Saturday, 31 January 2009

Life In the Dark

If you've never tried eating in the dark, I highly recommend it. Last night I went to a blind restaurant here in Zurich called Blindekuh. It's an establishment where all the waiters are blind, and all the patrons eat completely in the dark, without being able to see a thing. Considering I had just been made redundant/laid off from my only steady freelancing gig an hour before we went to eat, it was hard not to see the experience as a metaphor for the state of the world right now.

I wasn't quite sure what to expect from the blind dining experience. I went with my father and some of his friends, apparently they had to make reservations for it four months ago. It's pretty wild. When you go to the table you are guided in by your waiter into a large dining room that is completely pitch black. You go through the entire meal and then are led out without ever having seen the room you were in. It's interesting how being in the dark heightens all your other senses. You suddenly become aware of the tone of people's voices, the feel of the objects around you and the taste of the food. Eating is a bit of an adventure. You have to move your hands very slowly around the table to make sure you don't knock anything over. You have no idea what it is you're putting in your mouth, so you just have to guess from the texture. Sometimes I would bring the fork to my mouth to find there was nothing on it! I speculated that it would be hilarious if there was a night-vision camera trained on us and at the end of the evening we could all watch ourselves hanging our heads over our plates, dragging our food into our wide open mouths and eating like infants. Actually, maybe that wouldn't be so pleasant to watch!

Of course I was a little distracted throughout the evening because just before we left I got a call from the web company I do my regular writing shift for saying they're having money problems and could no longer have a Europe correspondent. It's not a huge big deal as it's just one of my sources of income, but it was the only one that came with a regular daily schedule and a regular paycheck. But times are tough and I can understand why they can't afford to have foreign contractors any more. I was going to stop doing it in the next few months anyway, assuming I can find a full-time job soon. But it was a rather startling reminder of the state the world is in right now.

By my count 15 of my friends in the US and UK have been laid off in the past month (judging from Facebook status updates). They're not alone. US unemployment rose 159,000 to a record 4.78 million Americans this week. The Eurozone unemployment rate has risen to 8 percent. The predictions and analysis coming from the World Economic Forum in Davos this week have been truly frightening. And nobody seems to be quite certain of what's coming next, all they seem to agree on is that it's going to be bad.

Sitting there helpless in the dark last night, at first I felt quite anxious. But soon I realized I wasn't alone, we were all in this together. Me, my table, and all the other diners were also trying to navigate their way through this new uncertain world. But by working together, advising each other on where the obstacles in the dark lie, we made it through. By the end of the meal it almost felt normal to be eating in the dark. As we all feel blindly around the table in 2009, perhaps it will be good to keep in mind that we're all in the same boat.

It's going to be an interesting year in the dark.

Friday, 30 January 2009

'Black Thursday'

The one-day strike in France has come to an end, and despite some predictions, it didn't shut down the country. Yet for anyone who wanted to dismiss this simply as the French being French, there were signs today that this wasn't your average French protest.

The nation-wide industrial action severely disrupted air, rail and commuter service across the country. Air France stopped its flights, and hospitals had to operate at reduced capacity. Even journalists didn't show up for work today.

Industrial action is hardly unusual in France, but one thing was significantly different about today's strike: the protest wasn't against a specific issue, but rather at the government's handling of the entire global economic crisis. The French public is furious at the perceived unfairness of government bailouts going to the bankers and investors who caused the crisis in the first place. The protests turned violent this evening, with riots and fires erupting throughout the city and clashes with riot police.

Sarkozy recently said that a country like France will be hard to govern during this global economic crisis. He seemed today to be quite rattled by the strike. And with the dismal views coming out of Davos this week, things clearly are only going to get worse. As these protests keep occurring with increasing frequency in Europe, it's looking more and more likely that 2009 will be a year of discontent on the streets of Europe's capitals.

Wednesday, 28 January 2009

Moving to Brussels

Well this is it, I'm finally doing it. In four days I'll be moving on from Zurich and hopping a train up to Brussels, trying to make it as an EU journalist. I'll still be doing my work-at-home job in the mornings, but now in the afternoons I'll be able to go to events, press conferences and interviews for freelance articles.

