detailed and up-to-date timeline on the European migrant crisis:
http://mapreport.com/countries/european_migrant_crisis.html#details
European Council access page to the conclusions to all of its meetings (mostly
similar to resolutions within the United Nations):
http://www.consilium.europa.eu/en/european-council/conclusions/
BBC article Schengen: Controversial EU free movement deal explained
containing a thorough explanation of the Schengen Agreement:
http://www.bbc.com/news/world-europe-13194723
Thorough Al Jazeera report, Europes Migration Policies in Crisis, discussing the
crisis as a whole, yet focusing on governmental policies and political pressures
around Europe regarding the influx of migrants:
http://studies.aljazeera.net/ResourceGallery/media/Documents/2015/8/19/201
5819121438303734Europe%20and%20Imigration.pdf

26

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<http://www.nytimes.com/
interactive/2015/08/28/world/europe/countries-under-strain-from-european-migration- crisis.html?_r=0>.
"Why Is EU Struggling with Migrants and Asylum? - BBC News." BBC News. British Broadcasting Company, 21
Sept. 2015. Web. 18 Oct. 2015. <http://www.bbc.com/news/world- europe-24583286>.
Zaborowski, Marcin. "Why Eastern Europes Resistance to Refugee Quotas Is Not selfish." The Guardian.
Guardian
News
and
Media
Limited,
16
Sept.
2015.
Web.
8
Nov.
2015.
<http://www.theguardian.com/commentisfree/2015/sep/16/eastern-european-migrants-refugeesselfish>.

29

EUROPEAN ECONOMIC CRISIS


Question of Ensuring a Long-Term Solution to the European Economic Crisis

Background Information
INTRODUCTION

In 2002, 19 members of the European Union (EU) decided to adopt a


common currency named the Euro. These became part of the Eurozone,
jointly deciding to discontinue their own monetary policies giving control to the
newly formed European Central Bank (ECB). This arrangement consolidated the
largest trade bloc in the world and created one of the world's strongest
currencies. However, a number of peripheral economies began to accumulate
massive and unsustainable deficits, ultimately threatening the Eurozones viability,
and triggering a sovereign debt crisis. The crisis highlighted the economic
interdependence of the EU, while also underscoring the lack of political integration
necessary to provide a coordinated fiscal and monetary response. In an attempt to
mitigate the worsening economic crisis, the EU and the International Monetary Fund
(IMF) began providing bailouts for crisis-ridden economies. Wealthier nations,
however, became reluctant to help bail out the debtor countries and demanded
that loans be conditioned on strict austerity measures, which contributed to a
deepening pessimism, inciting popular unrest, and toppling governments. By early
2015, elections in Greece had brought the anti-austerity Syriza party to power,
30

causing the country to clash with policymakers in Belgium, Germany, and the ECB.
As the continent struggled, the European Central Bank stepped in with
unprecedented bond-buying and monetary-easing programs.
Even as some of the periphery has emerged from recession, the specter of a
Greek exit from the Eurozonecombined with economic stagnation, hesitant
reforms, and rising nationalism across Europecalled into question the
sustainability of the monetary union. Critics argue that the creation of a centralized
fiscal union alongside the already existing monetary union could actually prevent
excessive borrowing and spending and provide a long-term solution to the
European economic crisis; without a centralized fiscal union, countries will continue
to run deficits, accumulate debt, and degrade the value of the Euro, ultimately
threatening the stability of the continent. In spite of that, such as proposal would
most likely be faced with great opposition from many of the members of the
European Union, as it would imply surrendering a portion of their sovereignty to an
external body. Can Europe take the necessary steps and create a fiscal union
alongside the monetary union? Or will the monetary union breakup and the Euro
disappear?
ORIGINS OF THE EUROZONE

Following the end of World War II, Frances Jean Monnet, the man regarded
by many as the chief architect of European unity and the founding father of modern
Europe, argued that economic integration would be vital to eliminating
intercontinental conflict. In the year of 1951, Monnet managed to establish the
European Coal and Steel Community, the most significant step ever taken toward
European integration at the time (ECSC Treaty).
The 1957 Treaty of Rome followed as the next major step toward the
integration of the European continent. With it were established the Common
Market and the European Economic Community (EEC) between the countries of
France, Germany, Italy, the Netherlands, Belgium, and Luxembourg, in which trade
tariffs were abolished between members, sparking rapid growth and paving the
steps toward a greater European Union (Single European Act).
Europes expansion accelerated in the following decades, especially with the
signing of the Single European Act of 1986, which facilitated the development of
an internal European market and allowed for the free exchange of capital, goods,
and people (Treaty of Rome).
MAASTRICHT TREATY AND THE EUROZONE

As is argued by global economics specialists Christopher Alessi and John


McBride, The move toward a common market soon revealed a need for monetary
coordination. The famous 1992 Maastricht Treaty formally established the
European Union, leading to the circulation of the euro currency in 2002. Currently,

31

nineteen of the twenty-eight members of the EU compose what is known as the


Eurozone. Others, such as Bulgaria, the Czech Republic, Romania, Hungary, and
Poland, are required by the treaty to eventually join, while Denmark and the UK
were granted exemptions in the signing of the treaty (Maastricht Treaty).
According to the Maastricht convergence criteria, states joining the euro
must have their economic houses in order, (European Commission, "Who Can Join
and When?") while the 1997 Stability and Growth Compact requires ongoing fiscal
compliance. Specifically, nations must ensure that inflation rates remain below 1.5
percent, budget deficits below 3
percent of GDP, and debt-to-GDP
ration below 60 percent. In order to
meet many of these criteria, multiple
members were forced to adopt strict
budgetary
reforms
(European
Commission, "Stability and Growth
Pact").
Many of these standards,
however, were not consistently
applied in practice, ultimately paving
the way to numerous problems in the
future; the eagerness of EU officials to establish a large and competitive Eurozone
led to multiple warning signs being overlooked. As hedge fund manager Jason
Manolopoulos explains, There was shockingly weak due diligence in assessing the
suitability for entry into the euro, and equally weak application of the few rules that
were supposed to police its operation (qtd in Alessi and McBride).
GLOBAL MELTDOWN AND SOVEREIGN DEBT

The effects of this negligence regarding the acceptance of nations into the
Eurozone were not immediately felt; propelled by unprecedented access to credit
from other Eurozone members, the
periphery states initially thrived.
Nonetheless, after liquidity dried up
with the global meltdown of 20072008, unsustainable deficits and
enormous
public
debts
were
revealed. By 2010, although most
pronounced in Greece, sovereign
debt crises spread throughout the
European periphery, leading, in
2011, to the EU and the
International Monetary Fund (IMF)
bailing out the nations of Greece, Ireland, and Portugal (Masters).
32

Greece was, and Alessi and McBride point out, ground zero. Its debtfueled boom was untenable. By November 2009, it had been reveled that Greek
officials had manipulated Greeces balance sheets to hide the scale of its debt, with
its actual deficit exceeding 15 percent of GDP (more than twice the official numbers)
(Smith). A report by George Mason University's School of Public Policy summed up:
"The roots of Greece's fiscal calamity lie in prolonged deficit spending, economic
mismanagement, government misreporting, and tax evasion" (qtd in Alessi and
McBride).
SOVEREIGN BAILOUTS

