Friday, 27 February 2009

Impressions of Sofia

I'm here in Sofia, taking a break at a coffee house in between interviews. So far the trip has been really interesting. My article on vote-buying is shaping up nicely. The political culture here is fascinating. There are something like 400 political parties, which has created a real mess of the government. It would seem they've gone from having too few parties (really only one, the Communist Party) to too many. This has led to widespread dissatisfaction with the political process, so much so that now three times as many Bulgarians say they have faith in EU institutions as say they have faith in their own national government. That's pretty much the reverse of Western European countries. In fact according to the people I've interviewed it's gotten to the point where Bulgarians now see the EU as the real leader of the country, and when NGOs or businesses want something done they bypass the Bulgarian government and go straight to Brussels. But more on that next week.

Sofia itself does remind me a bit of Prague, at least in terms of its eery quietness and the gloomy expressions on everyone's faces. It's interesting how much 50 years of Communism seemed to leave the same effect on such a huge and diverse swath of Europe. Before World War II, the Czechs had little in common with the Bulgarians in terms of their history, other than their shared Slavic ancestry, one being part of the Austrian Empire and the other the Ottoman Empire. Yet now you can observe so much similarity between their behavior and way of life. In my observation the same goes for Hungarians, Romanians, and Lithuanians; it's this sort of post-Warsaw Pact malaise. But you definitely notice it more with the older generation than the younger.

There aren't many tourist attractions in Sofia, really there's only one: The Alexander Nevsky Cathedral. And even that, when I went to visit, didn't have any non-religious visitors inside except me (in fact it was nearly empty). I spent a few hours walking around the city yesterday taking photos, and people seemed to be looking at me with bemusement, with my map and my camera in tow.

It's a shame really, because the city is actually thousands of years old. It was one of the first cities in the Roman Empire to adopt Christianity and was an early stronghold for the spreading religion. It was also an important centre for the Byzantine Empire. But the city centre was almost entirely destroyed during World War II, and over it was built a giant grid of characterless straight streets. There's actually nothing here that's much older than 150 years. And as it only became the capital of Bulgaria about a century ago, the government buildings have a rather rushed, characterless quality.

At the same time, the city is a lot of fun. The seven strangers have been having a great time, our Bulgarian hosts have been showing us some amazingly cool bars and restaurants. A bar we went to last night was down in a deep cellar, lit only by candles. Intense!

I'm actually the only Anglophone in the group, but naturally we've been speaking English as the common language between us all. A large portion of us speak French, but not everyone, so we're not using it. Take a note, France. It's a shame though because it takes away so much of the motivation for us Anglophones to learn foreign languages, when our native language allows us to communicate with most everyone we would need to. Still, I've had to remember to switch over to speaking Continental English instead of my normal way of speaking. Ironically, it's easier for everyone else in the group to understand each other speaking English than it is for them to understand me, since I have a tendency to speak too quickly. I need some Continental English lessons.

I'm about to head to the Parliament Building to interview an MP, she seems like she'll be an interesting character. I found some YouTube clips of her kicking up a fuss and yelling in the Parliament chamber. so she should be quite quotable! Then tomorrow we have our EU Debate on the Ground and the launch of CafeBabel Bulgaria. If you're in Sofia, come join us!

Wednesday, 25 February 2009

Six Strangers in Bulgaria

I'm flying to Sofia, Bulgaria later today to take part in a rather interesting project. CafeBabel, a web site I write for, is sending five journalists and one photographer to live in the city for about a week in order to participate in one of their ongoing EU Debate on the Ground forums. The forums have been taking place once a month in various cities throughout Europe, hosting debates about the EU with the local population as a run-up to the European Parliament elections in June. Several journalists are chosen from various corners of Europe and they assemble in the city, reporting on a specific issue and speaking at the forum. I'll be writing a feature on vote-buying in the country, as well as a second feature looking at how the global economic crisis is likely to effect Bulgaria.

We have quite a diverse group. There will be a Bulgarian from Sofia, a Spaniard living in Berlin, a Romanian living in Paris, an Italian from Turin, a Spaniard living in Paris, and an Italo-American living in Brussels (that's me). None of us know each other, but we'll be staying together in a large hostel room in the center of the city. We'll each be reporting on different issues, but I imagine we'll be swapping observations and ideas throughout the stay.

