Publications Finnish Institute of International Affairs (FIIA), Spring 2014

UntitledFIIA Briefing Paper

Teija Tiilikainen, Who leads the new EMU? Implications of the Economic Crisis for the EU’s Institutions

Reforms made to the EU’s economic and fiscal policies have served to reinforce the fragmentation of the division of competences between the EU and its member states in this field. It has also impacted the way in which these competences are exerted by the European and national institutions.

Resulting from a differentiation of responsibilities between the eurozone countries and the rest of the EU, fragmentation is increasingly taking place even inside the EU institutions. The current fragmentation of competences and institutions complicates the democratic scrutiny of economic and fiscal policies.

The biggest challenge is to accommodate the differentiated responsibilities of the Eurozone countries and the rest of the EU within the framework of existing institutions in a way that would ensure the unity of this framework, but also the proper democratic anchoring of the EU’s economic and fiscal powers.

FIIA Comment

Jyrki Kallio, Yet another ‘historic’ meeting between Mainland China and Taiwan:
The two sides are talking on a governmental level but there is no cause for celebration

The recent meeting between ministers from Mainland China and Taiwan has been widely hailed as historic. Such an evaluation is premature at best. In reality, the road towards a true reconciliation between the parties to the Chinese civil war is as long as ever.

Working Paper

Mika Aaltola, Drama Power on the Rise? US soft power may increase as a function of Washington dysfunction

Models of soft power have failed to take fully into account the changes in and appeal of contemporary forms of globally disseminated popular culture.

Paradoxically, the recent episodes in the Washington drama may captivate and ‘entertain’ global audiences because of the changing expectations cultivated by the wide dissemination of American media forms.
The modes of popular culture in the US and globally are transforming, greatly influenced by developments in the American media and film industry. This has led to the emergence of new types of drama formats, such as reality TV, and a new type of fame and celebrity-based status, which have not been considered in the models of soft power.

Cyberspace and social media reinforce these new tendencies. In addition to changing the way authenticity and authority are understood, the new ‘viral’ form of information sharing is strengthening the need for political drama.

Celebrity culture – the notion of famous for being famous – blends with political crises, rendering the rise and fall of political parties and figures attractive and entertaining. It is suggested that the US as a state enjoys such a fame-based status.

In effect, US politics has drama power that mitigates the negative effects of controversy, polarization, and paralysis in Washington.

FIIA Comment

Arkady Moshes, The crisis in Ukraine is not over: Any euphoria or triumphalism would be inappropriate

History is offering Ukraine another chance to build a better future. However, what has happened is no more than a promise. The situation in and around Ukraine is still dramatic, and the country is facing numerous challenges, each of which can prevent the dreams of a functioning state and a thriving economy from becoming a reality.

The West should not allow itself any feeling of euphoria or, even worse, celebrate a geopolitical victory. The stability is still fragile, and the result was achieved not by Western strategists but by Ukraine’s citizens. In addition, the West should be very cautious about financial assistance.

Briefing Paper

Antto Vihma & Harro van Asselt, The Conflict over Aviation Emissions: A Case of Retreating EU Leadership?

Notwithstanding the incremental steps taken in October 2013, meaningful action on regulating international aviation emissions through the International Civil Aviation Organisation (ICAO) remains a distant prospect. The European Union (EU) must decide on its aviation Directive without the guarantee of a global market-based mechanism being agreed in 2016.

The strong and uncompromising positions of countries opposed to the inclusion of foreign airlines in the EU’s emissions trading system (ETS) are more related to a realist game of politics rather than to the design details of the policy instrument.

The political and legal arguments against the European Commission’s proposal to amend the EU ETS vis-à-vis aviation emissions are unconvincing.

Europe should also insist on its own sovereign rights – such as the right to regulate international aviation in its own airspace – and consider ways of manifesting more assertiveness in the future in order not to create a precedent with the retreat in the Aviation Directive case.

Otherwise, the EU may become vulnerable to pressure in other areas of regulation with extraterritorial implications, and the EU’s credibility when faced with strong and coordinated external influences might be undermined.