A default by Greece would have led to its exit from the Eurozone and
potentially to a series of subsequent crises across Europe. Instead of allowing this to
take place, the troika of the European Commission, the European Central Bank
(ECB), and the IMF established the European Financial Stability Facility, which
provided Greece with a $163 billion bailout loan in exchange for the countrys
implementation of strict spending cuts and tax hikes (Alessi and McBride).
As the terms of Greeces bailout evolved, it struggled with austerity in the
two years that followed. In October 2011, a rescue plan provided Greece with a
second bailout of approximately $178 billion, which included a voluntary 50
percent haircut for private holders of the Greek debt (Parkin). In spite of this, the
political crisis that remained forced Greek Prime Minister George Papandreou to
resign to a so-called technocratic national unity government in 2012 (Alessi and
McBride). Later that year bailout terms were once again renegotiated, including
lower interest rates for Greek loans (Carassava).
Ireland and Portugal soon followed. Ireland, unlike Greece, had the origins of
its troubles in a bank crisis caused by its 2008 housing collapse; as Irelands banks
faced enormous losses from the crumbling housing market, the Irish government
stepped in to provide support for the countrys financial system (Muoz). In doing
so, the country accumulated an enormous debt and was forced to seek a $112
billion EU-IMF rescue package in November 2012 in exchange for austerity
measures. For this reason, the countrys economy experienced one of the most
severe recession in the Eurozone (output decreased by 10 percent and
unemployment rose from 4.5 percent to nearly 13 percent in 2010) (Kowsmann).
Portugals debt-financed deficit of over 10 percent of its GDP in 2009 meant
that, as Alessi and McBride put it, when investors withdrew, the country could no
longer finance itself. As a result, by May 2011, Portugal needed a $116 billion
bailout package. Elected in June 2011, Prime Minister Pedro Passos Coelhos
conservative government immediately began implementing austerity measures as
Portugal fell into its deepest recession in decades (The Economist, In the mire)

33

SPREAD OF THE CRISIS

By the end of 2011, the center of the crisis had shifted to Europes largest
countries. Among these was Italy, the Eurozones third largest economy. Given
Italys more than $2.6 trillion in public debt, however, a bailout was not an option,
and then-Prime Minister Silvio Berlusconi was forced to step aside in favor of a new
government, led by economist Mario Monti, entrusted with carrying out budget cuts
and reforms to pensions and labor markets (Povoledo). Currently, Matteo Renzi,
who in 2014 became Italys youngest Prime Minister, has, as did his recent
predecessors, struggled to implement structural reforms and pull Italy out of
recession (The Economist, Renzis Struggle).
Spain, very similar to Ireland, faced the burst of its housing market, which left
its banking sector highly exposed (Alessi and McBride). In 2012, in order to be
able to recapitalize its struggling banks, the Spanish government was forced to
request a bailout, to which EU leaders agreed to use Eurozone funds to provide a
$123 million package. In 2011, conservative, pro-austerity Prime Minister Mariano
Rajoy managed to win the election against Socialist leader Jose Luis Zapatero, yet
may himself be ousted by a new left-wing party in late 2015 (Deutsche Welle,
Eurozone Ministers Approve Spanish Bailout).
In France, socialist Francois Hollande was elected in 2012, bringing with him
a less willing to undertake structural reforms even as recession hit (Alessi and
McBride). With that, France unemployment reached 11 percent and the countrys
competitive position weakened as a result (Tully).
In early 2013, as foreign capital fled, Cyprus faced a collapse of its massively
unbalanced banking sector, leaving much of the financial sector insolvent. The 2012
haircut taken by private holders of Greek debt exacerbated the panic, as Cypriot
banks held many of those devalued Greek bonds. In order to manage this crisis,
Cyprus received a $13 billion bailout in March 2013, requiring Laiki, the country's
largest bank, to close, forcing heavy losses on wealthy depositors (Traynor).
RECOVERIES

By 2014, periphery countries had completed their bailout programs, with the
exception of Cyprus and Greece. Ireland was the first to exit the program in
December 2013. Spain soon followed in January 2014 and Portugal managed to
exit in May of the same year. As a result, growth resumed in the periphery, with
Ireland, having managed to expand its economy by 5 percent in 2014, set to be the
Eurozone economy with the highest growth rate for 2015. Portugals economy is
expected to have grown 1.5 percent by the end of the same year, and Spains
economy continues to expand since 2013 (Kowsmann).
In spite of this, as stated by Alessi and McBride, deep structural problems
persist, including stubbornly high unemployment, rigid labor markets, huge
debt, and weak banking systems (Alessi and McBride). All these three nations,

34

Ireland, Portugal, and Spain, despite their huge improvements, continue to struggle
with high double-digit unemployment (Roman). Similarly, Ireland and Portugal have
racked up public debts above 120 percent of GDP in the course of their bailout
programs.
Overall,
youth
unemployment has reached 23
percent across the Eurozone
(Kowsmann).
Having underwent years
of economic and political
turmoil, Greece managed to
emerge again as a crisis point in
2015. In July 2013, then-Prime
Minister Antonis Samarass
center-right government had
managed to push through a
painful package of wage cuts,
public layoffs, tax increases, and privatizations that allowed Greece to return to
international financial markets by April 2014. As a result, by the end of 2014, the
country was growing by almost 2 percent, and had achieved a budget surplus
(Wearden and Smith).
Still, as Alessi and McBride point out, conditions remained dire: The Greek
economy had contracted by a quarter, unemployment held at 25 percent, and the
debt load (now mostly owed to the public sector) reached 175 percent of GDP
(Alessi and McBride). Anti-austerity political movements on both the Right and Left
gained popularity; consequently, in the Greek national election in early 2015, the
leftist Syriza party won a resounding victory. Syriza Prime Minister Alexis Tsipras
immediately confronted the EU over renegotiating the terms of Greeces bailouta
move which, some fear, could lead to default and an exit from the Eurozone (Kahn).
EU REFORM

With the emergence of these many crises, while the EU has launched reforms
to improve governance and coordinate economic policy, support for
euroskeptic parties has been systematically rising (Alessi and McBride). In 2011,
leaders of the EU agreed to a German-backed fiscal union that allows the European
Commission to play a more active role in national budgets, mandating greater fiscal
coordination and budget discipline. In 2012, the process of creating a Eurozonewide banking system was initiated (Alessi).
Given the importance of monetary policy to reviving the blocs economies,
the ECB has played a central role in the EUs institutional development. In 2012, the
bank revealed a program that allows it to buy up potentially unlimited government
bonds, a move that brought down the borrowing costs for indebted nations (Alessi
and McBride).
35