For the past few months I've been writing freelance articles on EU politics for a few different publications, but I've found I could only do so much while not being in Brussels itself (I can only write so many articles on Switzerland joining the Schengen Zone and Obama's relations with Europe!). I'm in the process of getting credentialed for the press centre, so it's all very exciting. I'll be continuing to work on my French at the same time with another course three days a week.

Of course my long-term goal is to find a full-time job in Brussels covering the EU, but I know it's going to be a challenge, especially in this job market. Careers in Europe tend to be very stratified into tracks, and journalism is no exception. From what I've seen most of the young EU reporters in Brussels writing for policy-focused publications all started as interns for MEPs or for the Commission, and most of them tend to have the same kind of background. Of course, I've never worked for the EU in any capacity, and I haven't been on a track for working within the EU like they have. My knowledge of the EU comes from my education, but not from being part of it. So I've got work to do in expanding my list of contacts, but I'm ready to dive into it. My general experience with government has always been from the outside looking in, having covered the US government, Chicago politicians, and European regulatory bodies. Being an outsider can make generating contacts a challenge. But I've been thrown into strange reporting beats before and picked them up quickly, so I'm pretty confident I can do it again here.

I'll be very interested to see what living in Brussels is like. I've heard...well...mixed reviews! I've been there many times, but never lived there. I think I'm going to love it, but I'm a peculiar breed I suppose. I've taken a room in an apartment I'll be sharing with a girl from Iceland, she works in Brussels in food lobbying. My Brussels life is already so international!

Monday, 26 January 2009

Sarko to Save Newspapers

French President Nicolas Sarkozy is riding to the rescue on his white horse again, this time the damsel in distress is the struggling French newspaper industry. Considering that newspapers are struggling across the world, particularly in the United States, Sarko's plan to give free daily newspapers to all French 18-year-olds will certainly be watched closely by media analysts around the globe. But in this latest quest, in hindsight is the gallant Sir. Sarko going to more closely resemble Prince Valiant, or Don Quijote?

After a three-month investigation of the problems facing the French press, Sarko promised the following: tax breaks for delivery services, a doubling of the advertising it does in print and online newspapers, an increase in the public subsidies to newspapers to around €500 million, and giving all 18-year-olds a free subscription of the newspaper of their choice for a year.

Across the pond in the US much ink has been spilled about the imminent demise of the American newspaper. Paper after paper across the country has been folding, and big media conglomerates such as Tribune Corp. are going bankrupt. Even the New York Times, the most respected paper in the US, has been forced to take out a mortgage on its new Manhattan headquarters and start advertising on its front page. As far as I know the newpaper industry in the US doesn't receive any government assistance of any kind. So is the French social model of bailing out newspapers something that the US should consider?

It seems there is plenty of evidence to suggest no, but only hindsight will say for sure. In 30 years we may look back on the French decision to give 18-year-olds free newspapers as being akin to the government giving people free telegraphs in the 1920's after the invention of the phone.

There is increasing concern that the French newspaper bail-outs will discourage the industry from making any meaningful reform. The websites of French newspapers are notoriously bad, and if the papers don't start feeling the pain they might not have any motivation to improve them (although some of the aid is contingent on the papers investing in their online departments). The bail-out also doesn't address some of the fundamental cost problems in the French newspaper industry, including the high cost of producing the papers as a result of powerful labor unions in printing and distribution. Sarko will also not change the existing regulations that make cross-ownership across media nearly impossible, which has discouraged foreign media companies from investing in French papers.

Obviously I'm not an 18-year-old, but I would have little use for a free daily paper from my government. I'll freely admit that I have only subscribed to a newspaper once in my life, and that was in Chicago during journalism grad school when we were made to do so. The reason has never been economic, as subscription prices are very low. Rather, the idea of getting all my news from one source, that I would sit down and pour over at the kitchen table, is about as foreign to me as the eight-track. I get my news from different sources all over the world online, with RSS feeds, Google News, etc. During a commute I listen to podcasts on my ipod or read the latest headlines on my phone. And really, I move around too much to make a newspaper subscription very practical!