Briefing Paper

Karl Lallerstedt & Mikael Wigell, Illicit trade flows: how to deal with the neglected economic and security threat

Illicit trade flows generate massive costs for the EU, yet the countermeasures have been inadequate. A shortage of data, the tendency to look at different forms of illicit trade as separate phenomena, and the complexity of the problem have led to an under-prioritisation of illicit trade among policymakers.

Globally, the illicit trade in products that replace those that are generally licit (such as counterfeit goods and contraband excise goods) represents the biggest monetary turnover and hurts government and corporate revenues directly. Still, it is particularly under-prioritised.

Synergistic effects for smuggling different items relate to the fact that there are over one thousand international poly-crime groups operating in the EU, the same smuggling routes can be used for different commodities, and the same corrupt officials or purveyors of false documentation can deliver their services to multiple “operators”.

Illicit trade also makes the EU more vulnerable to terrorist attacks. It finances terrorist organisations, and well-established smuggling routes make the borders more porous.

To address the problem, better data need to be generated showing its extent and impact. Taking a holistic view of the various aspects of illicit trade is important to facilitate coordination among the relevant authorities. The costs of this work represent investments which – beyond enhancing security – will generate income by boosting tax revenues, reducing crime, creating jobs and driving economic growth.

FIIA Comment

Niklas Helwig, Is Germany ready to take a firm stand on Russia? Berlin is still in search of its foreign policy compass

Berlin-Moscow relations cooled over the Crimea crisis and caused Germany to break with its traditional Ostpolitik. Yet, it remains to be seen whether Germany implements its announced ‘culture of engagement’ by adopting economic sanctions.

FIIA Comment

Jyrki Kallio, Ukrainan kysymyksessä Kiinan kieli on keskellä suuta: Venäjä ei saa tukea idästä mutta lännen heikkous on Kiinankin etu

Kiinan presidentin Euroopan-vierailulla Ukrainan tilanne vienee päähuomion. Kiina voi läksyttää länttä Ukrainan saattamisesta sekasortoon mutta tuskin ryhtyy puolustamaan Venäjän toimia Krimillä. Kiina ei katso hyvällä kehitystä, joka horjuttaa kansainvälisen talouden ennustettavuutta.

FIIA Comment

Harri Mikkola, The Return of Realpolitik? The deepening crisis in Ukraine may spill over to the Arctic

The Arctic is not shielded from global dynamics in general and political crises in particular. The crisis in Ukraine may potentially have profound direct and indirect impacts on Arctic cooperation and development. For example, the crisis may affect Arctic political cooperation in the context of the Arctic Council, which Finland will chair in 2017-2019. However, it may very well be that the economic logic will prevail over the worsening relationship between Russia and the West in the region. In any case, it must be understood that the Arctic is one political theatre among others where the contemporary great game among major powers is played out.

Briefing Paper

Katja Creutz, The ICC under Political Pressure: Towards Lowered Expectations of Global Justice

In 2010, the International Criminal Court (ICC) launched investigations into the 2007–2008 post-election violence in Kenya, in which some 1,200 people were killed and several hundred thousand displaced. The ICC is breaking new ground with the Kenyan cases; for the first time sitting heads of state are facing charges before the Court.

Kenya’s response to the proceedings has involved a number of political and judicial measures. It has obstructed the work of the Court; it has sought deferral of the cases by the Security Council; and it has threatened the ICC with mass withdrawals.

Kenya’s objection to the trials has gained regional support and renewed strength for the claim that the Court has an anti-African bias. Its claims that the Court should not prosecute state leaders because of concerns over regional peace and security have been met with understanding. The Security Council has, however, refused to suspend the trials.

The political attack against the ICC will have broader implications for the Court. The Court will need to reconsider how it protects witnesses, safeguards evidence, and selects cases for prosecution. It may even have to retreat from the principle of prosecuting sitting heads of state.

The expectations placed upon the ICC as an institution of global justice have been unrealistic. The current international political climate will not further this goal. Major powers remain outside the Court and the current Ukrainian crisis will make it hard to agree upon Security Council referrals.