It should be interesting, it will actually be my first time back in Eastern Europe since I lived in Prague. One thing that's already throwing me is the country's use of the Cyrillic alphabet. It makes it very difficult to locate addresses on Google maps! I have appointments scheduled tomorrow and Friday with various government officials and NGOs, hopefully I've arranged them in some kind of logical order geographically. I learned from reporting in India that in a city with bad traffic, trying to zigzag across town going from interview to interview can quickly spell disaster.

The EU Debate on the Ground panel will take place this weekend. The purpose of the panel is to get a snapshot of the feelings on the ground about the EU, and to analyze those opinions in a way that can be meaningful for the upcoming parliament elections. I'll be particularly curious to hear the impressions of Bulgarians, who were promised much after their entry into the EU two years ago but have seen their economy teeter on the brink of collapse since then as a result of the global economic crisis. After many years of double digit growth in Eastern Europe, the sudden reversal of fortunes could lead Eastern Europeans to be more skeptical about what the EU can do for them. Additionally, Bulgarians were less than impressed with how the EU handled the recent gas crisis in January which left thousands of Bulgarians without heat for several days during a bitter cold snap.

All in all, it should be an enlightening trip.

Friday, 20 February 2009

La Crise Claims Her Second Victim

The Latvian government has become the second European administration to fall as a result of the global economic crisis, following the collapse of Iceland's government last month. Latvia's prime minister resigned today and the government folded as a result of the country's economic crisis, one of the worst in Europe.

Latvia is not in good shape, to say the least. With the country in severe recession, the economy is expected to contract by up to 12 percent in 2009, and unemployment is set to rise by 50 percent. GDP in the final quarter of 2008 fell by 10.5 percent compared to the previous year, and economists are predicting a further drop of 10 percent for this year.

The resignation follows last month's massive protests in Riga, the country's capital, which saw 40 people injured and 100 people arrested.

Latvia's situation is not isolated. The story throughout Eastern Europe is much the same. After years of boom following the east's entry into the EU, economies across the East have come to a crashing halt. Across Europe the countries that have experienced a boom in the past decade are now suffering the worst. The UK, for instance, is suffering severely while in France the effects have been less dramatic because the economy there had been performing poorly for some time before the crisis hit.

The plummeting fortunes of Eastern Europe have sparked fears that a "spring of discontent" is around the corner, a period that will see increasing violence in the young countries of the East and the collapse of several governments. Bulgaria, Romania and the Baltic states have all been hit particularly hard by the crisis. Sofia, Bulgaria has seen recent violence in which 150 people were arrested. I'll be travelling to Sofia next week to work on a story about vote buying and participate in a panel discussion organized by CafeBabel about the parliament elections. While I'm there, I'm also going to see what I can find out about the economic situation and whether the government is concerned about more dramatic protests in the near future. It will be an interesting time to be in the new EU state.

Thursday, 19 February 2009

Switzerland Opens the Bank Floodgates

Europe may be continuing to wage its battle against Switzerland and Liechtenstein over banking secrecy, but after a Swiss government decision yesterday it looks like it may have been the US that has delivered the knock-out blow to the Alpine tax haven system. Switzerland's uunprecedented decision to let UBS turn over their clients' banking details to the US could open the floodgates for governments demanding previously secret bank details, causing the whole system of secret bank accounts to come crashing down like an avalanche.

Since 1934 Switzerland has relied on a pledge of secrecy to fill the coffers of its massive banking system. According to the Swiss Banking Association, 27 percent of all privately held offshore assets are located in Switzerland. The result has been that the country's economy is heavily reliant on the banking industry, with two of the world's largest financial institutions, Credit Suisse and UBS, being the pride of the country. The US Internal Revenue Service had filed criminal charges against UBS, accusing it of helping Americans avoid paying US tax by opening Swiss bank accounts and demanding that it hand over client data. Under Swiss law UBS wasn't allowed to turn over those records, so UBS petititioned the government to allow it to do so, saying that if they didn't their very existence would be at risk. Yesterday the Swiss Financial Market Supervisory Authority said it would allow the release, throwing Swiss market analysts into a panic. Many are saying the government's decision was unnecessary and premature, and could put the whole Swiss banking system at risk.

But the pressure on Switzerland to reform its banking secrecy laws has been steadily mounting for the past several years. Germany in particular has been aggressively pursuing the issue, leading the efforts to force Liechtenstein's hand by stalling its Schengen Zone membership until it makes concessions on the issues. Last year the German finance minister even made the argument that Switzerland should be put on a blacklist of tax havens. The EU has also been looking to end what it views as a no-longer-acceptable tax island within its borders. This month the EC introduced a proposal to end anonymity for bank accounts within the EU. But since such secrecy is already illegal in most EU countries anyway, many analysts think the proposal is actually being made with the intention of extending the legislation to Switzerland and Liechtenstein, which both have bilateral treaties with the EU locking them in to many decisions made in Brussels.