Amid threats of deflation, in 2015, the President of the ECB, Mario Draghi,
announced a European version of the unorthodox monetary policy known as
quantitative easing (QE). Under the proposal, the ECB will buy $1.3 trillion worth of
assets, an effort to avoid a downward spiral of falling prices and deferred consumer
spending (Cassidy). Deflation is exacerbating the Eurozones low demand, low
investment, and weak lending, and is, in turn, making reestablishing growth
extremely
difficult,
ultimately
leading the IMF to downgrade the
prospects for the region for 2015
and 2016 (IMF).
The ECB has found such
aggressive measures necessary
due to the weakness of the core
economies of Europe (Alessi and
McBride). While the periphery
continues to recover, the European
economies regarded as the big
three (Germany, France, and Italy)
are barely growing or, as is the case for Italy, have fallen into recession. France and
Italy continue to struggle to implement their own structural reforms. Both
economies failed to meet EU budget and deficit targets for 2015, highlighting the
tension between the demands of the European Union and the realities of its
member states (Jolly).
CONCLUSION

In light of one of the worst economic crises in its history, the European Union
has adopted novel measures and implemented important structural changes in an
attempt to bring the situation to an end, yet, in spite of these many changes,
important transformations have yet to take place if its members wish to ensure that
another crisis of the same sort will not take place in the near future.
In order to find a long-term solution to the European economic crisis, EU
member states will not only have to focus on the current larger issues that remain
from the events involving countries such as Greece, Portugal, Spain, Italy, Ireland,
and Cyprus, but alsoand perhaps most importantlyon the broader measures
that will modify the structure of the European Union and will assure its future is void
of a crisis such as this one, ultimately changing the future of the EU as an institution
forever, be it through the full establishment of a fiscal union in the EU, through the
modification of the Eurozone, or through whatever it may be the honorable
members of the European Union shall propose.

36

Positions of Major Nations and Blocs


GERMANY

Germany has showed great sympathy toward Greece, the heart of the
sovereign debt crisis, by giving away the bailout cash. However, it is still accused of
destroying Europes economy. The excessive savings in the German national
treasury actually inflated real-estate bubbles in Ireland and Spain. Now that the
bubble has burst, wages have gone up. Also, as Germany increased its exports to
boost its manufacturing sector by selling more cars and machine tools to the
peripheral European countries, it left the southern countries with unaffordable
external deficits. In 2009, for instance, Germany exported 6.7 billion euros worth of
goods to Greece, but imported only 1.8 billion euros worth in return. Many have
thrown a question to Germany. Has Germany really thought about its role in the
EU? We cannot deny the fact that the external surplus has dragged Germanys
economy out of stagnation, but at the same time, Germany should also think of its
responsibility in the EU.
The serious problem laying in front of Europe now is the disagreement about
how to solve the crisis. While the European Central Bank (ECB) announced that it
would buy some government bonds from Euro-zone countries to help them pay off
debt, Germany is still holding onto its ordoliberal ideas. This German mindset
embraces independent monetary policies with an emphasis on establishing
competitive markets. Troubled Euro-zone countries want Germany to agree to the
Eurobonds plan, or at least come up with some other schemes to mutualize the
debt of countries that share the single currency. Germany left with no comments.
PORTUGAL

Portugals foreign debt-financed deficitover 10 percent of GDP in 2009


meant that when investors withdrew, the country could no longer finance itself. By
May 2011, the country needed a $116 billion bailout package. The conservative
government of Prime Minister Pedro Passos Coelho, elected in June 2011,
immediately set about implementing austerity measures as Portugal fell into its
deepest recession in decades. It is widely agreed that as of late 2014 Portugal has
made enough progress to avert their financial crisis and is no longer considered an
imminent threat to economic stability in the region.
ITALY

At the end of 2011, the center of the debt crisis shifted to Europes larger
countries, including Italythe Eurozones third largest economy. Given Italys more
than $2.6 trillion in public debt, however, a bailout was not an option. Instead, the
then-Prime Minister Silvio Berlusconi was forced to step aside in favor of a new

37

government, led by economist Mario Monti, charged with carrying out budget cuts
and reforms to pensions and labor markets.
SPAIN

Spain, like Ireland, faced a housing-market bust that left its banking sector
highly exposed. The main cause of Spain's crisis was its enormous housing bubble
and the accompanying artificial and unsustainably high GDP growth rate. The
Spanish government supported the critical development by relaxing supervision of
the financial sector and thereby allowing the banks to violate International
Accounting Standards Board standards. So the banks in Spain were able to hide
losses and earnings volatility, mislead regulators, analysts, and investors, and
thereby finance the Spanish real estate bubble. The results of the crisis were
devastating for Spain, including a strong economic downturn, a severe increase in
unemployment, and bankruptcies of major companies. By 2012, it was forced to
request a bailout, and EU leaders agreed to use Eurozone funds to provide the
Spanish government with $123 million to recapitalize its struggling banks.

Timeline of Events
1999: On 1 January, the currency officially comes into existence.
2001: Greece joins the euro.
2002: On 1 January, notes and coins are introduced.
2007: Slovenia joins the euro
2008: Malta and Cyprus join the euro
December, 2008: EU leaders agree on a 200bn-euro stimulus plan to help boost
European growth following the global financial crisis.
2009 Slovakia joins the euro. Estonia, Denmark, Latvia and Lithuania join the
Exchange Rate Mechanism to bring their currencies and monetary policy into line
with the euro in preparation for joining.
April 2009: the EU orders France, Spain, the Irish Republic and Greece to reduce
their budget deficits - the difference between their spending and tax receipts.

38

October 2009: amid much anger towards the previous government over corruption
and spending, George Papandreou's Socialists win an emphatic snap general
election victory in Greece.
November 2009: concerns about some EU member states' debts start to grow
following the Dubai sovereign debt crisis.
December 2009: Greece admits that its debts have reached 300bn euros - the
highest in modern history. Greece is burdened with debt amounting to 113% of
GDP - nearly double the Eurozone limit of 60%. Ratings agencies start to
downgrade Greek bank and government debt.
January 2010: an EU report condemns "severe irregularities" in Greek accounting
procedures. Greece's budget deficit in 2009 is revised upwards to 12.7%, from
3.7%, and more than four times the maximum allowed by EU rules. The European
Central Bank dismisses speculation that Greece will have to leave the EU.
February 2010 Greece unveils a series of austerity measures aimed at curbing the
deficit. Concern starts to build about all the heavily indebted countries in Europe Portugal, Ireland, Greece and Spain.
February 11, 2010: the EU promises to act over Greek debts and tells Greece to
make further spending cuts. The austerity plans spark strikes and riots in the streets.
March 2010: Mr. Papandreou continues to insist that no bailout is needed. The euro
continues to fall against the dollar and the pound.
The Eurozone and IMF agree a safety net of 22bn euros to help Greece - but no
loans.
April 2010: following worsening financial markets and more protests, Eurozone
countries agree to provide up to 30bn euros in emergency loans.
Greek borrowing costs reach yet further record highs. The EU announces that the
Greek deficit is even worse than thought after reviewing its accounts - 13.6% of
GDP, not 12.7%.
May 2, 2010: Eurozone members and the IMF agree a 110bn-euro bailout package
to rescue Greece. The euro continues to fall and other EU member state debt starts
to come under scrutiny, starting with the Republic of Ireland.
November, 2010: the EU and IMF agree to a bailout package to the Irish Republic
totaling 85bn euros. The Irish Republic soon passes the toughest budget in the
country's history. Amid growing speculation, the EU denies that Portugal will be

39

next for a bailout.