But on the other hand one need only look at the countries that are not having a problem in the newspaper industry to think that perhaps governments shouldn't just toss newspapers to the wolves. One thing France and the US have in common is a high respect for the printed press, and a comparatively low number of tabloid papers. On the other hand, in the UK and Germany there is considerably less respect for the printed press and an extremely high proportion of newspapers are tabloids. And guess which countries have the most newspaper sales? According to the World Association of Newspapers, circulation of paid-for dailies in France is only about half the level in Germany or the UK.

Clearly, the only clear commercial way that companies have found to make newspapers profitable in this day and age is to go the tabloid direction. Without government help, this is what newspapers in France and the US will likely have to do. Government bail-outs for the newspaper industry may be an uncomfortable proposition, but it may be better than the alternative: a nation with a collapsed fourth estate and no reliable source from which the public can get information.

Friday, 23 January 2009

One Letter and Six Months

Following the rioting in Iceland this week resulting from the country's economic collapse, the cruel joke making the rounds in Europe right now is that Ireland, its Atlantic island neighbor, is just one letter and six months away from being Iceland itself.

Once hailed as the "Celtic Tiger" for its economic power performance after joining the EU, Ireland today finds itself in bad economic straights. Yesterday the government announced that it would nationalize Anglo Irish Bank, the country's third largest lender. The government is also considering reducing the pay of public sector workers as it scrambles to find money anywhere, a decision which could lead to massive and possibly violent demonstrations in Dublin. In six months, Ireland could be in the same situation as Iceland.

Of course there is one key difference between the two: Ireland is on the Euro, Iceland is not. Many economists are saying that the fact that Ireland is in the euro zone is the only thing that has enabled the country's economy to stay afloat during these trying times. Though the economy is in big trouble, investors still consider the country safe because it is part of the euro zone, and its credit rating has not been downgraded.

This fact has seemed to make a few Euroskeptics across the Irish sea more than a little defensive. The British pound has virtually collapsed over the past six months, dropping today to its lowest level against the dollar in 23 years. It's fallen from $2.00 to one pound in July to $1.34 to one pound today. And the pound has lost 20 percent of its value against the euro in the same time, with the two currencies now almost equal in value. Today the UK also officially entered a recession, with commentators noting that the fact that 3/4 of the UK's economy is dependent on the services industry (the most harshly affected industry in the current global crisis) means that the country will likely be the hardest hit of any during the global downturn. And without the stability of being part of a larger currency block, it is thought the UK may have to go crawling to the International Monetary Fund begging for money, because it won't be able to finance the massive level of debt it is taking on with its currency so devalued.

This might explain the peculiarly hostile questioning the Irish finance minister received on the UK program Newsnight last night about whether it had been "too early" for the country to join the euro zone. The presenter insisted that the country's "hands are tied" by the Eurozone since it will be unable to set its own interest rates in response to the crisis (interest rates for the euro zone are set centrally by the European Central Bank in Frankfurt). The minister, Brian Lenihan, seemed hardly able to disguise his bemusement at the absurd question, pointing out that before Ireland joined the Euro its currency was pegged to the pound, and since the country has never freely floated its currency it has never been able control its own currency measures anyway. That shut the presenter up. But Lenihan must have taken a bit of satisfaction in then being able to tell the lecturing presenter that the Euro, "is the currency of our trade with many of our European partners. With the United Kingdom of course, we are at some disadvantage now because we're far stronger than sterling." Oh snap! "Small countries which have their own currencies tend to be speculated against," he continued. "We don't want to put our country in that position, so we linked to a stronger currency." Lenihan had cause for the comparison. Although the Irish economy is hurting, in the long run it may be in better shape than the UK ecnomy.

A New UK Euro Debate?