But although Europe's been gunning for the tax havens for some time, it looks like it is the IRS that's delivered the knock-out punch. The Swiss government was at pains today to insist that the ruling is an isolated case and will have no bearing on such negotiations with the rest of Europe. But it's undeniable that the decision is likely to encourage the EU and individual countries to pursue similar criminal action against Swiss banks in order to force their hand. And now that the precedent has been set, it will be hard for the Swiss government to block those requests in the future. As the economic crisis continues to worsen, governments will be keen to grab additional revenue wherever they can. Some of that may now come from unpaid taxes sitting in Swiss banks.

Thursday, 12 February 2009

Pretty Blonde Spies

Today I attended my first midday briefing press conference at the European Commission. I had watched some of them on the live satellite feed before, but never had the opportunity to attend one in person. I've actually been to a lot of events and meetings in the European Quarter this week, and the coolest part is how each of the chambers is so high tech (like the hemicycle of the European Parliament building, pictured right). In the Commission's press briefing room for example, each seat has headsets for listening to the translators, who all have separate booths lining the outside of the room. Each seat also has a microphone which you can use to ask a question to the spokesperson, and when its your turn your seat lights up. The future is here!

The subject which took up the most time at today's briefing was particularly relevant for me. Yesterday the EC circulated a memo to staff telling them to beware of spies seeking to infiltrate the European Commission, which is the EU's executive branch. The note warned to be wary of non-EU nationals, and reminded them that spies could come in any form, even a "pretty trainee with long legs and blonde hair."

Despite the memo writer's obvious talent for amusing self-parody, what has caused some controversy is that it mentioned journalists in the list of people to be wary of; a list that also included lobbyists, IT experts and private agencies. At today's press conference, a reporter named Lorenzo who represents the International Press Association voiced the association's displeasure that journalists, who have a mandate to discover hidden information, would be included on this list. He demanded to know why the EC was telling their staff to be wary of journalists because they were seeking information.

The spokesman and the reporter seemed to have a good relationship so it wasn't a tense exchange, but it was clear the reporter was not happy about the memo. The commissioner insisted that the memo wasn't criticizing journalists for seeking information, but rather EC workers for possibly giving out classified information too freely. He then pointed out that recently the current commission relaxed decades-old limitations on who in the EC could speak with the media. Apparently before these rules were relaxed only official spokespeople of the EC could speak with members of the media. The spokesman said this was unprecedented for most national parliaments, but I know that's not the case in Washington or London (any member of congress or parliament can speak with the media whenever they like) so I think that was a bit of hyperbole on his part.

He also mentioned that the EC's accreditation process was one of the most liberal in the world and does not involve security checks. So far this hasn't been my experience, as I am in the process of trying to get accredited and am finding it quite difficult. I have to first become a member of a journalists' union, so I just hastily applied for membership in the NUJ, which comes with a cost of 15 pounds a month. Then I have to show that I have been a working journalist, with pay stubs and published articles, for the past two years. Then I also need to bring letters of reference from employers. Getting my press accreditation in Washington did involve a quick security check, but it was far less cumbersome than this process in whole.

So it was an interesting first day. The midday briefings take place just down the street from my French course and happen just after my class ends, so I'm going to try to pop in at least three times a week to see if anything interesting comes up. Who knows, maybe I'll even ask a question one of these days. It will be worth it just to be able to use that little microphone!

Tuesday, 10 February 2009

How do you say Schiavo in Italian?

One of my favourite things about my new French class is that it's geared toward EU workers, so we discuss news and current events in class. This morning we were talking about the Eluana Englaro debate going on in Italy right now. Interestingly, when I mentioned that the situation is virtually identical to what happened with Terry Schiavo three years ago in the United States, I found that no one actually knew about the Schiavo case (I'm the only American in the class). Although it had little international relevance, the Schiavo episode was one of the biggest domestic political events of the last several years in the United States.

Scanning the Belgian, French and British papers today I have been unable to find a single mention of the Italian case's similarities with the Schiavo case. But considering that the spectacle which took place in the US senate during the Schiavo episode was one of the contributing factors to the downfall of the Republican Party, Italian conservatives may want to take a lesson and reign in their rhetoric on this issue.