January 1, 2011: Estonia joins the euro, taking the number of countries with the
single currency to 17.
February 2011: Eurozone finance ministers set up a permanent bailout fund, called
the European Stability Mechanism, worth about 500bn euros.
April 2011: Portugal admits it cannot deal with its finances itself and asks the EU for
help.
May 2011: Eurozone and the IMF approve a 78bn-euro bailout for Portugal.
June 2011: Eurozone ministers say Greece must impose new austerity measures
before it gets the next tranche of its loan, without which the country will probably
default on its enormous debts.
Talk abounds that Greece will be forced to become the first country to leave the
Eurozone.
July 2011: Greek parliament votes in favor of a fresh round of drastic austerity
measures, the EU approves the latest tranche of the Greek loan, worth 12bn euros.
A second bailout for Greece is agreed. The Eurozone agrees a comprehensive
109bn-euro ($155bn; 96.3bn) package designed to resolve the Greek crisis and
prevent contagion among other European economies.
August 2011: European Commission President Jose Manuel Barroso warns that the
sovereign debt crisis is spreading beyond the periphery of the Eurozone. The yields
on government bonds from Spain and Italy rise sharply - and Germany's falls to
record lows - as investors demand huge returns to borrow.
August 7, 2011: European Central Bank says it will buy Italian and Spanish
government bonds to try to bring down their borrowing costs, as concern grows
that the debt crisis may spread to the larger economies of Italy and Spain.
September 2011: Spain passes a constitutional amendment to add in a "golden
rule," keeping future budget deficits to a strict limit. Italy passes a 50bn-euro
austerity budget to balance the budget by 2013 after weeks of haggling in
parliament. The European Commission predicts that economic growth in the
Eurozone will come "to a virtual standstill" in the second half of 2011, growing just
0.2% and putting more pressure on countries' budgets.
September 19, 2011 Greece holds "productive and substantive" talks with its

40

international supporters, the European Central Bank, European Commission and


IMF. The following day, Italy has its debt rating cut by Standard & Poor's, to A from
A+. Italy says the move was influenced by "political considerations". That same day,
in its World Economic Outlook, the IMF cuts growth forecasts and warns that
countries are entering a 'dangerous new phase'.
September 22, 2011 with data showing that growth in the Eurozones private sector
shrank for the first time in two years.
September 23, 2011 The sense of urgency is heightened when IMF head Christine
Lagarde urges countries to "act now and act together" to keep the path to
economic recovery on track. On the same day, UK Prime Minister David Cameron
calls for swift action on the debt crisis.
September 24, 2011: The next day US Treasury Secretary Timothy Geithner tells
Europe to create a "firewall" around its problems to stop the crisis spreading. A
meeting of finance ministers and central bankers in Washington leads to more calls
for urgent action, but a lack of concrete proposals sparks further falls in share
markets. After days of intense speculation that Greece will fail to meet its budget
cut targets, there are signs of a Eurozone rescue plan emerging to write down
Greek debt and increase the size of the bloc's bailout fund.
September 28, 2011: European Union head Jose Manuel Barroso warns that the EU
"faces its greatest challenge", there is a widespread view that the latest efforts to
thrash out a deal have failed. The sense that events are spinning out of control are
underlined by Foreign Secretary William Hague, who calls the euro a "burning
building with no exits".
On 4 October, Eurozone finance ministers delay a decision on giving Greece its
next instalment of bailout cash, sending European shares down sharply.
Speculation intensifies that European leaders are working on plans to recapitalize
the banking system.
October 6, 2011: Bank of England injects a further 75bn into the UK economy
through quantitative easing, while the European Central Bank unveils emergency
loans measures to help banks.
October 8, 2011: Financial markets are bolstered by news on 8 October that the
leaders of Germany and France have reached an accord on measures to help
resolve the debt crisis. But without publication of any details, nervousness remains.
October 10, 2011: Relief in the markets that the authorities will help the banking
sector grows on when struggling Franco-Belgian bank Dexia receives a huge

41

bailout.
October 10, 2011: an EU summit on the debt crisis is delayed by a week so that
ministers can finalize plans that would allow Greece its next bailout money and
bolster debt-laden banks.
October 14, 2011: G20 finance ministers meet in Paris to continue efforts to find a
solution to the debt crisis in the Eurozone.
October 21 2011: Eurozone finance ministers approve the next, 8bn euro ($11bn;
7bn), tranche of Greek bailout loans, potentially saving the country from default.
October 26, 2011: European leaders reach a "three-pronged" agreement described
as vital to solve the region's huge debt crisis. After marathon talks in Brussels, the
leaders say some private banks holding Greek debt have accepted a loss of 50%.
Banks must also raise more capital to protect them against losses resulting from any
future government defaults.
December 9, 2011: after another round of talks in Brussels going through much of
the night, French President Nicolas Sarkozy announces that Eurozone countries and
others will press ahead with an inter-governmental treaty enshrining new budgetary
rules to tackle the crisis.
Attempts to get all 27 EU countries to agree to treaty changes fail due to the
objections of the UK and Hungary. The new accord is to be agreed by March 2012,
Mr. Sarkozy says.
January 13, 2012: credit rating agency Standard & Poor's downgrades France and
eight other Eurozone countries, blaming the failure of Eurozone leaders to deal with
the debt crisis.
16 January, 2012: the agency also downgrades the EU bailout fund, the European
Financial Stability Facility.
January 13, 2012: talks between Greece and its private creditors over a debt writeoff deal stall. The deal is necessary if Greece is to receive the bailout funds it needs
to repay billions of euros of debt in March.
January 31, 2012: The "fiscal pact" agreed by the EU in December is signed. The
UK abstains, as does the Czech Republic, but the other 25 members sign up to new
rules that make it harder to break budget deficits.
Weeks of negotiations ensue between Greece, private lenders and the "troika" of
the European Commission, the European Central Bank and the IMF, as Greece tries

42

to get a debt write-off and make even more spending cuts to get its second bailout.
February 10, 2012: Greece's coalition government finally agrees to pass the
demands made of it by international lenders. This leads to a new round of protests.
But the Eurozone effectively casts doubt on the Greeks' figures, saying Athens must
find a further 325m euros in budget cuts to get the aid.
February 12, 2012: Greece passes the unpopular austerity bill in parliament - two
months before a general election. Coalition parties expelled more than 40 deputies
for failing to back the bill.
February 22, 2012: a Markit survey reports that the Eurozone service sector has
shrunk unexpectedly, raising fears of a recession.
February 23, 2012: European Commission predicts that the Eurozone economy will
contract by 0.3% in 2012.
March 2012: begins with the news that the Eurozone jobless rate has hit a new high.
However, the economic news takes a turn for the better just days later with official
figures showing that the Eurozones retail sales increased unexpectedly in January
by 0.3%, and the OECD reports its view that the region is showing tentative signs of
recovery.
March 13, 2012: Eurozone finally backs a second Greek bailout of 130bn euros. IMF
backing was also required and was later given.
The month ends with a call from the OECD for the Eurozone rescue fund to be
doubled to 1tn euros. The German chancellor, Angela Merkel says she would favor
only a temporary boost to its firepower.
April 12, 2012: Italian borrowing costs increase in a sign of fresh concerns among
investors about the country's ability to reduce its high levels of debt. In an auction
of three-year bonds, Italy pays an interest rate of 3.89%, up from 2.76% in a sale of
similar bonds the previous month.
Attention shifted to Spain the next day, with shares hit by worries over the country's
economy and the Spanish government's 10-year cost of borrowing rose back
towards 6% - a sign of fear over the country's creditworthiness.
April 18, 2012: Italian government cut its growth forecast for the economy in 2012.
It was previously predicting that the economy would shrink by 0.4%, but is now
forecasting a 1.2% contraction.
April 19, 2012: there was some relief for Spain after it saw strong demand at an

43

auction of its debt, even though some borrowing costs rose.