The prospect of the UK joining the Euro has long been dead in the water, but the current situation might revive the idea, particularly now that the pro-Europe Tory politician Ken Clarke has been brought back to the front benches. Rather than defending the British pound, however, British Euroskeptics seem to have fired an opening salvo by attacking the decisions of other countries to join. An opinion piece by Ruth Lea in today's Telegraph calls the euro zone "dysfunctional" and says the 'one size fits all' interest rate policy has been a disaster for smaller economies like Spain, Italy and Greece. She even blames the recent downgrading of Spain's credit rating on the Euro, seeming to suggest the Southern European economies will imminently drop out of the zone in order to devalue their own currencies out of the crisis.

But in reality, the Fitch ratings agency has kept Spain's credit rating as triple A because it's on the Euro. As the Wall Street Journal Europe pointed out today, Fitch affirmed Madrid's triple-A rating partly because "Spain's membership of the euro area supports its rating, as it eliminates the risk of a currency crisis." The Journal also points out that being part of the euro zone has kept these Southern European economies' budget deficits lower than 3 percent of GDP (or at least made them try to do so), making many euro zone countries now in a better position to absorb their rising deficits. Futher, the idea that these countries would suddenly leave the zone doesn't make sense. Aside from the enormous cost involved in converting the bills and the national debts back to the old currency, such a move would lead to massive wage inflation. And the concerns about national defaults would still exist to the same degree, only now the counties wouldn't have the security of being in thre euro zone to protect their credit rating. Perhaps it is just euroskeptic wishful thinking to think the euro zone is about to fall apart.

Celtic Tiger Laid Low

Many have been speculating on what effect the new economic reality in Ireland will have on the re-vote to be held in the country on the ratification of the EU Reform Treaty. Last night Lenihan seemed pretty confident that the crisis has made the Irish realize how much they have benefited from membership in the EU and adoption of the Euro. One of the explanations analysts had given for the no vote last year was that, although Ireland had historically been very pro-Europe, its economic success over the past decade had given the Irish the confidence to spurn the EU, thinking they could go it alone if they needed to. The recent months have certainly been humbling for the tiny country, and perhaps they will be thinking differently this time around when they enter the voting booths. That's the hope in Brussels at least.

Thursday, 22 January 2009

What's Going on at Switzerlands Borders??

Something very strange is going on here. Back on 12 December, Switzerland joined the passport-free Schengen Zone, which enables travel between it and all of its EU neighbors without a passport check. Yet from stories I've been hearing it seems that Switzerland's borders have actually become harder to cross since it entered Schengen.

In the past two weeks two friends of mine have come to visit from Paris, both taking the direct high-speed TGV train. Both of their trains were stopped at Basel for 30 minutes while authorities came on board and checked people's passports. On the first visitor's train into Switzerland two weeks ago, the authorities adked everyone for a passport and searched everyone's luggage. The second visitor who came last week also had his train stopped. He hadn't brought his passport, and only had his French national ID. The border guard took his ID to the other end of the train car and made a phone call about it for ten minutes before eventually handing it back and continuing down the train. Last night I was talking to a German friend who lives here in Zurich and he said he encountered the same thing when driving up to Germany for Christmas. All of the cars were being stopped and passports were demanded.

Now this strikes me as rather unusual because under the precepts of the Schengen Agreement authorities at borders within the zone are actually not allowed to ask people for passports just because they are crossing the border. And before Switzerland joined the zone last month, passport checks on trains and roads leaving/entering Switzerland were sporadic and not frequent. Both me and my father have taken that TGV between Zurich and Paris many times before last month and neither of us has ever been asked for a passport (the train never stopped for thirty minutes in Basel either). The same goes for trains I've taken from Geneva into France and from Lugano into Italy.

So why has Switzerland's Schengen entry resulted in the exact opposite of what the entry was supposed to accomplish? I've been searching for answers this week. Switzerland's Schengen status is a bit different from the others because it is still a separate trade zone from the EU and therefor can still have customs checks at its borders, unlike borders within the EU. But my understanding is that the current arrangement allows them to search luggage but not to ask for travel documents. But on the other hand Swiss, French, German and Italian police all have the right to demand identification from anyone, anywhere, at any time. Does that invalidate the Schengen clause about not being allowed to demand travel documents?