Monday, 9 February 2009

The Swiss Say Yes to Europe

Brussels was breathing a sigh of relief today as the news of yesterday's Swiss referendum result reached people's desks. There had been some apprehension about the vote, which extends free-movement rules to new EU entrants Bulgaria and Romania, as opinion polls taken before the vote seemed to suggest that it would have a razor-thin margin. In the end, a massive 60 percent of voters said 'JA.' Only four of Switzerland's 26 cantons voted no.

The vote is being called a "broad yes" by the Swiss to economic collaboration with Europe, and a mandate for pro-European parties in the Swiss government to increase ties. The news is already being taken as a sign that the financial crisis may lead to a more receptive attitude toward the EU and coordinated pan-European policies. With the Irish revote on the Lisbon Treaty just around the corner, many in Brussels are hoping this is a trend that will continue. But is the vote's outcome the result of changing EU attitudes in the face of the financial crisis, or was it simply the result of a skillful vote mobilisation effort on the ground by pro-EU groups?

Switzerland has a rather unusual arrangement with the EU. While it's not a member, it has a series of seven 'special accords' with the block that make it effectively a shadow member. It isn't an official member, so it doesn't have any representation in the European Parliament or Commission, but the accords oblige Switzerland to follow many areas of EU legislation. Free movement, which allows any EU citizen to work in any EU country, is one of those areas. However, now that EU membership hassuch a change must be put to a public vote (they basically have to have a public vote for everything in Switzerland). But here's where it gets tricky. The EU has made clear that Switzerland doesn't have the right to 'pick and choose' which parts of EU law it will follow, and under the infamous "guillotine clause," if the Swiss voted no to extending free movement to Bulgaria and Romania, all of their agreements with the EU would be torn up. Considering that the vast majority of Switzerland's trade is with the EU, and that non-Swiss EU citizens make up a huge percentage of its skilled workforce, a collapse in the accords would be catastrophic for the country's economy. So one has to ask, is this really a vote for increased EU ties, or a desire to maintain the status quo? And if it's now economically impossible for the Swiss to vote against policies enacted in Brussels, isn't this really just an illusory independence anyway?

Switzerland's biggest political party, the rightist Swiss People's Party, had waged an aggressive ad campaign urging people to vote no, arguing that the two new EU entrants were too poor to be allowed unfettered access to Swiss jobs. (this photo is of one of their billboards that was on the street outside my parents' house). The issue was complicated by the fact that Switzerland has had a less than smooth history with immigration from the Balkans. During the 1990's the country took in many refugees from the former Yugoslavia as the Balkan wars raged on. Now the country has a sizable former Yugoslav population, particularly in Zurich, which hasn't integrated with the wider Swiss society and who treated with much hostility from the native Swiss population (complete with a nasty epithet that I won't repeat here). Many, particularly in German-speaking Switzerland, aren't crazy about the idea of taking in more immigrants from Serbia's neighbors in the Balkans.

A Sign of the Times?

So does the wide victory in Switzerland mean that people's fears about the financial crisis are going to make them less likely to snub the EU, for fear of the economic consequences? I've speculated that the economic turmoil in Ireland will likely make the Irish too scared to vote against the Lisbon Treaty again when the revote occurs later this year. It seems likely that the hold-up in approval by the Czech Parliament may also be resolved quickly now that the future looks so uncertain. On the other hand, many commentators have speculated that the recession could lead to an increase in populism and protectionism, which could put the European single market in jeopardy. The recent walk-outs in the UK and the one-day strike in France have certainly been a worrying sign in that direction.

For now though, Brussels has reason to be encouraged by the Swiss result.

Tuesday, 3 February 2009

May you live in interesting times

I've spent the past few days getting settled here in Brussels, and so far things have gone quite well. I've got a great apartment right in Centre Ville next to the Grand Place, and my intensive French class is fantastic. It's an advanced class and there's only seven of us, each from a different country.

Last night I had drinks with a French friend who lives here in Brussels, and we were talking about different things going on the EU these days. There wasn't a shortage of things to discuss. Toward the end of the conversation, we remarked on what a crazy time this is to be living in Brussels reporting on the EU. It feels like we're on the precipice of something, particularly in Europe. Things are about to change, we speculated, and they could possibly go in extreme directions. It looks like we've all been victims of that old purported Chinese curse, "may you live in interesting times." But to continue with the 'mangled cliches claiming to be proverbs theme', the Chinese character for crisis also means opportunity! Could the economic crisis lead to a strengthening of pan-European institutions, or could it just as easily lead to the disintegration of the entire EU project?