The 10-year bonds were sold at a yield of 5.743%, up from 5.403% when the bonds
were last sold in February.
May 6, 2012: a majority of Greeks vote in a general election for parties that reject
the country's bailout agreement with the EU and International Monetary Fund.
May 16, 2012: Greece announces new elections for 17 June after attempts to form a
coalition government fail.
May 25, 2012: Spain's fourth largest bank, Bankia, says it has asked the government
for a bailout worth 19bn euros ($24bn; 15bn).
June 9, 2012: after emergency talks Spain's Economy Minister Luis de Guindos says
that the country will shortly make a formal request for up to 100bn euros ($125bn;
80bn) in loans from Eurozone funds to try to help shore up its banks.
June 12, 2012: optimism over the bank bailout evaporates as Spain's borrowing
costs rise to the highest rate since the launch of the euro in 1999.
June 15, 2012: former UK chancellor of the exchequer Gordon Brown underlined
fears of contagion with a warning that France and Italy may need a bailout.
June 17, 2012: Greeks went to the polls, with the pro-austerity party New
Democracy getting most votes, allaying fears the country was about to leave the
Eurozone.
November 4, 2013: Customs agents at borders of European countries in economic
crisis say they are seizing increasing amounts of undeclared cash exceeding 10,000
euros each traveler within European Union is allowed to carry; cash smuggling is
following political currents as some Europeans seek to hide their wealth from rising
taxes, high-profile tax investigations, and tightening rules at Swiss banks and other
traditional havens.
November 5, 2013: Negotiations are opened on chapter 22 Reg. Policy and
Coordination of Structural Instruments
November 14, 2013: European Union's top economic policy chiefs, invoking new
oversight tools, warn Germany, France and 14 other member countries to address
problems with their economies; warnings are largely advisory, and are unlikely to
result in the fines allowed for in European rules.

44

November 27, 2013: International Monetary Fund is advocating a more aggressive


approach to debt restructuring that would shift some pain to the private sector and
away from German-style austerity; it is pushing hard for plan that would impose
upfront losses on bondholders the next time euro zone country requests bailout.
*The
timeline
above
contains
extracts
from
<http://www.bbc.com/news/business-13856580>
<http://ec.europa.eu/economy_finance/economic_governance/timeline/index_en.htm>

and

Definition of Key Terms


BAILOUT

A situation in which a business, individual or government offers money to a failing


business in order to prevent the consequences that arise from a business's downfall.
Bailouts can take the form of loans, bonds, stocks or cash.
SOVEREIGN DEBT

Bonds issued by a national government in a foreign currency, in order to finance the


issuing country's growth. Sovereign debt is generally a riskier investment when it
comes from a developing country, and a safer investment when it comes from a
developed country.
EUROZONE

A geographic and economic region that consists of all the European


Union countries that have fully incorporated the euro as their national currency. Also
referred to as "euroland"
INTERNATIONAL MONETARY FUND (IMF)

The International Monetary Fund (IMF) is an international organization created for


the purpose of standardizing global financial relations and exchange rates. The IMF
generally monitors the global economy, and its core goal is to economically
strengthen its member countries. Specifically, the IMF was created with the
intention of: (1) promoting global monetary and exchange stability, (2) facilitating
the expansion and balanced growth of international trade, and (3) assisting in the
establishment of a multilateral system of payments for current transactions.
EUROPEAN CENTRAL BANK (ECB)

The central bank responsible for the monetary system of the European Union
(EU) and the euro currency. The bank was formed in Germany in June 1998 and

45

works with the other national banks of each of the EU members to


formulate monetary policy that helps maintain price stability in the European Union.
DEFICIT

The amount by which a resource falls short of a mark, most often used to describe a
difference between cash inflows and outflows. Deficit is the opposite of surplus and
is synonymous with shortfall or loss.
DEBT

An amount of money borrowed by one party from another. Many


corporations/individuals use debt as a method for making large purchases that they
could not afford under normal circumstances. A debt arrangement gives the
borrowing party permission to borrow money under the condition that it is to be
paid back at a later date, usually with interest.
EUROPEAN FINANCIAL STABILITY FACILITY

An organization created by the European Union to provide assistance to member


states with unstable economies. The European Financial Stability Facility is a special
purpose vehicle (SPV) managed by the European Investment Bank, a lending
institution. The fund raises money by issuing debt, and distributes the funds to
Eurozone countries whose lending institutions need to be recapitalized, who need
help managing their sovereign debt or who need financial stabilization.
HAIR CUT

1. The difference between prices at which a market maker can buy and sell a
security.
2. The percentage by which an asset's market value is reduced for the purpose
of calculating capital requirement, margin and collateral levels.
FISCAL POLICY

Government spending policies that influence macroeconomic conditions. Through


fiscal policy, regulators attempt to improve unemployment rates, control inflation,
stabilize business cycles and influence interest rates in an effort to control the
economy. Fiscal policy is largely based on the ideas of British economist John
Maynard Keynes (18831946), who believed governments could change economic
performance by adjusting tax rates and government spending.
MONETARY POLICY

Monetary policy is the actions of a central bank, currency board or other regulatory

46

committee that determine the size and rate of growth of the money supply, which in
turn affects interest rates. Monetary policy is maintained through actions such as
modifying the interest rate, buying or selling government bonds, and changing the
amount of money banks are required to keep in the vault (bank reserves).
MAASTRICHT TREATY

A treaty that is responsible for the creation of the European Union, signed in
Maastricht, a city in the Netherlands. The Maastricht Treaty was signed on February
7, 1992, by the leaders of 12 member nations, and it reflected the serious intentions
of all countries to create a common economic and monetary union. Also known as
the Treaty on European Union.
MONETARY UNION

When two or more groups (usually countries) share a common currency or decide to
peg their exchange rates in order to keep the value of their currency at a certain
level. One of the main goals of forming a currency union is to synchronize and
manage each country's monetary policy. Also referred to as a "currency union.
EUROPEAN ECONOMIC COMMUNITY (EEC)

An institution of the European Union, an economic association of western European


countries set up by the Treaty of Rome (1957). The original members were France,
West Germany, Italy, Belgium, the Netherlands, and Luxembourg.
SINGLE EUROPEAN ACT