A contact who works for the Cantonal government in Schaffhausen tells me he's heard that Switzerland has cracked down on its border with Germany in response to Germany doing so immediately after 12 December. He says starting on 13 December the Germans started manning every single one of their border checks with Switzerland (usually around 30 percent of these are not staffed at any given time). So in response, Switzerland started aggressively checking everyone coming the other way, and perhaps, he speculated, they've followed suit with their other borders now as well. In other words, Germany started it. That's all well and good, but when is it going to end? And is what the Swiss (and their neighbors) are doing at the borders allowed under the Schengen Agreement? I'll keep trying to get to the bottom of this.

All of the friends who have been stopped have been aware of Schengen Rules, but none of them has had the nerve to challenge the border guards on their right to ask them for a passport (it's not the type of situation you want to make trouble in!). But this weekend I might take a drive up to Germany's black forest and see if I can ask some questions to the border guards there on what their instructions are currently.

If Switzerland isn't going to follow the rules of the Schengen Agreement, one wonders what the point of them joining was.

Wednesday, 21 January 2009

Rioting in Iceland

When there's rioting in Iceland, you know we're in trouble. The small Scandinavian country in the middle of the Atlantic isn't usually associated with domestic strife, but rather high quality of life and abundant natural resources. But yesterday thousands of people took to the streets to protest the government's handling of the economy, which has plunged in recent months as a result of the larger global turmoil. Gross national product is down two-thirds, there has been a 45 percent rise in unemployment and the country is defaulting on loan repayments. In October the country's financial system collapsed and its currency plunged under the weight of billions of dollars in foreign debt taken on by its banks.

These weren't just mild demonstrations. Riot police had to fight with a large number of violent protesters outside the country's parliament. Pepper spray was fired at the protesters and 30 arrests were made.

Coming on the heels of the riots in Greece last month, many in Europe are becoming increasingly worried that the economic turmoil could lead to violent clashes between disaffected people and their governments across the continent. Eastern Europe is seen as particularly vulnerable to such violence, with some even predicting a "spring of discontent" in the region to be around the corner.

Eastern Europe has been hit hard by the financial crisis, especially Bulgaria, Romania and the Baltic states - all recent EU entrants. As the Guardian recently reported, incidents have been steadily increasing. Last week police in Vilnius, Lithuania had to tear-gas a crowd of demonstrators protesting tax rises and benefit cuts designed to save the state from bankruptcy. Sofia, Bulgaria has also seen recent widespread violence in which 150 people were arrested. Riga, Latvia has seen street battles as well.

These Eastern European economies are increasingly experiencing unexpected turmoil after years of posting double-digit growth. Their anger will likely be compounded by the fact that they were expecting that growth to continue, particularly after they joined the EU. The post-cold war governments are still new and relatively weak, and could be unprepared to deal with widespread unrest. And the increasing hostility isn't just being directed at the governments. Attacks on minorities are also becoming increasingly common, particularly against Roma (gypsy) communities. Recently 700 members of the far-right Workers' Party in the Czech Republic fought with police when they were prevented from marching on a Roma area.

Of course Iceland is just about as far as you can get from Eastern Europe without leaving the continent. If the global economic turmoil can cause rioting in a country with one of the highest quality of life ratings in the world, could rioting be far behind in the major Western economies? And even if it isn't, how will the major economies of Western Europe respond to growing political unrest to their east, in countries with which they are now united? Clearly the EU has an obligation to help Eastern Europe through the financial turmoil, but if the situation becomes fundamentally dangerous, can the EU do anything to stem the violence without a proper policing military force?

The "spring of discontent" will be an anxious time for Europe.

Tuesday, 20 January 2009

A New Dawn

I'm watching the inauguration on TV now, a little sad that I'm not there in DC for it but I'm getting lots of twitter updates from my friends in Washington! Looks like fun. It's striking to me that every news channel over here in Europe has had live coverage of this event from the wee hours of the morning. Truly, all eyes are on Washington today.