The Single European Act (SEA) revises the Treaties of Rome in order to add new
momentum to European integration and to complete the internal market. It amends
the rules governing the operation of the European institutions and expands
Community powers, notably in the field of research and development, the
environment and common foreign policy.
MAASTRICHT CONVERGENCE CRITERIA

There are five criteria set out in the Treaty of Maastricht that must be met by
European countries if they wish to adopt the European Union's single currency, the
euro. They are: 1) inflation of no more than 1.5 percentage points above the
average rate of the three EU member states with the lowest inflation over the
previous year. 2) A national budget deficit at or below 3 percent of gross domestic
product (GDP). 3) National public debt not exceeding 60 percent of gross domestic
product. A country with a higher level of debt can still adopt the euro provided its
debt level is falling steadily. 4) Long-term interest rates should be no more than two
percentage points above the rate in the three EU countries with the lowest inflation

47

over the previous year. 5) The national currency is required to enter the ERM 2
exchange rate mechanism two years prior to entry.
HEDGE FUND

Hedge fund is a type of investment vehicle and business structure that aggregates
capital from multiple investors and invests that capital in securities and other
investments. Hedge funds are different from mutual funds in that they are willing to
take on more risk and their leverage is not capped by regulators. Hedge funds
normally invest in liquid assets. However, they can invest in different types of
investment products, and hedge fund managers have been adding real estate to
their lists of nontraditional investments. Of all the hedge funds in operation, roughly
40 of them heavily invest in real estate, giving them the name of "real estate hedge
funds."

Guiding Questions
1. What are the factors that make your nation vulnerable to a future economic
crisis?
2. What national measures has your countrys government implemented in order
to reduce the exposure to a future economic crisis?
3. What solutions does your country propose to prevent a future economic
crisis?
4. Are austerity measures the most effective means of assuring debt-ridden
economies are forced to implement changes that will reestablish their
economies?
5. Tracing the cause of the Eurozone crisis, what are the lessons learned from
the EUs approach to the Eurozone crisis, and are the derived preventive and
corrective measures adequate or legitimate in preventing the possibility of
another crisis from happening?
6. Should the European Union have greater control over its members fiscal
policies?
7. Should the EU move towards greater integration or revert towards
intergovernmentalism?
8. How can the EU reconcile a common monetary policy with separate fiscal
policies?

48

9. Should the EU have common financial regulations? Is the European Stability


Mechanism sufficient as a permanent mechanism, or is it just a temporary
solution to a likely recurring problem?
10. To what extent should the EU should play a role in its members welfare and
fiscal systems (i.e.: unemployment, pensions, national budgets, taxation etc.)?
11. How should Europe tackle its unemployment crisis, especially as it relates to
youth unemployment?
12. How should the EU address rising euroscepticism?

Further Research
Bloomberg Business animation video The European Debt Crisis Explained
providing an overview of the crisiss multiple facets:
https://youtu.be/kbcvdKwmCtg
European Commission map containing links to pages with detailed information on
each of the EU members economy and their situation in the crisis:
http://ec.europa.eu/economy_finance/explained/economies_of_europe/my_c
ountry/index_en.htm
The New York Times detailed timeline (chronology of coverage) of the European
debt crisis with direct links to articles related to specific events:
http://topics.nytimes.com/top/reference/timestopics/subjects/e/european_sov
ereign_debt_crisis/index.html
Stratfor timeline of articles and situation report pertaining to the European
economic crisis:
https://www.stratfor.com/topics/economics-and-finance/europes-economiccrisis
The euro debt crisis explained and broken down into its basic components:
http://www.economicshelp.org/blog/3806/economics/euro-debt-crisisexplained/
The Economist article European economy guide containing a series of
infographics regarding to the European economys multiple components:

49

http://www.economist.com/blogs/graphicdetail/2015/11/taking-europe-spulse
CFR backgrounder explaining the role of the European Central Bank in the EU:
http://www.cfr.org/europe/role-european-central-bank/p28989
European Commission article on the causes of the European economic crisis:
http://ec.europa.eu/economy_finance/explained/the_financial_and_economic_
crisis/why_did_the_crisis_happen/index_en.htm
European Commission article on the spread of the European economic crisis:
http://ec.europa.eu/economy_finance/explained/the_financial_and_economic_
crisis/why_did_the_crisis_spread/index_en.htm
European Commission article on the EUs response to the financial crisis:
http://ec.europa.eu/economy_finance/explained/the_financial_and_economic_
crisis/responding_to_the_financial_crisis/index_en.htm
European Commission article on the EUs response to the debt crisis:
http://ec.europa.eu/economy_finance/explained/the_financial_and_economic_
crisis/responding_to_the_debt_crisis/index_en.htm
European Commission article on the EUs assistance to indebted nations:
http://ec.europa.eu/economy_finance/explained/the_financial_and_economic_
crisis/assisting_countries_in_trouble/index_en.htm
European Commission animation video European Economy Explained providing a
brief explanation of the inner workings of the European economy:
http://ec.europa.eu/economy_finance/explained/index_en.htm

50

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52

INTEGRATION OF TURKEY
Question of the Integration of Turkey into the European Union

Background Information
INTRODUCTION

Turkey has been fighting to become a member of the European Union since
1987 when it first petitioned to become a part of the European Economic
Community. Since then, Turkey has been working its way through the admissions
process and in 1997 was declared eligible to join the EU. Turkeys cultural, religious
and ethnic majorities differs majorly to those of European Countries, and in
combination to the countrys proximity with the Middle East, Turkey has now
become one of the biggest routes used in the recruitment for ISIS. The Turkish
borders have been strongly affiliated with ISIS oil market, and so the European
Union worries that if Turkey abides by the Schengen Agreement, it will be harder to
monitor travels and will endanger the citizens of Europe.
As a major emerging economy and a member of NATO and the G20, Turkey
is a key partner for the European Union. It is recognized as an active regional

53

foreign policy player, with a strategic location, including for the EU's energy
security.
However, many view Turkey as a possible solution into the Economic Crises,
due to the fact that the Turkish National Economic growth averaged at around 3.5%
for 2014. Adding Turkey to the EU would inject 75 million consumers to the
European market and would, eventually, help revitalize it. British Prime Minister
David Cameron has even said that the Turkish admission to the EU is vital for our
economy, vital for our security and vital for our diplomacy." Currently, in order for
eight other negotiation chapters to be opened Turkey must comply with the
Additional Protocol of the Ankara Agreement to Cyprus, and so Turkeys
membership remains on hold on a list alongside Montenegro, the former Yugoslav
Republic of Macedonia and Serbia.
In this Council, delegates must come together and strive towards a collective
agreement in order decide the future of the Turkish nation as a potential member of
the European Union. Delegates must consider above all, economic, political, moral,
cultural and geographical implications in order to ensure the best possible future for
all countries in question. The EU is therefore committed to intensify further the
political dialogue with Turkey in particular on foreign policy issues of mutual
interest.
There are currently 13 open negotiation chapters:

Free Movement of Capital Company


Law Intellectual Property
Law Information Society and Media
Food Safety, Veterinary & Phytosanitary Policy
Taxation Statistics Enterprise & Industrial Policy
Trans-European Networks
Environment
Consumer & Health Protection
Financial Control
Regional policy & coordination of structural instruments

The last official procedures were opened on chapter 22 Reg. Policy and
Coordination of Structural Instruments, on April 5, 2013.
THE DEBATE
*Extracted from, <http://www.theweek.co.uk/24083/turkey-and-the-eu-the-pros-and-cons-of-membership>

Security
The rise of Islamic State in Iraq and Syria has put Turkey at the center of a
conflict that has global consequences. Some European officials, including French
foreign affairs minister Laurent Fabius, believe allowing Turkey to become a
member will create a strong ally in the fight against Islamic terrorism in the region,

54

reports French radio station RFI. Conversely, the EU's open movement laws could
create a passageway both in and out of Syria for jihadists and new recruits.
Employment
Allowing Turkey to join the union would provide a fresh influx of workers for
Europe. The Turkish population is young and increasingly well-educated and some
argue the ageing EU cannot afford to block this demographic from its workforce.
But at a time when many governments are under increasing pressure to reduce high
levels of immigration, allowing millions more workers to cross their borders is not
expected to be high on their agenda.
Economy
The Turkish economy is growing rapidly and it is also the country across
which key pipelines deliver large supplies of oil and gas from Asia. Free trade
between EU countries is one of the greatest advantages of the union and granting
Turkey membership would create a whole new market for European goods.
However, others argue that with a gross national income per capita of just $18,800
(less than Greece), Turkey is not yet rich enough to join the EU and taxpayers in
wealthier countries would be forced to subsidize it.
Culture
Turkey's geographic position at the crossroads between Europe and the East
allows it to provide a much-needed bridge between the western and Islamic worlds,
especially at a time when tensions between the two remain heightened. Many argue
that Turkey is better equipped to mediate in the Middle East than European
countries. During the 2009 crisis in Gaza, Turkish diplomats were able to talk
directly to the Hamas leadership and the country also has comparatively good
relations with Israel. But leaders in a number of powerful EU nations, including
Germany, have long been wary of allowing Turkey into the bloc, "arguing that the
cultural, political and geographic differences may be too vast," reports the Wall
Street Journal.
Adherence to EU laws
Countries hoping to join the EU are required to achieve a certain standard of
democracy and human rights. Since it first applied for membership, Turkey has
made some gains towards these goals, including abolishing the death penalty,
introducing tougher laws against torture, as well as reforms to help women and the
minority Kurdish population. However, there are serious concerns about increasing
authoritarianism in President Recep Tayyip Erdogan's government and the
widespread crackdown on dissent and free speech. Despite modest reforms
benefiting women, human rights organizations say there has been a dramatic rise in
violence against women under Erdogan's rule, the BBC reports. The countrys

55

territorial claim to Northern Cyprus is another ongoing bone of contention for


Europe, as is Turkeys refusal to recognize the Armenian Genocide of 1915.

Positions of Major Nations and Blocs


GERMANY

While in April 2004 polls showed only 12 percent of Germans supported


Turkish accession, wit 66 percent against, 11 years later the scenario could not be
more different. Currently, German Chancellor Angela Merkel is advocating on
behalf of the acceleration of Turkeys accession to the EU. Merkels statement came
as a result of Ankaras support of the current migrant situation in the European
Union. Turkey has taken in more than two million Syrian refugees since a civil war
erupted there in 2011, according to UN figures. She said Berlin was prepared to
support opening EU accession talks on economic and monetary affairs, and would
also consider opening more of the 35 total so-called "policy chapters"
(DeutscheWelle).
FRANCE

French President Nicholas Sarkozy stated on September 26, 2007 "I do not
think that Turkey has a place in Europe," and hoped that in doing so the message
that there is no official place for [Muslims] in Europe would be spread. Presently,
French President Franois Hollande has been cautiously backing Turkeys aim to
join the European Union since the beginning of his presidency. Yet, in light of the
recent terrorist attacks, the full shut down of French borders and extreme
carefulness with which foreign policy is being dealt with it hard to pin-point what it
the paramount strategy that France should take currently.
UNITED KINGDOM

On May 8th 2015, David Cameron, British Prime Minister, was re-elected. One
of his campaign promises, present in his manifesto, was that a referendum was in
fact going to be held to decide if the UK was to continue as a member of the EU. By
the end of 2017 the world will know if the British people wishes or not to remain
part of the European Union. While the Brits have been mainly looking inward when
it comes to the membership of the EU, ever since Tony Blairs government, support
for the Turkish accession into the EU has been escalating and current PM, Cameron,
has repeatedly stated that he still want[s] Turkey to join EU, despite migrant fears.
British and Turkish cooperates grows increasingly and have even agreed to
cooperate in terms of intelligence.

56

GREECE

An ardent opponent of Turkeys bid for many years, Greece shifted its
position following sustained pressure from the EU and the US and as previously
mentioned following the 1999e earthquakes that hit both countries. Ever since,
Greek support for Turkish membership has endured several potential irritations over
the question of Cyprus and is based on the conception that bilateral problems will
be easier to solve once Turkey has become a member of the EU. Now, relations
between NATO allies have been pretty strained strained in the past by disputes
over territorial borders in the Aegean Sea and the partition of Cyprus, and both
Greece and Turkey see this as the accession of Turkey into the EU as a window of
opportunity
AUSTRIA

For years now, one of the main opponents to Turkeys accession into the
European Union has been Austria. Ex-Chancellor Alfred Gusenbauer has previously
stated that Turkey in the EU would mean the end of the EU. Austria would prefer
forging a special partnership between the European Union and Turkey over full EU
membership for Ankara, Austrian Foreign Minister Michael Spindelegger has said.

Timeline of Events
MODERN TURKEY
1923: Grand National Assembly declares Turkey a republic and Kemal Ataturk
president.
1928: Turkey becomes secular: clause retaining Islam as state religion removed from
constitution.
1945: Neutral for most of World War II, Turkey declares war on Germany and Japan,
but does not take part in combat. Joins United Nations.
1950: First free elections won by opposition Democratic Party.
1963: Association agreement signed with European Economic Community (EEC).
1971: Army forces Demirel's resignation after spiral of political violence.
1974: Turkish troops invade Northern Cyprus.

57

1978: US trade embargo resulting from invasion lifted.


1980: Military coup follows political deadlock and civil unrest. Imposition of martial
law.
1982: New constitution creates seven-year presidency, and reduces parliament to
single chamber.
1983: General election won by Turgut Ozal's Motherland Party.
1984: Turkey recognises "Turkish Republic of Northern Cyprus."

Kurdistan Workers' Party launches separatist guerrilla war in


1987: Turkey applies for full EEC membership.
1989: The European Commission endorses Turkeys eligibility for membership, but
defers the assessment of its application.
1990: Turkey allows US-led coalition against Iraq to launch air strikes from Turkish
bases.
1992: 20,000 Turkish troops enter Kurdish safe havens in Iraq in anti-PKK operation.
1993: Tansu Ciller becomes Turkey's first woman prime minister, and Demirel
elected president.
1995: Major military offensive launched against the Kurds in northern Iraq, involving
some 35,000 Turkish troops.