People have placed a lot of hope in this man, and it will be interesting to see what he can do in these critical first months of his presidency. George W. Bush is walking out at the moment, and he looks a bit melancholy; almost sheepish as they emerge to be greeted by almost complete silence from the crowd. In fact the entire Republican entourage around him looks quite downtrodden and sober. It seems appropriate. The massive crowds in DC today and the people watching around the world are not only celebrating the momentous occasion of the election of the first African-American president of the United States, they are celebrating the end of the Bush presidency.

And yet as Europe hails America's 'renewal,' there is still an acknowledgement that the world today is very different from the world of eight years ago, and not just because of September 11. I recently wrote an article for the webzine CafeBabel on the subject.

And now, the speech...

Monday, 19 January 2009

Will Clarke change Tories' Europe stance?

A dramatic reshuffling in the Tory shadow cabinet is taking effect in the UK today, and the biggest story is the pro-Europe politician Ken Clarke being brought back to the front-bench. Clarke, who has a long and controversial history in UK politics, is sure to rile the Eurosceptics of the Tory Party. Now the question on many people's minds is this - will Clarke's appointment reignite the old civil war within the Tory Party over Europe?

The former chancellor, who has lost elections to lead the Tories three times, is being brought on as the shadow business secretary. Under the British system of government, the opposition parties form "shadow governments," which advise the public on what they would do instead of the ruling party if they were elected. Though they have no actual power, they help shape the policies of the party on which they campaign in elections.

Clarke's pro-Europe views are well-known. He even favours Britain joining the Euro. However Clarke has insisted that he won't rock the boat over Europe, telling the British media, "I accept that the party has come to a settled view on European matters, and I will not oppose the direction David will set on European policies in the future."

Monday, 12 January 2009

A Week in the Life of an MEP

The BBC has an interesting feature this week in which one of their Westminster-based reporters is going to spend a week as a UK Member of the European Parliament (MEP). Considering that the vast majority of people in the UK are unable to name their own MEP (if they know what an MEP is at all), it's an interesting project. Elections for the European Parliament are coming up in June, and British citizens will shortly be asked to chose a representative from a list of people they've probably never heard of for a job they probably don't understand.

The reporter, Brian Wheeler, is going to be blogging throughout the week, and this morning he hopped on the Eurostar over to Strasbourg to attend one of the monthly assemblies of the Parliament in that city. So for those of you wondering what an MEP actually does (and you have cause to be confused, it's hardly clear), this feature can shed some light on that topic. I know I'll be reading it with interest. This could be even better than the BBC Shipping Box!

Friday, 9 January 2009

1968 Tensions in the Gazprom Crisis

The EU has struck a deal with Russia, and it appears the gas crisis may be coming to an end, as millions of people in the Balkans continue to be without heat during a brutal cold snap across Europe. In exchange for Russia immediately reopening its gas pipeline through the Ukraine, who it has accused of stealing gas, the EU will send monitors to supervise supplies of Russian gas through the country. However according to the latest reports, gas is still not flowing through the pipeline as of this afternoon.

Given that this is the first crisis faced by the new Czech presidency of the European Union, many are doing some hand-wringing over whether the bad blood between the Czech Republic and Russia is going to affect the negotiations over this crisis. The history between the Czech Republic and its former occupier, as well as its current diplomatic tension over the missile defense system being installed by the US, mean that negotiations taking place between the Czech presidency and Russia are going to have some baggage.

Today the FT's EU correspondent Tony Barber wrote in his blog that these fears are misplaced, but I have to say that his his analysis doesn't conform with my experience there. I lived in Prague back in 2002-2003, and during this time I found antipathy toward the Russians to still be alive and well, especially among the older generation. I had a Ukranian friend there who spoke fluent Russian, but no Czech. But although most older Czechs can understand Russian because they learned it in school, when she would walk into a store and speak in Russian she would be met with just cold stares. She would then ask again in English and then they would respond, even though it was clear they had understood her the first time.

I found this same attitude existed with older Czech coworkers where I worked in Prague. Whenever something about Russia came up I could see their expressions harden. This is probably only to be expected, after all we are talking about a country that brutally crushed their political movement in 1968 and then occupied their country until for the next 20 years.

Of course this is just anecdotal evidence, and not the same as the Czech foreign minister's assertions to the contrary. But of course it's any diplomat's job to gloss over tensions. So far Czech-Russian tension doesn't seem to have had an affect on the current crisis, but even once this is resolved there are serious implications of what has happened here that need to be dealt with. This incident will surely bring home the fact that the EU is dangerously dependent on Russia for its energy supply. Could hostile words from a Czech presidency have the effect of exacerbating the conflict? At a time when Brussels is already worried about the effect the Czech presidency will have on the Lisbon Treaty ratification, the last thing they probably want is another cause for hand-wringing.

Wednesday, 7 January 2009

Energy Wars

It's been freezing the past week here in Zurich, a situation I'm sharing with the rest of Europe as a brutal cold snap extends from London to Warsaw. And just as the chill is forcing us all to huddle around our heaters, a crisis is unfolding that could cut off the energy keeping us warm.

Since New Years Day, Russia has been steadily restricting its gas supply to Europe amid a dispute with Ukraine, which it accuses of siphoning off gas in transit. Now seven days later, exports of Russian gas to Europe via Ukraine appear to have completely stopped. With the EU dependant on Russia for about a quarter of its total gas supplies, 80 percent of which is pumped through Ukraine, the situation is quickly becoming a crisis. It is a crisis many have predicted as they have warned of Europe's over-dependence on Russian energy.

Now the Balkans are facing a situation where they could in a matter of days face rolling blackouts. Bulgaria says it has sufficient supplies for just a few more days, and already thousands of Bulgarian homes are without heat as temperatures in some parts of the country hit -16 degrees celcius. Other countries have now dipped into their strategic reserves. Germany and Italy, which together account for nearly 50 percent of the gas consumed in the EU, are also in danger. So far the Ukraine disruption has only been felt in the Balkans and in Greece, but this could change as soon as tomorrow.

Russia's state-owned energy company Gazprom has accused Ukraine of stealing 15 percent of gas flowing through that country intended for Western Europe, however the Ukrainian government has insisted that amount is being lost through technical malfunctions only.

A Preview of Things to Come

Even if this energy crisis is resolved, it will still likely be an important lesson for the EU. Analysts have been warning that energy independence for the block is the most pressing issue it currently faces. With Russia proving to be an increasingly assertive and sometime hostile neighbor, the fact that the country could, if it wanted, plunge Europe into a deep freeze is very worrying. Even these minor disputes over one pipeline can cause huge disruptions.

Now that Serbia’s government has agreed to sell its oil and gas company, NIS, to Russia’s Gazprom, it looks like Russia will achieve its goal of building a pipeline called "South Stream" to send gas directly into the EU. Gazprom has also done similar deals with EU members Italy, Hungary and Bulgaria, all of which is a direct challenge to the European pipeline project Nabucco, which would bring gas to Europe from Iran and Azerbaijan via Turkey, reducing EU dependence on Russia. But the Nabucco project seems to be going nowhere while Russia's plans to build dedicated pipeways to the EU moves quickly ahead.

Russia insists that the Ukraine siphoning off energy is the real threat to EU gas supplies, but foreign policy analysts know better. It is precisely the fact that the EU is reliant on Russia for energy, no matter how or through whom it is supplied, that is worrying to many here.

Sunday, 4 January 2009

No Passport in Liechtenstein

I'm back in Switzerland after my holidays in New York, and yesterday I decided to take a drive over to the border with Liechtenstein to see if they had set anything up as a result of the Schengen discrepency. As I expected, there is no new passport check along the section of the Rhine seperating the tiny principality from Switzerland, but interestingly, I didn't see any sign of the reported surveilance systems that they've now set up either.