Pro-Islamist Welfare Party wins elections but lacks support to form government two major center-right parties form anti-Islamist coalition.
December 31, 1995: Turkey-EU Association Council finalizes agreement creating a
customs union.
December 13, 1997:
become EU member.

Luxembourg Council summit declares Turkey eligible to

December 11, 1999:


Country

Helsinki European Council declares Turkey a Candidate

March 23, 2001: Council adopts Accession Partnership for Turkey.


May 19, 2003: Council adopts revised Accession Partnership for Turkey.
December 12, 2004: European Council declares that Turkey sufficiently fulfills the

58

criteria for opening accession negotiations in October 2005


October 3, 2005:
formally opened.

Council adopts negotiating framework, and negotiations are

October 3, 2005: "Screening process" begins to determine to what degree Turkey


meets the membership criteria and what remains to be done.
June 1, 2006: Negotiations are opened and closed on Chapter 25 (science and
research).
December 11, 2006: Because Turkey refused to apply to Cyprus the Additional
Protocol to the Ankara Agreement, Council decides that eight chapters will not be
opened.
February 2, 2008: Council adopts revised Accession Partnership for Turkey.
June 30, 2010: Negotiations are opened on Chapter 12 (food safety, veterinary
and phytosanitary policy).
April 17, 2012: Positive Agenda intended to bring fresh dynamics into the EUTurkey relations was launched.
November 5, 2013: Negotiations are opened on chapter 22 Reg. Policy and
Coordination of Structural Instruments.
*The
timeline
above
was
extracted
from
<http://www.bbc.com/news/world-europe-17994865>
<http://ec.europa.eu/enlargement/countries/detailed-country-information/turkey/index_en.htm>

and

Definition of Key Terms


ABSORPTION CAPACITY

The ability of a country or organization to receive aid and use it effectively. For
example, a country may receive enough money to enable all its children to attend
primary school - but owing to a lack of teachers, lack of schools or a poor
administrative system, it is impossible to spend this money in the short term. Work
must first be done to train teachers, build schools and improve the efficiency of the
system - thus raising the country's 'absorptive capacity'.

59

ACCESSION

The act or process by which someone rises to a powerful and important position. In
the case of the topic at hand, accession relates solely to the formal subscription to
the Accession Treaty.
ACCESSION TREATY

Declares a countrys membership to the EU. A country does so once it has met the
Copenhagen Criteria and all negotiations have been completed.
ACQUIS COMMUNAUTAIRE

French term used to refer to the obligation a country of the EU has to share. In short
the Acquis Communautaire is EU-Law, in it lays the fundamental laws and principles
all treaties should abide by and enforce. It is composed of more than 108,000
documents and all countries wishing to become official member must accept the full
Acquis before managing to do so. (http://en.euabc.com/word/12)
ANKARA ASSOCIATION AGREEMENT

Was made in order to bring Turkey and the European Union closer in 1963, with the
final aim of the Turkish accession into the EEC (European Economic Community).
The agreement initiated a 3-step process in which a Customs Unit would be
created. Some of its goals included the continuous and balanced strengthening of
trade and economic relations between the Parties.
BENCHMARKING

Method by which a country is analyzed in order to examine if the accession criteria


benchmark standard is met. Categories include: legal system, business, industry,
etc.
CANDIDATE COUNTRY

A country is deemed to be a candidate country when, having examined its


application for EU membership, the EU Council formally recognizes the country as
candidate, thus granting the country candidate status. Acceding countries are those
candidate countries which have completed accession negotiations and signed an
accession treaty with the EU. These include: Albania, The former Yugoslav Republic,
Montenegro, Serbia and Turkey.
(http://ec.europa.eu/economy_finance/international/non_eu/candidate/index_en.ht
m)
COPENHAGEN CRITERIA

1. Stable institutions guaranteeing democracy, the rule of law, human rights and

60

respect for and protection of minorities;


2. A functioning market economy and the capacity to cope with competition and
market forces in the EU;
3. The ability to take on and implement effectively the obligations of
membership, including adherence to the aims of political, economic and
monetary union.
4. Absorption Capacity of the EU: accepting new members while maintaining
momentum of European Integration
CUSTOMS UNION

The Customs Union is a foundation of the European Union and an essential element
in the functioning of the single market. The single market can only function properly
when there is a common application of common rules at its external borders. This
implies that the 28 Customs administrations of the EU must act as though they were
one. These common rules go beyond the Customs Union as such - with its common
tariff - and extend to all aspects of trade policy, such as preferential trade, health
and environmental controls, the common agricultural and fisheries policies, the
protection of our economic interests by non-tariff instruments and external relations
policy measures.
NEGOTIATION CHAPTERS

Can be defined as the following: The content, principles and political objectives of
the Treaties on which the Union is founded; Legislation and decisions adopted
pursuant to the Treaties, and the case law of the Court of Justice; Other acts, legally
binding or not, adopted within the Union framework, such as inter-institutional
agreements, resolutions, statements, recommendations, guidelines; Joint actions,
common positions, declarations, conclusions and other acts within the framework of
the common foreign and security policy; Joint actions, joint positions, conventions
signed, resolutions, statements and other acts agreed within the framework of
justice and home affairs; International agreements concluded by the Communities,
the Communities jointly with their Member States, the Union, and those concluded
by the Member States among themselves with regard to Union activities. 13 of
these are still open, and 1 has been provisionally closed.

Guiding Questions
1. Do the pros for Turkey joining the EU outweigh the cons?

61

2. What could be established as the guidelines for Turkey being accessioned


into the EU?
3. In light of the growing Migrant Crisis, what could Turkey do to help the EU?
4. How would the EU manage to control the Turkish borders in regards to both
the safety of the Migrants and of the EU citizens.
5. Could Turkey be considered more of a liability than an asset due to its close
geographical and cultural proximity to the conflicts in the Middle East?
6. Does Turkey truly fit in as a country for the EU
7. Turkeys population is expected to surpass Germanys in a few years, how
much percent of the QMV would be allocated to Germany?
8. Could integrating Turkey disturb the International Community due to its long
standing claim to Cyprus?

Further Research
http://www.bbc.com/news/world-europe-11283616
http://www.dailymail.co.uk/news/article-3278181/Turkey-join-EU-sooner-helpingdisorderly-migrant-crisis-says-Merkel-visit-Istanbul.html
http://www.debate.org/opinions/should-turkey-be-given-membership-in-the-eu
http://www.debatingeurope.eu/2012/04/11/should-turkey-join-the-europeanunion/
http://www.independent.co.uk/news/world/europe/europe-refugee-crisis-angelamerkel-offers-to-speed-up-turkey-eu-membership-in-exchange-for-help-toa6699071.html
http://www.infoplease.com/country/turkey.html
http://www.telegraph.co.uk/news/worldnews/europe/turkey/11937537/EUapproves-Turkey-migrant-plan.html
http://www.voanews.com/content/turkey-european-union-accessionprospects/3015279.html

62

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