Switzerland joined the Schengen zone, which allows passport-free travel between European countries, last month. However Liechtenstein has not yet joined, because the EU is trying to strong-arm it into cracking down on tax cheats before it will allow the principality in. Liechtenstein, which has had an open border with Switzerland since 1923, is now wedged between two Schengen countries and in theory, Switzerland must now set up border checks with Liechtenstein for the first time. This could be a big headache because for all intents and purposes Liechtenstein is pretty much part of Switzerland. It uses the Swiss franc, relies on Switzerland's military for defense, and many people live in one country and work in the other. Aside from a few small signs at the border, there is little differentiating the principality from its neighbor.

The border guard corps in Eastern Switzerland has said it is setting up a series of surveilance cameras along the bridges in order to comply with Schengen rules, and in theory if any cars look suspicious they have border guards ready to investigate. However I didn't see any sign of such cameras when I was there, and considering I was walking around taking pictures you'd think if anyone was watching they might have come to ask me what I was doing! Perhaps they haven't set them up yet. Interestingly, I've heard that this surveilance system is going to cost several million francs, just to be dismantled once Liechtenstein does eventually join. Liechtenstein has even had to issue Schengen visas free of charge to foreign nationals living there, who would now in theory be legally trapped within the 160 square kilometre country. I guess Brussels has proven that it can make life difficult for the tax havens when it wants to.

I had never been to Liechtenstein before, it's a pretty weird place. It is true that from the prince's palace you can see almost the entire inhabited area of the country. It's really just a small strip of land on one side of the Rhine in a valley. It was a Saturday afternoon and Vaduz, the capital, was completely deserted. It was just me and some Eastern Europeans who seemed to also be there for the novelty factor, taking pictures of every Liechtenstein flag in sight.

On the way back I came across a reminder of another ongoing issue with Switzerland's entry into the Schengen Zone. Switzerland's bilateral agreements with the EU requires that all EU nationals be allowed free movement in and out of the country, but Switzerland is going to vote on whether the two newest entrants, Romania and Bulgaria, will be afforded the same access. That vote will be February 8th, and in St. Gallen I came across this billboard from the FDP urging people to vote yes to giving Romanians and Bulgarians the same rights as other EU citizens. The billboard points out that a no vote, being advocated by the conservative SVP party, would send a hostile signal to Switzerland's neighbors and lead to further isolationism. It shows two people with SVP signs destroying a rail bridge to the rest of Europe. It reminds of the Swiss of the infamous "guillotine clause," which says that if Switzerland renegs on any treaty its already signed with the EU, all of the bilateral treaties will be rendered invalid, effectively completely cutting off the country from its neighbors.

Tonight I noticed that the SVP has put up a contrary billboard right outside my dad's house urging people to vote no (photo below), with their usual motif of dark nefarious foreigners greedily eyeing Switzerland's riches.

Honestly the idea that people would be making decisions on these important issues based on some childish cartoons seems pretty absurd to me, but it's typical of this country's obsession with referendi. Neither of these cartoons clearly conveys what's really at stake with this vote. The SVP ad seems to be suggesting that this is some kind of additional right that the Swiss people can choose to give to their neighbors to the east, when in reality a no vote would be reneging on a treaty that Switzerland has already signed. The EU has made very clear that Switzerland cannot pick and choose which parts its bilateral agreements it's going to obey as if it was some sort of dipomatic buffet. On Saturday Switzerland's EU ambassador Michael Reiterer told the newspaper Tribune de Geneve that if the Swiss refuse to extend the free movement clause to the new entrants it will invalidate the country's entry into the Schengen Zone and the whole agreement will be torn up.

I'll be watching with interest to see what happens in that referendum. After stopping in Leichtenstein I drove over the border with Austria and as expected I found the border check dismantled. If the Swiss vote no in February 8th, those checkpoints may have to be hastily reassembled. And contrary to Reiterer's optimism, I'm not so certain the referendum will pass. A few years ago the referendum to join Schengen did not pass by a large margin, and the recent success of the SVP may reflect the fact that public attitudes on immigration may have continued to harden since then. In the mean time I'll be interested to hear from people here whether they understand what reprocutions a no vote could have.